Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021 | |
Document and Entity Information [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | CADRE HOLDINGS, INC. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001860543 |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets $ in Thousands | Dec. 31, 2019USD ($) |
Current assets | |
Cash and cash equivalents | $ 2,520 |
Accounts receivable, net | 55,568 |
Inventories | 62,126 |
Prepaid expenses | 7,333 |
Other current assets | 9,150 |
Assets held for sale | 6,168 |
Total current assets | 142,865 |
Property and equipment, net | 36,048 |
Deferred tax assets, net | 1,900 |
Intangible assets, net | 59,955 |
Goodwill | 66,180 |
Other assets | 385 |
Total assets | 307,333 |
Current liabilities | |
Accounts payable | 25,695 |
Accrued liabilities | 32,206 |
Income tax payable | 678 |
Current portion of long-term debt | 4,328 |
Total current liabilities | 62,907 |
Long-term debt | 270,313 |
Deferred tax liabilities | 3,333 |
Other liabilities | 802 |
Total liabilities | 337,355 |
Commitments and contingencies (Note 13) | |
Mezzanine equity | |
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019) | 0 |
Shareholders' equity (deficit) | |
Common stock ($0.0001 par value, 190,000,000 shares authorized, 27,483,350 issued and outstanding as of December 31, 2020 and 2019) | 3 |
Additional paid-in capital | 48,670 |
Accumulated other comprehensive loss | (3,280) |
Accumulated deficit | (75,415) |
Total shareholders' equity | (30,022) |
Total liabilities, mezzanine equity and shareholders' equity | $ 307,333 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | |||
Accounts receivable, allowance for doubtful accounts | $ 624 | $ 1,113 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 190,000,000 | 190,000,000 | 190,000,000 |
Common stock, shares issued | 27,483,350 | 27,483,350 | 27,483,350 |
Common stock, shares outstanding | 27,483,350 | 27,483,350 | 27,483,350 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME. | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
Cost of goods sold | 192,256 | 183,869 | 251,704 | 274,699 |
Gross profit | 131,495 | 113,150 | 152,938 | 146,037 |
Operating expenses | ||||
Selling, general and administrative | 87,168 | 79,963 | 106,627 | 124,270 |
Restructuring and transaction costs | 1,491 | 3,143 | 5,822 | 918 |
Related party expense | 437 | 480 | 1,635 | 1,096 |
Other general income | (10,950) | (10,950) | (7,630) | |
Total operating expenses | 89,096 | 72,636 | 103,134 | 118,654 |
Operating income | 42,399 | 40,514 | 49,804 | 27,383 |
Other income (expense) | ||||
Interest expense | (14,129) | (18,275) | (24,388) | (29,848) |
Loss on extinguishment of debt | (15,155) | (200) | ||
Other income, net | (881) | 1,925 | 2,659 | 395 |
Total other expense, net | (30,165) | (16,350) | (21,929) | (29,453) |
(Loss) income before provision for income taxes | 12,234 | 24,164 | 27,875 | (2,070) |
Benefit for income taxes | 3,861 | 1,491 | 10,578 | 142 |
Net (loss) income | $ 8,373 | $ 22,673 | $ 38,453 | $ (1,928) |
Net income (loss) per share: | ||||
Basic | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Diluted | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Weighted average shares outstanding: | ||||
Basic | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Diluted | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments arising during the period | $ 23 | $ (776) | $ 420 | $ 1,883 |
Change in fair value of derivative instruments(1) | 90 | |||
Comprehensive (loss) income, net of tax | $ 8,486 | $ 21,897 | $ 38,873 | $ (45) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (38,453) | $ 1,928 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 14,733 | 15,443 |
Amortization of original issue discount and debt issue costs | 2,216 | 1,340 |
Loss on extinguishment of debt | 200 | |
Non cash consideration received from sale of business | (9,197) | (5,175) |
Deferred income taxes | (12,248) | (817) |
Impairment | 0 | 7,585 |
(Gain) loss on sale of fixed assets | (6,240) | 428 |
Gain on sale of business | (3,019) | |
Gain on settlement of contingent consideration | (1,427) | |
Loss on settlement of equity securities | 2,288 | |
Provision for losses on accounts receivable | 177 | 2,651 |
Foreign exchange gain | (940) | (1,859) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 11,811 | 8,663 |
Inventories | 1,639 | 5,716 |
Prepaid expenses and other assets | 1,837 | (1,918) |
Accounts payable and other liabilities | 2,117 | (19,696) |
Net cash provided by operating activities | 45,419 | 7,414 |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (4,708) | (3,082) |
Proceeds from disposition of property and equipment | 12,408 | 70 |
Proceeds from sale of equity securities | 14,372 | 2,531 |
Payments on settlement of equity securities | (2,288) | |
Proceeds from sale of business | 26,853 | |
Net cash (used in) provided by investing activities | 19,784 | 26,372 |
Cash Flows From Financing Activities: | ||
Proceeds from revolving credit facilities | 382,056 | 383,516 |
Principal payments on revolving credit facilities | (384,215) | (406,381) |
Proceeds from term loans | 219,586 | |
Principal payments on term loans | (276,444) | (9,357) |
Proceeds from insurance premium financing | 2,733 | 2,484 |
Principal payments on insurance premium financing | (2,897) | (2,437) |
Payment of capital leases | (43) | (242) |
Payment of contingent consideration | (240) | |
Payment of debt modification costs | (5,438) | |
Net cash used in financing activities | (64,902) | (32,417) |
Effect of foreign exchange rates on cash and cash equivalents | 52 | (139) |
Change in cash and cash equivalents | 353 | 1,230 |
Cash and cash equivalents, beginning of period | 2,520 | 1,290 |
Cash and cash equivalents, end of period | $ 2,873 | $ 2,520 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at the beginning at Dec. 31, 2018 | $ 3 | $ 48,670 | $ (5,163) | $ (73,487) | $ (29,977) |
Balance at the beginning (in shares) at Dec. 31, 2018 | 27,369,700 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,928) | (1,928) | |||
Foreign currency translation adjustments | 732 | 732 | |||
Amounts reclassified from accumulated other comprehensive loss | 1,151 | $ 1,151 | |||
Exercise of warrants (in shares) | 113,650 | 113,650 | |||
Balance at the end at Dec. 31, 2019 | $ 3 | 48,670 | (3,280) | (75,415) | $ (30,022) |
Balance at the end (in shares) at Dec. 31, 2019 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 22,673 | $ 22,673 | |||
Balance at the end at Sep. 30, 2020 | $ 3 | 48,670 | (4,056) | (52,742) | (8,125) |
Balance at the end (in shares) at Sep. 30, 2020 | 27,483,350 | ||||
Balance at the beginning at Dec. 31, 2019 | $ 3 | 48,670 | (3,280) | (75,415) | $ (30,022) |
Balance at the beginning (in shares) at Dec. 31, 2019 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 38,453 | $ 38,453 | |||
Balance at the end at Dec. 31, 2020 | $ 3 | 48,670 | (2,860) | (36,962) | $ 8,851 |
Balance at the end (in shares) at Dec. 31, 2020 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,373 | $ 8,373 | |||
Change in fair value of derivative instruments | 90 | 90 | |||
Dividends declared | (10,000) | (10,000) | |||
Balance at the end at Sep. 30, 2021 | $ 3 | $ 48,670 | $ (2,747) | $ (38,589) | $ 7,337 |
Balance at the end (in shares) at Sep. 30, 2021 | 27,483,350 | 27,483,350 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
SIGNIFICANT ACCOUNTING POLICIES | 1. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through 15 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers. Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated in consolidation. Stock Split In July 2021, the Company effected a 50-for-1 Dividend In August 2021, the Company declared share Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Certain items previously reported in the notes to the consolidated financial statements have been reclassified to conform to the current financial statement presentation. Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2021 and 2020. The carrying value of our long-term debt obligations approximates the fair value, as the long-term debt was entered into recently. The Company classifies its long-term debt within Level 2 of the fair value hierarchy. Goodwill and Other Intangible Assets The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. Revenue Recognition The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 Net Income per Share Basic income or loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. There were no dilutive instruments outstanding during the nine months ended September 30, 2021 and 2020. The calculation of weighted average shares outstanding and net income per share are as follows: Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. | 1. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through On June 20, 2019, the Company sold Mustang Survival Holdings Corporation and its subsidiaries (“Mustang”), a wholly owned subsidiary that forms the Company’s Marine Safety and Climate Protection Business. See Note 4, Dispositions and Assets Held For Sale Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) and include the accounts of Cadre Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Stock Split In July 2021, the Company effected a 50-for-1 Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. Refer to Note 6 , Fair Value Measurements Cash and Cash Equivalents Included in cash and cash equivalents are deposits with banks, cash on hand in stores, and amounts due from credit card transactions. We have no restrictions on our cash and cash equivalents. Accounts Receivable Trade accounts receivable consists of amounts owed to the Company and is stated net of allowances. The Company’s outstanding accounts receivable balances are exposed to credit risk and valuation allowances are established for estimated losses resulting from non-collection of outstanding amounts due from customers. The Company establishes a reserve for estimated doubtful accounts based on the aging of its receivable balances and collection history. In addition, specific reserves are established for customer accounts as known collection problems occur due to insolvency, disputes, or other collection issues. The amounts of these specific reserves are estimated by management based on the customer’s financial position, the age of the customer’s receivables and the reasons for any disputes. The allowance for doubtful accounts is reduced by any write-off of uncollectible customer accounts. Inventories Inventories are stated at the lower of cost using the first-in, first-out method (“FIFO”) or net realizable value. Elements of cost in the Company’s manufactured inventories generally include raw materials, direct labor, indirect labor, manufacturing overhead and freight-in. The Company periodically reviews its inventories considering sales forecasts and historical experience to identify excess, close-out, or slow-moving items and makes provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value. Assets Held for Sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. A long-lived asset is not depreciated or amortized while it is classified as held for sale. Property and Equipment Property and equipment, including those acquired under capital lease agreements, is stated at cost less accumulated depreciation and amortization, except for assets acquired using acquisition accounting, which are initially recorded at fair value. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings and improvements 5 to 39 years Furniture and fixtures 10 years Computer hardware and software 3 to 5 years Machinery and equipment 3 to 8 years Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Major replacements, which extend the useful lives of property and equipment, are capitalized and depreciated over the remaining useful life of the asset. Normal repair and maintenance items are expensed as incurred. The recoverability of the carrying amount of property and equipment is assessed when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If it is determined that the carrying amount of an asset or asset group is not recoverable based upon expected undiscounted future cash flows of the asset or asset group, an impairment loss equal to the excess of the carrying amount over the estimated fair value of the asset or asset group is recorded. Goodwill and Other Intangible Assets The Company classifies intangible assets into three categories: i) intangible assets with definite lives subject to amortization, ii) intangible assets with indefinite lives not subject to amortization and iii) goodwill. The Company determines the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized on a straight-line basis over their useful lives. The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. The Company performs sensitivity tests with respect to growth rates and discount rates used in the income approach. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions and applied to projected operating data for each reporting unit to arrive at an indication of fair value. Other Intangible Assets For indefinite-lived intangible assets other than goodwill, the impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The Company tests definite-lived intangible assets for recoverability when changes in circumstances indicate the carrying value may not be recoverable. Events that trigger a test for recoverability include: ● material adverse changes in projected revenues and expenses; ● significant underperformance relative to historical and projected future operating results; ● significant negative industry or economic trends; and, ● a significant adverse change in the manner in which an asset group is used or in its physical condition. Future adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified. When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. For the periods presented, the Company has not recorded any impairments of long-lived assets. Accounts Payable Accounts payable represents amounts owed by us to third parties at the end of the period. Accounts payable includes $1,329 and $1,145 of book cash overdrafts in excess of cash balances in such accounts at December 31, 2020 and 2019, respectively. We include the change in book cash overdrafts in operating cash flows in the consolidated statements of cash flows. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Other Assets and Deferred Costs — Contracts with Customers There was no cumulative effect adjustment recorded to opening retained earnings as of January 1, 2019, upon adoption of Topic 606, Revenue from Contracts with Customers. We do not expect an impact to our net income on an ongoing basis as a result of the adoption of the new standard. The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income (loss). We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Policy Elections ● The Company does not account for significant financing components if, at contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for the product or service will be one year or less. ● Incremental costs to obtain a contract with a customer will be capitalized if the Company expects to recover those costs unless the amortization period is one year or less. ● The Company recognizes revenue equal to the amount it has the right to invoice when the amount corresponds directly with the value to the customer of the Company’s performance to date. ● The Company does not account for shipping and handling activities as a separate performance obligation, but rather as an activity performed to transfer the promised goods. ● Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss). The following table represents changes in the Company’s accrued warranties and related costs: Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 Cost of Goods Sold Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, shipping costs, reimbursable research and development costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs. Selling, General & Administrative Expenses Selling, general and administrative expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges. Advertising Expenses Advertising costs are expensed in the period incurred. Advertising expenses primarily consist of marketing, promotions, catalog and trade show expenses and were $2,692 and $3,468 during the years ended December 31, 2020 and 2019, respectively. Advertising expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Research and Development Research and development expenses are expensed as incurred and included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Total research and development costs were $5,630 and $6,868 for the years ended December 31, 2020 and 2019, respectively. In addition, the Company incurs research and development expenses related to reimbursable development contracts. Contractual research and development expenses are included in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss) and were $3,697 and $2,291 for the years ended December 31, 2020 and 2019, respectively. Debt Issuance Costs The related provisions Interest — Imputation of Interest. over Restructuring Costs Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. The Company applies the provisions of ASC Topic 420, Exit or Disposal Cost Obligations Nonretirement Postemployment Benefits for probable Income Taxes The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes . Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and are classified as noncurrent in the consolidated balance sheets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of date. laws have Deferred tax assets are reduced by a valuation allowance likely all evaluation for valuation allowance for valuation all have valuation allowance The Company is subject to income taxes in the United States and several States, taken taken all available likely any. Tax taken Tax more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Further information regarding the Company’s tax positions is included in Note 14 , Income Taxes Accumulated Other Comprehensive Loss Comprehensive income (loss) represents all changes in equity of the Company that result from recognized transactions and other economic events during the period. Other comprehensive income refers to revenues, expenses, gains, and losses that under GAAP are included in comprehensive income (loss) but excluded from net income (loss). Foreign Currency Translation Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average exchange rate prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the cumulative translation adjustment included in accumulated other comprehensive loss in the consolidated balance sheets. Transaction Transactions denominated in foreign currency are recorded at the exchange rate on the date of each transaction. Realized gains and losses on foreign currency transactions are included in other income, net in the consolidated statements of operations and comprehensive income (loss), except on certain intercompany balances which the Company has determined are of a long-term investment nature, which are included in accumulated other comprehensive loss in the consolidated balance sheets. Monetary assets and liabilities are remeasured at the balance sheet date at end-of-period exchange rates. Unrealized gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other income, net in the consolidated statements of operations and comprehensive income (loss) in the period in which they occur. Investments in Equity Securities Investments in equity securities are recorded in accordance with ASC Subtopic 321-10 , Investments — Equity Securities Net Income (Loss) per Share Basic income or loss per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted income (loss) per share reflects the potential dilution from outstanding warrants. For the year ended December 31, 2019, there were 81,268 shares excluded from the diluted earnings per share calculation because the impact of their assumed exercise would be antidilutive due to a net loss in that period. The calculation of weighted average shares outstanding and net income (loss) per share are as follows (in thousands, except for per share data): Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) Risk and Uncertainties Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. Risks associated with cash within the United States and foreign countries are mitigated by banking with federally insured, creditworthy institutions. As of December 31, 2020, and 2019, the Company had deposits of $3,130 and $1,868, respectively, at foreign financial institutions. Accounts receivable are financial instruments that also expose the Company to concentration of credit risk. Such exposure is limited by the large number of customers comprising the Company’s customer base and their dispersion across different geographic areas. In addition, the Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for credit losses. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management. Novel Coronavirus (COVID-19) On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID- 19 outbreak continues to evolve as of the date of this report. During 2020, the business was relatively unaffected. In all countries and states which the business operates, the relevant local authorities have deemed the business to be essential in nature and thereby allowed us to continue operations during any government mandated shutdowns. The business has taken many measures to mitigate outbreaks in any of its facilities that would negatively impact the business. The extent to which the Company’s business may be affected by the current outbreak of the Coronavirus will largely depend on both current and future developments, including its duration, spread and treatment, all of which are highly uncertain and cannot be reasonably predicted. While any impact to global markets is uncertain, the Company continues to monitor developments. Recent Accounting Pronouncements Pronouncements Adopted During 2020 In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company adopted this ASU effective January 1, 2020. The adoption did not have a material impact on the Company’s disclosures. Refer to Note 6, Fair Value Measurements, for further discussion. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. |
ACCOUNTS RECEIVEABLE, NET
ACCOUNTS RECEIVEABLE, NET | 12 Months Ended |
Dec. 31, 2020 | |
ACCOUNTS RECEIVEABLE, NET | |
ACCOUNTS RECEIVEABLE, NET | 2. ACCOUNTS RECEIVEABLE, NET The following is a reconciliation of the changes in our allowance for doubtful accounts during fiscal 2020 and 2019: Year ended December 31, 2020 2019 Beginning allowance for doubtful accounts $ 1,345 $ 1,260 Provision 177 2,651 Write-offs, net of recoveries (409) (2,488) Mustang disposal — (78) Ending allowance for doubtful accounts $ 1,113 $ 1,345 |
INVESTMENT IN EQUITY SECURITIES
INVESTMENT IN EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENT IN EQUITY SECURITIES | |
INVESTMENT IN EQUITY SECURITIES | 3. INVESTMENT IN EQUITY SECURITIES In connection with the sale of Vievu to Axon Enterprise, Inc., the Company received earn-out stock payments on the first and second anniversary of the sale date based on the retention of certain customers. In May 2019, we received the first stock payment of which were recorded within other current assets in the consolidated balance sheets. During the first quarter of 2020, the Company sold the equity securities for Shortly after receiving the second stock payment, the Company entered into a stock collar transaction to mitigate the impact of market volatility on our equity securities. The stock collar was settled at the time the equity securities were sold in December 2020 and resulted in a loss of $2,288. The calculation of net unrealized gains and losses recognized during the year related to equity securities still held at the end of the year is as follows: Year ended December 31, 2020 2019 Net gains recognized during the year $ 2,178 $ 2,175 Less: Net gains recognized during the year related to equity securities sold during the year (2,178) — Net unrealized gains recognized during the year related to equity securities still held at the end of the year $ — $ 2,175 |
DISPOSITIONS AND ASSETS HELD FO
DISPOSITIONS AND ASSETS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2020 | |
DISPOSITIONS AND ASSETS HELD FOR SALE | |
DISPOSITIONS AND ASSETS HELD FOR SALE | 4. DISPOSITIONS AND ASSETS HELD FOR SALE Dispositions On June 20, 2019, the Company completed the sale of all the issued and outstanding shares of Mustang for a sales price of $27,000, exclusive of net working capital adjustments of $147 paid to the buyer. The Company received $26,853 in cash. As of December 31, 2019, the company recognized a gain of $3,019 associated with the sale of Mustang which is included in other general expenses in the consolidated statements of operations and comprehensive income (loss). In connection with the sale of Mustang, Kanders & Company, Inc., a company controlled by Warren Kanders, our Chairman of the Board, received compensation from Cadre of $450, which is included in related party expense in the Company’s consolidated statements of operations and comprehensive income (loss). The sale of Mustang did not meet the criteria for classification as discontinued operations as the deconsolidation did not represent a strategic shift in the business. Held for Sale In November 2019, the Company designated a Ontario, California facility as held for sale. Accordingly, during 2019, the Company determined that the assets and liabilities associated with the Ontario, California facility met the criteria for classification as held for sale but did not meet the criteria for classification as discontinued operations as the deconsolidation did not represent a strategic shift in the business. Total assets associated with our Ontario, California facility were |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
REVENUE RECOGNITION | ||
REVENUE RECOGNITION | 2. REVENUE RECOGNITION The following tables disaggregate net sales by channel and geography: Nine months ended September 30, 2021 2020 U.S. state and local agencies (a) $ 179,385 $ 171,552 Commercial 27,102 25,117 U.S. federal agencies 37,365 43,632 International 74,647 51,691 Other 5,252 5,027 Net sales $ 323,751 $ 297,019 (a)Includes all Distribution sales Nine months ended September 30, 2021 2020 United States $ 249,104 $ 245,328 International 74,647 51,691 $ 323,751 $ 297,019 Contract Liabilities Contract liabilities are recorded as a component of other liabilities when customers remit cash payments in advance of the Company satisfying performance obligations which are satisfied at a future point of time. Contract liabilities are reduced when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s consolidated balance sheets and totaled $9,044 and $6,485 at September 30, 2021 and December 31, 2020, respectively. Revenue recognized during the nine months ended September 30, 2021 from amounts included in contract liabilities at December 31, 2020 was $4,785. Remaining Performance Obligations As of September 30, 2021, we had $25,851 of remaining performance obligations, which included amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under ASC Topic 606, Revenue from Contracts with Customers | 5. REVENUE RECOGNITION The following tables disaggregate net sales by channel and geography: Year ended December 31, 2020 2019 U.S state and local agencies (a) $ 230,706 $ 219,482 Commercial 35,648 32,837 U.S. federal agencies 63,267 74,756 International 68,669 89,367 Other 6,352 4,294 Net sales $ 404,642 $ 420,736 (a) Includes all Distribution sales Year ended December 31, 2020 2019 United States $ 335,973 $ 331,369 International 68,669 89,367 $ 404,642 $ 420,736 Revenue by product is not disclosed, as it is impractical to do so. Contract Liabilities Contract liabilities are recorded as a component of other liabilities when customers remit cash payments in advance of the Company satisfying performance obligations which are satisfied at a future point of time. Contract liabilities are derecognized when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s consolidated balance sheets and totaled $6,485 and $2,072, at December 31, 2020 and 2019, with all of the 2019 contract liabilities being recognized in revenue during the year ended December 31, 2020. Remaining Performance Obligations As of December 31, 2020, we had $27,516 of remaining performance obligations, which included amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under Topic 606 as of December 31, 2020. We expect to recognize 89% of this balance over the next twelve months and expect the remainder to be recognized in the following two years. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 6. FAIR VALUE MEASUREMENTS There were no assets and liabilities measured at fair value on a recurring basis as of December 31, 2020. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 consisted of: Level 1 Level 2 Level 3 Total Assets: Equity investments $ 5,175 — — 5,175 Total assets at fair value $ 5,175 — — 5,175 Liabilities: Contingent consideration (a) $ — — 1,667 1,667 Total liabilities at fair value $ — — 1,667 1,667 (a) Represents the estimated fair value of the additional variable cash consideration payable by the Company in connection with an acquisition completed by the Company in a prior year that was contingent upon the achievement of certain performance milestones. The Company estimated the fair value using expected future cash flows over the period in which the obligations are expected to be settled and applied a discount rate that appropriately captures a market participant’s view of the risk associated with the obligation. Significant increases (decreases) to values of the unobservable inputs would result in a lower (higher) fair value measurement. The unobservable inputs are not considered to be interrelated. The liabilities are included in accrued liabilities in the Company’s consolidated balance sheets, based upon the timing of the expected payout. As of December 31, 2020, the obligation has been fully settled with the difference between the settled amount and the fair value included in selling, general, and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). There were no transfers of assets or liabilities between levels during the years ended December 31, 2020, and 2019. The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy as of December 31, 2019 are as shown below: Significant unobservable Valuation technique inputs Range Contingent Consideration Discounted Cash Flows Discount rate 17.00 % The following table provides a summary of changes in fair value of the Company’s Level 3 financial instruments for the years ended December 31, 2020 and 2019. Level 3 Instruments Balance, December 31, 2018 $ 1,667 Settlement of obligation — Balance, December 31, 2019 $ 1,667 Settlement of obligation (240) Fair value adjustment included in earnings (1,427) Balance, December 31, 2020 $ — The carrying value of our long-term debt obligations approximates the fair value, as the long-term debt was entered close to year-end. The Company classifies its long-term debt within Level 2 of the fair value hierarchy. |
INVENTORIES
INVENTORIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
INVENTORIES | ||
INVENTORIES | 3. INVENTORIES The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Finished goods $ 31,541 $ 25,986 Work-in-process 4,833 3,741 Raw materials and supplies 34,693 31,196 $ 71,067 $ 60,923 | 7. INVENTORIES The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of December 31, 2020 and 2019: December 31, 2020 2019 Finished goods $ 25,986 $ 21,458 Work-in-process 3,741 4,614 Raw materials and supplies 31,196 36,054 $ 60,923 $ 62,126 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 8. PROPERTY AND EQUIPMENT Property and equipment consist of the following: December 31, 2020 2019 Land $ 4,620 $ 4,620 Building and improvements 17,367 15,030 Furniture and fixtures 1,288 1,191 Computer hardware and software 23,125 22,273 Machinery and equipment 22,162 20,066 Construction in progress 518 1,096 69,080 64,276 Less accumulated depreciation (33,643) (28,228) $ 35,437 $ 36,048 The Company recorded depreciation expense of $5,495 and $6,626 for the years ended December 31, 2020 and 2019, respectively, of which $2,523 and $2,900 was included in cost of goods sold in the consolidated statements of operations and comprehensive income (loss) for the respective years. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | 4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table summarizes the changes in goodwill for the nine months ended September 30, 2021: Products Distribution Total Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Foreign currency translation adjustments (87) — (87) Balance, September 30, 2021 $ 63,611 $ 2,616 $ 66,227 Gross goodwill and accumulated impairment losses was $73,812 and $7,585, respectively, at September 30, 2021 and $73,899 and $7,585, respectively, at December 31, 2020. Intangible Assets Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite-lived and are therefore not subject to amortization. Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,088 (50,858) 23,230 11 Technology 11,978 (10,919) 1,059 7 Tradenames 6,472 (2,980) 3,492 4 Non-compete agreements 1,037 (1,037) — 4 $ 93,575 (65,794) 27,781 Indefinite lived intangibles: Tradenames 16,678 — 16,678 Indefinite Total $ 110,253 (65,794) 44,459 December 31, 2020 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 11 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 4 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 Indefinite lived intangibles: Tradenames 16,674 — 16,674 Indefinite Total $ 110,319 (59,310) 51,009 Amortization expense for the nine months ended September 30, 2021 and 2020 was $6,538 and $7,047, respectively, of which $596 and $1,090 was included in cost of goods sold in the consolidated statements of operations and comprehensive income for the respective periods. The estimated amortization expense for finite-lived intangible assets for the remaining three months of 2021, the next four years and thereafter is as follows: Remainder of 2021 $ 2,037 2022 7,683 2023 6,754 2024 3,856 2025 1,856 Thereafter 5,595 $ 27,781 | 9. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table summarizes the changes in goodwill during the years ended December 31, 2020 and 2019: Products Distribution Total Balance, December 31, 2018 $ 66,780 $ 10,201 $ 76,981 Impairment losses — (7,585) (7,585) Foreign currency translation adjustments 93 — 93 Mustang disposal (3,309) — (3,309) Balance, December 31, 2019 63,564 2,616 66,180 Foreign currency translation adjustments 134 — 134 Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Impairment of Goodwill In 2019, as a result of a decline in the forecasted financial performance for the Distribution reporting unit, the Company performed an impairment evaluation and determined that the carrying value of the goodwill of the Distribution reporting unit exceeded the implied fair value. The decline in the fair value of the Distribution reporting unit was primarily due to unfavorable performance in 2019 that was impacting operating margins that led the Company to use a higher discount rate due to an increase in the risk-free rate of return. The Company recorded a goodwill impairment charge of $7,585 within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) as of December 31, 2019. No impairment losses were recorded during the year ended December 31, 2020. Gross goodwill and accumulated impairment losses was $73,899 and $7,585 at December 31, 2020 and $73,765 and $7,585, respectively, at December 31, 2019. Intangible Assets Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite- lived and are therefore not subject to amortization. Intangible assets, net of amortization, as of December 31, 2020, and 2019 are as follows: December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 12 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 1 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Indefinite lived intangibles: Tradenames 16,674 — 16,674 Total $ 110,319 (59,310) 51,009 December 31, 2019 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 73,825 (39,010) 34,815 12 Technology 11,913 (8,991) 2,922 7 Tradenames 3,640 (913) 2,727 1 Non-compete agreements 1,020 (944) 76 4 $ 90,398 (49,858) 40,540 Indefinite lived intangibles: Tradenames 19,415 — 19,415 Total $ 109,813 (49,858) 59,955 The Company recorded amortization expense of $9,238 and $8,817 for the years ended December 31, 2020 and 2019, respectively, of which $1,342 and $1,729 was included in cost of goods sold in the consolidated statements of operations and comprehensive income (loss) for the respective years. The estimated amortization expense for finite-lived intangible assets for the next five years and thereafter is presented below. 2021 $ 8,366 2022 7,608 2023 6,601 2024 3,603 2025 1,650 Thereafter 6,507 $ 34,335 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES Accrued liabilities as of December 31, 2020 and 2019 are as follows: December 31, 2020 2019 Accrued expenses $ 4,257 $ 2,760 Accrued compensation and payroll tax 18,745 15,570 Accrued interest payable 703 2,043 Accrued warranty expense 1,133 2,368 Deferred revenue and customer credit balances 7,262 4,870 Other accrued liabilities 3,904 4,595 $ 36,004 $ 32,206 |
DEBT
DEBT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
DEBT | 5. DEBT The Company’s debt is as follows: September 30, 2021 December 31, 2020 Short-term debt: Insurance premium financing $ 2,883 $ 1,225 Current portion of term loan 10,000 2,251 Current portion of other 21 20 $ 12,904 $ 3,496 Long-term debt: Revolver 25,500 — Term loan 190,000 222,187 Other 113 128 $ 215,613 $ 222,315 Unamortized debt discount and debt issuance costs (2,667) (13,005) Total long-term debt, net $ 212,946 $ 209,310 The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs, for the remaining three months of 2021, the next four years and thereafter: Remainder of 2021 $ 2,505 2022 10,021 2023 10,022 2024 10,022 2025 10,023 Thereafter 183,041 Total principal payments $ 225,634 New Credit Facility On August 20, 2021 (the “Closing Date”), the Company refinanced its existing credit facilities and entered into a new credit agreement whereby Safariland, LLC, as borrower (the “Borrower”), the Company and certain domestic subsidiaries of the Borrower, as guarantors (the “Guarantors”), closed on and received funding under a credit agreement (initially entered into on July 23, 2021), pursuant to a First Amendment to Credit Agreement (collectively, the “New Credit Agreement”) with PNC Bank, National Association (“PNC”), as administrative agent, and the several lenders from time to time party thereto (together with PNC, the “Lenders”) pursuant to which the Borrower (i) borrowed $200,000 under a term loan (the “Term Loan”), and (ii) may borrow up to $100,000 under a revolving credit facility (including up to $15,000 for letters of credit and up to $10,000 for swing line loans) (the “Revolving Loan”). Each of the Term Loan and the Revolving Loan mature on July 23, 2026. Commencing December 31, 2021, the New Term Loan requires scheduled quarterly payments in amounts equal to 1.25% per quarter of the original aggregate principal amount of the Term Loan, with the balance due at maturity. The New Credit Agreement is guaranteed, jointly and severally, by the Guarantors and, subject to certain exceptions, secured by a first-priority security interest in substantially all of the assets of the Borrower and the Guarantors pursuant to a Security and Pledge Agreement (the “Security Agreement”) and a Guaranty and Suretyship Agreement (the “Guaranty Agreement”), each dated as of the Closing Date. As of September 30, 2021, the Revolving Loan had $25,500 in outstanding borrowings, $2,762 in outstanding letters of credit, and $71,738 of availability. The Borrower may elect to have the Revolving Loan and Term Loan under the New Credit Agreement bear interest at a base rate or a LIBOR rate, in each case, plus an applicable margin. The applicable margin for these borrowings will range from 0.50% to 1.50% per annum, in the case of base rate borrowings, and 1.50% to 2.50% per annum, in the case of LIBOR borrowings, in each case based upon the level of the Company’s consolidated total net leverage ratio. The New Credit Agreement also requires the Borrower to pay a commitment fee on the unused portion of the loan commitments. Such commitment fee will range between 0.175% and 0.25% per annum, and is also based upon the level of the Company’s consolidated total net leverage ratio. The New Credit Agreement also contains customary representations and warranties, and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the Borrowers or any Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. The New Credit Agreement contains certain restrictive debt covenants, which require us to: (i) maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, starting with the quarter ended December 31, 2021, which is to be determined for each quarter end on a trailing four quarter basis and (ii) maintain a quarterly maximum consolidated total net leverage ratio of 3.75 to 1.00 from the quarter ended December 31, 2021 until the quarter ended September 30, 2022, and thereafter 3.50 to 1.00, which is in each case to be determined on a trailing four quarter basis; provided that under certain circumstances and subject to certain limitations, in the event of a material acquisition, we may temporarily increase the consolidated total net leverage ratio by up to 0.50 to 1.00 for four fiscal quarters following such acquisition. The New Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the New Credit Agreement may be accelerated and the Lenders could foreclose on their security interests in the assets of the Borrowers and the Guarantors. The Company performed an analysis on a creditor-by-creditor basis for debt modifications and extinguishments to determine the appropriate accounting treatment of associated issuance costs. In connection with the refinancing, the Company recorded a loss on debt extinguishment of $15,155 related to early extinguishments fees and the write-off of unamortized debt discount and debt issuance costs In connection with the New Credit Agreement, the Company paid financing costs totaling $4,095, of which $2,730 related to the Term Loan and $1,365 related to the Revolving Loan. Total financing costs include debt issuance costs of $1,897. Costs incurred in connection with the Term Loan were deferred and recorded as an offset to long-term debt. Costs incurred in connection with the Revolving Loan were deferred and recorded to other assets. All deferred debt costs are amortized to interest expense over the term of the loan using the effective interest method. Canadian Credit Facility On October 14, 2021, Med-Eng Holdings ULC and Pacific Safety Products Inc., the Company’s Canadian subsidiaries, as borrowers (the “Canadian Borrowers”), and Safariland, LLC, as guarantor (the “Canadian Guarantor”), closed on a line of credit pursuant to a Loan Agreement (the “Canadian Loan Agreement”) and a Revolving Line of Credit Note (the “Note”) with PNC Bank Canada Branch (“PNC Canada”), as lender pursuant to which the Canadian Borrowers may borrow up to CDN$10,000 under a revolving line of credit (including up to $3,000 for letters of credit) (the “Revolving Canadian Loan”). The Revolving Canadian Loan matures on July 23, 2026. The Canadian Loan Agreement is guaranteed by Safariland, LLC pursuant to a Guaranty and Suretyship Agreement (the “Canadian Guaranty Agreement”). The Canadian Borrowers may elect to have borrowings either in United States dollars or Canadian dollars under the Canadian Loan Agreement, which will bear interest at a base rate or a LIBOR rate, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable margin for these borrowings will range from 0.50% to 1.50% per annum, in the case of base rate borrowings and Canadian Prime Rate borrowings, and 1.50% to 2.50% per annum, in the case of LIBOR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) an unused line fee on the unused portion of the loan commitments in an amount ranging between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note. The Canadian Loan Agreement also contains customary representations and warranties, and affirmative and negative covenants, including, among others, limitations on additional indebtedness, entry into new lines of business, entry into guarantee agreements, making of any loans or advances to, or investments in, any other person, restrictions on liens on the assets of the Canadian Borrowers and mergers, transfers of assets and acquisitions. The Canadian Loan Agreement and Note also contain customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Canadian Loan Agreement may be accelerated. Interest Rate Swaps In September 2021, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on our floating rate debt. As of September 30, 2021, we had the following interest rate swap agreement (the “Swap Agreement”): Effective date Notional amount Fixed rate September 30, 2021 through July 23, 2026 $ 100,000 0.875 % Under the terms of the Swap Agreement, we receive payments based on the 1-month LIBOR (approximately 0.09% as of September 30, 2021). During the nine months ended September 30, 2021, there were no interest rate swap agreements that expired. We entered into the Swap Agreement to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated this Swap Agreement as a cash flow hedge. A portion of the amount included in accumulated other comprehensive loss is reclassified into interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreement is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreement. It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparty will be able to fulfill their obligations under our agreement, and we believe we will have debt outstanding through the expiration date of the swap such that the occurrence of future cash flow hedges remains probable. The estimated fair value of our Swap Agreement in the consolidated balance sheets was as follows: Balance sheet account September 30, 2021 December 31, 2020 Other assets $ 829 $ — Accrued liabilities $ 709 $ — A cumulative gain of $90 net of tax is reflected in accumulated other comprehensive loss as of September 30, 2021. The amount of gain recognized in other comprehensive loss for the nine months ended September 30, 2021 was $90 net of tax. There were no amounts reclassified from accumulated comprehensive loss into earnings for the nine months ended September 30, 2021. As of September 30, 2021, approximately $710 is expected to be reclassified from accumulated other comprehensive loss into interest expense over the next 12 months. | 11. DEBT The Company’s debt is as follows: December 31, 2020 2019 Short-term debt: Insurance premium financing $ 1,225 $ 1,389 Current portion of term loan 2,251 2,920 Current portion of other 20 19 $ 3,496 $ 4,328 Long-term debt: Revolving credit facility $ — $ 2,159 Term loan 222,187 273,254 Other 128 145 $ 222,315 $ 275,558 Unamortized debt discount and debt issuance costs (13,005) (5,245) Total long-term debt, net $ 209,310 $ 270,313 Revolving Credit Facility Prior to 2019, the Company executed a Revolving Credit Agreement, as amended and restated (“Credit Facility Agreement”), with Bank of America, N.A., as agent and sole lender, that provides total committed capital of $50,000 in the form of a revolving credit facility (the “Revolving Credit Facility”), which is allocated into US and Canadian categories of $45,000 and $5,000 respectively. In June 2019, the Company entered into an amendment to the Credit Facility Agreement. This amendment gave consent to the Mustang sale transaction and released Mustang from its obligations under the Credit Facility Agreement. In November 2020, the Company entered into an amendment to the Credit Facility Agreement, which gave consent to the Term Loan debt refinancing and extended the terms of the Credit Facility Agreement to November 2025. The Revolving Credit Facility is collateralized by the Company’s and subsidiaries’ property, including but not limited to accounts receivable, inventory and real estate. The Revolving Credit Facility classifies eligible accounts receivable and inventory into three groups: United States inventory and accounts receivable denominated in U.S. dollars; Canadian inventory and accounts receivable denominated in U.S. dollars; and Canadian inventory and accounts receivable denominated in Canadian dollars. The Revolving Credit Facility bears interest at a base rate (“Base Rate”) plus an applicable margin as determined by average availability or 30, 60, or 90 day London Interbank Offered Rate (“LIBOR”) plus an applicable margin as determined by average availability. The Base Rate is calculated as, for any day, a per annum rate equal to the greater of the Prime Rate for such day or the Federal Funds Rate for such day plus 0.50%. Interest is payable monthly, and all outstanding interest and principal is due at the maturity date. Availability to borrow under the Revolving Credit Facility is calculated by applying a borrowing advance rate to eligible accounts receivable and inventory, which is reported to the bank in the form of a borrowing base certificate (“Borrowing Base”). In addition to interest paid on outstanding borrowings, the Revolving Credit Facility is also subject to an unused commitment fee, which is paid monthly. The Revolving Credit Facility contains various affirmative, negative and financial covenants which the Company considers to be customary for such borrowings and requires the Company and its subsidiaries to maintain a minimum fixed charge coverage ratio includes certain limitations on cross-border intercompany transactions. Failure to meet one or more of these covenants would result in an event of default, and if uncured, could eliminate the Company’s ability to borrow and result in acceleration of principal repayment on any amounts outstanding. Under the terms of the Revolving Credit Facility, the Company is required to provide audited financial statements to its lenders and agents no later than 90 days following the close of each fiscal year. For the fiscal year ended December 31, 2019, the Company requested, and its lenders and agents consented to, a 30 day extension of this deadline. The Company was in compliance with all financial covenants during 2020 and 2019. As of December 31, 2020 and 2019, the Company had outstanding borrowings under the Revolving Credit Facility of $0 and $2,159, that bore interest at a U.S. all-in rate (U.S. Base Rate plus applicable margin) of 3.5% and 5.0% and a Canadian all-in rate (Canadian Base Rate plus applicable margin) of 3.7% and 5.2%, respectively. As of December 31, 2020 and 2019, availability, less outstanding letters of credit, was $41,299 and $40,387, respectively. The Company had outstanding letters of credit of $2,713 and $2,453 on December 31, 2020 and 2019, respectively. Term Loan Prior to 2019, the Company executed a $279,000 Term Loan and Security Agreement, as amended and restated (the “Original Term Loan Agreement”), with certain financial institutions as lenders and Virtus Group, L.P. as agent. The Original Term Loan (the “Original Term Loan”) was issued with a debt discount of $4,185 with a maturity date of November 18, 2023. The Original Term Loan bears interest at an applicable rate of LIBOR Rate plus 7.25% or Base Rate plus 6.25%. For applicable rate determination, LIBOR is the higher of 1.00% and the LIBOR for a term equivalent to such period. The Original Term Loan is collateralized by all property including but not limited to accounts receivable, inventory, fixed assets and real estate with seniority in the Company’s fixed assets and real estate. The Original Loan may be prepaid or terminated after one year at the Company’s option with the payment of a prepayment penalty of 2% of the outstanding principal balance in year one, 1% of the outstanding principal balance in year two, and none in year three and thereafter. The Original Term Loan requires quarterly outstanding principal payments of $730 through September 30, 2023. Any outstanding principal balance together with any accrued but unpaid interest or fees will be due in full at maturity. In June 2019, the Company entered into an amendment to the Original Term Loan Agreement. This amendment gave consent to the Mustang sale transaction and released Mustang from its obligations under the Original Term Loan Agreement. On February 11, 2020, the Original Term Loan was assigned to a new group of financial institutions. This transaction did not result in any changes or amendments to the terms, provisions, or balances of the Original Term Loan, as disclosed above. On November 17, 2020, the Company settled the Original Term Loan and executed a $225,000 Term Loan and Security Agreement (the “Term Loan Agreement”) with certain financial institutions as lenders and an agent. The Term Loan (the “Term Loan”) was issued with a debt discount of $10,126 comprised of $5,063 in original issuance discount and $5,063 of fees paid to the lender, and a maturity date of May 17, 2026. In connection with the execution of the Term Loan Agreement, Kanders & Company, Inc., a company controlled by Warren Kanders, our Chairman of the Board, received compensation from Cadre of In conjunction with the settlement of the Original Term Loan and the execution of the Term Loan Agreement, the Company performed a restructuring analysis under ASC 470, Debt The Term Loan includes a feature for delayed draws up to $30,000 (the “Delayed Draw Maximum Amount”) to consummate permitted acquisitions under the Term Loan Agreement with such feature terminated on November 17, 2021 (the “Delayed Draw Termination Date”). Any delayed draw amounts will have an accompanying fee of The Term Loan Agreement bears interest at an applicable rate of LIBOR rate plus 6.50% or Base Rate plus 5.50% if the Company reports a Leverage Ratio of less than or equal to 5.00 to 1.00 or a rate of LIBOR rate plus 7.00% or Base Rate plus 6.00% if the Company reports a Leverage Ratio greater than 5.00 to 1.00. For applicable rate determination, LIBOR is the higher of 1.00% or the LIBOR for a term equivalent to such period. The Term Loan is collateralized by all property including but not limited to accounts receivable, inventory, fixed assets and real estate with seniority in the Company’s fixed assets and real estate. The The Term Loan Agreements contain certain restrictive debt covenants that require the Company and its subsidiaries to: (i) maintain a minimum fixed charge coverage ratio and (ii) maintain a quarterly maximum leverage ratio. In addition, the Term Loan Agreements contain covenants restricting the Company and its subsidiaries from engaging in acquisitions other than acquisitions permitted by the Term Loan Agreements. The Term Loan Agreements contain customary events of default (with grace periods where customary), including, among other things, failure to pay any principal or interest when due; any materially false or misleading representation, warranty, or financial statement; failure to comply with or to perform any provision of the Term Loan Agreements; and default on any debt or agreement in excess of certain amounts. The Credit Facility Agreement and the Term Loan Agreements have a cross-default clause whereby a violation of one may constitute a violation in the other causing an acceleration of payments. Additionally, under the terms of the Term Loan Agreements, the Company is required to provide audited financial statements to its lenders and agents no later than Company requested, and its lenders and agents consented to, a 30-day extension of this deadline. The Company was in compliance with all financial covenants during 2020 and 2019. As of December 31, 2020 and 2019, the Term Loan’s outstanding principal balance was $224,438 and $276,174 and bore interest at 7.50% and 9%, respectively. As of December 31, 2020 and 2019, the Company had an unamortized debt discount of $11,906 and $3,387 and unamortized debt issuance costs of $1,099 and $1,858, respectively, included as an offset to debt in the consolidated balance sheets. Short-Term Debt In August 2019, the Company entered into a short-term loan facility (the “2019 Short-Term Loan”) for insurance premium financing with Imperial PFS for $2,754 with a maturity date of June 27, 2020. The loan had a fixed annual interest rate of 4.29% on the outstanding balance and required monthly payments of principal and interest of $281. We repaid the outstanding balance on the date of maturity. In August 2020, the Company entered into a short-term loan facility (the “2020 Short-Term Loan”) for insurance premium with Aon Premium Finance for $2,733 with a maturity date of April 27, 2021. The loan has a fixed annual interest rate of 4.25% on the outstanding balance and required monthly payments of principal and interest of $309. As of December 31, 2020, $1,225 was outstanding. The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs as of December 31, 2020: 2021 $ 2,271 2022 2,272 2023 2,272 2024 2,272 2025 2,273 Thereafter 213,226 Total principal payments $ 224,586 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2020 | |
SHAREHOLDERS' EQUITY (DEFICIT) | |
SHAREHOLDERS' EQUITY (DEFICIT) | 12. SHAREHOLDERS’ EQUITY (DEFICIT) Warrants During 2019, the Company issued 113,650 shares of its common stock, respectively, in connection with the exercise of a warrant to purchase shares of the Company’s common stock with a strike price of $0.0001 per share. As of December 31, 2020 and 2019, the Company has no warrants outstanding. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2020, the Company settled an administrative enforcement action filed by the U.S. Federal Trade Commission (“FTC”) relating to Company’s sale of VieVu, LLC to Axon Enterprise Inc. (“Axon”) wherein the FTC alleged that the operative agreements contained non-compete and non-solicitation provisions in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. The FTC’s administrative complaint sought only injunctive relief against the Company to enjoin the enforcement of these provisions, now and in the future, and did not seek monetary damages against the Company. In January 2020, the Company and Axon had rescinded these provisions. Pursuant to a consent agreement and proposed consent order entered into by the FTC and the Company, on June 11, 2020, the FTC issued a Decision and Order accepting the Consent Agreement (the “Order”). Under the Order, the Company agreed to not modify and reinstate the rescinded provisions and to not enter into any new similar provisions with Axon, absent prior approval from the FTC. In addition, as part of the Company’s compliance program, the Order imposes an obligation to distribute to, and train the directors and officers on, the requirements of the consent order and to report annually for five years to the FTC ensuring compliance with the consent order. On July 10, 2020, the Company filed its Interim Verified Compliance Report and, on June 11, 2021, filed its First Annual Compliance Report, both as required by the Order. In June 2020, the Company received a Civil Investigative Demand (“CID”) from the United States Department of Justice (“DOJ”), Western District of Washington (Seattle, WA), pertaining to a False Claims Act investigation, 31 U.S.C, sections 3729-3733 (“FCA”), concerning allegations that soft body armor vest accessory panels sold by the Company are falsely labeled as compliant with the National Institute of Justice performance standards. In September 2020, the Company made its First Production of Documents which contained only documents and data that had been deemed to be of a “priority” nature pursuant to an agreement reached between the Company’s counsel and the Assistant U.S. Attorney handling the matter. In July 2021, the Company received a request for additional information relating to the subject matter of the investigation, with which the Company intends to comply. In October 2021 and November 2021, the Company produced additional documents responsive to the correspondence containing requests for specific documents and supplemental information. At this preliminary stage of the investigation, the Company does not have enough information to make an evaluation of the merits, exposure or potential risks regarding this matter. In June 2021, two subcommittees of the U.S. House Committee on Oversight and Reform initiated an inquiry into the safety of crowd control products. Major U.S. manufacturers of crowd control products, including us, received a letter from the subcommittees requesting information and documents about the production, sale, safety, and regulation of crowd control products. The Company has provided information to the subcommittees who released a Memorandum on this issue on October 14, 2021, noting the absence of Federal regulation on the use of tear gas and the safety risks arising from its use. The implementation of additional regulations governing the sale of crowd control products would not be expected to have a material effect on our business. In September 2021, Safariland, LLC, a wholly-owned subsidiary of the Company, received a jury verdict awarding $7,500 to a plaintiff relating to a personal injury case wherein the plaintiff alleged various product liability claims against Safariland, LLC. The plaintiff in the proceeding, Mr. David Hakim, instituted the proceeding on July 24, 2015, through the filing of a complaint with the United States District Court, Northern District of Illinois, Eastern Division. In the proceeding, the plaintiff, a SWAT officer with the DuPage County Sheriff’s Office (“DCSO”), alleged that he suffered injuries during a training exercise conducted by DCSO in which a Defense Technology Shotgun Breaching TKO round was deployed and passed through a door and lower-floor ceiling causing a fragment to strike plaintiff’s back resulting in injury. Prior to the jury rendering its verdict, the court deferred ruling on Safariland, LLC’s Motion for Judgment as a Matter of Law (“JMOL”) and, thus, no judgment has been issued. On November 8, 2021, Safariland, LLC filed its post-trial motions, including a supplemental JMOL, motion for new trial and remittitur. Plaintiff’s response is due on January 8, 2022, and Safariland’s reply would be due on February 8, 2022. In the event of an unfavorable ruling by the court, Safariland, LLC intends to pursue an appeal. While any litigation contains an element of uncertainty, the Company believes it is reasonably possible, not probable, that the Company could incur losses related to this case, however, any losses would be indemnified by our insurance carrier under applicable policies. The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against all lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Insurance The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost. International As an international company, we are, from time to time, the subject of investigations relation to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and international laws. Leases The Company leases office, warehouse, and distribution space under non-cancelable operating leases. As leases expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced. Our leases generally contain multi-year renewal options and escalation clauses. Total rent expense for the nine months ended September 30, 2021 and 2020 was $3,499 and $3,320, respectively. The Company maintains capital lease agreements. As of September 30, 2021 and December 31, 2020, the Company recorded capital lease obligations of $43 within accrued liabilities and $14 and $46, respectively, within other liabilities in the consolidated balance sheets. Future minimum lease payments required under non-cancelable operating leases that have initial or remaining non-cancelable lease terms in excess of one year and the Company’s capital lease agreements for the remaining three months of 2021, the next four years and thereafter is as follows: Capital Leases Operating Leases Remainder of 2021 $ 11 $ 1,149 2022 43 4,290 2023 4 3,887 2024 — 2,763 2025 — 1,428 Thereafter — 469 Total minimum lease payments $ 58 $ 13,986 Less: Amount representing interest (13) Capital lease obligation $ 45 There were no material future minimum sublease payments to be received under non-cancelable subleases at September 30, 2021. There was no material sublease income for the nine months ended September 30, 2021 and 2020. | 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2020, the Company settled an administrative enforcement action filed by the U.S. Federal Trade Commission (“FTC”) relating to Company’s sale of VieVu, LLC to Axon Enterprise Inc. wherein the FTC alleged that the operative agreements contained non-compete and non-solicitation provisions in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. The FTC’s administrative complaint sought only injunctive relief against the Company to enjoin the enforcement of these provisions, now and in the future, and did not seek monetary damages against the Company. In January 2020, the Company and Axon had rescinded these provisions. Pursuant to a consent agreement and proposed consent order entered into by the FTC and the Company, on June 11, 2020, the Commission issued a Decision and Order accepting the Consent Agreement (the “Order”). Under the Order, the Company agreed to not modify and reinstate the rescinded provisions and to not enter into any new similar provisions with Axon, absent prior approval from the FTC. In addition, as part of the Company’s compliance program, the Order imposes an obligation to distribute to, and train the directors and officers on, the requirements of the consent order and to report annually for five years to the FTC ensuring compliance with the consent order. On June 11, 2021, the Company filed its second Interim Verified Compliance Report as required by the Order. In June 2020, the Company received a Civil Investigative Demand (“CID”) from the United States Department of Justice (“DOJ”), Western District of Washington (Seattle, WA), pertaining to an investigation with regard the to the False Claims Act, 31 U.S.C, sections 3729-3733 (“FCA”), concerning allegations that soft body armor vest accessory panels sold by the Company are falsely labeled as compliant with the National Institute of Justice (NIJ) performance standards. In September 2020, the Company made its First Production of Documents which contained only documents and data that had been deemed to be of a “priority” nature pursuant to an agreement reached between the Company’s counsel and the Assistant US Attorney handling the matter. There has been no further communication or production of documents with the US Attorney’s Office since September 2020. At this preliminary stage of the investigation, the Company does not have enough information to make an evaluation of the merits, exposure or potential risks regarding this matter. The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against all lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Insurance The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost. International As an international company, we are, from time to time, the subject of investigations relation to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and international laws. Leases The Company leases office, warehouse, and distribution space under non-cancelable operating leases. As leases expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced. Our leases generally contain multi-year renewal options and escalation clauses. Total rent expense of the Company for the years ended December 31, 2020 and 2019 was $4,403 and $4,256, respectively. The Company maintains capital lease agreements. As of December 31, 2020, and 2019 the Company recorded capital lease obligations of $43 and $44 within accrued liabilities and $46 and $89, respectively, within other liabilities in the consolidated balance sheets. Future minimum lease payments required under non-cancelable operating leases that have initial or remaining non-cancelable lease terms in excess of one year and the Company’s capital lease agreements are as follows: Capital Leases Operating Leases 2021 $ 43 $ 4,470 2022 43 4,139 2023 3 3,732 2024 — 2,602 2025 — 1,263 Thereafter — 397 Total minimum lease payments $ 89 $ 16,603 Less: Amount representing interest (18) Capital lease obligation $ 71 There were no material future minimum sublease payments to be received under non-cancelable subleases at December 31, 2020. There was no material sublease income as of December 31, 2020 and 2019, respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | 7. INCOME TAXES The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of September 30, 2021, the Company’s tax years subsequent to 2016 are subject to examination by tax authorities with few exceptions. One of the Company’s Canadian subsidiaries is currently undergoing an examination of its tax filings for the period June 1, 2016 through December 31, 2017. In July 2021, we received notification from the Canadian Revenue Agency that the 2018 and 2019 tax returns of a different Canadian subsidiary had been selected for examination. In assessing the realizability of deferred income tax assets, the Company performs a quarterly evaluation of whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. During the course of this evaluation, the Company considers all available positive and negative evidence and if, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. Based on its evaluation during the nine months ended September 30, 2021, the Company has recorded a valuation allowance of $1,729. The Company’s effective tax rate for the nine months ended September 30, 2021 and 2020 was 31.6% and 6.2% respectively. The change in the effective tax rate period over period primarily relates to the valuation allowance the Company had on its deferred tax assets during 2020. | 14. INCOME TAXES Consolidated income (loss) from continuing operations before income taxes consists of the following: Year ended December 31, 2020 2019 U.S. operations $ 23,776 $ (12,989) Foreign operations 4,099 10,919 Income (loss) before benefit for income taxes $ 27,875 $ (2,070) The benefit for income taxes is detailed below: Year ended December 31, 2020 2019 Current tax provision: Federal $ — $ — State (188) (10) Foreign (1,482) (665) Total current provision (1,670) (675) Deferred tax benefit: Federal 10,233 149 State 1,949 27 Foreign 66 641 Total deferred benefit 12,248 817 Total income tax benefit $ 10,578 $ 142 The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the Company’s consolidated financial statements: Year ended December 31, 2020 2019 Federal statutory rate 21.0 % 21.0 % Increase (decrease) in income taxes resulting from: State income taxes, net of federal income taxes 7.7 (7.7) Change in valuation allowance (71.1) (53.3) Current year tax credits (2.3) 34.1 Difference between foreign and federal tax rate 2.0 23.4 Permanent items 2.8 43.3 Reserve for uncertain tax positions 1.3 (57.9) Other 0.7 4.0 Effective tax rate (37.9) % 6.9 % Deferred taxes have not been recognized for the excess financial reporting basis over the tax basis of investments of foreign subsidiaries. It is the Company’s intent to permanently reinvest the earnings of those foreign subsidiaries in those jurisdictions. It is not practical to determine the amount of any unrecognized deferred tax liability on this item. Deferred income tax assets and liabilities are determined based on the difference between the financial reporting carrying amounts and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. The tax effects of temporary differences giving rise to significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss and other carry forwards $ 15,531 $ 25,756 Accrued liabilities 4,201 3,359 Reserves and other 3,587 3,124 263A uniform capitalization costs 1,067 1,106 Other deferred tax assets 2,122 2,064 Total deferred tax assets 26,508 35,409 Valuation allowance (1,729) (21,562) Net deferred tax assets 24,779 13,847 Deferred tax liabilities: Intangibles (3,626) (4,580) Depreciation (3,667) (4,217) Goodwill (6,182) (5,171) Other (489) (1,312) Total deferred tax liabilities (13,964) (15,280) Total deferred income taxes $ 10,815 $ (1,433) As of December 31, 2020 and 2019, the Company had federal and state net operating loss carryforwards (“NOLs”) resulting in deferred tax assets of $6,990 and $3,494, respectively. The federal NOLs will expire in varying amounts beginning in 2030 through 2038 and the state NOLs will begin to expire in varying amounts in 2021 through 2037. In assessing the realizability of deferred income tax assets, the Company performs an evaluation of whether it is more likely than not that some portion, or all, of its deferred income tax assets will not be realized. During the course of this evaluation, the Company considers all available positive and negative evidence and if, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. Based on its current evaluation, the Company determined it was appropriate to decrease its valuation allowance by $19,833. The total amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect the Company’s effective tax rate was $2,122. A reconciliation of the change in the unrecognized income tax benefit for the year ended December 31, 2020 is as follows: Year ended December 31, 2020 2019 Beginning unrecognized tax benefits $ 1,754 $ 556 Current period unrecognized tax benefits 368 1,198 Ending unrecognized tax benefits $ 2,122 $ 1,754 The Company recognizes interest expense and penalties related to unrecognized tax benefits as income tax expense. No amounts representing penalties and interest were recorded as income tax expense during the years ended December 31, 2020 and 2019. The Company had no interest or penalties accrued in the consolidated balance sheets at December 31, 2020 and 2019. The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of December 31, 2020, the Company’s tax years subsequent to 2015 are subject to examination by tax authorities with few exceptions. One of the Company’s Canadian subsidiaries is currently undergoing an examination of its tax filings for the period June 1, 2016 through December 31, 2017. |
COMPENSATION AND DEFINED CONTRI
COMPENSATION AND DEFINED CONTRIBUTION PLANS | 12 Months Ended |
Dec. 31, 2020 | |
COMPENSATION AND DEFINED CONTRIBUTION PLANS | |
COMPENSATION AND DEFINED CONTRIBUTION PLANS | 15. COMPENSATION AND DEFINED CONTRIBUTION PLANS The Company and its wholly owned subsidiaries sponsor Internal Revenue Code Section 401(k) defined contribution plans for the benefit of all full-time and part-time employees. Employees are entitled to make tax- deferred contributions up to the maximum allowed by law of their eligible compensation. The Company sponsors various other non-U.S. Defined Contribution and Defined Profit-Sharing Plans that are offered by the Company’s foreign subsidiaries. Many of these plans were assumed through the Company’s acquisitions or are required by local regulatory requirements. The Company may deposit funds for these plans with insurance companies, or into government-managed accounts consistent with local regulatory requirements, as applicable. Contribution to the plans are made by both the employee and the Company. The Company’s contributions to the plans was $1,812 and $1,889 for the years ended December 31, 2020 and 2019, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS The Company leases 5 distribution warehouses and retail stores from certain employees. The Company recorded rent expense related to these leases of $437 and $480 for the nine months ended September 30, 2021 and 2020, respectively. Rent expense related to these leases is included in related party expenses in the Company’s consolidated statements of operations and comprehensive income. In connection with the execution of the New Credit Agreement, Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer, received compensation from Cadre of $1,000. | 16. RELATED PARTY TRANSACTIONS The Company leases 5 distribution warehouses and retail stores from an employee. During the years ended December 31, 2020 and 2019 the Company made payments and recorded rent expense related to these leases of $635 and $646 respectively which are included in related party expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company recorded balances of $42 as of December 31, 2020 and 2019, which is recorded in prepaid expenses in the Company’s consolidated balance sheets. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2020 | |
RESTRUCTURING | |
RESTRUCTURING | 17. RESTRUCTURING During the year ended December 31, 2017, the Company initiated a plan to perform a companywide reorganization which resulted in the realignment of reporting structures and elimination of redundant positions. In addition, prior to the sale of Mustang, all of the foregoing operations were relocated into existing facilities. These initiatives consisted of one-time termination benefits and other shutdown costs that continued through the year ended December 31, 2020. Restructuring accruals are presented below and are included within accrued liabilities in the consolidated balance sheets: Year ended December 31, 2020 2019 Beginning accrued restructuring cost $ — $ 2,884 Additions 160 (69) Payments (160) (2,815) Ending accrued restructuring cost $ — $ — The cost of restructuring projects totaled $160 and $(69) during the year ended December 31, 2020 and 2019, respectively, representing employee-related severance and other benefits and incremental costs related to disposal activities. The Company has incurred $5,080 of cumulative restructuring charges since the commencement of the organizational realignment. The restructuring did not result in any asset write down. Restructuring expenses are presented below and are included within restructuring and transactions cost in the Company’s consolidated statements of operations and comprehensive income (loss): Year ended December 31, 2020 2019 Employee severance and other benefits $ 160 $ (177) Other shutdown costs — 108 $ 160 $ (69) Other shut down costs primarily represents incremental costs associated with the consolidation of the Company’s facilities and manufacturing operations. |
SEGMENT DATA
SEGMENT DATA | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
SEGMENT DATA | 10. SEGMENT DATA Our operations are comprised of two reportable segments: Products and Distribution. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. The CODM is not provided asset information or operating expenses by segment. Nine months ended September 30, 2021 Reconciling Products Distribution Items (1) Total Net sales $ 274,039 $ 69,086 $ (19,374) $ 323,751 Cost of goods sold 159,924 51,696 (19,364) 192,256 Gross profit $ 114,115 $ 17,390 $ (10) $ 131,495 Nine months ended September 30, 2020 Reconciling Products Distribution Items (1) Total Net sales $ 251,441 $ 62,707 $ (17,129) $ 297,019 Cost of goods sold 153,233 47,897 (17,261) 183,869 Gross profit $ 98,208 $ 14,810 $ 132 $ 113,150 (1) | 18. SEGMENT DATA Our operations are comprised of two reportable segments: Products and Distribution. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. Senior management evaluates segment performance based on segment profit. Each segment’s profit is measured as gross profit. The CODM is not provided asset information or operating expenses by segment. Year ended December 31, 2020 Products Distribution Reconciling Items (1) Total Net sales $ 343,689 $ 84,922 $ (23,969) $ 404,642 Cost of goods sold 211,048 64,761 (24,105) 251,704 Gross profit $ 132,641 $ 20,161 $ 136 $ 152,938 Year ended December 31, 2019 Products Distribution Reconciling Items (1) Total Net sales $ 365,903 $ 78,171 $ (23,338) $ 420,736 Cost of goods sold 236,355 61,657 (23,313) 274,699 Gross profit $ 129,548 $ 16,514 $ (25) $ 146,037 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
SUPPLEMENTAL DISCLOSURES TO CAS
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS | |
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS | 19. SUPPLEMENTAL DISCLOSURES TO CASH FLOWS Supplemental non-cash and other cash flow information consists of the following: Year ended December 31, 2020 2019 Supplemental disclosures: Cash paid for income taxes, net of refunds $ 879 $ 307 Cash paid for interest $ 23,316 $ 27,907 Non-cash transactions: Stock received in the sale of business $ 4,731 $ 4,611 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS On November 3, 2021, the Company completed its initial public offering (“IPO”) in which the Company issued and sold 6,900,000 shares, which included 900,000 shares that were offered and sold pursuant to the full exercise of the underwriters’ over-allotment option, of common stock at a public offering price of $13.00 per share. The Company’s aggregate gross proceeds from the sale of shares in the IPO was $89,700 before underwriter discounts and commissions, fees and expenses of $11,397, of which $2,250 was paid to Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer. On November 9, 2021 the Company utilized proceeds received in connection with the IPO and repaid $38,937 and $20,500, respectively, that were outstanding under our existing Term Loan and Revolving Loan under the New Credit Agreement. On November 11, 2021, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend policy of $0.08 per share of the Company’s common stock or $0.32 per share on an annualized basis. The Company’s first dividend payment will be made on December 7, 2021 to shareholders of record as of the close of business on November 22, 2021. In connection with the completion of IPO, the Company granted restricted stock awards to certain employees, including the Company’s Chief Executive Officer, President and Chief Financial Officer, comprised of an aggregate of 2,600,000 restricted shares of common stock (the “Restricted Stock Awards”) pursuant to terms of their respective employment agreements with the Company. The Restricted Stock Awards contain market-based performance conditions and have a grant date fair value of $4.65 , which is expected to be recognized as compensation expense over a weighted average period of 5.67 years. | 20. SUBSEQUENT EVENTS Management has evaluated the impact of events that have occurred from December 31, 2020 through May 7, 2021, the date these financial statements were available to be issued. Based on this evaluation, except for the following, the Company has determined no other events were required to be recognized or disclosed: The Company maintains a cash-based executive compensation plan for certain employees. The Company’s Board of Directors awarded 1,433,500 (split-adjusted) interests in the plan (“units”). Each unit represents an unfunded and unsecured right, subject to certain conditions as set forth by the plan. One-third of the units granted to any holder will vest on each of the first, second, and third anniversaries of March 18, 2021 during the term of such holder’s employment with the Company. Payment of a holder’s vested balance is dependent upon a transaction or series of related transactions constituting a change of control, as defined by the executive compensation plan. The plan will expire on March 18, 2025, at which time the plan and all awarded units will be terminated for no consideration if a change in control event has not occurred before that date. If a change in control event becomes probable, the fair value of the awards would be calculated as follows: enterprise value of the Company (net of debt) divided by the sum of the fully diluted common shares outstanding and vested units immediately before the change in control event is deemed probable multiplied by the number of vested units. Compensation expense would be recognized on the vested units at that time. Awards not yet vested at the time of a change in control event will terminate, however, the Company, at its sole discretion, may choose to accelerate the vesting of all unvested units upon a change in control event. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through 15 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers. | Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through On June 20, 2019, the Company sold Mustang Survival Holdings Corporation and its subsidiaries (“Mustang”), a wholly owned subsidiary that forms the Company’s Marine Safety and Climate Protection Business. See Note 4, Dispositions and Assets Held For Sale |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) and include the accounts of Cadre Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Stock Split | Stock Split In July 2021, the Company effected a 50-for-1 | Stock Split In July 2021, the Company effected a 50-for-1 |
Dividend | Dividend In August 2021, the Company declared share | |
Emerging Growth Company | Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. | Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Certain items previously reported in the notes to the consolidated financial statements have been reclassified to conform to the current financial statement presentation. | Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2021 and 2020. The carrying value of our long-term debt obligations approximates the fair value, as the long-term debt was entered into recently. The Company classifies its long-term debt within Level 2 of the fair value hierarchy. | Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. Refer to Note 6 , Fair Value Measurements |
Cash and Cash Equivalents | Cash and Cash Equivalents Included in cash and cash equivalents are deposits with banks, cash on hand in stores, and amounts due from credit card transactions. We have no restrictions on our cash and cash equivalents. | |
Accounts Receivable | Accounts Receivable Trade accounts receivable consists of amounts owed to the Company and is stated net of allowances. The Company’s outstanding accounts receivable balances are exposed to credit risk and valuation allowances are established for estimated losses resulting from non-collection of outstanding amounts due from customers. The Company establishes a reserve for estimated doubtful accounts based on the aging of its receivable balances and collection history. In addition, specific reserves are established for customer accounts as known collection problems occur due to insolvency, disputes, or other collection issues. The amounts of these specific reserves are estimated by management based on the customer’s financial position, the age of the customer’s receivables and the reasons for any disputes. The allowance for doubtful accounts is reduced by any write-off of uncollectible customer accounts. | |
Inventories | Inventories Inventories are stated at the lower of cost using the first-in, first-out method (“FIFO”) or net realizable value. Elements of cost in the Company’s manufactured inventories generally include raw materials, direct labor, indirect labor, manufacturing overhead and freight-in. The Company periodically reviews its inventories considering sales forecasts and historical experience to identify excess, close-out, or slow-moving items and makes provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value. | |
Assets Held for Sale | Assets Held for Sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. A long-lived asset is not depreciated or amortized while it is classified as held for sale. | |
Property and Equipment | Property and Equipment Property and equipment, including those acquired under capital lease agreements, is stated at cost less accumulated depreciation and amortization, except for assets acquired using acquisition accounting, which are initially recorded at fair value. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings and improvements 5 to 39 years Furniture and fixtures 10 years Computer hardware and software 3 to 5 years Machinery and equipment 3 to 8 years Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Major replacements, which extend the useful lives of property and equipment, are capitalized and depreciated over the remaining useful life of the asset. Normal repair and maintenance items are expensed as incurred. The recoverability of the carrying amount of property and equipment is assessed when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If it is determined that the carrying amount of an asset or asset group is not recoverable based upon expected undiscounted future cash flows of the asset or asset group, an impairment loss equal to the excess of the carrying amount over the estimated fair value of the asset or asset group is recorded. | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. | Goodwill and Other Intangible Assets The Company classifies intangible assets into three categories: i) intangible assets with definite lives subject to amortization, ii) intangible assets with indefinite lives not subject to amortization and iii) goodwill. The Company determines the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized on a straight-line basis over their useful lives. The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. The Company performs sensitivity tests with respect to growth rates and discount rates used in the income approach. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions and applied to projected operating data for each reporting unit to arrive at an indication of fair value. |
Other Intangible Assets | Other Intangible Assets For indefinite-lived intangible assets other than goodwill, the impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The Company tests definite-lived intangible assets for recoverability when changes in circumstances indicate the carrying value may not be recoverable. Events that trigger a test for recoverability include: ● material adverse changes in projected revenues and expenses; ● significant underperformance relative to historical and projected future operating results; ● significant negative industry or economic trends; and, ● a significant adverse change in the manner in which an asset group is used or in its physical condition. Future adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified. When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. For the periods presented, the Company has not recorded any impairments of long-lived assets. | |
Accounts Payable | Accounts Payable Accounts payable represents amounts owed by us to third parties at the end of the period. Accounts payable includes $1,329 and $1,145 of book cash overdrafts in excess of cash balances in such accounts at December 31, 2020 and 2019, respectively. We include the change in book cash overdrafts in operating cash flows in the consolidated statements of cash flows. | |
Revenue Recognition | Revenue Recognition The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Other Assets and Deferred Costs — Contracts with Customers There was no cumulative effect adjustment recorded to opening retained earnings as of January 1, 2019, upon adoption of Topic 606, Revenue from Contracts with Customers. We do not expect an impact to our net income on an ongoing basis as a result of the adoption of the new standard. The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income (loss). We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Policy Elections ● The Company does not account for significant financing components if, at contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for the product or service will be one year or less. ● Incremental costs to obtain a contract with a customer will be capitalized if the Company expects to recover those costs unless the amortization period is one year or less. ● The Company recognizes revenue equal to the amount it has the right to invoice when the amount corresponds directly with the value to the customer of the Company’s performance to date. ● The Company does not account for shipping and handling activities as a separate performance obligation, but rather as an activity performed to transfer the promised goods. ● Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. |
Product Warranty | Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 | Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss). The following table represents changes in the Company’s accrued warranties and related costs: Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, shipping costs, reimbursable research and development costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs. | |
Selling, General & Administrative Expenses | Selling, General & Administrative Expenses Selling, general and administrative expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges. | |
Advertising Expenses | Advertising Expenses Advertising costs are expensed in the period incurred. Advertising expenses primarily consist of marketing, promotions, catalog and trade show expenses and were $2,692 and $3,468 during the years ended December 31, 2020 and 2019, respectively. Advertising expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). | |
Research and Development | Research and Development Research and development expenses are expensed as incurred and included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Total research and development costs were $5,630 and $6,868 for the years ended December 31, 2020 and 2019, respectively. In addition, the Company incurs research and development expenses related to reimbursable development contracts. Contractual research and development expenses are included in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss) and were $3,697 and $2,291 for the years ended December 31, 2020 and 2019, respectively. | |
Debt Issuance Costs | Debt Issuance Costs The related provisions Interest — Imputation of Interest. over | |
Restructuring Costs | Restructuring Costs Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. The Company applies the provisions of ASC Topic 420, Exit or Disposal Cost Obligations Nonretirement Postemployment Benefits for probable | |
Income Taxes | Income Taxes The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes . Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and are classified as noncurrent in the consolidated balance sheets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of date. laws have Deferred tax assets are reduced by a valuation allowance likely all evaluation for valuation allowance for valuation all have valuation allowance The Company is subject to income taxes in the United States and several States, taken taken all available likely any. Tax taken Tax more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Further information regarding the Company’s tax positions is included in Note 14 , Income Taxes | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Comprehensive income (loss) represents all changes in equity of the Company that result from recognized transactions and other economic events during the period. Other comprehensive income refers to revenues, expenses, gains, and losses that under GAAP are included in comprehensive income (loss) but excluded from net income (loss). | |
Foreign Currency | Foreign Currency Translation Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average exchange rate prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the cumulative translation adjustment included in accumulated other comprehensive loss in the consolidated balance sheets. Transaction Transactions denominated in foreign currency are recorded at the exchange rate on the date of each transaction. Realized gains and losses on foreign currency transactions are included in other income, net in the consolidated statements of operations and comprehensive income (loss), except on certain intercompany balances which the Company has determined are of a long-term investment nature, which are included in accumulated other comprehensive loss in the consolidated balance sheets. Monetary assets and liabilities are remeasured at the balance sheet date at end-of-period exchange rates. Unrealized gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other income, net in the consolidated statements of operations and comprehensive income (loss) in the period in which they occur. | |
Investments in Equity Securities | Investments in Equity Securities Investments in equity securities are recorded in accordance with ASC Subtopic 321-10 , Investments — Equity Securities | |
Net Income (Loss) per Share | Net Income per Share Basic income or loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. There were no dilutive instruments outstanding during the nine months ended September 30, 2021 and 2020. The calculation of weighted average shares outstanding and net income per share are as follows: Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 | Net Income (Loss) per Share Basic income or loss per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted income (loss) per share reflects the potential dilution from outstanding warrants. For the year ended December 31, 2019, there were 81,268 shares excluded from the diluted earnings per share calculation because the impact of their assumed exercise would be antidilutive due to a net loss in that period. The calculation of weighted average shares outstanding and net income (loss) per share are as follows (in thousands, except for per share data): Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) |
Risk and Uncertainties | Risk and Uncertainties Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. Risks associated with cash within the United States and foreign countries are mitigated by banking with federally insured, creditworthy institutions. As of December 31, 2020, and 2019, the Company had deposits of $3,130 and $1,868, respectively, at foreign financial institutions. Accounts receivable are financial instruments that also expose the Company to concentration of credit risk. Such exposure is limited by the large number of customers comprising the Company’s customer base and their dispersion across different geographic areas. In addition, the Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for credit losses. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management. Novel Coronavirus (COVID-19) On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID- 19 outbreak continues to evolve as of the date of this report. During 2020, the business was relatively unaffected. In all countries and states which the business operates, the relevant local authorities have deemed the business to be essential in nature and thereby allowed us to continue operations during any government mandated shutdowns. The business has taken many measures to mitigate outbreaks in any of its facilities that would negatively impact the business. The extent to which the Company’s business may be affected by the current outbreak of the Coronavirus will largely depend on both current and future developments, including its duration, spread and treatment, all of which are highly uncertain and cannot be reasonably predicted. While any impact to global markets is uncertain, the Company continues to monitor developments. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. | Recent Accounting Pronouncements Pronouncements Adopted During 2020 In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company adopted this ASU effective January 1, 2020. The adoption did not have a material impact on the Company’s disclosures. Refer to Note 6, Fair Value Measurements, for further discussion. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of property and equipment | Buildings and improvements 5 to 39 years Furniture and fixtures 10 years Computer hardware and software 3 to 5 years Machinery and equipment 3 to 8 years | |
Summary of changes in the accrued warranties and related costs | The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 | Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 |
Summary of calculation of weighted average shares outstanding and net income (loss) per share | Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 | Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) |
ACCOUNTS RECEIVEABLE, NET (Tabl
ACCOUNTS RECEIVEABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
ACCOUNTS RECEIVEABLE, NET | |
Schedule of reconciliation of the changes in our allowance for doubtful accounts | Year ended December 31, 2020 2019 Beginning allowance for doubtful accounts $ 1,345 $ 1,260 Provision 177 2,651 Write-offs, net of recoveries (409) (2,488) Mustang disposal — (78) Ending allowance for doubtful accounts $ 1,113 $ 1,345 |
INVESTMENT IN EQUITY SECURITI_2
INVESTMENT IN EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENT IN EQUITY SECURITIES | |
Schedule of equity securities | Year ended December 31, 2020 2019 Net gains recognized during the year $ 2,178 $ 2,175 Less: Net gains recognized during the year related to equity securities sold during the year (2,178) — Net unrealized gains recognized during the year related to equity securities still held at the end of the year $ — $ 2,175 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
REVENUE RECOGNITION | ||
Summary of disaggregation of net sales by channel and geography | The following tables disaggregate net sales by channel and geography: Nine months ended September 30, 2021 2020 U.S. state and local agencies (a) $ 179,385 $ 171,552 Commercial 27,102 25,117 U.S. federal agencies 37,365 43,632 International 74,647 51,691 Other 5,252 5,027 Net sales $ 323,751 $ 297,019 (a)Includes all Distribution sales Nine months ended September 30, 2021 2020 United States $ 249,104 $ 245,328 International 74,647 51,691 $ 323,751 $ 297,019 | The following tables disaggregate net sales by channel and geography: Year ended December 31, 2020 2019 U.S state and local agencies (a) $ 230,706 $ 219,482 Commercial 35,648 32,837 U.S. federal agencies 63,267 74,756 International 68,669 89,367 Other 6,352 4,294 Net sales $ 404,642 $ 420,736 (a) Includes all Distribution sales Year ended December 31, 2020 2019 United States $ 335,973 $ 331,369 International 68,669 89,367 $ 404,642 $ 420,736 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | ||
Summary of assets and liabilities measured at fair value on a recurring basis | The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — | There were no assets and liabilities measured at fair value on a recurring basis as of December 31, 2020. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 consisted of: Level 1 Level 2 Level 3 Total Assets: Equity investments $ 5,175 — — 5,175 Total assets at fair value $ 5,175 — — 5,175 Liabilities: Contingent consideration (a) $ — — 1,667 1,667 Total liabilities at fair value $ — — 1,667 1,667 |
Summary of significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy | The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy as of December 31, 2019 are as shown below: Significant unobservable Valuation technique inputs Range Contingent Consideration Discounted Cash Flows Discount rate 17.00 % | |
Summary of changes in fair value of the Company's Level 3 financial instruments | The following table provides a summary of changes in fair value of the Company’s Level 3 financial instruments for the years ended December 31, 2020 and 2019. Level 3 Instruments Balance, December 31, 2018 $ 1,667 Settlement of obligation — Balance, December 31, 2019 $ 1,667 Settlement of obligation (240) Fair value adjustment included in earnings (1,427) Balance, December 31, 2020 $ — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
INVENTORIES | ||
Summary of inventories stated at lower of cost or net realizable value | The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Finished goods $ 31,541 $ 25,986 Work-in-process 4,833 3,741 Raw materials and supplies 34,693 31,196 $ 71,067 $ 60,923 | December 31, 2020 2019 Finished goods $ 25,986 $ 21,458 Work-in-process 3,741 4,614 Raw materials and supplies 31,196 36,054 $ 60,923 $ 62,126 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
Summary of property and equipment | Property and equipment consist of the following: December 31, 2020 2019 Land $ 4,620 $ 4,620 Building and improvements 17,367 15,030 Furniture and fixtures 1,288 1,191 Computer hardware and software 23,125 22,273 Machinery and equipment 22,162 20,066 Construction in progress 518 1,096 69,080 64,276 Less accumulated depreciation (33,643) (28,228) $ 35,437 $ 36,048 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Summary of changes in goodwill | The following table summarizes the changes in goodwill for the nine months ended September 30, 2021: Products Distribution Total Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Foreign currency translation adjustments (87) — (87) Balance, September 30, 2021 $ 63,611 $ 2,616 $ 66,227 | Products Distribution Total Balance, December 31, 2018 $ 66,780 $ 10,201 $ 76,981 Impairment losses — (7,585) (7,585) Foreign currency translation adjustments 93 — 93 Mustang disposal (3,309) — (3,309) Balance, December 31, 2019 63,564 2,616 66,180 Foreign currency translation adjustments 134 — 134 Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 |
Summary of intangible assets | Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,088 (50,858) 23,230 11 Technology 11,978 (10,919) 1,059 7 Tradenames 6,472 (2,980) 3,492 4 Non-compete agreements 1,037 (1,037) — 4 $ 93,575 (65,794) 27,781 Indefinite lived intangibles: Tradenames 16,678 — 16,678 Indefinite Total $ 110,253 (65,794) 44,459 December 31, 2020 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 11 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 4 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 Indefinite lived intangibles: Tradenames 16,674 — 16,674 Indefinite Total $ 110,319 (59,310) 51,009 | December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 12 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 1 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Indefinite lived intangibles: Tradenames 16,674 — 16,674 Total $ 110,319 (59,310) 51,009 December 31, 2019 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 73,825 (39,010) 34,815 12 Technology 11,913 (8,991) 2,922 7 Tradenames 3,640 (913) 2,727 1 Non-compete agreements 1,020 (944) 76 4 $ 90,398 (49,858) 40,540 Indefinite lived intangibles: Tradenames 19,415 — 19,415 Total $ 109,813 (49,858) 59,955 |
Summary of estimated amortization expense for finite lived intangible assets | The estimated amortization expense for finite-lived intangible assets for the remaining three months of 2021, the next four years and thereafter is as follows: Remainder of 2021 $ 2,037 2022 7,683 2023 6,754 2024 3,856 2025 1,856 Thereafter 5,595 $ 27,781 | 2021 $ 8,366 2022 7,608 2023 6,601 2024 3,603 2025 1,650 Thereafter 6,507 $ 34,335 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
ACCRUED LIABILITIES | |
Summary of accrued liabilities | December 31, 2020 2019 Accrued expenses $ 4,257 $ 2,760 Accrued compensation and payroll tax 18,745 15,570 Accrued interest payable 703 2,043 Accrued warranty expense 1,133 2,368 Deferred revenue and customer credit balances 7,262 4,870 Other accrued liabilities 3,904 4,595 $ 36,004 $ 32,206 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
Schedule of company's debt | The Company’s debt is as follows: September 30, 2021 December 31, 2020 Short-term debt: Insurance premium financing $ 2,883 $ 1,225 Current portion of term loan 10,000 2,251 Current portion of other 21 20 $ 12,904 $ 3,496 Long-term debt: Revolver 25,500 — Term loan 190,000 222,187 Other 113 128 $ 215,613 $ 222,315 Unamortized debt discount and debt issuance costs (2,667) (13,005) Total long-term debt, net $ 212,946 $ 209,310 | December 31, 2020 2019 Short-term debt: Insurance premium financing $ 1,225 $ 1,389 Current portion of term loan 2,251 2,920 Current portion of other 20 19 $ 3,496 $ 4,328 Long-term debt: Revolving credit facility $ — $ 2,159 Term loan 222,187 273,254 Other 128 145 $ 222,315 $ 275,558 Unamortized debt discount and debt issuance costs (13,005) (5,245) Total long-term debt, net $ 209,310 $ 270,313 |
Summary of aggregate principal payments of long-term debt | The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs, for the remaining three months of 2021, the next four years and thereafter: Remainder of 2021 $ 2,505 2022 10,021 2023 10,022 2024 10,022 2025 10,023 Thereafter 183,041 Total principal payments $ 225,634 | 2021 $ 2,271 2022 2,272 2023 2,272 2024 2,272 2025 2,273 Thereafter 213,226 Total principal payments $ 224,586 |
Schedule of Interest rate swaps | Effective date Notional amount Fixed rate September 30, 2021 through July 23, 2026 $ 100,000 0.875 % | |
Schedule of fair value swap agreement | The estimated fair value of our Swap Agreement in the consolidated balance sheets was as follows: Balance sheet account September 30, 2021 December 31, 2020 Other assets $ 829 $ — Accrued liabilities $ 709 $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of future minimum lease payments required under non-cancelable operating leases | Capital Leases Operating Leases 2021 $ 43 $ 4,470 2022 43 4,139 2023 3 3,732 2024 — 2,602 2025 — 1,263 Thereafter — 397 Total minimum lease payments $ 89 $ 16,603 Less: Amount representing interest (18) Capital lease obligation $ 71 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of consolidated income (loss) from continuing operations before income taxes | Year ended December 31, 2020 2019 U.S. operations $ 23,776 $ (12,989) Foreign operations 4,099 10,919 Income (loss) before benefit for income taxes $ 27,875 $ (2,070) |
Schedule of benefit for income taxes | Year ended December 31, 2020 2019 Current tax provision: Federal $ — $ — State (188) (10) Foreign (1,482) (665) Total current provision (1,670) (675) Deferred tax benefit: Federal 10,233 149 State 1,949 27 Foreign 66 641 Total deferred benefit 12,248 817 Total income tax benefit $ 10,578 $ 142 |
Schedule of reconciliation of statutory federal income tax rate to effective rate | Year ended December 31, 2020 2019 Federal statutory rate 21.0 % 21.0 % Increase (decrease) in income taxes resulting from: State income taxes, net of federal income taxes 7.7 (7.7) Change in valuation allowance (71.1) (53.3) Current year tax credits (2.3) 34.1 Difference between foreign and federal tax rate 2.0 23.4 Permanent items 2.8 43.3 Reserve for uncertain tax positions 1.3 (57.9) Other 0.7 4.0 Effective tax rate (37.9) % 6.9 % |
Schedule of deferred income tax assets and liabilities | December 31, 2020 2019 Deferred tax assets: Net operating loss and other carry forwards $ 15,531 $ 25,756 Accrued liabilities 4,201 3,359 Reserves and other 3,587 3,124 263A uniform capitalization costs 1,067 1,106 Other deferred tax assets 2,122 2,064 Total deferred tax assets 26,508 35,409 Valuation allowance (1,729) (21,562) Net deferred tax assets 24,779 13,847 Deferred tax liabilities: Intangibles (3,626) (4,580) Depreciation (3,667) (4,217) Goodwill (6,182) (5,171) Other (489) (1,312) Total deferred tax liabilities (13,964) (15,280) Total deferred income taxes $ 10,815 $ (1,433) |
Schedule of reconciliation of change in unrecognized income tax benefit | Year ended December 31, 2020 2019 Beginning unrecognized tax benefits $ 1,754 $ 556 Current period unrecognized tax benefits 368 1,198 Ending unrecognized tax benefits $ 2,122 $ 1,754 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
RESTRUCTURING | |
Schedule of restructuring accruals | Year ended December 31, 2020 2019 Beginning accrued restructuring cost $ — $ 2,884 Additions 160 (69) Payments (160) (2,815) Ending accrued restructuring cost $ — $ — |
Schedule of restructuring expenses | Year ended December 31, 2020 2019 Employee severance and other benefits $ 160 $ (177) Other shutdown costs — 108 $ 160 $ (69) |
SEGMENT DATA (Tables)
SEGMENT DATA (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
Summary of segment data | Nine months ended September 30, 2021 Reconciling Products Distribution Items (1) Total Net sales $ 274,039 $ 69,086 $ (19,374) $ 323,751 Cost of goods sold 159,924 51,696 (19,364) 192,256 Gross profit $ 114,115 $ 17,390 $ (10) $ 131,495 Nine months ended September 30, 2020 Reconciling Products Distribution Items (1) Total Net sales $ 251,441 $ 62,707 $ (17,129) $ 297,019 Cost of goods sold 153,233 47,897 (17,261) 183,869 Gross profit $ 98,208 $ 14,810 $ 132 $ 113,150 (1) | Year ended December 31, 2020 Products Distribution Reconciling Items (1) Total Net sales $ 343,689 $ 84,922 $ (23,969) $ 404,642 Cost of goods sold 211,048 64,761 (24,105) 251,704 Gross profit $ 132,641 $ 20,161 $ 136 $ 152,938 Year ended December 31, 2019 Products Distribution Reconciling Items (1) Total Net sales $ 365,903 $ 78,171 $ (23,338) $ 420,736 Cost of goods sold 236,355 61,657 (23,313) 274,699 Gross profit $ 129,548 $ 16,514 $ (25) $ 146,037 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
SUPPLEMENTAL DISCLOSURES TO C_2
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS | |
Schedule of cash flow supplemental disclosures | Year ended December 31, 2020 2019 Supplemental disclosures: Cash paid for income taxes, net of refunds $ 879 $ 307 Cash paid for interest $ 23,316 $ 27,907 Non-cash transactions: Stock received in the sale of business $ 4,731 $ 4,611 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Furniture and fixtures | |
Property and Equipment | |
Useful lives of property and equipment | 10 years |
Minimum | Building and improvements | |
Property and Equipment | |
Useful lives of property and equipment | 5 years |
Minimum | Computer hardware and software | |
Property and Equipment | |
Useful lives of property and equipment | 3 years |
Minimum | Machinery and equipment | |
Property and Equipment | |
Useful lives of property and equipment | 3 years |
Maximum | Building and improvements | |
Property and Equipment | |
Useful lives of property and equipment | 39 years |
Maximum | Computer hardware and software | |
Property and Equipment | |
Useful lives of property and equipment | 5 years |
Maximum | Machinery and equipment | |
Property and Equipment | |
Useful lives of property and equipment | 8 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Accrued warranties and related costs (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the Company's accrued warranties and related costs | ||||
Beginning accrued warranty expense | $ 1,133 | $ 2,114 | $ 2,114 | $ 2,330 |
Current period claims | (236) | (223) | (442) | (456) |
Provision for current period sales | 256 | 357 | 307 | 490 |
Impact of accounting estimate change | (846) | |||
Mustang disposal | (250) | |||
Ending accrued warranty expense | $ 1,153 | $ 2,248 | $ 1,133 | $ 2,114 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Weighted average shares outstanding and net income (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator for basic and diluted earnings per share: | ||||
Net income (loss) | $ 8,373 | $ 22,673 | $ 38,453 | $ (1,928) |
Weighted average shares outstanding: | ||||
Weighted average shares outstanding - basic | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Dilutive effect of warrants | 0 | 0 | ||
Diluted weighted average shares outstanding | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Anti-dilutive warrants excluded | 81,268 | |||
Net income (loss) per share: | ||||
Basic | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Diluted | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ in Thousands | Apr. 12, 2012item | Jul. 31, 2021 | Jul. 31, 2012 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Nature of Operations and Basis of Presentation | |||||||
Number of manufacturing plants | item | 15 | ||||||
Stock Split | |||||||
Stock split ratio | 50 | 50 | |||||
Accounts payable, book cash overdrafts | $ 1,329 | $ 1,145 | |||||
Total research and development costs | 5,630 | 6,868 | |||||
Contractual research and development expenses | $ 192,256 | $ 183,869 | 251,704 | 274,699 | |||
Deposits | 3,130 | 1,868 | |||||
Reimbursable development contract | |||||||
Stock Split | |||||||
Contractual research and development expenses | 3,697 | 2,291 | |||||
Marketing, promotions and catalog | |||||||
Stock Split | |||||||
Advertising Expense | $ 2,692 | ||||||
Trade show expenses | |||||||
Stock Split | |||||||
Advertising Expense | $ 3,468 |
ACCOUNTS RECEIVEABLE, NET (Deta
ACCOUNTS RECEIVEABLE, NET (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning allowance for doubtful accounts | $ 1,113 | $ 1,345 | $ 1,345 | $ 1,260 |
Provision | $ (254) | $ (130) | 177 | 2,651 |
Write-offs, net of recoveries | (409) | (2,488) | ||
Mustang disposa1 | (78) | |||
Ending allowance for doubtful accounts | $ 1,113 | $ 1,345 |
INVESTMENT IN EQUITY SECURITI_3
INVESTMENT IN EQUITY SECURITIES - Net unrealized gains and losses recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INVESTMENT IN EQUITY SECURITIES | ||
Net gains recognized during the year | $ 2,178 | $ 2,175 |
Less: Net gains recognized during the year related to equity securities sold during the year | $ (2,178) | |
Net unrealized gains recognized during the year related to equity securities still held at the end of the year | $ 2,175 |
INVESTMENT IN EQUITY SECURITI_4
INVESTMENT IN EQUITY SECURITIES - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
May 31, 2020 | May 31, 2019 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Stock Collar Transaction | |||||
Marketable Securities [Line Items] | |||||
Equity securities, loss | $ 2,288 | ||||
Axon Enterprise, Inc | |||||
Marketable Securities [Line Items] | |||||
Equity security payment | 70,613 | 70,613 | |||
Equity securities | $ 4,731 | $ 4,611 | $ 5,175 | ||
Sale of equity securities | $ 8,781 | $ 5,591 |
DISPOSITIONS AND ASSETS HELD _2
DISPOSITIONS AND ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Jun. 20, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Mustang | Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sales price | $ 27,000 | |||
Net working capital adjustments | 147 | |||
Cash received | 26,853 | |||
Gain on sale of assets | $ 3,019 | |||
related party expense | $ 450 | |||
Ontario | Discontinued Operations Held for sale | California facility | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sales price | $ 12,387 | |||
Gain on sale of assets | $ 6,219 | |||
Current assets held for sale | 6,168 | |||
Liabilities current, held for sale | $ 0 |
REVENUE RECOGNITION - Net sales
REVENUE RECOGNITION - Net sales by channel and geography (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
U.S. state and local agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 179,385 | 171,552 | 230,706 | 219,482 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 27,102 | 25,117 | 35,648 | 32,837 |
U.S. federal agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 37,365 | 43,632 | 63,267 | 74,756 |
International. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 74,647 | 51,691 | 68,669 | 89,367 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 5,252 | $ 5,027 | $ 6,352 | $ 4,294 |
REVENUE RECOGNITION - Includes
REVENUE RECOGNITION - Includes all Distribution sales (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 249,104 | 245,328 | 335,973 | 331,369 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 74,647 | $ 51,691 | $ 68,669 | $ 89,367 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | |
REVENUE RECOGNITION | |||
Contract liabilities, current | $ 6,485 | $ 9,044 | $ 2,072 |
Revenue recognized from amounts included in contract liabilities | $ 4,785 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 25,851 | $ 27,516 |
Percentage of remaining performance obligations expect to recognize | 61.00% | 89.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-31 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-31 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 2 years |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Equity investments | $ 5,175 | |
Total assets at fair value | 5,175 | |
Liabilities: | ||
Contingent consideration | 1,667 | |
Total liabilities at fair value | $ 0 | 1,667 |
Level 1 | ||
Assets: | ||
Equity investments | 5,175 | |
Total assets at fair value | 5,175 | |
Level 3 | ||
Liabilities: | ||
Contingent consideration | 1,667 | |
Total liabilities at fair value | $ 1,667 |
FAIR VALUE MEASUREMENTS - Trans
FAIR VALUE MEASUREMENTS - Transfers of assets or liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | ||||
Transfers of assets from level 1 to level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Transfers of assets from level 2 to level 1 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | 0 | 0 |
Transfers of assets in and out of level 3 | $ 0 | $ 0 | 0 | 0 |
Transfers of liabilities in and out of level 3 | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Unobs
FAIR VALUE MEASUREMENTS - Unobservable inputs used in the fair value measurement (Details) | Dec. 31, 2019 |
Discounted Cash Flows | Discount rate | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration, measurement input | 17 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in fair value of the Company Level 3 financial instruments (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 1,667 | $ 1,667 |
Settlement of obligation | (240) | 0 |
Fair value adjustment included in earnings | (1,427) | |
Ending balance | $ 0 | $ 1,667 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
INVENTORIES | |||
Finished goods | $ 25,986 | $ 21,458 | |
Work-in-process | $ 4,833 | 3,741 | 4,614 |
Raw materials and supplies | 34,693 | 31,196 | 36,054 |
Inventory Net | $ 71,067 | $ 60,923 | $ 62,126 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 69,080 | $ 64,276 | |
Less accumulated depreciation | (33,643) | (28,228) | $ (37,510) |
Property and equipment, net | 35,437 | 36,048 | $ 33,780 |
Depreciation expense | 5,495 | 6,626 | |
Depreciation expense included in cost of goods sold | 2,523 | 2,900 | |
Land | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 4,620 | 4,620 | |
Building and improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 17,367 | 15,030 | |
Furniture and fixtures | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 1,288 | 1,191 | |
Computer hardware and software | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 23,125 | 22,273 | |
Machinery and equipment | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 22,162 | 20,066 | |
Construction in progress | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 518 | $ 1,096 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of changes in goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | $ 66,314 | $ 66,180 | $ 76,981 |
Impairment losses | 0 | 7,585 | |
Foreign currency translation adjustments | (87) | 134 | 93 |
Mustang disposal | (3,309) | ||
Balance, September 30, 2021 | 66,227 | 66,314 | 66,180 |
Products | |||
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | 63,698 | 63,564 | 66,780 |
Foreign currency translation adjustments | (87) | 134 | 93 |
Mustang disposal | (3,309) | ||
Balance, September 30, 2021 | 63,611 | 63,698 | 63,564 |
Distribution | |||
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | 2,616 | 2,616 | 10,201 |
Impairment losses | 7,585 | ||
Balance, September 30, 2021 | $ 2,616 | $ 2,616 | $ 2,616 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Impairment of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Goodwill impairment charge | $ 0 | $ 7,585 | |
Gross goodwill | 73,899 | 73,765 | $ 73,812 |
Accumulated impairment losses | $ 7,585 | $ 7,585 | $ 7,585 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 93,575 | $ 93,645 | $ 90,398 |
Definite lived intangibles, Accumulated amortization | (65,794) | (59,310) | (49,858) |
Definite lived intangibles, Net | 27,781 | 34,335 | 40,540 |
Indefinite lived intangibles | 110,253 | 110,319 | 109,813 |
Indefinite lived intangibles, Net | 44,459 | 51,009 | 59,955 |
Tradenames | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Indefinite lived intangibles | 16,678 | 16,674 | 19,415 |
Indefinite lived intangibles, Net | 16,674 | 19,415 | |
Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | 74,123 | 73,825 | |
Definite lived intangibles, Accumulated amortization | (45,815) | (39,010) | |
Definite lived intangibles, Net | $ 28,308 | $ 34,815 | |
Weighted Average Useful Life | 12 years | 12 years | |
Technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | 11,978 | $ 11,991 | $ 11,913 |
Definite lived intangibles, Accumulated amortization | (10,919) | (10,333) | (8,991) |
Definite lived intangibles, Net | $ 1,059 | $ 1,658 | $ 2,922 |
Weighted Average Useful Life | 7 years | 7 years | 7 years |
Tradenames | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 6,490 | $ 3,640 | |
Definite lived intangibles, Accumulated amortization | (2,135) | (913) | |
Definite lived intangibles, Net | $ 4,355 | $ 2,727 | |
Weighted Average Useful Life | 1 year | 1 year | |
Non-compete agreements | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 1,037 | $ 1,041 | $ 1,020 |
Definite lived intangibles, Accumulated amortization | $ (1,037) | (1,027) | (944) |
Definite lived intangibles, Net | $ 14 | $ 76 | |
Weighted Average Useful Life | 4 years | 4 years | 4 years |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||
Amortization expense | $ 6,538 | $ 7,047 | $ 9,238 | $ 8,817 |
Amortization expense included in cost of goods sold | $ 596 | $ 1,090 | $ 1,342 | $ 1,729 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense for finite lived intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
2021 | $ 7,683 | $ 8,366 | |
2022 | 6,754 | 7,608 | |
2023 | 3,856 | 6,601 | |
2024 | 1,856 | 3,603 | |
2025 | 1,650 | ||
Thereafter | 6,507 | ||
Finite lived intangible assets | $ 27,781 | $ 34,335 | $ 40,540 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ACCRUED LIABILITIES | |||
Accrued expenses | $ 4,257 | $ 2,760 | |
Accrued compensation and payroll tax | 18,745 | 15,570 | |
Accrued interest payable | 703 | 2,043 | |
Accrued warranty expense | 1,133 | 2,368 | |
Deferred revenue and customer credit balances | 7,262 | 4,870 | |
Other accrued liabilities | 3,904 | 4,595 | |
Accrued liabilities | $ 40,238 | $ 36,004 | $ 32,206 |
DEBT - Schedule of company's de
DEBT - Schedule of company's debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Debt [Line Item] | |||
Short-term debt | $ 12,904 | $ 3,496 | $ 4,328 |
Long-term debt | 215,613 | 222,315 | 275,558 |
Unamortized debt discount and debt issuance costs | (2,667) | (13,005) | (5,245) |
Total long-term debt, net | 212,946 | 209,310 | 270,313 |
Revolver | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 25,500 | 2,159 | |
Term loan | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 190,000 | 222,187 | 273,254 |
Other. | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 113 | 128 | 145 |
Insurance premium financing | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | 2,883 | 1,225 | 1,389 |
Current portion of term loan | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | 10,000 | 2,251 | 2,920 |
Current portion of other | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | $ 21 | $ 20 | $ 19 |
DEBT - Revolving Credit Facilit
DEBT - Revolving Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
Schedule Of Debt [Line Item] | |||
Availability, less outstanding letters of credit | $ 41,299 | $ 40,387 | $ 71,738 |
Fed Funds Effective Rate Overnight Index Swap Rate [Member] | |||
Schedule Of Debt [Line Item] | |||
Spread on variable interest rate | 0.50% | ||
United States | |||
Schedule Of Debt [Line Item] | |||
Total committed capital | $ 45,000 | ||
CANADA | |||
Schedule Of Debt [Line Item] | |||
Total committed capital | 5,000 | ||
Revolving credit facility. | |||
Schedule Of Debt [Line Item] | |||
Total committed capital | 50,000 | ||
Outstanding borrowings | $ 0 | $ 2,159 | |
Revolving credit facility. | United States | |||
Schedule Of Debt [Line Item] | |||
Spread on variable interest rate | 3.50% | 5.00% | |
Revolving credit facility. | CANADA | |||
Schedule Of Debt [Line Item] | |||
Spread on variable interest rate | 3.70% | 5.20% | |
Letter of credit | |||
Schedule Of Debt [Line Item] | |||
Availability, less outstanding letters of credit | $ 2,713 | $ 2,453 |
DEBT - Term loan (Details)
DEBT - Term loan (Details) - USD ($) | Nov. 17, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 17, 2021 |
Warren Kanders | |||||
Schedule Of Debt [Line Item] | |||||
Compensation to related party | $ 1,000,000 | ||||
Federal Funds Rate | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 0.50% | ||||
Original Term Loan Agreement | Term loan | |||||
Schedule Of Debt [Line Item] | |||||
Face amount | $ 279,000,000 | ||||
Debt discount | $ 4,185,000 | ||||
Prepayment penalty in year one (in percent) | 2.00% | ||||
Prepayment penalty in year two (in percent) | 1.00% | ||||
Quarterly principal payments to be made | $ 730,000 | ||||
Original Term Loan Agreement | Term loan | LIBOR | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 7.25% | ||||
Percentage of higher in LIBOR rate | 1.00% | ||||
Original Term Loan Agreement | Term loan | Federal Funds Rate | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 6.25% | ||||
Term Loan Agreement | Term loan | |||||
Schedule Of Debt [Line Item] | |||||
Face amount | $ 225,000,000 | ||||
Debt discount | 10,126,000 | $ 10,126,000 | |||
Quarterly principal payments to be made | 563,000 | ||||
Original issue discount | 5,063,000 | ||||
Fees paid to lender | 5,063,000 | ||||
Debt extinguishment related to the write-off of unamortized debt discount and debt issuance costs | $ 200,000 | ||||
Delayed Draw Maximum Amount | $ 30,000,000 | ||||
Percentage of fee incurred for Delayed Draw amounts | 1.00% | ||||
Maximum request amount for delayed draws if completely drawn | $ 40,000,000 | ||||
Maximum unused portion for delayed draws if completely drawn | 20,000,000 | ||||
Minimum incremental increase in amount for delayed draws if completely drawn | 1,000,000 | ||||
Minimum incremental increase in integral multiples for delayed draws | 100,000 | ||||
Prepayment amount in year one | $ 10,000,000 | ||||
Prepayment premium in year one (in percent) | 2.00% | ||||
Prepayment amount in year two | $ 10,000,000 | ||||
Prepayment premium in year two (in percent) | 1.00% | ||||
Percentage of principal amount of Delayed Draw Loans | 0.25% | ||||
Threshold period for providing audited financial statements | 90 days | ||||
Period of extension consented for providing audited financial statements | 30 days | ||||
Outstanding principal balance | $ 224,438,000 | $ 276,174,000 | |||
Interest rate (in percent) | 7.50% | 9.00% | |||
Unamortized debt discount | $ 11,906,000 | $ 3,387,000 | |||
Unamortized debt issuance costs | $ 1,099,000 | $ 1,858,000 | |||
Term Loan Agreement | Term loan | LIBOR | |||||
Schedule Of Debt [Line Item] | |||||
Percentage of higher in LIBOR rate | 1.00% | ||||
Term Loan Agreement | Term loan | LIBOR | Leverage Ratio of less than or equal to 5.00 to 1.00 | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 6.50% | ||||
Term Loan Agreement | Term loan | LIBOR | Leverage Ratio of greater than 5.00 to 1.00 | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 7.00% | ||||
Term Loan Agreement | Term loan | Federal Funds Rate | |||||
Schedule Of Debt [Line Item] | |||||
Compensation to related party | $ 1,000,000 | ||||
Term Loan Agreement | Term loan | Base Rate | Leverage Ratio of less than or equal to 5.00 to 1.00 | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 5.50% | ||||
Term Loan Agreement | Term loan | Base Rate | Leverage Ratio of greater than 5.00 to 1.00 | |||||
Schedule Of Debt [Line Item] | |||||
Spread on variable interest rate | 6.00% |
DEBT - Short-Term Debt (Details
DEBT - Short-Term Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||||
Aug. 31, 2020 | Aug. 31, 2019 | Sep. 30, 2021 | Apr. 27, 2021 | Dec. 31, 2020 | Jun. 27, 2020 | Dec. 31, 2019 | |
Schedule Of Debt [Line Item] | |||||||
Outstanding balance | $ 12,904 | $ 3,496 | $ 4,328 | ||||
2019 Short-Term Loan | |||||||
Schedule Of Debt [Line Item] | |||||||
Amount of short term loan facility | $ 2,754 | ||||||
Fixed annual interest rate | 4.29% | ||||||
Required monthly payments | $ 281 | ||||||
2020 Short-Term Loan | |||||||
Schedule Of Debt [Line Item] | |||||||
Amount of short term loan facility | $ 2,733 | ||||||
Fixed annual interest rate | 4.25% | ||||||
Required monthly payments | $ 309 | ||||||
Outstanding balance | $ 1,225 |
DEBT - Summary of aggregate pri
DEBT - Summary of aggregate principal payment of long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
DEBT | ||
2021 | $ 2,505 | $ 2,271 |
2022 | 10,021 | 2,272 |
2023 | 10,022 | 2,272 |
2024 | 10,022 | 2,272 |
2025 | 10,023 | 2,273 |
Thereafter | 183,041 | 213,226 |
Total principal payments | $ 225,634 | $ 224,586 |
SHAREHOLDERS EQUITY (DEFICIT) (
SHAREHOLDERS EQUITY (DEFICIT) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
SHAREHOLDERS' EQUITY (DEFICIT) | ||
Number of shares of common stock issued during period upon exercise of a warrant | 113,650 | |
Strike price per share | $ 0.0001 | |
Number of warrants outstanding | 0 | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |||
Total rent expense | $ 4,403 | $ 4,256 | |
Capital Lease Obligations Accrued Current | 43 | 44 | |
Capital Lease Obligations Accrued Noncurrent | 46 | $ 89 | |
Capital Lease Obligations, Current | 43 | $ 43 | |
Capital Lease Obligations, Noncurrent | $ 46 | $ 14 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future minimum lease payments required under non-cancelable operating leases and capital lease agreements (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Capital Leases | |
2021 | $ 43 |
2022 | 43 |
2023 | 3 |
Total minimum lease payments | 89 |
Less: Amount representing interest | (18) |
Capital lease obligation | 71 |
Operating Leases | |
2021 | 4,470 |
2022 | 4,139 |
2023 | 3,732 |
2024 | 2,602 |
2025 | 1,263 |
Thereafter | 397 |
Total minimum lease payments | $ 16,603 |
INCOME TAXES - Consolidated inc
INCOME TAXES - Consolidated income (loss) from continuing operations before income taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Expense (Benefit), Continuing Operations, by Jurisdiction [Abstract] | ||||
Consolidated income (loss) before income taxes from US operations | $ 23,776 | $ (12,989) | ||
Consolidated income (loss) before income taxes from foreign operations | 4,099 | 10,919 | ||
(Loss) income before provision for income taxes | $ 12,234 | $ 24,164 | $ 27,875 | $ (2,070) |
INCOME TAXES - Benefit for inco
INCOME TAXES - Benefit for income taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax provision: | ||||
State | $ (188) | $ (10) | ||
Foreign | (1,482) | (665) | ||
Total current provision | (1,670) | (675) | ||
Deferred tax benefit: | ||||
Federal | 10,233 | 149 | ||
State | 1,949 | 27 | ||
Foreign | 66 | 641 | ||
Total deferred benefit | $ 1,533 | $ 125 | (12,248) | (817) |
Total income tax benefit | $ 3,861 | $ 1,491 | $ 10,578 | $ 142 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the statutory federal income tax rate to the effective rate reported in the Company's consolidated financial statements (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Federal statutory rate | 21.00% | 21.00% | ||
State income taxes, net of federal income taxes | 7.70% | (7.70%) | ||
Change in valuation allowance | (71.10%) | (53.30%) | ||
Current year tax credits | 2.30% | (34.10%) | ||
Difference between foreign and federal tax rate | 2.00% | 23.40% | ||
Permanent items | 2.80% | 43.30% | ||
Reserve for uncertain tax positions | 1.30% | (57.90%) | ||
Other | 0.70% | 4.00% | ||
Effective tax rate | 31.60% | 6.20% | (37.90%) | 6.90% |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | |||
Net operating loss and other carry forwards | $ 15,531 | $ 25,756 | |
Accrued liabilities | 4,201 | 3,359 | |
Reserves and other | 3,587 | 3,124 | |
263A uniform capitalization costs | 1,067 | 1,106 | |
Other deferred tax assets | 2,122 | 2,064 | |
Total deferred tax assets | 26,508 | 35,409 | |
Valuation allowance | $ (1,729) | (1,729) | (21,562) |
Net deferred tax assets | 24,779 | 13,847 | |
Deferred tax liabilities: | |||
Intangibles | (3,626) | (4,580) | |
Depreciation | (3,667) | (4,217) | |
Goodwill | (6,182) | (5,171) | |
Other | (489) | (1,312) | |
Total deferred tax liabilities | (13,964) | (15,280) | |
Total deferred income taxes | $ (10,815) | $ (1,433) |
INCOME TAXES - Operating loss C
INCOME TAXES - Operating loss Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Federal and state net operating loss carryforwards ("NOLs") resulting in deferred tax assets | $ 15,531 | $ 25,756 |
Decrease in valuation allowance | 19,833 | |
Amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect the Company's effective tax rate | 2,122 | |
State and federal | ||
Operating Loss Carryforwards [Line Items] | ||
Federal and state net operating loss carryforwards ("NOLs") resulting in deferred tax assets | $ 6,990 | $ 3,494 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Unrecognised Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning unrecognized tax benefits | $ 1,754 | $ 556 |
Current period unrecognized tax benefits | 368 | 1,198 |
Ending unrecognized tax benefits | 2,122 | 1,754 |
Amounts representing penalties and interest were recorded as income tax expense | 0 | 0 |
Amount of interest or penalties accrued | $ 0 | $ 0 |
COMPENSATION AND DEFINED CONT_2
COMPENSATION AND DEFINED CONTRIBUTION PLANS (Details) - USD ($) $ in Thousands | Mar. 18, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
COMPENSATION AND DEFINED CONTRIBUTION PLANS | ||||
Number of units awarded | 1,433,500 | |||
Vesting percentage | 0.33% | |||
Net proceeds of initial public offering | $ 250,000 | |||
Employer contribution to plans | $ 1,812 | $ 1,889 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021warehouse | Dec. 31, 2020USD ($)warehouse | Dec. 31, 2019USD ($) | |
RELATED PARTY TRANSACTIONS | |||
Number of distribution warehouses and retail stores | warehouse | 5 | 5 | |
Rent expense related to leases | $ 635 | $ 646 | |
Amount of balance recorded | $ 42 | $ 42 |
RESTRUCTURING - Restructuring A
RESTRUCTURING - Restructuring Accruals in Balance Sheet (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
RESTRUCTURING | ||
Beginning accrued restructuring cost | $ 2,884 | |
Additions | $ 160 | (69) |
Payments | $ (160) | $ (2,815) |
RESTRUCTURING - Restructuring E
RESTRUCTURING - Restructuring Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
RESTRUCTURING | ||
Cost of restructuring projects | $ 160 | $ (69) |
Cumulative restructuring charges since the commencement of the organizational realignment | 5,080 | |
Restructuring expenses | ||
Employee severance and other benefits | 160 | (177) |
Other shutdown costs | 108 | |
Restructuring Charges (Benefits) | $ 160 | $ (69) |
SEGMENT DATA (Details)
SEGMENT DATA (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
Number of reportable segments | 2 | 2 |
SEGMENT DATA - asset informatio
SEGMENT DATA - asset information or operating expenses by segment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
Cost of goods sold | 192,256 | 183,869 | 251,704 | 274,699 |
Gross profit | 131,495 | 113,150 | 152,938 | 146,037 |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (19,374) | (17,129) | (23,969) | (23,338) |
Cost of goods sold | (19,364) | (17,261) | (24,105) | (23,313) |
Gross profit | (10) | 132 | 136 | (25) |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 274,039 | 251,441 | 343,689 | 365,903 |
Cost of goods sold | 159,924 | 153,233 | 211,048 | 236,355 |
Gross profit | 114,115 | 98,208 | 132,641 | 129,548 |
Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 69,086 | 62,707 | 84,922 | 78,171 |
Cost of goods sold | 51,696 | 47,897 | 64,761 | 61,657 |
Gross profit | $ 17,390 | $ 14,810 | $ 20,161 | $ 16,514 |
SUPPLEMENTAL DISCLOSURES TO C_3
SUPPLEMENTAL DISCLOSURES TO CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental disclosures: | ||
Cash paid for income taxes, net of refunds | $ 879 | $ 307 |
Cash paid for interest | 23,316 | 27,907 |
Non-cash transactions: | ||
Stock received in the sale of business | $ 4,731 | $ 4,611 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | May 07, 2021shares |
Cash-based executive compensation plan | |
Subsequent Event [Line Items] | |
Number of shares awarded to board of directors | 1,433,500 |
CONSOLIDATED BALANCE SHEETS_2
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | |||||
Cash and cash equivalents | $ 15,275 | $ 2,873 | $ 2,520 | ||
Accounts receivable, net of allowance for doubtful accounts of $624 and $1,113, respectively | 42,230 | 43,646 | 55,568 | ||
Inventories | 71,067 | 60,923 | 62,126 | ||
Prepaid expenses | 9,212 | 6,665 | 7,333 | ||
Other current assets | 5,859 | 3,362 | 9,150 | ||
Total current assets | 143,643 | 117,469 | 142,865 | ||
Property and equipment, net of accumulated depreciation and amortization of $37,510 and $33,643, respectively | 33,780 | 35,437 | 36,048 | ||
Deferred tax assets, net | 11,696 | 12,900 | 1,900 | ||
Intangible assets, net | 44,459 | 51,009 | 59,955 | ||
Goodwill | 66,227 | 66,314 | 66,180 | $ 76,981 | |
Other assets | 2,219 | 150 | 385 | ||
Total assets | 302,024 | 283,279 | 307,333 | ||
Current liabilities | |||||
Accounts payable | 21,890 | 21,978 | 25,695 | ||
Accrued liabilities | 40,238 | 36,004 | 32,206 | ||
Income tax payable | 2,505 | 1,005 | 678 | ||
Current portion of long-term debt | 12,904 | 3,496 | 4,328 | ||
Total current liabilities | 77,537 | 62,483 | 62,907 | ||
Long-term debt | 212,946 | 209,310 | 270,313 | ||
Deferred tax liabilities | 2,430 | 2,085 | 3,333 | ||
Other liabilities | 1,774 | 550 | 802 | ||
Total liabilities | 294,687 | 274,428 | 337,355 | ||
Commitments and contingencies (Note 6) | |||||
Mezzanine equity | |||||
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2021 and December 31, 2020) | 0 | 0 | |||
Shareholders' equity | |||||
Common stock ($0.0001 par value, 190,000,000 shares authorized, 27,483,350 issued and outstanding as of September 30, 2021 and December 31, 2020) | 3 | 3 | 3 | ||
Additional paid-in capital | 48,670 | 48,670 | 48,670 | ||
Accumulated other comprehensive loss | (2,747) | (2,860) | (3,280) | ||
Accumulated deficit | (38,589) | (36,962) | (75,415) | ||
Total shareholders' equity | 7,337 | 8,851 | $ (8,125) | (30,022) | $ (29,977) |
Total liabilities, mezzanine equity and shareholders' equity | $ 302,024 | $ 283,279 | $ 307,333 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | |||
Accounts receivable, allowance for doubtful accounts | $ 624 | $ 1,113 | |
Property and equipment, accumulated depreciation and amortization | $ 37,510 | $ 33,643 | $ 28,228 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 190,000,000 | 190,000,000 | 190,000,000 |
Common stock, shares issued | 27,483,350 | 27,483,350 | 27,483,350 |
Common stock, shares outstanding | 27,483,350 | 27,483,350 | 27,483,350 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME. | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
Cost of goods sold | 192,256 | 183,869 | 251,704 | 274,699 |
Gross profit | 131,495 | 113,150 | 152,938 | 146,037 |
Operating expenses | ||||
Selling, general and administrative | 87,168 | 79,963 | 106,627 | 124,270 |
Restructuring and transaction costs | 1,491 | 3,143 | 5,822 | 918 |
Related party expense | 437 | 480 | 1,635 | 1,096 |
Other general income | (10,950) | (10,950) | (7,630) | |
Total operating expenses | 89,096 | 72,636 | 103,134 | 118,654 |
Operating income | 42,399 | 40,514 | 49,804 | 27,383 |
Other expense | ||||
Interest expense | (14,129) | (18,275) | (24,388) | (29,848) |
Loss on extinguishment of debt | (15,155) | (200) | ||
Other (expense) income, net | (881) | 1,925 | 2,659 | 395 |
Total other expense, net | (30,165) | (16,350) | (21,929) | (29,453) |
(Loss) income before provision for income taxes | 12,234 | 24,164 | 27,875 | (2,070) |
Benefit (provision) for income taxes | (3,861) | (1,491) | (10,578) | (142) |
Net (loss) income | $ 8,373 | $ 22,673 | $ 38,453 | $ (1,928) |
Net (loss) income per share: | ||||
Basic | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Diluted | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Weighted average shares outstanding: | ||||
Basic | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Diluted | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments arising during the period | $ 23 | $ (776) | $ 420 | $ 1,883 |
Change in fair value of derivative instruments(1) | 90 | |||
Comprehensive (loss) income, net of tax | $ 8,486 | $ 21,897 | $ 38,873 | $ (45) |
CONSOLIDATED STATEMENTS OF OP_3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME. | ||
Change in fair value of derivative instruments, tax | $ 30 | $ 30 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net income | $ (8,373) | $ (22,673) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,426 | 11,207 |
Amortization of original issue discount and debt issue costs | 2,483 | 1,012 |
Loss on extinguishment of debt | 15,155 | |
Non cash consideration received from sale of business | (6,821) | |
Deferred income taxes | 1,533 | 125 |
Gain on sale of fixed assets | (6,218) | |
Provision for losses on accounts receivable | (254) | (130) |
Foreign exchange loss (gain) | 45 | (752) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,549 | 10,922 |
Inventories | (10,261) | (4,902) |
Prepaid expenses and other assets | (4,642) | (2,332) |
Accounts payable and other liabilities | 6,582 | 3,408 |
Net cash provided by operating activities | 30,989 | 28,192 |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (2,225) | (3,913) |
Proceeds from disposition of property and equipment | 12,386 | |
Proceeds from sale of equity securities | 5,591 | |
Net cash (used in) provided by investing activities | (2,225) | 14,064 |
Cash Flows From Financing Activities: | ||
Proceeds from revolving credit facilities | 248,000 | 281,730 |
Principal payments on revolving credit facilities | (223,132) | (283,887) |
Proceeds from term loans | 198,735 | |
Principal payments on term loans | (224,547) | (40,841) |
Proceeds from insurance premium financing | 4,269 | 2,733 |
Principal payments on insurance premium financing | (2,611) | (1,998) |
Payment of capital leases | (32) | (35) |
Payments for debt issuance costs | (2,830) | |
Payments on extinguishment of debt | (4,215) | |
Dividends distributed | 9,996 | |
Net cash used in financing activities | (16,359) | (42,298) |
Effect of foreign exchange rates on cash and cash equivalents | (3) | 6 |
Change in cash and cash equivalents | 12,402 | (36) |
Cash and cash equivalents, beginning of period | 2,873 | 2,520 |
Cash and cash equivalents, end of period | $ 15,275 | $ 2,484 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at the beginning at Dec. 31, 2018 | $ 3 | $ 48,670 | $ (5,163) | $ (73,487) | $ (29,977) |
Balance at the beginning (in shares) at Dec. 31, 2018 | 27,369,700 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,928) | (1,928) | |||
Foreign currency translation adjustments arising during the period | 1,883 | ||||
Balance at the end at Dec. 31, 2019 | $ 3 | 48,670 | (3,280) | (75,415) | $ (30,022) |
Balance at the end (in shares) at Dec. 31, 2019 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 22,673 | $ 22,673 | |||
Foreign currency translation adjustments arising during the period | (776) | (776) | |||
Balance at the end at Sep. 30, 2020 | $ 3 | 48,670 | (4,056) | (52,742) | (8,125) |
Balance at the end (in shares) at Sep. 30, 2020 | 27,483,350 | ||||
Balance at the beginning at Dec. 31, 2019 | $ 3 | 48,670 | (3,280) | (75,415) | $ (30,022) |
Balance at the beginning (in shares) at Dec. 31, 2019 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 38,453 | $ 38,453 | |||
Foreign currency translation adjustments arising during the period | 420 | 420 | |||
Balance at the end at Dec. 31, 2020 | $ 3 | 48,670 | (2,860) | (36,962) | $ 8,851 |
Balance at the end (in shares) at Dec. 31, 2020 | 27,483,350 | 27,483,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,373 | $ 8,373 | |||
Foreign currency translation adjustments arising during the period | 23 | 23 | |||
Change in fair value of derivative instruments | 90 | 90 | |||
Dividends declared | (10,000) | (10,000) | |||
Balance at the end at Sep. 30, 2021 | $ 3 | $ 48,670 | $ (2,747) | $ (38,589) | $ 7,337 |
Balance at the end (in shares) at Sep. 30, 2021 | 27,483,350 | 27,483,350 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
SIGNIFICANT ACCOUNTING POLICIES | 1. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through 15 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers. Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated in consolidation. Stock Split In July 2021, the Company effected a 50-for-1 Dividend In August 2021, the Company declared share Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Certain items previously reported in the notes to the consolidated financial statements have been reclassified to conform to the current financial statement presentation. Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2021 and 2020. The carrying value of our long-term debt obligations approximates the fair value, as the long-term debt was entered into recently. The Company classifies its long-term debt within Level 2 of the fair value hierarchy. Goodwill and Other Intangible Assets The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. Revenue Recognition The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 Net Income per Share Basic income or loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. There were no dilutive instruments outstanding during the nine months ended September 30, 2021 and 2020. The calculation of weighted average shares outstanding and net income per share are as follows: Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. | 1. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through On June 20, 2019, the Company sold Mustang Survival Holdings Corporation and its subsidiaries (“Mustang”), a wholly owned subsidiary that forms the Company’s Marine Safety and Climate Protection Business. See Note 4, Dispositions and Assets Held For Sale Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) and include the accounts of Cadre Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Stock Split In July 2021, the Company effected a 50-for-1 Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. Refer to Note 6 , Fair Value Measurements Cash and Cash Equivalents Included in cash and cash equivalents are deposits with banks, cash on hand in stores, and amounts due from credit card transactions. We have no restrictions on our cash and cash equivalents. Accounts Receivable Trade accounts receivable consists of amounts owed to the Company and is stated net of allowances. The Company’s outstanding accounts receivable balances are exposed to credit risk and valuation allowances are established for estimated losses resulting from non-collection of outstanding amounts due from customers. The Company establishes a reserve for estimated doubtful accounts based on the aging of its receivable balances and collection history. In addition, specific reserves are established for customer accounts as known collection problems occur due to insolvency, disputes, or other collection issues. The amounts of these specific reserves are estimated by management based on the customer’s financial position, the age of the customer’s receivables and the reasons for any disputes. The allowance for doubtful accounts is reduced by any write-off of uncollectible customer accounts. Inventories Inventories are stated at the lower of cost using the first-in, first-out method (“FIFO”) or net realizable value. Elements of cost in the Company’s manufactured inventories generally include raw materials, direct labor, indirect labor, manufacturing overhead and freight-in. The Company periodically reviews its inventories considering sales forecasts and historical experience to identify excess, close-out, or slow-moving items and makes provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value. Assets Held for Sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. A long-lived asset is not depreciated or amortized while it is classified as held for sale. Property and Equipment Property and equipment, including those acquired under capital lease agreements, is stated at cost less accumulated depreciation and amortization, except for assets acquired using acquisition accounting, which are initially recorded at fair value. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings and improvements 5 to 39 years Furniture and fixtures 10 years Computer hardware and software 3 to 5 years Machinery and equipment 3 to 8 years Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Major replacements, which extend the useful lives of property and equipment, are capitalized and depreciated over the remaining useful life of the asset. Normal repair and maintenance items are expensed as incurred. The recoverability of the carrying amount of property and equipment is assessed when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If it is determined that the carrying amount of an asset or asset group is not recoverable based upon expected undiscounted future cash flows of the asset or asset group, an impairment loss equal to the excess of the carrying amount over the estimated fair value of the asset or asset group is recorded. Goodwill and Other Intangible Assets The Company classifies intangible assets into three categories: i) intangible assets with definite lives subject to amortization, ii) intangible assets with indefinite lives not subject to amortization and iii) goodwill. The Company determines the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized on a straight-line basis over their useful lives. The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. The Company performs sensitivity tests with respect to growth rates and discount rates used in the income approach. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions and applied to projected operating data for each reporting unit to arrive at an indication of fair value. Other Intangible Assets For indefinite-lived intangible assets other than goodwill, the impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The Company tests definite-lived intangible assets for recoverability when changes in circumstances indicate the carrying value may not be recoverable. Events that trigger a test for recoverability include: ● material adverse changes in projected revenues and expenses; ● significant underperformance relative to historical and projected future operating results; ● significant negative industry or economic trends; and, ● a significant adverse change in the manner in which an asset group is used or in its physical condition. Future adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified. When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. For the periods presented, the Company has not recorded any impairments of long-lived assets. Accounts Payable Accounts payable represents amounts owed by us to third parties at the end of the period. Accounts payable includes $1,329 and $1,145 of book cash overdrafts in excess of cash balances in such accounts at December 31, 2020 and 2019, respectively. We include the change in book cash overdrafts in operating cash flows in the consolidated statements of cash flows. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Other Assets and Deferred Costs — Contracts with Customers There was no cumulative effect adjustment recorded to opening retained earnings as of January 1, 2019, upon adoption of Topic 606, Revenue from Contracts with Customers. We do not expect an impact to our net income on an ongoing basis as a result of the adoption of the new standard. The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income (loss). We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Policy Elections ● The Company does not account for significant financing components if, at contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for the product or service will be one year or less. ● Incremental costs to obtain a contract with a customer will be capitalized if the Company expects to recover those costs unless the amortization period is one year or less. ● The Company recognizes revenue equal to the amount it has the right to invoice when the amount corresponds directly with the value to the customer of the Company’s performance to date. ● The Company does not account for shipping and handling activities as a separate performance obligation, but rather as an activity performed to transfer the promised goods. ● Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss). The following table represents changes in the Company’s accrued warranties and related costs: Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 Cost of Goods Sold Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, shipping costs, reimbursable research and development costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs. Selling, General & Administrative Expenses Selling, general and administrative expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges. Advertising Expenses Advertising costs are expensed in the period incurred. Advertising expenses primarily consist of marketing, promotions, catalog and trade show expenses and were $2,692 and $3,468 during the years ended December 31, 2020 and 2019, respectively. Advertising expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Research and Development Research and development expenses are expensed as incurred and included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Total research and development costs were $5,630 and $6,868 for the years ended December 31, 2020 and 2019, respectively. In addition, the Company incurs research and development expenses related to reimbursable development contracts. Contractual research and development expenses are included in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss) and were $3,697 and $2,291 for the years ended December 31, 2020 and 2019, respectively. Debt Issuance Costs The related provisions Interest — Imputation of Interest. over Restructuring Costs Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. The Company applies the provisions of ASC Topic 420, Exit or Disposal Cost Obligations Nonretirement Postemployment Benefits for probable Income Taxes The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes . Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and are classified as noncurrent in the consolidated balance sheets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of date. laws have Deferred tax assets are reduced by a valuation allowance likely all evaluation for valuation allowance for valuation all have valuation allowance The Company is subject to income taxes in the United States and several States, taken taken all available likely any. Tax taken Tax more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Further information regarding the Company’s tax positions is included in Note 14 , Income Taxes Accumulated Other Comprehensive Loss Comprehensive income (loss) represents all changes in equity of the Company that result from recognized transactions and other economic events during the period. Other comprehensive income refers to revenues, expenses, gains, and losses that under GAAP are included in comprehensive income (loss) but excluded from net income (loss). Foreign Currency Translation Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average exchange rate prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the cumulative translation adjustment included in accumulated other comprehensive loss in the consolidated balance sheets. Transaction Transactions denominated in foreign currency are recorded at the exchange rate on the date of each transaction. Realized gains and losses on foreign currency transactions are included in other income, net in the consolidated statements of operations and comprehensive income (loss), except on certain intercompany balances which the Company has determined are of a long-term investment nature, which are included in accumulated other comprehensive loss in the consolidated balance sheets. Monetary assets and liabilities are remeasured at the balance sheet date at end-of-period exchange rates. Unrealized gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other income, net in the consolidated statements of operations and comprehensive income (loss) in the period in which they occur. Investments in Equity Securities Investments in equity securities are recorded in accordance with ASC Subtopic 321-10 , Investments — Equity Securities Net Income (Loss) per Share Basic income or loss per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted income (loss) per share reflects the potential dilution from outstanding warrants. For the year ended December 31, 2019, there were 81,268 shares excluded from the diluted earnings per share calculation because the impact of their assumed exercise would be antidilutive due to a net loss in that period. The calculation of weighted average shares outstanding and net income (loss) per share are as follows (in thousands, except for per share data): Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) Risk and Uncertainties Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. Risks associated with cash within the United States and foreign countries are mitigated by banking with federally insured, creditworthy institutions. As of December 31, 2020, and 2019, the Company had deposits of $3,130 and $1,868, respectively, at foreign financial institutions. Accounts receivable are financial instruments that also expose the Company to concentration of credit risk. Such exposure is limited by the large number of customers comprising the Company’s customer base and their dispersion across different geographic areas. In addition, the Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for credit losses. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management. Novel Coronavirus (COVID-19) On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID- 19 outbreak continues to evolve as of the date of this report. During 2020, the business was relatively unaffected. In all countries and states which the business operates, the relevant local authorities have deemed the business to be essential in nature and thereby allowed us to continue operations during any government mandated shutdowns. The business has taken many measures to mitigate outbreaks in any of its facilities that would negatively impact the business. The extent to which the Company’s business may be affected by the current outbreak of the Coronavirus will largely depend on both current and future developments, including its duration, spread and treatment, all of which are highly uncertain and cannot be reasonably predicted. While any impact to global markets is uncertain, the Company continues to monitor developments. Recent Accounting Pronouncements Pronouncements Adopted During 2020 In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company adopted this ASU effective January 1, 2020. The adoption did not have a material impact on the Company’s disclosures. Refer to Note 6, Fair Value Measurements, for further discussion. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. |
REVENUE RECOGNITION_2
REVENUE RECOGNITION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
REVENUE RECOGNITION | ||
REVENUE RECOGNITION | 2. REVENUE RECOGNITION The following tables disaggregate net sales by channel and geography: Nine months ended September 30, 2021 2020 U.S. state and local agencies (a) $ 179,385 $ 171,552 Commercial 27,102 25,117 U.S. federal agencies 37,365 43,632 International 74,647 51,691 Other 5,252 5,027 Net sales $ 323,751 $ 297,019 (a)Includes all Distribution sales Nine months ended September 30, 2021 2020 United States $ 249,104 $ 245,328 International 74,647 51,691 $ 323,751 $ 297,019 Contract Liabilities Contract liabilities are recorded as a component of other liabilities when customers remit cash payments in advance of the Company satisfying performance obligations which are satisfied at a future point of time. Contract liabilities are reduced when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s consolidated balance sheets and totaled $9,044 and $6,485 at September 30, 2021 and December 31, 2020, respectively. Revenue recognized during the nine months ended September 30, 2021 from amounts included in contract liabilities at December 31, 2020 was $4,785. Remaining Performance Obligations As of September 30, 2021, we had $25,851 of remaining performance obligations, which included amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under ASC Topic 606, Revenue from Contracts with Customers | 5. REVENUE RECOGNITION The following tables disaggregate net sales by channel and geography: Year ended December 31, 2020 2019 U.S state and local agencies (a) $ 230,706 $ 219,482 Commercial 35,648 32,837 U.S. federal agencies 63,267 74,756 International 68,669 89,367 Other 6,352 4,294 Net sales $ 404,642 $ 420,736 (a) Includes all Distribution sales Year ended December 31, 2020 2019 United States $ 335,973 $ 331,369 International 68,669 89,367 $ 404,642 $ 420,736 Revenue by product is not disclosed, as it is impractical to do so. Contract Liabilities Contract liabilities are recorded as a component of other liabilities when customers remit cash payments in advance of the Company satisfying performance obligations which are satisfied at a future point of time. Contract liabilities are derecognized when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s consolidated balance sheets and totaled $6,485 and $2,072, at December 31, 2020 and 2019, with all of the 2019 contract liabilities being recognized in revenue during the year ended December 31, 2020. Remaining Performance Obligations As of December 31, 2020, we had $27,516 of remaining performance obligations, which included amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under Topic 606 as of December 31, 2020. We expect to recognize 89% of this balance over the next twelve months and expect the remainder to be recognized in the following two years. |
INVENTORIES_2
INVENTORIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
INVENTORIES | ||
INVENTORIES | 3. INVENTORIES The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Finished goods $ 31,541 $ 25,986 Work-in-process 4,833 3,741 Raw materials and supplies 34,693 31,196 $ 71,067 $ 60,923 | 7. INVENTORIES The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of December 31, 2020 and 2019: December 31, 2020 2019 Finished goods $ 25,986 $ 21,458 Work-in-process 3,741 4,614 Raw materials and supplies 31,196 36,054 $ 60,923 $ 62,126 |
GOODWILL AND OTHER INTANGIBLE_8
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | 4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table summarizes the changes in goodwill for the nine months ended September 30, 2021: Products Distribution Total Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Foreign currency translation adjustments (87) — (87) Balance, September 30, 2021 $ 63,611 $ 2,616 $ 66,227 Gross goodwill and accumulated impairment losses was $73,812 and $7,585, respectively, at September 30, 2021 and $73,899 and $7,585, respectively, at December 31, 2020. Intangible Assets Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite-lived and are therefore not subject to amortization. Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,088 (50,858) 23,230 11 Technology 11,978 (10,919) 1,059 7 Tradenames 6,472 (2,980) 3,492 4 Non-compete agreements 1,037 (1,037) — 4 $ 93,575 (65,794) 27,781 Indefinite lived intangibles: Tradenames 16,678 — 16,678 Indefinite Total $ 110,253 (65,794) 44,459 December 31, 2020 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 11 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 4 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 Indefinite lived intangibles: Tradenames 16,674 — 16,674 Indefinite Total $ 110,319 (59,310) 51,009 Amortization expense for the nine months ended September 30, 2021 and 2020 was $6,538 and $7,047, respectively, of which $596 and $1,090 was included in cost of goods sold in the consolidated statements of operations and comprehensive income for the respective periods. The estimated amortization expense for finite-lived intangible assets for the remaining three months of 2021, the next four years and thereafter is as follows: Remainder of 2021 $ 2,037 2022 7,683 2023 6,754 2024 3,856 2025 1,856 Thereafter 5,595 $ 27,781 | 9. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table summarizes the changes in goodwill during the years ended December 31, 2020 and 2019: Products Distribution Total Balance, December 31, 2018 $ 66,780 $ 10,201 $ 76,981 Impairment losses — (7,585) (7,585) Foreign currency translation adjustments 93 — 93 Mustang disposal (3,309) — (3,309) Balance, December 31, 2019 63,564 2,616 66,180 Foreign currency translation adjustments 134 — 134 Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Impairment of Goodwill In 2019, as a result of a decline in the forecasted financial performance for the Distribution reporting unit, the Company performed an impairment evaluation and determined that the carrying value of the goodwill of the Distribution reporting unit exceeded the implied fair value. The decline in the fair value of the Distribution reporting unit was primarily due to unfavorable performance in 2019 that was impacting operating margins that led the Company to use a higher discount rate due to an increase in the risk-free rate of return. The Company recorded a goodwill impairment charge of $7,585 within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss) as of December 31, 2019. No impairment losses were recorded during the year ended December 31, 2020. Gross goodwill and accumulated impairment losses was $73,899 and $7,585 at December 31, 2020 and $73,765 and $7,585, respectively, at December 31, 2019. Intangible Assets Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite- lived and are therefore not subject to amortization. Intangible assets, net of amortization, as of December 31, 2020, and 2019 are as follows: December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 12 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 1 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Indefinite lived intangibles: Tradenames 16,674 — 16,674 Total $ 110,319 (59,310) 51,009 December 31, 2019 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 73,825 (39,010) 34,815 12 Technology 11,913 (8,991) 2,922 7 Tradenames 3,640 (913) 2,727 1 Non-compete agreements 1,020 (944) 76 4 $ 90,398 (49,858) 40,540 Indefinite lived intangibles: Tradenames 19,415 — 19,415 Total $ 109,813 (49,858) 59,955 The Company recorded amortization expense of $9,238 and $8,817 for the years ended December 31, 2020 and 2019, respectively, of which $1,342 and $1,729 was included in cost of goods sold in the consolidated statements of operations and comprehensive income (loss) for the respective years. The estimated amortization expense for finite-lived intangible assets for the next five years and thereafter is presented below. 2021 $ 8,366 2022 7,608 2023 6,601 2024 3,603 2025 1,650 Thereafter 6,507 $ 34,335 |
DEBT_2
DEBT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
DEBT | 5. DEBT The Company’s debt is as follows: September 30, 2021 December 31, 2020 Short-term debt: Insurance premium financing $ 2,883 $ 1,225 Current portion of term loan 10,000 2,251 Current portion of other 21 20 $ 12,904 $ 3,496 Long-term debt: Revolver 25,500 — Term loan 190,000 222,187 Other 113 128 $ 215,613 $ 222,315 Unamortized debt discount and debt issuance costs (2,667) (13,005) Total long-term debt, net $ 212,946 $ 209,310 The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs, for the remaining three months of 2021, the next four years and thereafter: Remainder of 2021 $ 2,505 2022 10,021 2023 10,022 2024 10,022 2025 10,023 Thereafter 183,041 Total principal payments $ 225,634 New Credit Facility On August 20, 2021 (the “Closing Date”), the Company refinanced its existing credit facilities and entered into a new credit agreement whereby Safariland, LLC, as borrower (the “Borrower”), the Company and certain domestic subsidiaries of the Borrower, as guarantors (the “Guarantors”), closed on and received funding under a credit agreement (initially entered into on July 23, 2021), pursuant to a First Amendment to Credit Agreement (collectively, the “New Credit Agreement”) with PNC Bank, National Association (“PNC”), as administrative agent, and the several lenders from time to time party thereto (together with PNC, the “Lenders”) pursuant to which the Borrower (i) borrowed $200,000 under a term loan (the “Term Loan”), and (ii) may borrow up to $100,000 under a revolving credit facility (including up to $15,000 for letters of credit and up to $10,000 for swing line loans) (the “Revolving Loan”). Each of the Term Loan and the Revolving Loan mature on July 23, 2026. Commencing December 31, 2021, the New Term Loan requires scheduled quarterly payments in amounts equal to 1.25% per quarter of the original aggregate principal amount of the Term Loan, with the balance due at maturity. The New Credit Agreement is guaranteed, jointly and severally, by the Guarantors and, subject to certain exceptions, secured by a first-priority security interest in substantially all of the assets of the Borrower and the Guarantors pursuant to a Security and Pledge Agreement (the “Security Agreement”) and a Guaranty and Suretyship Agreement (the “Guaranty Agreement”), each dated as of the Closing Date. As of September 30, 2021, the Revolving Loan had $25,500 in outstanding borrowings, $2,762 in outstanding letters of credit, and $71,738 of availability. The Borrower may elect to have the Revolving Loan and Term Loan under the New Credit Agreement bear interest at a base rate or a LIBOR rate, in each case, plus an applicable margin. The applicable margin for these borrowings will range from 0.50% to 1.50% per annum, in the case of base rate borrowings, and 1.50% to 2.50% per annum, in the case of LIBOR borrowings, in each case based upon the level of the Company’s consolidated total net leverage ratio. The New Credit Agreement also requires the Borrower to pay a commitment fee on the unused portion of the loan commitments. Such commitment fee will range between 0.175% and 0.25% per annum, and is also based upon the level of the Company’s consolidated total net leverage ratio. The New Credit Agreement also contains customary representations and warranties, and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the Borrowers or any Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. The New Credit Agreement contains certain restrictive debt covenants, which require us to: (i) maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, starting with the quarter ended December 31, 2021, which is to be determined for each quarter end on a trailing four quarter basis and (ii) maintain a quarterly maximum consolidated total net leverage ratio of 3.75 to 1.00 from the quarter ended December 31, 2021 until the quarter ended September 30, 2022, and thereafter 3.50 to 1.00, which is in each case to be determined on a trailing four quarter basis; provided that under certain circumstances and subject to certain limitations, in the event of a material acquisition, we may temporarily increase the consolidated total net leverage ratio by up to 0.50 to 1.00 for four fiscal quarters following such acquisition. The New Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the New Credit Agreement may be accelerated and the Lenders could foreclose on their security interests in the assets of the Borrowers and the Guarantors. The Company performed an analysis on a creditor-by-creditor basis for debt modifications and extinguishments to determine the appropriate accounting treatment of associated issuance costs. In connection with the refinancing, the Company recorded a loss on debt extinguishment of $15,155 related to early extinguishments fees and the write-off of unamortized debt discount and debt issuance costs In connection with the New Credit Agreement, the Company paid financing costs totaling $4,095, of which $2,730 related to the Term Loan and $1,365 related to the Revolving Loan. Total financing costs include debt issuance costs of $1,897. Costs incurred in connection with the Term Loan were deferred and recorded as an offset to long-term debt. Costs incurred in connection with the Revolving Loan were deferred and recorded to other assets. All deferred debt costs are amortized to interest expense over the term of the loan using the effective interest method. Canadian Credit Facility On October 14, 2021, Med-Eng Holdings ULC and Pacific Safety Products Inc., the Company’s Canadian subsidiaries, as borrowers (the “Canadian Borrowers”), and Safariland, LLC, as guarantor (the “Canadian Guarantor”), closed on a line of credit pursuant to a Loan Agreement (the “Canadian Loan Agreement”) and a Revolving Line of Credit Note (the “Note”) with PNC Bank Canada Branch (“PNC Canada”), as lender pursuant to which the Canadian Borrowers may borrow up to CDN$10,000 under a revolving line of credit (including up to $3,000 for letters of credit) (the “Revolving Canadian Loan”). The Revolving Canadian Loan matures on July 23, 2026. The Canadian Loan Agreement is guaranteed by Safariland, LLC pursuant to a Guaranty and Suretyship Agreement (the “Canadian Guaranty Agreement”). The Canadian Borrowers may elect to have borrowings either in United States dollars or Canadian dollars under the Canadian Loan Agreement, which will bear interest at a base rate or a LIBOR rate, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable margin for these borrowings will range from 0.50% to 1.50% per annum, in the case of base rate borrowings and Canadian Prime Rate borrowings, and 1.50% to 2.50% per annum, in the case of LIBOR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) an unused line fee on the unused portion of the loan commitments in an amount ranging between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note. The Canadian Loan Agreement also contains customary representations and warranties, and affirmative and negative covenants, including, among others, limitations on additional indebtedness, entry into new lines of business, entry into guarantee agreements, making of any loans or advances to, or investments in, any other person, restrictions on liens on the assets of the Canadian Borrowers and mergers, transfers of assets and acquisitions. The Canadian Loan Agreement and Note also contain customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Canadian Loan Agreement may be accelerated. Interest Rate Swaps In September 2021, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on our floating rate debt. As of September 30, 2021, we had the following interest rate swap agreement (the “Swap Agreement”): Effective date Notional amount Fixed rate September 30, 2021 through July 23, 2026 $ 100,000 0.875 % Under the terms of the Swap Agreement, we receive payments based on the 1-month LIBOR (approximately 0.09% as of September 30, 2021). During the nine months ended September 30, 2021, there were no interest rate swap agreements that expired. We entered into the Swap Agreement to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated this Swap Agreement as a cash flow hedge. A portion of the amount included in accumulated other comprehensive loss is reclassified into interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreement is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreement. It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparty will be able to fulfill their obligations under our agreement, and we believe we will have debt outstanding through the expiration date of the swap such that the occurrence of future cash flow hedges remains probable. The estimated fair value of our Swap Agreement in the consolidated balance sheets was as follows: Balance sheet account September 30, 2021 December 31, 2020 Other assets $ 829 $ — Accrued liabilities $ 709 $ — A cumulative gain of $90 net of tax is reflected in accumulated other comprehensive loss as of September 30, 2021. The amount of gain recognized in other comprehensive loss for the nine months ended September 30, 2021 was $90 net of tax. There were no amounts reclassified from accumulated comprehensive loss into earnings for the nine months ended September 30, 2021. As of September 30, 2021, approximately $710 is expected to be reclassified from accumulated other comprehensive loss into interest expense over the next 12 months. | 11. DEBT The Company’s debt is as follows: December 31, 2020 2019 Short-term debt: Insurance premium financing $ 1,225 $ 1,389 Current portion of term loan 2,251 2,920 Current portion of other 20 19 $ 3,496 $ 4,328 Long-term debt: Revolving credit facility $ — $ 2,159 Term loan 222,187 273,254 Other 128 145 $ 222,315 $ 275,558 Unamortized debt discount and debt issuance costs (13,005) (5,245) Total long-term debt, net $ 209,310 $ 270,313 Revolving Credit Facility Prior to 2019, the Company executed a Revolving Credit Agreement, as amended and restated (“Credit Facility Agreement”), with Bank of America, N.A., as agent and sole lender, that provides total committed capital of $50,000 in the form of a revolving credit facility (the “Revolving Credit Facility”), which is allocated into US and Canadian categories of $45,000 and $5,000 respectively. In June 2019, the Company entered into an amendment to the Credit Facility Agreement. This amendment gave consent to the Mustang sale transaction and released Mustang from its obligations under the Credit Facility Agreement. In November 2020, the Company entered into an amendment to the Credit Facility Agreement, which gave consent to the Term Loan debt refinancing and extended the terms of the Credit Facility Agreement to November 2025. The Revolving Credit Facility is collateralized by the Company’s and subsidiaries’ property, including but not limited to accounts receivable, inventory and real estate. The Revolving Credit Facility classifies eligible accounts receivable and inventory into three groups: United States inventory and accounts receivable denominated in U.S. dollars; Canadian inventory and accounts receivable denominated in U.S. dollars; and Canadian inventory and accounts receivable denominated in Canadian dollars. The Revolving Credit Facility bears interest at a base rate (“Base Rate”) plus an applicable margin as determined by average availability or 30, 60, or 90 day London Interbank Offered Rate (“LIBOR”) plus an applicable margin as determined by average availability. The Base Rate is calculated as, for any day, a per annum rate equal to the greater of the Prime Rate for such day or the Federal Funds Rate for such day plus 0.50%. Interest is payable monthly, and all outstanding interest and principal is due at the maturity date. Availability to borrow under the Revolving Credit Facility is calculated by applying a borrowing advance rate to eligible accounts receivable and inventory, which is reported to the bank in the form of a borrowing base certificate (“Borrowing Base”). In addition to interest paid on outstanding borrowings, the Revolving Credit Facility is also subject to an unused commitment fee, which is paid monthly. The Revolving Credit Facility contains various affirmative, negative and financial covenants which the Company considers to be customary for such borrowings and requires the Company and its subsidiaries to maintain a minimum fixed charge coverage ratio includes certain limitations on cross-border intercompany transactions. Failure to meet one or more of these covenants would result in an event of default, and if uncured, could eliminate the Company’s ability to borrow and result in acceleration of principal repayment on any amounts outstanding. Under the terms of the Revolving Credit Facility, the Company is required to provide audited financial statements to its lenders and agents no later than 90 days following the close of each fiscal year. For the fiscal year ended December 31, 2019, the Company requested, and its lenders and agents consented to, a 30 day extension of this deadline. The Company was in compliance with all financial covenants during 2020 and 2019. As of December 31, 2020 and 2019, the Company had outstanding borrowings under the Revolving Credit Facility of $0 and $2,159, that bore interest at a U.S. all-in rate (U.S. Base Rate plus applicable margin) of 3.5% and 5.0% and a Canadian all-in rate (Canadian Base Rate plus applicable margin) of 3.7% and 5.2%, respectively. As of December 31, 2020 and 2019, availability, less outstanding letters of credit, was $41,299 and $40,387, respectively. The Company had outstanding letters of credit of $2,713 and $2,453 on December 31, 2020 and 2019, respectively. Term Loan Prior to 2019, the Company executed a $279,000 Term Loan and Security Agreement, as amended and restated (the “Original Term Loan Agreement”), with certain financial institutions as lenders and Virtus Group, L.P. as agent. The Original Term Loan (the “Original Term Loan”) was issued with a debt discount of $4,185 with a maturity date of November 18, 2023. The Original Term Loan bears interest at an applicable rate of LIBOR Rate plus 7.25% or Base Rate plus 6.25%. For applicable rate determination, LIBOR is the higher of 1.00% and the LIBOR for a term equivalent to such period. The Original Term Loan is collateralized by all property including but not limited to accounts receivable, inventory, fixed assets and real estate with seniority in the Company’s fixed assets and real estate. The Original Loan may be prepaid or terminated after one year at the Company’s option with the payment of a prepayment penalty of 2% of the outstanding principal balance in year one, 1% of the outstanding principal balance in year two, and none in year three and thereafter. The Original Term Loan requires quarterly outstanding principal payments of $730 through September 30, 2023. Any outstanding principal balance together with any accrued but unpaid interest or fees will be due in full at maturity. In June 2019, the Company entered into an amendment to the Original Term Loan Agreement. This amendment gave consent to the Mustang sale transaction and released Mustang from its obligations under the Original Term Loan Agreement. On February 11, 2020, the Original Term Loan was assigned to a new group of financial institutions. This transaction did not result in any changes or amendments to the terms, provisions, or balances of the Original Term Loan, as disclosed above. On November 17, 2020, the Company settled the Original Term Loan and executed a $225,000 Term Loan and Security Agreement (the “Term Loan Agreement”) with certain financial institutions as lenders and an agent. The Term Loan (the “Term Loan”) was issued with a debt discount of $10,126 comprised of $5,063 in original issuance discount and $5,063 of fees paid to the lender, and a maturity date of May 17, 2026. In connection with the execution of the Term Loan Agreement, Kanders & Company, Inc., a company controlled by Warren Kanders, our Chairman of the Board, received compensation from Cadre of In conjunction with the settlement of the Original Term Loan and the execution of the Term Loan Agreement, the Company performed a restructuring analysis under ASC 470, Debt The Term Loan includes a feature for delayed draws up to $30,000 (the “Delayed Draw Maximum Amount”) to consummate permitted acquisitions under the Term Loan Agreement with such feature terminated on November 17, 2021 (the “Delayed Draw Termination Date”). Any delayed draw amounts will have an accompanying fee of The Term Loan Agreement bears interest at an applicable rate of LIBOR rate plus 6.50% or Base Rate plus 5.50% if the Company reports a Leverage Ratio of less than or equal to 5.00 to 1.00 or a rate of LIBOR rate plus 7.00% or Base Rate plus 6.00% if the Company reports a Leverage Ratio greater than 5.00 to 1.00. For applicable rate determination, LIBOR is the higher of 1.00% or the LIBOR for a term equivalent to such period. The Term Loan is collateralized by all property including but not limited to accounts receivable, inventory, fixed assets and real estate with seniority in the Company’s fixed assets and real estate. The The Term Loan Agreements contain certain restrictive debt covenants that require the Company and its subsidiaries to: (i) maintain a minimum fixed charge coverage ratio and (ii) maintain a quarterly maximum leverage ratio. In addition, the Term Loan Agreements contain covenants restricting the Company and its subsidiaries from engaging in acquisitions other than acquisitions permitted by the Term Loan Agreements. The Term Loan Agreements contain customary events of default (with grace periods where customary), including, among other things, failure to pay any principal or interest when due; any materially false or misleading representation, warranty, or financial statement; failure to comply with or to perform any provision of the Term Loan Agreements; and default on any debt or agreement in excess of certain amounts. The Credit Facility Agreement and the Term Loan Agreements have a cross-default clause whereby a violation of one may constitute a violation in the other causing an acceleration of payments. Additionally, under the terms of the Term Loan Agreements, the Company is required to provide audited financial statements to its lenders and agents no later than Company requested, and its lenders and agents consented to, a 30-day extension of this deadline. The Company was in compliance with all financial covenants during 2020 and 2019. As of December 31, 2020 and 2019, the Term Loan’s outstanding principal balance was $224,438 and $276,174 and bore interest at 7.50% and 9%, respectively. As of December 31, 2020 and 2019, the Company had an unamortized debt discount of $11,906 and $3,387 and unamortized debt issuance costs of $1,099 and $1,858, respectively, included as an offset to debt in the consolidated balance sheets. Short-Term Debt In August 2019, the Company entered into a short-term loan facility (the “2019 Short-Term Loan”) for insurance premium financing with Imperial PFS for $2,754 with a maturity date of June 27, 2020. The loan had a fixed annual interest rate of 4.29% on the outstanding balance and required monthly payments of principal and interest of $281. We repaid the outstanding balance on the date of maturity. In August 2020, the Company entered into a short-term loan facility (the “2020 Short-Term Loan”) for insurance premium with Aon Premium Finance for $2,733 with a maturity date of April 27, 2021. The loan has a fixed annual interest rate of 4.25% on the outstanding balance and required monthly payments of principal and interest of $309. As of December 31, 2020, $1,225 was outstanding. The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs as of December 31, 2020: 2021 $ 2,271 2022 2,272 2023 2,272 2024 2,272 2025 2,273 Thereafter 213,226 Total principal payments $ 224,586 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2020, the Company settled an administrative enforcement action filed by the U.S. Federal Trade Commission (“FTC”) relating to Company’s sale of VieVu, LLC to Axon Enterprise Inc. (“Axon”) wherein the FTC alleged that the operative agreements contained non-compete and non-solicitation provisions in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. The FTC’s administrative complaint sought only injunctive relief against the Company to enjoin the enforcement of these provisions, now and in the future, and did not seek monetary damages against the Company. In January 2020, the Company and Axon had rescinded these provisions. Pursuant to a consent agreement and proposed consent order entered into by the FTC and the Company, on June 11, 2020, the FTC issued a Decision and Order accepting the Consent Agreement (the “Order”). Under the Order, the Company agreed to not modify and reinstate the rescinded provisions and to not enter into any new similar provisions with Axon, absent prior approval from the FTC. In addition, as part of the Company’s compliance program, the Order imposes an obligation to distribute to, and train the directors and officers on, the requirements of the consent order and to report annually for five years to the FTC ensuring compliance with the consent order. On July 10, 2020, the Company filed its Interim Verified Compliance Report and, on June 11, 2021, filed its First Annual Compliance Report, both as required by the Order. In June 2020, the Company received a Civil Investigative Demand (“CID”) from the United States Department of Justice (“DOJ”), Western District of Washington (Seattle, WA), pertaining to a False Claims Act investigation, 31 U.S.C, sections 3729-3733 (“FCA”), concerning allegations that soft body armor vest accessory panels sold by the Company are falsely labeled as compliant with the National Institute of Justice performance standards. In September 2020, the Company made its First Production of Documents which contained only documents and data that had been deemed to be of a “priority” nature pursuant to an agreement reached between the Company’s counsel and the Assistant U.S. Attorney handling the matter. In July 2021, the Company received a request for additional information relating to the subject matter of the investigation, with which the Company intends to comply. In October 2021 and November 2021, the Company produced additional documents responsive to the correspondence containing requests for specific documents and supplemental information. At this preliminary stage of the investigation, the Company does not have enough information to make an evaluation of the merits, exposure or potential risks regarding this matter. In June 2021, two subcommittees of the U.S. House Committee on Oversight and Reform initiated an inquiry into the safety of crowd control products. Major U.S. manufacturers of crowd control products, including us, received a letter from the subcommittees requesting information and documents about the production, sale, safety, and regulation of crowd control products. The Company has provided information to the subcommittees who released a Memorandum on this issue on October 14, 2021, noting the absence of Federal regulation on the use of tear gas and the safety risks arising from its use. The implementation of additional regulations governing the sale of crowd control products would not be expected to have a material effect on our business. In September 2021, Safariland, LLC, a wholly-owned subsidiary of the Company, received a jury verdict awarding $7,500 to a plaintiff relating to a personal injury case wherein the plaintiff alleged various product liability claims against Safariland, LLC. The plaintiff in the proceeding, Mr. David Hakim, instituted the proceeding on July 24, 2015, through the filing of a complaint with the United States District Court, Northern District of Illinois, Eastern Division. In the proceeding, the plaintiff, a SWAT officer with the DuPage County Sheriff’s Office (“DCSO”), alleged that he suffered injuries during a training exercise conducted by DCSO in which a Defense Technology Shotgun Breaching TKO round was deployed and passed through a door and lower-floor ceiling causing a fragment to strike plaintiff’s back resulting in injury. Prior to the jury rendering its verdict, the court deferred ruling on Safariland, LLC’s Motion for Judgment as a Matter of Law (“JMOL”) and, thus, no judgment has been issued. On November 8, 2021, Safariland, LLC filed its post-trial motions, including a supplemental JMOL, motion for new trial and remittitur. Plaintiff’s response is due on January 8, 2022, and Safariland’s reply would be due on February 8, 2022. In the event of an unfavorable ruling by the court, Safariland, LLC intends to pursue an appeal. While any litigation contains an element of uncertainty, the Company believes it is reasonably possible, not probable, that the Company could incur losses related to this case, however, any losses would be indemnified by our insurance carrier under applicable policies. The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against all lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Insurance The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost. International As an international company, we are, from time to time, the subject of investigations relation to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and international laws. Leases The Company leases office, warehouse, and distribution space under non-cancelable operating leases. As leases expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced. Our leases generally contain multi-year renewal options and escalation clauses. Total rent expense for the nine months ended September 30, 2021 and 2020 was $3,499 and $3,320, respectively. The Company maintains capital lease agreements. As of September 30, 2021 and December 31, 2020, the Company recorded capital lease obligations of $43 within accrued liabilities and $14 and $46, respectively, within other liabilities in the consolidated balance sheets. Future minimum lease payments required under non-cancelable operating leases that have initial or remaining non-cancelable lease terms in excess of one year and the Company’s capital lease agreements for the remaining three months of 2021, the next four years and thereafter is as follows: Capital Leases Operating Leases Remainder of 2021 $ 11 $ 1,149 2022 43 4,290 2023 4 3,887 2024 — 2,763 2025 — 1,428 Thereafter — 469 Total minimum lease payments $ 58 $ 13,986 Less: Amount representing interest (13) Capital lease obligation $ 45 There were no material future minimum sublease payments to be received under non-cancelable subleases at September 30, 2021. There was no material sublease income for the nine months ended September 30, 2021 and 2020. | 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2020, the Company settled an administrative enforcement action filed by the U.S. Federal Trade Commission (“FTC”) relating to Company’s sale of VieVu, LLC to Axon Enterprise Inc. wherein the FTC alleged that the operative agreements contained non-compete and non-solicitation provisions in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. The FTC’s administrative complaint sought only injunctive relief against the Company to enjoin the enforcement of these provisions, now and in the future, and did not seek monetary damages against the Company. In January 2020, the Company and Axon had rescinded these provisions. Pursuant to a consent agreement and proposed consent order entered into by the FTC and the Company, on June 11, 2020, the Commission issued a Decision and Order accepting the Consent Agreement (the “Order”). Under the Order, the Company agreed to not modify and reinstate the rescinded provisions and to not enter into any new similar provisions with Axon, absent prior approval from the FTC. In addition, as part of the Company’s compliance program, the Order imposes an obligation to distribute to, and train the directors and officers on, the requirements of the consent order and to report annually for five years to the FTC ensuring compliance with the consent order. On June 11, 2021, the Company filed its second Interim Verified Compliance Report as required by the Order. In June 2020, the Company received a Civil Investigative Demand (“CID”) from the United States Department of Justice (“DOJ”), Western District of Washington (Seattle, WA), pertaining to an investigation with regard the to the False Claims Act, 31 U.S.C, sections 3729-3733 (“FCA”), concerning allegations that soft body armor vest accessory panels sold by the Company are falsely labeled as compliant with the National Institute of Justice (NIJ) performance standards. In September 2020, the Company made its First Production of Documents which contained only documents and data that had been deemed to be of a “priority” nature pursuant to an agreement reached between the Company’s counsel and the Assistant US Attorney handling the matter. There has been no further communication or production of documents with the US Attorney’s Office since September 2020. At this preliminary stage of the investigation, the Company does not have enough information to make an evaluation of the merits, exposure or potential risks regarding this matter. The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against all lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Insurance The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost. International As an international company, we are, from time to time, the subject of investigations relation to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and international laws. Leases The Company leases office, warehouse, and distribution space under non-cancelable operating leases. As leases expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced. Our leases generally contain multi-year renewal options and escalation clauses. Total rent expense of the Company for the years ended December 31, 2020 and 2019 was $4,403 and $4,256, respectively. The Company maintains capital lease agreements. As of December 31, 2020, and 2019 the Company recorded capital lease obligations of $43 and $44 within accrued liabilities and $46 and $89, respectively, within other liabilities in the consolidated balance sheets. Future minimum lease payments required under non-cancelable operating leases that have initial or remaining non-cancelable lease terms in excess of one year and the Company’s capital lease agreements are as follows: Capital Leases Operating Leases 2021 $ 43 $ 4,470 2022 43 4,139 2023 3 3,732 2024 — 2,602 2025 — 1,263 Thereafter — 397 Total minimum lease payments $ 89 $ 16,603 Less: Amount representing interest (18) Capital lease obligation $ 71 There were no material future minimum sublease payments to be received under non-cancelable subleases at December 31, 2020. There was no material sublease income as of December 31, 2020 and 2019, respectively. |
INCOME TAXES_2
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
INCOME TAXES | 7. INCOME TAXES The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of September 30, 2021, the Company’s tax years subsequent to 2016 are subject to examination by tax authorities with few exceptions. One of the Company’s Canadian subsidiaries is currently undergoing an examination of its tax filings for the period June 1, 2016 through December 31, 2017. In July 2021, we received notification from the Canadian Revenue Agency that the 2018 and 2019 tax returns of a different Canadian subsidiary had been selected for examination. In assessing the realizability of deferred income tax assets, the Company performs a quarterly evaluation of whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. During the course of this evaluation, the Company considers all available positive and negative evidence and if, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. Based on its evaluation during the nine months ended September 30, 2021, the Company has recorded a valuation allowance of $1,729. The Company’s effective tax rate for the nine months ended September 30, 2021 and 2020 was 31.6% and 6.2% respectively. The change in the effective tax rate period over period primarily relates to the valuation allowance the Company had on its deferred tax assets during 2020. | 14. INCOME TAXES Consolidated income (loss) from continuing operations before income taxes consists of the following: Year ended December 31, 2020 2019 U.S. operations $ 23,776 $ (12,989) Foreign operations 4,099 10,919 Income (loss) before benefit for income taxes $ 27,875 $ (2,070) The benefit for income taxes is detailed below: Year ended December 31, 2020 2019 Current tax provision: Federal $ — $ — State (188) (10) Foreign (1,482) (665) Total current provision (1,670) (675) Deferred tax benefit: Federal 10,233 149 State 1,949 27 Foreign 66 641 Total deferred benefit 12,248 817 Total income tax benefit $ 10,578 $ 142 The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the Company’s consolidated financial statements: Year ended December 31, 2020 2019 Federal statutory rate 21.0 % 21.0 % Increase (decrease) in income taxes resulting from: State income taxes, net of federal income taxes 7.7 (7.7) Change in valuation allowance (71.1) (53.3) Current year tax credits (2.3) 34.1 Difference between foreign and federal tax rate 2.0 23.4 Permanent items 2.8 43.3 Reserve for uncertain tax positions 1.3 (57.9) Other 0.7 4.0 Effective tax rate (37.9) % 6.9 % Deferred taxes have not been recognized for the excess financial reporting basis over the tax basis of investments of foreign subsidiaries. It is the Company’s intent to permanently reinvest the earnings of those foreign subsidiaries in those jurisdictions. It is not practical to determine the amount of any unrecognized deferred tax liability on this item. Deferred income tax assets and liabilities are determined based on the difference between the financial reporting carrying amounts and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. The tax effects of temporary differences giving rise to significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss and other carry forwards $ 15,531 $ 25,756 Accrued liabilities 4,201 3,359 Reserves and other 3,587 3,124 263A uniform capitalization costs 1,067 1,106 Other deferred tax assets 2,122 2,064 Total deferred tax assets 26,508 35,409 Valuation allowance (1,729) (21,562) Net deferred tax assets 24,779 13,847 Deferred tax liabilities: Intangibles (3,626) (4,580) Depreciation (3,667) (4,217) Goodwill (6,182) (5,171) Other (489) (1,312) Total deferred tax liabilities (13,964) (15,280) Total deferred income taxes $ 10,815 $ (1,433) As of December 31, 2020 and 2019, the Company had federal and state net operating loss carryforwards (“NOLs”) resulting in deferred tax assets of $6,990 and $3,494, respectively. The federal NOLs will expire in varying amounts beginning in 2030 through 2038 and the state NOLs will begin to expire in varying amounts in 2021 through 2037. In assessing the realizability of deferred income tax assets, the Company performs an evaluation of whether it is more likely than not that some portion, or all, of its deferred income tax assets will not be realized. During the course of this evaluation, the Company considers all available positive and negative evidence and if, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. Based on its current evaluation, the Company determined it was appropriate to decrease its valuation allowance by $19,833. The total amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect the Company’s effective tax rate was $2,122. A reconciliation of the change in the unrecognized income tax benefit for the year ended December 31, 2020 is as follows: Year ended December 31, 2020 2019 Beginning unrecognized tax benefits $ 1,754 $ 556 Current period unrecognized tax benefits 368 1,198 Ending unrecognized tax benefits $ 2,122 $ 1,754 The Company recognizes interest expense and penalties related to unrecognized tax benefits as income tax expense. No amounts representing penalties and interest were recorded as income tax expense during the years ended December 31, 2020 and 2019. The Company had no interest or penalties accrued in the consolidated balance sheets at December 31, 2020 and 2019. The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of December 31, 2020, the Company’s tax years subsequent to 2015 are subject to examination by tax authorities with few exceptions. One of the Company’s Canadian subsidiaries is currently undergoing an examination of its tax filings for the period June 1, 2016 through December 31, 2017. |
COMPENSATION PLANS
COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2021 | |
COMPENSATION PLANS | |
COMPENSATION PLANS | 8. COMPENSATION PLANS The Company maintains a cash-based executive compensation plan for certain employees. The Company’s Board of Directors awarded 1,433,500 interests in the plan (“units”). Each unit represents an unfunded and unsecured right, subject to certain conditions as set forth by the plan. One-third |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS The Company leases 5 distribution warehouses and retail stores from certain employees. The Company recorded rent expense related to these leases of $437 and $480 for the nine months ended September 30, 2021 and 2020, respectively. Rent expense related to these leases is included in related party expenses in the Company’s consolidated statements of operations and comprehensive income. In connection with the execution of the New Credit Agreement, Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer, received compensation from Cadre of $1,000. | 16. RELATED PARTY TRANSACTIONS The Company leases 5 distribution warehouses and retail stores from an employee. During the years ended December 31, 2020 and 2019 the Company made payments and recorded rent expense related to these leases of $635 and $646 respectively which are included in related party expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company recorded balances of $42 as of December 31, 2020 and 2019, which is recorded in prepaid expenses in the Company’s consolidated balance sheets. |
SEGMENT DATA_2
SEGMENT DATA | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
SEGMENT DATA | 10. SEGMENT DATA Our operations are comprised of two reportable segments: Products and Distribution. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. The CODM is not provided asset information or operating expenses by segment. Nine months ended September 30, 2021 Reconciling Products Distribution Items (1) Total Net sales $ 274,039 $ 69,086 $ (19,374) $ 323,751 Cost of goods sold 159,924 51,696 (19,364) 192,256 Gross profit $ 114,115 $ 17,390 $ (10) $ 131,495 Nine months ended September 30, 2020 Reconciling Products Distribution Items (1) Total Net sales $ 251,441 $ 62,707 $ (17,129) $ 297,019 Cost of goods sold 153,233 47,897 (17,261) 183,869 Gross profit $ 98,208 $ 14,810 $ 132 $ 113,150 (1) | 18. SEGMENT DATA Our operations are comprised of two reportable segments: Products and Distribution. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. Senior management evaluates segment performance based on segment profit. Each segment’s profit is measured as gross profit. The CODM is not provided asset information or operating expenses by segment. Year ended December 31, 2020 Products Distribution Reconciling Items (1) Total Net sales $ 343,689 $ 84,922 $ (23,969) $ 404,642 Cost of goods sold 211,048 64,761 (24,105) 251,704 Gross profit $ 132,641 $ 20,161 $ 136 $ 152,938 Year ended December 31, 2019 Products Distribution Reconciling Items (1) Total Net sales $ 365,903 $ 78,171 $ (23,338) $ 420,736 Cost of goods sold 236,355 61,657 (23,313) 274,699 Gross profit $ 129,548 $ 16,514 $ (25) $ 146,037 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS On November 3, 2021, the Company completed its initial public offering (“IPO”) in which the Company issued and sold 6,900,000 shares, which included 900,000 shares that were offered and sold pursuant to the full exercise of the underwriters’ over-allotment option, of common stock at a public offering price of $13.00 per share. The Company’s aggregate gross proceeds from the sale of shares in the IPO was $89,700 before underwriter discounts and commissions, fees and expenses of $11,397, of which $2,250 was paid to Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer. On November 9, 2021 the Company utilized proceeds received in connection with the IPO and repaid $38,937 and $20,500, respectively, that were outstanding under our existing Term Loan and Revolving Loan under the New Credit Agreement. On November 11, 2021, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend policy of $0.08 per share of the Company’s common stock or $0.32 per share on an annualized basis. The Company’s first dividend payment will be made on December 7, 2021 to shareholders of record as of the close of business on November 22, 2021. In connection with the completion of IPO, the Company granted restricted stock awards to certain employees, including the Company’s Chief Executive Officer, President and Chief Financial Officer, comprised of an aggregate of 2,600,000 restricted shares of common stock (the “Restricted Stock Awards”) pursuant to terms of their respective employment agreements with the Company. The Restricted Stock Awards contain market-based performance conditions and have a grant date fair value of $4.65 , which is expected to be recognized as compensation expense over a weighted average period of 5.67 years. | 20. SUBSEQUENT EVENTS Management has evaluated the impact of events that have occurred from December 31, 2020 through May 7, 2021, the date these financial statements were available to be issued. Based on this evaluation, except for the following, the Company has determined no other events were required to be recognized or disclosed: The Company maintains a cash-based executive compensation plan for certain employees. The Company’s Board of Directors awarded 1,433,500 (split-adjusted) interests in the plan (“units”). Each unit represents an unfunded and unsecured right, subject to certain conditions as set forth by the plan. One-third of the units granted to any holder will vest on each of the first, second, and third anniversaries of March 18, 2021 during the term of such holder’s employment with the Company. Payment of a holder’s vested balance is dependent upon a transaction or series of related transactions constituting a change of control, as defined by the executive compensation plan. The plan will expire on March 18, 2025, at which time the plan and all awarded units will be terminated for no consideration if a change in control event has not occurred before that date. If a change in control event becomes probable, the fair value of the awards would be calculated as follows: enterprise value of the Company (net of debt) divided by the sum of the fully diluted common shares outstanding and vested units immediately before the change in control event is deemed probable multiplied by the number of vested units. Compensation expense would be recognized on the vested units at that time. Awards not yet vested at the time of a change in control event will terminate, however, the Company, at its sole discretion, may choose to accelerate the vesting of all unvested units upon a change in control event. |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through 15 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers. | Nature of Operations and Basis of Presentation Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety and survivability products and other related products for the law enforcement, first responder and military markets. The business operates through On June 20, 2019, the Company sold Mustang Survival Holdings Corporation and its subsidiaries (“Mustang”), a wholly owned subsidiary that forms the Company’s Marine Safety and Climate Protection Business. See Note 4, Dispositions and Assets Held For Sale |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) and include the accounts of Cadre Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Stock Split | Stock Split In July 2021, the Company effected a 50-for-1 | Stock Split In July 2021, the Company effected a 50-for-1 |
Dividend | Dividend In August 2021, the Company declared share | |
Emerging Growth Company | Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. | Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Certain items previously reported in the notes to the consolidated financial statements have been reclassified to conform to the current financial statement presentation. | Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2021 and 2020. The carrying value of our long-term debt obligations approximates the fair value, as the long-term debt was entered into recently. The Company classifies its long-term debt within Level 2 of the fair value hierarchy. | Fair Value Measurements The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available. The Company’s financial instruments consist principally of cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income tax payable and debt. The carrying amounts of certain of these financial instruments, including cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income tax payable approximate their current fair value due to the relatively short-term nature of these accounts. Refer to Note 6 , Fair Value Measurements |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. | Goodwill and Other Intangible Assets The Company classifies intangible assets into three categories: i) intangible assets with definite lives subject to amortization, ii) intangible assets with indefinite lives not subject to amortization and iii) goodwill. The Company determines the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized on a straight-line basis over their useful lives. The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31 st In evaluating goodwill for impairment, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the Company performs a two-step goodwill impairment test. The first step involves a comparison of the fair value of a reporting unit to its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process is performed, which compares the implied value of the reporting unit goodwill with the carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company determines the fair value of its reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. The Company performs sensitivity tests with respect to growth rates and discount rates used in the income approach. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions and applied to projected operating data for each reporting unit to arrive at an indication of fair value. |
Revenue Recognition | Revenue Recognition The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Other Assets and Deferred Costs — Contracts with Customers There was no cumulative effect adjustment recorded to opening retained earnings as of January 1, 2019, upon adoption of Topic 606, Revenue from Contracts with Customers. We do not expect an impact to our net income on an ongoing basis as a result of the adoption of the new standard. The Company derives revenue primarily from the sale of physical products. The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point of sale transactions. The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company has some long-term contracts that may contain research and development performance obligations that are satisfied over time. The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold. Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying consolidated statements of operations and comprehensive income (loss). We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer. Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs are capitalized and amortized over the life of the contract. These costs are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Policy Elections ● The Company does not account for significant financing components if, at contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for the product or service will be one year or less. ● Incremental costs to obtain a contract with a customer will be capitalized if the Company expects to recover those costs unless the amortization period is one year or less. ● The Company recognizes revenue equal to the amount it has the right to invoice when the amount corresponds directly with the value to the customer of the Company’s performance to date. ● The Company does not account for shipping and handling activities as a separate performance obligation, but rather as an activity performed to transfer the promised goods. ● Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. |
Product Warranty | Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 | Product Warranty Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements and is recorded in cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss). The following table represents changes in the Company’s accrued warranties and related costs: Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 |
Net (loss) Income per Share | Net Income per Share Basic income or loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. There were no dilutive instruments outstanding during the nine months ended September 30, 2021 and 2020. The calculation of weighted average shares outstanding and net income per share are as follows: Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 | Net Income (Loss) per Share Basic income or loss per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted income (loss) per share reflects the potential dilution from outstanding warrants. For the year ended December 31, 2019, there were 81,268 shares excluded from the diluted earnings per share calculation because the impact of their assumed exercise would be antidilutive due to a net loss in that period. The calculation of weighted average shares outstanding and net income (loss) per share are as follows (in thousands, except for per share data): Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. | Recent Accounting Pronouncements Pronouncements Adopted During 2020 In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company adopted this ASU effective January 1, 2020. The adoption did not have a material impact on the Company’s disclosures. Refer to Note 6, Fair Value Measurements, for further discussion. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes There were no other new accounting standards that the Company expects to have a potential material impact to the financial position or results of operations upon adoption. |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3 Assets: Interest rate swap (Note 5) $ 829 $ — $ 829 $ — $ — $ — $ — $ — Liabilities: Interest rate swap (Note 5) 709 — 709 — — — — — | There were no assets and liabilities measured at fair value on a recurring basis as of December 31, 2020. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 consisted of: Level 1 Level 2 Level 3 Total Assets: Equity investments $ 5,175 — — 5,175 Total assets at fair value $ 5,175 — — 5,175 Liabilities: Contingent consideration (a) $ — — 1,667 1,667 Total liabilities at fair value $ — — 1,667 1,667 |
Summary of changes in the accrued warranties and related costs | The following table represents changes in the Company’s accrued warranties and related costs: Nine months ended September 30, 2021 2020 Beginning accrued warranty expense $ 1,133 $ 2,114 Current period claims (236) (223) Provision for current period sales 256 357 Ending accrued warranty expense $ 1,153 $ 2,248 | Year ended December 31, 2020 2019 Beginning accrued warranty expense $ 2,114 $ 2,330 Current period claims (442) (456) Provision for current period sales 307 490 Impact of accounting estimate change (846) — Mustang disposal — (250) Ending accrued warranty expense $ 1,133 $ 2,114 |
Summary of calculation of weighted average shares outstanding and net (loss) income per share | Nine months ended September 30, 2021 2020 Numerator for basic and diluted earnings per share: Net income $ 8,373 $ 22,673 Denominator: Weighted average shares outstanding - basic 27,483,350 27,483,350 Diluted weighted average shares outstanding 27,483,350 27,483,350 Net income per share: Basic $ 0.30 $ 0.82 Diluted $ 0.30 $ 0.82 | Year ended December 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income (loss) $ 38,453 $ (1,928) Denominator: Weighted average shares outstanding – basic 27,483,350 27,402,082 Dilutive effect of warrants — — Diluted weighted average shares outstanding 27,483,350 27,402,082 Anti-dilutive warrants excluded — 81,268 Net income (loss) per share: Basic $ 1.40 $ (0.07) Diluted $ 1.40 $ (0.07) |
REVENUE RECOGNITION (Tables)_2
REVENUE RECOGNITION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
REVENUE RECOGNITION | ||
Summary of disaggregation of net sales by channel and geography | The following tables disaggregate net sales by channel and geography: Nine months ended September 30, 2021 2020 U.S. state and local agencies (a) $ 179,385 $ 171,552 Commercial 27,102 25,117 U.S. federal agencies 37,365 43,632 International 74,647 51,691 Other 5,252 5,027 Net sales $ 323,751 $ 297,019 (a)Includes all Distribution sales Nine months ended September 30, 2021 2020 United States $ 249,104 $ 245,328 International 74,647 51,691 $ 323,751 $ 297,019 | The following tables disaggregate net sales by channel and geography: Year ended December 31, 2020 2019 U.S state and local agencies (a) $ 230,706 $ 219,482 Commercial 35,648 32,837 U.S. federal agencies 63,267 74,756 International 68,669 89,367 Other 6,352 4,294 Net sales $ 404,642 $ 420,736 (a) Includes all Distribution sales Year ended December 31, 2020 2019 United States $ 335,973 $ 331,369 International 68,669 89,367 $ 404,642 $ 420,736 |
INVENTORIES (Tables)_2
INVENTORIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
INVENTORIES | ||
Summary of inventories stated at lower of cost or net realizable value | The following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Finished goods $ 31,541 $ 25,986 Work-in-process 4,833 3,741 Raw materials and supplies 34,693 31,196 $ 71,067 $ 60,923 | December 31, 2020 2019 Finished goods $ 25,986 $ 21,458 Work-in-process 3,741 4,614 Raw materials and supplies 31,196 36,054 $ 60,923 $ 62,126 |
GOODWILL AND OTHER INTANGIBLE_9
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Summary of changes in goodwill | The following table summarizes the changes in goodwill for the nine months ended September 30, 2021: Products Distribution Total Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 Foreign currency translation adjustments (87) — (87) Balance, September 30, 2021 $ 63,611 $ 2,616 $ 66,227 | Products Distribution Total Balance, December 31, 2018 $ 66,780 $ 10,201 $ 76,981 Impairment losses — (7,585) (7,585) Foreign currency translation adjustments 93 — 93 Mustang disposal (3,309) — (3,309) Balance, December 31, 2019 63,564 2,616 66,180 Foreign currency translation adjustments 134 — 134 Balance, December 31, 2020 $ 63,698 $ 2,616 $ 66,314 |
Summary of intangible assets | Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,088 (50,858) 23,230 11 Technology 11,978 (10,919) 1,059 7 Tradenames 6,472 (2,980) 3,492 4 Non-compete agreements 1,037 (1,037) — 4 $ 93,575 (65,794) 27,781 Indefinite lived intangibles: Tradenames 16,678 — 16,678 Indefinite Total $ 110,253 (65,794) 44,459 December 31, 2020 Weighted Accumulated Average Gross amortization Net Useful Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 11 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 4 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 Indefinite lived intangibles: Tradenames 16,674 — 16,674 Indefinite Total $ 110,319 (59,310) 51,009 | December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 74,123 (45,815) 28,308 12 Technology 11,991 (10,333) 1,658 7 Tradenames 6,490 (2,135) 4,355 1 Non-compete agreements 1,041 (1,027) 14 4 $ 93,645 (59,310) 34,335 December 31, 2020 Weighted Average Accumulated Useful Gross amortization Net Life Indefinite lived intangibles: Tradenames 16,674 — 16,674 Total $ 110,319 (59,310) 51,009 December 31, 2019 Weighted Average Accumulated Useful Gross amortization Net Life Definite lived intangibles: Customer relationships $ 73,825 (39,010) 34,815 12 Technology 11,913 (8,991) 2,922 7 Tradenames 3,640 (913) 2,727 1 Non-compete agreements 1,020 (944) 76 4 $ 90,398 (49,858) 40,540 Indefinite lived intangibles: Tradenames 19,415 — 19,415 Total $ 109,813 (49,858) 59,955 |
Summary of estimated amortization expense for finite lived intangible assets | The estimated amortization expense for finite-lived intangible assets for the remaining three months of 2021, the next four years and thereafter is as follows: Remainder of 2021 $ 2,037 2022 7,683 2023 6,754 2024 3,856 2025 1,856 Thereafter 5,595 $ 27,781 | 2021 $ 8,366 2022 7,608 2023 6,601 2024 3,603 2025 1,650 Thereafter 6,507 $ 34,335 |
DEBT (Tables)_2
DEBT (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
Schedule of company's debt | The Company’s debt is as follows: September 30, 2021 December 31, 2020 Short-term debt: Insurance premium financing $ 2,883 $ 1,225 Current portion of term loan 10,000 2,251 Current portion of other 21 20 $ 12,904 $ 3,496 Long-term debt: Revolver 25,500 — Term loan 190,000 222,187 Other 113 128 $ 215,613 $ 222,315 Unamortized debt discount and debt issuance costs (2,667) (13,005) Total long-term debt, net $ 212,946 $ 209,310 | December 31, 2020 2019 Short-term debt: Insurance premium financing $ 1,225 $ 1,389 Current portion of term loan 2,251 2,920 Current portion of other 20 19 $ 3,496 $ 4,328 Long-term debt: Revolving credit facility $ — $ 2,159 Term loan 222,187 273,254 Other 128 145 $ 222,315 $ 275,558 Unamortized debt discount and debt issuance costs (13,005) (5,245) Total long-term debt, net $ 209,310 $ 270,313 |
Summary of aggregate principal payments of long-term debt | The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs, for the remaining three months of 2021, the next four years and thereafter: Remainder of 2021 $ 2,505 2022 10,021 2023 10,022 2024 10,022 2025 10,023 Thereafter 183,041 Total principal payments $ 225,634 | 2021 $ 2,271 2022 2,272 2023 2,272 2024 2,272 2025 2,273 Thereafter 213,226 Total principal payments $ 224,586 |
Schedule of Interest rate swaps | Effective date Notional amount Fixed rate September 30, 2021 through July 23, 2026 $ 100,000 0.875 % | |
Schedule of fair value swap agreement | The estimated fair value of our Swap Agreement in the consolidated balance sheets was as follows: Balance sheet account September 30, 2021 December 31, 2020 Other assets $ 829 $ — Accrued liabilities $ 709 $ — |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of future minimum lease payments required under non-cancelable operating leases | Capital Leases Operating Leases Remainder of 2021 $ 11 $ 1,149 2022 43 4,290 2023 4 3,887 2024 — 2,763 2025 — 1,428 Thereafter — 469 Total minimum lease payments $ 58 $ 13,986 Less: Amount representing interest (13) Capital lease obligation $ 45 |
SEGMENT DATA (Tables)_2
SEGMENT DATA (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
Summary of segment data | Nine months ended September 30, 2021 Reconciling Products Distribution Items (1) Total Net sales $ 274,039 $ 69,086 $ (19,374) $ 323,751 Cost of goods sold 159,924 51,696 (19,364) 192,256 Gross profit $ 114,115 $ 17,390 $ (10) $ 131,495 Nine months ended September 30, 2020 Reconciling Products Distribution Items (1) Total Net sales $ 251,441 $ 62,707 $ (17,129) $ 297,019 Cost of goods sold 153,233 47,897 (17,261) 183,869 Gross profit $ 98,208 $ 14,810 $ 132 $ 113,150 (1) | Year ended December 31, 2020 Products Distribution Reconciling Items (1) Total Net sales $ 343,689 $ 84,922 $ (23,969) $ 404,642 Cost of goods sold 211,048 64,761 (24,105) 251,704 Gross profit $ 132,641 $ 20,161 $ 136 $ 152,938 Year ended December 31, 2019 Products Distribution Reconciling Items (1) Total Net sales $ 365,903 $ 78,171 $ (23,338) $ 420,736 Cost of goods sold 236,355 61,657 (23,313) 274,699 Gross profit $ 129,548 $ 16,514 $ (25) $ 146,037 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | Aug. 11, 2021USD ($) | Apr. 12, 2012item | Aug. 31, 2021$ / shares | Jul. 31, 2021 | Jul. 31, 2012 |
Nature of Operations and Basis of Presentation | |||||
Number of manufacturing plants | item | 15 | ||||
Stock Split | |||||
Stock split ratio | 50 | 50 | |||
Dividend | |||||
Dividend declared | $ | $ 10,000 | ||||
Dividend paid | $ | $ 10,000 | ||||
Dividend declared (in dollars per share) | $ / shares | $ 0.36 | ||||
Dividend paid (in dollars per share) | $ / shares | $ 0.36 |
SIGNIFICANT ACCOUNTING POLIC_12
SIGNIFICANT ACCOUNTING POLICIES - Assets and liabilities measured at fair value on a recurring basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | |||
Assets | $ 5,175 | ||
Liabilities: | |||
Liabilities: | $ 0 | 1,667 | |
Level 1 | |||
Assets: | |||
Assets | 5,175 | ||
Level 3 | |||
Liabilities: | |||
Liabilities: | $ 1,667 | ||
Carrying amount | Interest Rate Swap | |||
Assets: | |||
Assets | $ 829 | ||
Liabilities: | |||
Liabilities: | 709 | ||
Fair value | Level 2 | Interest Rate Swap | |||
Assets: | |||
Assets | 829 | ||
Liabilities: | |||
Liabilities: | $ 709 |
SIGNIFICANT ACCOUNTING POLIC_13
SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | ||||
Transfers of assets, level 1 to level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Transfers of assets, level 2 to level 1 | 0 | 0 | 0 | 0 |
Transfers of assets in and out of level 3 | 0 | 0 | 0 | 0 |
Transfers of liabilities, level 1 to level 2 | 0 | 0 | 0 | 0 |
Transfers of liabilities, level 2 to level 1 | $ 0 | $ 0 | 0 | 0 |
Transfers of liabilities in and out of level 3 | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLIC_14
SIGNIFICANT ACCOUNTING POLICIES - Accrued warranties and related costs (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the Company's accrued warranties and related costs | ||||
Beginning accrued warranty expense | $ 1,133 | $ 2,114 | $ 2,114 | |
Current period claims | (236) | (223) | (442) | $ (456) |
Provision for current period sales | 256 | 357 | 307 | 490 |
Ending accrued warranty expense | $ 1,153 | $ 2,248 | $ 1,133 | $ 2,114 |
SIGNIFICANT ACCOUNTING POLIC_15
SIGNIFICANT ACCOUNTING POLICIES - Weighted average shares outstanding and net (loss) income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator for basic and diluted earnings per share: | ||||
Net (loss) income | $ 8,373 | $ 22,673 | $ 38,453 | $ (1,928) |
Weighted average shares outstanding: | ||||
Weighted average shares outstanding - basic | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Diluted weighted average shares outstanding | 27,483,350 | 27,483,350 | 27,483,350 | 27,402,082 |
Net (loss) income per share: | ||||
Basic | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
Diluted | $ 0.30 | $ 0.82 | $ 1.40 | $ (0.07) |
REVENUE RECOGNITION - Net sal_2
REVENUE RECOGNITION - Net sales by channel and geography (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
U.S. state and local agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 179,385 | 171,552 | 230,706 | 219,482 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 27,102 | 25,117 | 35,648 | 32,837 |
U.S. federal agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 37,365 | 43,632 | 63,267 | 74,756 |
International. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 74,647 | 51,691 | 68,669 | 89,367 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 5,252 | $ 5,027 | $ 6,352 | $ 4,294 |
REVENUE RECOGNITION - Include_2
REVENUE RECOGNITION - Includes all Distribution sales (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 74,647 | 51,691 | 68,669 | 89,367 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 249,104 | $ 245,328 | $ 335,973 | $ 331,369 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
REVENUE RECOGNITION | |||
Contract liabilities, current | $ 9,044 | $ 6,485 | $ 2,072 |
REVENUE RECOGNITION - Additio_2
REVENUE RECOGNITION - Additional information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 25,851 | $ 27,516 |
Percentage of remaining performance obligations expect to recognize | 61.00% | 89.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-31 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-31 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 2 years |
INVENTORIES (Details)_2
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
INVENTORIES | |||
Finished goods | $ 31,541 | $ 25,986 | |
Work-in-process | 4,833 | 3,741 | $ 4,614 |
Raw materials and supplies | 34,693 | 31,196 | 36,054 |
Inventory Net | $ 71,067 | $ 60,923 | $ 62,126 |
GOODWILL AND OTHER INTANGIBL_10
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of changes in goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | $ 66,314 | $ 66,180 | $ 76,981 |
Foreign currency translation adjustments | (87) | 134 | 93 |
Balance, September 30, 2021 | 66,227 | 66,314 | 66,180 |
Gross goodwill | 73,812 | 73,899 | 73,765 |
Accumulated impairment losses | 7,585 | 7,585 | 7,585 |
Products | |||
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | 63,698 | 63,564 | 66,780 |
Foreign currency translation adjustments | (87) | 134 | 93 |
Balance, September 30, 2021 | 63,611 | 63,698 | 63,564 |
Distribution | |||
Goodwill [Roll Forward] | |||
Balance, December 31, 2020 | 2,616 | 2,616 | 10,201 |
Balance, September 30, 2021 | $ 2,616 | $ 2,616 | $ 2,616 |
GOODWILL AND OTHER INTANGIBL_11
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 93,575 | $ 93,645 | $ 90,398 |
Definite lived intangibles, Accumulated amortization | (65,794) | (59,310) | (49,858) |
Definite lived intangibles, Net | 27,781 | 34,335 | 40,540 |
Indefinite lived intangibles | 110,253 | 110,319 | 109,813 |
Indefinite lived intangibles, Net | 44,459 | 51,009 | 59,955 |
Tradenames | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Indefinite lived intangibles | 16,678 | 16,674 | 19,415 |
Indefinite lived intangibles, Net | 16,674 | 19,415 | |
Customer relationship | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | 74,088 | 74,123 | |
Definite lived intangibles, Accumulated amortization | (50,858) | (45,815) | |
Definite lived intangibles, Net | $ 23,230 | $ 28,308 | |
Weighted Average Useful Life | 11 years | 11 years | |
Technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 11,978 | $ 11,991 | 11,913 |
Definite lived intangibles, Accumulated amortization | (10,919) | (10,333) | (8,991) |
Definite lived intangibles, Net | $ 1,059 | $ 1,658 | $ 2,922 |
Weighted Average Useful Life | 7 years | 7 years | 7 years |
Tradename | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 6,472 | $ 6,490 | |
Definite lived intangibles, Accumulated amortization | (2,980) | (2,135) | |
Definite lived intangibles, Net | $ 3,492 | $ 4,355 | |
Weighted Average Useful Life | 4 years | 4 years | |
Non-compete agreements | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Definite lived intangibles, Gross | $ 1,037 | $ 1,041 | $ 1,020 |
Definite lived intangibles, Accumulated amortization | $ (1,037) | (1,027) | (944) |
Definite lived intangibles, Net | $ 14 | $ 76 | |
Weighted Average Useful Life | 4 years | 4 years | 4 years |
GOODWILL AND OHER INTANGIBLE AS
GOODWILL AND OHER INTANGIBLE ASSETS - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||
Amortization expense | $ 6,538 | $ 7,047 | $ 9,238 | $ 8,817 |
Amortization expense included in cost of goods sold | $ 596 | $ 1,090 | $ 1,342 | $ 1,729 |
GOODWILL AND OTHER INTANGIBL_12
GOODWILL AND OTHER INTANGIBLE ASSETS amortization expense for finite lived intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Remainder of 2021 | $ 2,037 | ||
2022 | 7,683 | $ 8,366 | |
2023 | 6,754 | 7,608 | |
2024 | 3,856 | 6,601 | |
2025 | 1,856 | 3,603 | |
Thereafter | 5,595 | ||
Finite lived intangible assets | $ 27,781 | $ 34,335 | $ 40,540 |
DEBT - Schedule of company's _2
DEBT - Schedule of company's debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Debt [Line Item] | |||
Short-term debt | $ 12,904 | $ 3,496 | $ 4,328 |
Long-term debt | 215,613 | 222,315 | 275,558 |
Unamortized debt discount and debt issuance costs | (2,667) | (13,005) | (5,245) |
Total long-term debt, net | 212,946 | 209,310 | 270,313 |
Revolver | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 25,500 | 2,159 | |
Term loan | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 190,000 | 222,187 | 273,254 |
Other. | |||
Schedule Of Debt [Line Item] | |||
Long-term debt | 113 | 128 | 145 |
Insurance premium financing | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | 2,883 | 1,225 | 1,389 |
Current portion of term loan | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | 10,000 | 2,251 | 2,920 |
Current portion of other | |||
Schedule Of Debt [Line Item] | |||
Short-term debt | $ 21 | $ 20 | $ 19 |
DEBT - Summary of aggregate p_2
DEBT - Summary of aggregate principal payment of long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
DEBT | ||
Remainder of 2021 | $ 2,505 | $ 2,271 |
2022 | 10,021 | 2,272 |
2023 | 10,022 | 2,272 |
2024 | 10,022 | 2,272 |
2025 | 10,023 | 2,273 |
Thereafter | 183,041 | 213,226 |
Total principal payments | $ 225,634 | $ 224,586 |
DEBT - Schedule of interest rat
DEBT - Schedule of interest rate swaps (Details) $ in Thousands | Sep. 30, 2021USD ($) |
DEBT | |
Notional amount | $ 100,000 |
Fixed rate | 0.875% |
DEBT - Schedule of fair value s
DEBT - Schedule of fair value swap agreement (Details) - Swap $ in Thousands | Sep. 30, 2021USD ($) |
Other assets | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | |
Estimated fair value of assets | $ 829 |
Accrued liabilities | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | |
Estimated fair value of liabilities | $ 709 |
DEBT - Additional Information (
DEBT - Additional Information (Details) | Oct. 01, 2022 | Dec. 31, 2021 | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Aug. 20, 2021USD ($) | Dec. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | ||||||
Outstanding borrowings | $ 215,613,000 | $ 222,315,000 | $ 275,558,000 | |||
Available borrowing capacity | 71,738,000 | 41,299,000 | 40,387,000 | |||
Minimum fixed charge coverage ratio | 1.25 | |||||
Total net leverage ratio | 3.75 | |||||
Increase in total net leverage ratio | 0.50 | |||||
Loss on extinguishment of debt | 15,155,000 | 200,000 | ||||
Financing costs | 4,095,000 | |||||
Debt issuance costs | $ 2,830,000 | |||||
Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment Fee | 0.175% | |||||
Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment Fee | 0.25% | |||||
Total net leverage ratio | 3.50 | |||||
Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Interest rate percentage | 0.50% | |||||
Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Interest rate percentage | 1.50% | |||||
LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Interest rate percentage | 1.50% | |||||
LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Interest rate percentage | 2.50% | |||||
Revolver | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding borrowings | $ 25,500,000 | 2,159,000 | ||||
Term loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding borrowings | 190,000,000 | $ 222,187,000 | $ 273,254,000 | |||
Letter of credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Amount borrowed | $ 15,000,000 | |||||
Outstanding letters of credit | 2,762,000 | |||||
Swing line loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Amount borrowed | 10,000,000 | |||||
Revolving credit facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Amount borrowed | 100,000,000 | |||||
Financing costs | 2,730,000 | |||||
Debt issuance costs | $ 1,897,000 | |||||
Term loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Aggregate principal amount per quarter (in percent) | 1.25% | |||||
Outstanding borrowings | $ 200,000,000 | |||||
Financing costs | $ 1,365,000 |
Disclosure - DEBT - Canadian Cr
Disclosure - DEBT - Canadian Credit Facility (Details) | Oct. 14, 2021USD ($) | Oct. 14, 2021CAD ($) | Sep. 30, 2021 | Aug. 20, 2021USD ($) | Dec. 31, 2020USD ($) |
CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 5,000,000 | ||||
Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Unused line fee | 0.175% | ||||
Base Rate | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 0.50% | ||||
Base Rate | Minimum | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 0.50% | ||||
Base Rate | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 1.50% | ||||
LIBOR | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 1.50% | ||||
LIBOR | Minimum | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 1.50% | ||||
LIBOR | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 2.50% | ||||
Letter of credit | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 15,000,000 | ||||
Letter of credit | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 3,000,000 | ||||
Revolving credit facility | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 100,000,000 | ||||
Upfront Fee | 0.25% | ||||
Revolving credit facility | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 10,000,000 | ||||
Revolving credit facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Unused line fee | 0.25% | ||||
Revolving credit facility | Base Rate | Maximum | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 1.50% | ||||
Revolving credit facility | LIBOR | Maximum | CANADA | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 2.50% |
DEBT - Swap (Details)
DEBT - Swap (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Offsetting Assets [Line Items] | ||
Amount of gain recognized | $ 90,000 | |
Accumulated Other Comprehensive Loss | ||
Offsetting Assets [Line Items] | ||
Amount of gain recognized | 90,000 | |
Swap | ||
Offsetting Assets [Line Items] | ||
Amount of gain recognized | $ 90,000 | 90,000 |
Amount reclassified from AOCI into interest expense within next twelve months | 710,000 | 710,000 |
Amount reclassified from AOCI into interest | $ 0 | $ 0 |
Interest Rate Swap | ||
Offsetting Assets [Line Items] | ||
Derivative, Variable Interest Rate | 0.09% | 0.09% |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Thousands | 1 Months Ended |
Sep. 30, 2021USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Damage awarded | $ 7,500 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
ASU 2016-02 Transition [Abstract] | |||
Total rent expense | $ 3,499 | $ 3,320 | |
Capital lease obligations, within accrued liabilities | 43 | $ 43 | |
Capital lease obligations, within other liabilities | $ 14 | $ 46 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES - future minimum lease payments required under non-cancelable operating leases and capital lease agreements (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Capital Leases | |
Remainder of 2021 | $ 11 |
2022 | 43 |
2023 | 4 |
Total minimum lease payments | 58 |
Less: Amount representing interest | (13) |
Capital lease obligation | 45 |
Operating Leases | |
Remainder of 2021 | 1,149 |
2022 | 4,290 |
2023 | 3,887 |
2024 | 2,763 |
2025 | 1,428 |
Thereafter | 469 |
Total minimum lease payments | $ 13,986 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||||
Valuation allowance | $ 1,729 | $ 1,729 | $ 21,562 | |
Effective tax rate | 31.60% | 6.20% | (37.90%) | 6.90% |
COMPENSATION PLANS (Details)
COMPENSATION PLANS (Details) - USD ($) $ in Thousands | Mar. 18, 2021 | Sep. 30, 2020 |
COMPENSATION PLANS | ||
Number of units awarded | 1,433,500 | |
Vesting percentage | 0.33% | |
Net proceeds of initial public offering | $ 250,000 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)warehouse | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)warehouse | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | ||||
Number of distribution warehouses and retail stores | warehouse | 5 | 5 | ||
Rent expense related to leases | $ 437,000 | $ 480,000 | $ 1,635,000 | $ 1,096,000 |
Warren Kanders | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 1,000,000 |
SEGMENT DATA (Details)_2
SEGMENT DATA (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SEGMENT DATA | ||
Number of reportable segments | 2 | 2 |
SEGMENT DATA - asset informat_2
SEGMENT DATA - asset information or operating expenses by segment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 323,751 | $ 297,019 | $ 404,642 | $ 420,736 |
Cost of goods sold | 192,256 | 183,869 | 251,704 | 274,699 |
Gross profit | 131,495 | 113,150 | 152,938 | 146,037 |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (19,374) | (17,129) | (23,969) | (23,338) |
Cost of goods sold | (19,364) | (17,261) | (24,105) | (23,313) |
Gross profit | (10) | 132 | 136 | (25) |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 274,039 | 251,441 | 343,689 | 365,903 |
Cost of goods sold | 159,924 | 153,233 | 211,048 | 236,355 |
Gross profit | 114,115 | 98,208 | 132,641 | 129,548 |
Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 69,086 | 62,707 | 84,922 | 78,171 |
Cost of goods sold | 51,696 | 47,897 | 64,761 | 61,657 |
Gross profit | $ 17,390 | $ 14,810 | $ 20,161 | $ 16,514 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Thousands | Nov. 03, 2021USD ($)$ / sharesshares |
Initial public offering | |
Subsequent Event [Line Items] | |
Number of shares issued | shares | 6,900,000 |
Public offering price | $ / shares | $ 13 |
Gross proceeds from the sale of shares | $ 89,700 |
Underwriter discounts and commissions, fees and expenses | 11,397 |
Initial public offering | Kanders & Company, Inc | |
Subsequent Event [Line Items] | |
Underwriter discounts and commissions, fees and expenses | $ 2,250 |
Over-Allotment Option | |
Subsequent Event [Line Items] | |
Number of shares issued | shares | 900,000 |
SUBSEQUENT EVENTS - Company uti
SUBSEQUENT EVENTS - Company utilized proceeds (Details) - USD ($) $ in Thousands | Nov. 09, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||
Repayment of revolving loan | $ 223,132 | $ 283,887 | $ 384,215 | $ 406,381 | |
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Repayments of term loan | $ 38,937 | ||||
Repayment of revolving loan | $ 20,500 |
SUBSEQUENT EVENTS - dividend to
SUBSEQUENT EVENTS - dividend to shareholders (Details) - $ / shares | Nov. 22, 2021 | Nov. 11, 2021 |
Subsequent event | ||
Subsequent Event [Line Items] | ||
Dividends per share declared | $ 0.32 | $ 0.08 |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional information (Details) - USD ($) | Nov. 11, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||
Number of awards granted | 1,433,500 | |
Subsequent event | Restricted Stock | ||
Subsequent Event [Line Items] | ||
Number of awards granted | 2,600,000 | |
Grant date fair value which is expected to be recognized as compensation expense | $ 4,650 | |
Grant date fair value expected to be recognized as compensation expense over a weighted average period | 5 years 8 months 1 day |