Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 06, 2023 | Jul. 02, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-08174 | ||
Entity Registrant Name | DUCOMMUN INCORPORATED | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-0693330 | ||
Entity Address, Address Line One | 200 Sandpointe Avenue, Suite 700 | ||
Entity Address, City or Town | Santa Ana | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92707-5759 | ||
City Area Code | 657 | ||
Local Phone Number | 335-3665 | ||
Title of 12(b) Security | Common Stock, $.01 par value per share | ||
Trading Symbol | DCO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 529 | ||
Entity Common Stock, Shares Outstanding | 12,146,494 | ||
Documents Incorporated by Reference | The following documents are incorporated by reference:(a) Proxy Statement for the 2023 Annual Meeting of Shareholders (the “2023 Proxy Statement”), incorporated partially in Part III hereof. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000030305 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Irvine, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 46,246 | $ 76,316 |
Accounts receivable (net of allowance for credit losses of $589 and $1,098 at December 31, 2022 and 2021, respectively) | 103,958 | 72,261 |
Contract assets | 191,290 | 176,405 |
Inventories | 171,211 | 150,938 |
Production cost of contracts | 5,693 | 8,024 |
Other current assets | 8,938 | 8,625 |
Total Current Assets | 527,336 | 492,569 |
Property and Equipment, Net | 106,225 | 102,419 |
Operating Lease Right-of-Use Assets | 34,632 | 33,265 |
Goodwill | 203,407 | 203,694 |
Intangibles, Net | 127,201 | 141,764 |
Other Assets | 22,705 | 5,024 |
Total Assets | 1,021,506 | 978,735 |
Current Liabilities | ||
Accounts payable | 90,143 | 66,059 |
Contract liabilities | 47,068 | 42,077 |
Accrued and other liabilities | 48,820 | 41,291 |
Operating lease liabilities | 7,155 | 6,133 |
Current portion of long-term debt | 6,250 | 7,000 |
Total Current Liabilities | 199,436 | 162,560 |
Long-Term Debt, Less Current Portion | 240,595 | 279,384 |
Non-Current Operating Lease Liabilities | 28,841 | 28,074 |
Deferred Income Taxes | 13,953 | 18,727 |
Other Long-Term Liabilities | 12,721 | 15,388 |
Total Liabilities | 495,546 | 504,133 |
Commitments and Contingencies (Notes 13, 15) | ||
Shareholders’ Equity | ||
Common stock - $0.01 par value; 35,000,000 shares authorized; 12,106,285 and 11,925,087 shares issued and outstanding at December 31, 2022 and 2021, respectively | 121 | 119 |
Additional paid-in capital | 112,042 | 104,253 |
Retained earnings | 406,052 | 377,263 |
Accumulated other comprehensive income (loss) | 7,745 | (7,033) |
Total Shareholders’ Equity | 525,960 | 474,602 |
Total Liabilities and Shareholders’ Equity | $ 1,021,506 | $ 978,735 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 589 | $ 1,098 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 12,106,285 | 11,925,087 |
Common stock, shares outstanding (in shares) | 12,106,285 | 11,925,087 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net Revenues | $ 712,537 | $ 645,413 | $ 628,941 |
Cost of Sales | 568,240 | 502,953 | 491,203 |
Gross Profit | 144,297 | 142,460 | 137,738 |
Selling, General and Administrative Expenses | 98,351 | 93,579 | 89,808 |
Restructuring Charges | 6,158 | 0 | 2,424 |
Operating Income | 39,788 | 48,881 | 45,506 |
Interest Expense | (11,571) | (11,187) | (13,653) |
Loss on Extinguishment of Debt | (295) | 0 | 0 |
Gain on Sale-Leaseback | 0 | 132,522 | 0 |
Other Income, Net | 5,400 | 268 | 128 |
Income Before Taxes | 33,322 | 170,484 | 31,981 |
Income Tax Expense | 4,533 | 34,948 | 2,807 |
Net Income | $ 28,789 | $ 135,536 | $ 29,174 |
Earnings Per Share | |||
Basic earnings per share (in dollars per share) | $ 2.38 | $ 11.41 | $ 2.50 |
Diluted earnings per share (in dollars per share) | $ 2.33 | $ 11.06 | $ 2.45 |
Weighted-Average Number of Shares Outstanding | |||
Basic (in shares) | 12,074 | 11,879 | 11,676 |
Diluted (in shares) | 12,366 | 12,251 | 11,932 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 28,789 | $ 135,536 | $ 29,174 |
Pension Adjustments: | |||
Amortization of actuarial losses and prior service costs, net of tax of $143, $309, and $236 for 2022, 2021, and 2020, respectively | 442 | 976 | 757 |
Actuarial gains (losses) arising during the period, net of tax of $722, $902, and $701 for 2022, 2021, and 2020, respectively | 2,259 | 2,859 | (2,251) |
Change in net unrealized (losses) gains on cash flow hedges, net of tax of $3,753, $391, and $57 for 2022, 2021, and 2020, respectively | 12,077 | (1,268) | 162 |
Other Comprehensive Income (Loss), Net of Tax | 14,778 | 2,567 | (1,332) |
Comprehensive Income, Net of Tax | $ 43,567 | $ 138,103 | $ 27,842 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Amortization of actuarial (loss) gain, tax | $ 143 | $ 309 | $ 236 |
Actuarial gain (loss) arising during the period, tax benefit | 722 | 902 | 701 |
Unrealized gain (loss) on cash flow hedge, tax expense (benefit) | $ 3,753 | $ 391 | $ 57 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2019 | 11,572,668 | ||||
Beginning balance at Dec. 31, 2019 | $ 292,800 | $ 116 | $ 88,399 | $ 212,553 | $ (8,268) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 29,174 | 29,174 | |||
Other comprehensive income (loss), net of tax | (1,332) | (1,332) | |||
Employee stock purchase plan (in shares) | 57,285 | ||||
Employee stock purchase plan | 2,194 | $ 1 | 2,193 | ||
Stock options exercised (in shares) | 54,063 | ||||
Stock options exercised | 1,564 | $ 1 | 1,563 | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (95,411) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (4,365) | $ (2) | (4,363) | ||
Stock awards vested (in shares) | 139,607 | ||||
Stock awards vested | 0 | $ 1 | (1) | ||
Stock-based compensation | 9,299 | 9,299 | |||
Ending balance (in shares) at Dec. 31, 2020 | 11,728,212 | ||||
Ending balance at Dec. 31, 2020 | 329,334 | $ 117 | 97,090 | 241,727 | (9,600) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 135,536 | 135,536 | |||
Other comprehensive income (loss), net of tax | 2,567 | 2,567 | |||
Employee stock purchase plan (in shares) | 56,524 | ||||
Employee stock purchase plan | 2,904 | $ 1 | 2,903 | ||
Stock options exercised (in shares) | 48,769 | ||||
Stock options exercised | 1,733 | $ 1 | 1,732 | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (155,653) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (8,684) | $ (2) | (8,682) | ||
Stock awards vested (in shares) | 247,235 | ||||
Stock awards vested | 0 | $ 2 | (2) | ||
Stock-based compensation | $ 11,212 | 11,212 | |||
Ending balance (in shares) at Dec. 31, 2021 | 11,925,087 | 11,925,087 | |||
Ending balance at Dec. 31, 2021 | $ 474,602 | $ 119 | 104,253 | 377,263 | (7,033) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 28,789 | 28,789 | |||
Other comprehensive income (loss), net of tax | 14,778 | 14,778 | |||
Employee stock purchase plan (in shares) | 59,693 | ||||
Employee stock purchase plan | $ 2,231 | $ 1 | 2,230 | ||
Stock options exercised (in shares) | 109,186 | 109,186 | |||
Stock options exercised | $ 3,475 | $ 1 | 3,474 | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (151,213) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (7,459) | $ (2) | (7,457) | ||
Stock awards vested (in shares) | 163,532 | ||||
Stock awards vested | 0 | $ 2 | (2) | ||
Stock-based compensation | $ 9,544 | 9,544 | |||
Ending balance (in shares) at Dec. 31, 2022 | 12,106,285 | 12,106,285 | |||
Ending balance at Dec. 31, 2022 | $ 525,960 | $ 121 | $ 112,042 | $ 406,052 | $ 7,745 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | |||
Net Income | $ 28,789 | $ 135,536 | $ 29,174 |
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities: | |||
Depreciation and amortization | 31,421 | 28,389 | 28,850 |
Non-cash operating lease cost | 7,267 | 3,349 | 3,157 |
Inventory write-down and property and equipment impairment due to restructuring | 1,610 | 0 | 0 |
Stock-based compensation expense | 10,744 | 11,212 | 9,299 |
Deferred income taxes | (9,392) | 1,768 | 327 |
(Recovery of) provision for credit losses | (509) | (454) | 231 |
Noncash loss on extinguishment of debt | 295 | 0 | 0 |
Insurance recoveries related to loss on operating assets | 0 | 0 | 8,546 |
Gain on sale-leaseback | 0 | (132,522) | 0 |
Other | 1,060 | (505) | 826 |
Changes in Assets and Liabilities: | |||
Accounts receivable | (31,188) | (11,689) | 8,877 |
Contract assets | (14,885) | (22,377) | (47,358) |
Inventories | (20,841) | (17,129) | (20,183) |
Production cost of contracts | 8 | (2,311) | (1,488) |
Other assets | (1,354) | (4,902) | (212) |
Accounts payable | 24,222 | 2,793 | (19,714) |
Contract liabilities | 4,991 | 13,813 | 13,747 |
Operating lease liabilities | (6,473) | (3,531) | (2,953) |
Accrued and other liabilities | 6,915 | (2,005) | 1,485 |
Net Cash Provided by (Used in) Operating Activities | 32,680 | (565) | 12,611 |
Cash Flows from Investing Activities | |||
Purchases of property and equipment | (19,689) | (16,863) | (12,510) |
Proceeds from sale-leaseback | 0 | 143,100 | 0 |
Proceeds from sale of assets | 82 | 553 | 5 |
Insurance recoveries related to property and equipment | 0 | 0 | 4,954 |
Proceeds from life insurance | 0 | 439 | 1,889 |
Post closing cash received from (payments for acquisition of) Magnetic Seal LLC, net of cash acquired | 365 | (69,479) | 0 |
Post closing cash received from the acquisition of Nobles Worldwide, Inc., net | 0 | 0 | 190 |
Net Cash (Used in) Provided by Investing Activities | (19,242) | 57,750 | (5,472) |
Cash Flows from Financing Activities | |||
Borrowings from senior secured revolving credit facility | 4,000 | 96,000 | 65,900 |
Repayments of senior secured revolving credit facility | (4,000) | (121,000) | (40,900) |
Borrowings from term loans | 250,000 | 0 | 0 |
Repayments of term loans | (289,274) | (7,926) | (14,362) |
Repayments of other debt | (344) | (362) | (288) |
Debt issuance costs | (2,511) | 0 | 0 |
Net cash paid upon issuance of common stock under stock plans | (1,379) | (4,047) | (607) |
Net Cash (Used in) Provided by Financing Activities | (43,508) | (37,335) | 9,743 |
Net (Decrease) Increase in Cash and Cash Equivalents | (30,070) | 19,850 | 16,882 |
Cash and Cash Equivalents at Beginning of Year | 76,316 | 56,466 | 39,584 |
Cash and Cash Equivalents at End of Year | $ 46,246 | $ 76,316 | $ 56,466 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business We are a leading global provider of innovative, value-added proprietary products and manufacturing solutions for high-performance products and high-cost-of failure applications used primarily in the aerospace and defense (“A&D”), industrial, medical, and other industries (collectively, “Industrial”). Our operations are organized into two primary businesses: Electronic Systems segment (“Electronic Systems”) and Structural Systems segment (“Structural Systems”), each of which is a reportable operating segment. Electronic Systems designs, engineers and manufactures high-reliability electronic and electromechanical products used in worldwide technology-driven markets including A&D and Industrial end-use markets. Electronic Systems’ product offerings primarily range from prototype development to complex assemblies. Structural Systems designs, engineers and manufactures large, complex contoured aerostructure components and assemblies and supplies composite and metal bonded structures and assemblies. Structural Systems’ products are primarily used on commercial aircraft, military fixed-wing aircraft, and military and commercial rotary-wing aircraft. All reportable operating segments follow the same accounting principles. Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and include the accounts of Ducommun Incorporated and its subsidiaries (“Ducommun,” the “Company,” “we,” “us” or “our”), after eliminating intercompany balances and transactions. Our fiscal quarters typically end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. As a result of using fiscal quarters for the first three quarters combined with leap years, our first and fourth fiscal quarters can range between 12 1/2 weeks to 13 1/2 weeks while the second and third fiscal quarters remain at a constant 13 weeks per fiscal quarter. Use of Estimates Certain amounts and disclosures included in the consolidated financial statements required management to make estimates and judgments that affect the amount of assets, liabilities (including forward loss reserves), revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Reclassifications Certain prior period amounts have been reclassified to conform to current year’s presentation. Supplemental Cash Flow Information (Dollars in thousands) 2022 2021 2020 Interest paid $ 10,983 $ 10,135 $ 11,859 Taxes paid, net $ 3,825 $ 32,934 $ 3,810 Non-cash activities: Purchases of property and equipment not paid $ 1,195 $ 1,333 $ 2,477 Fair Value Assets and liabilities that are measured, recorded or disclosed at fair value on a recurring basis are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value. Level 1, the highest level, refers to the values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant observable inputs. Level 3, the lowest level, includes fair values estimated using significant unobservable inputs. We have money market funds and they are included as cash and cash equivalents. We also have forward interest rate swap agreements and had interest rate cap hedge agreements and the fair value of the forward interest rate swap agreements and interest rate cap hedge agreements were determined using pricing models that use observable market inputs as of the balance sheet date, a Level 2 measurement. The interest rate cap hedges matured during the second quarter of 2020 and as such, the premium was zero as of both December 31, 2022 and December 31, 2021. There were no transfers between Level 1, Level 2, or Level 3 financial instruments in either 2022 or 2021. Cash and Cash Equivalents Cash equivalents consist of highly liquid instruments purchased with original maturities of three months or less. These assets are valued at cost, which approximates fair value, which we classify as Level 1. See Fair Value above. Derivative Instruments We recognize derivative instruments on our condensed consolidated balance sheets at their fair value. On the date that we enter into a derivative contract, we designate the derivative instrument as a fair value hedge, a cash flow hedge, or a derivative instrument that will not be accounted for using hedge accounting methods. In November 2021, we entered into forward interest rate swap agreements with an aggregate notional amount of $150.0 million, all with an effective date of January 1, 2024 (“Forward Interest Rate Swaps”) to manage our exposure to interest rate movements on a portion of our debt. As such, at the time we entered into the Forward Interest Rate Swaps, there was a high probability of forecasted interest payments on our debts occurring and the swaps are highly effective in offsetting those interest payments and therefore, we elected to apply cash flow hedge accounting. On July 14, 2022, as a result of refinancing all our existing debt, which allows borrowing based on a Secured Overnight Financing Rate (“SOFR”), we were required to complete an amendment of the Forward Interest Rate Swaps from One Month London Interbank Offered Rate (“LIBOR”) to One Month Term SOFR (“Amended Forward Interest Rate Swaps”), which occurred on the same day. After the transition of the Forward Interest Rate Swaps and debt to SOFR was completed, we determined the hedging relationship was still highly effective as of the amendment date. See Note 9. As of December 31, 2022, all of our derivative instruments were designated as cash flow hedges. We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. Since the Amended Forward Interest Rate Swaps are not effective until January 1, 2024, we only record the changes in fair value of the derivative instruments that were highly effective and that were designated and qualified as cash flow hedges. As such, during 2022, we recorded changes of $15.8 million to other assets, deferred income taxes, and accumulated other comprehensive income (loss). During the fourth quarter of 2022, we recorded an adjustment of $6.7 million to correct an understatement of the hedge asset balance as of the end of the third quarter of 2022, with a corresponding increase of $5.1 million to other comprehensive income, net of tax of $1.6 million. There was no impact to net income. When we determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings. Allowance for Credit Losses We maintain an allowance for credit losses for expected losses from the inability of customers to make required payments. The allowance for credit losses is evaluated periodically for expected credit losses based on the financial condition of customers and their payment history, the aging of accounts receivable, historical write-off experience and other assumptions, such as current assessment of economic conditions. Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a moving average cost basis for raw materials and actual cost for work-in-process and finished goods. The majority of our inventory is charged to cost of sales as raw materials are placed into production. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle performance center expense, freight, handling costs, and wasted materials (spoilage) incurred. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. The majority of our revenues are recognized over time, however, for revenue contracts where revenue is recognized using the point in time method, inventory is not reduced until it is shipped or transfer of control to the customer has occurred. Our ending inventory consists of raw materials, work-in-process, and finished goods. Property and Equipment and Depreciation Property and equipment, including assets recorded under operating and finance leases, are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, or the lease term if shorter for leasehold improvements. Repairs and maintenance are charged to expense as incurred. We evaluate long-lived assets for recoverability considering undiscounted cash flows, when significant changes in conditions occur, and recognize impairment losses if any, based upon the fair value of the assets. Business Combinations When a business is acquired, we allocate the purchase price by recording the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date, with the excess cost recorded as goodwill. A preliminary fair value is determined once a business is acquired, with the final determination of fair value be completed no later than one year from the date of acquisition. To determine the estimated fair value of assets acquired and liabilities assumed requires significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies. We engage the assistance of valuation specialists in concluding on fair value measurements in determining the fair value of assets acquired and liabilities assumed in business combinations. The fair value of the intangible assets is estimated using several valuation methodologies, including the income based or market based approaches, which represent Level 3 fair value measurements. Inputs to fair value analyses and other aspects of the allocation of the purchase price require judgment. The value for customer relationships is typically estimated based on a multi-period excess earnings approach. The more significant inputs used in the customer relationships intangible asset valuation include (i) future revenue growth rates, (ii) projected gross margins, (iii) the customer attrition rate, and (iv) the discount rate. The useful lives are estimated based on the underlying agreements or the future economic benefit expected to be received from the assets. Acquisition related costs are not included as components of consideration transferred but instead, expensed as incurred and are included in selling, general and administrative expenses in our consolidated statements of income. See Note 2. Goodwill Goodwill is evaluated for impairment on an annual basis on the first day of the fourth fiscal quarter. If certain factors occur, including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter. We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis is performed to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a discounted cash flow model) and the market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable business acquisitions and the transaction values observed and its related control premiums. In the fourth quarter of 2022, the carrying amount of goodwill at the date of the most recent annual impairment evaluation for Electronic Systems and Structural Systems was $117.4 million and $86.0 million, respectively. We acquired 100% of the equity interests of Magnetic Seal LLC (f/k/a Magnetic Seal Corporation, “MagSeal”) in December 2021, for an original purchase price of $69.5 million, net of cash acquired. We recorded goodwill of $32.6 million in our Structural Systems segment, which is also our reporting unit. See Note 2. As our commercial aerospace end-use market business continues to be negatively impacted by the COVID-19 pandemic, we performed a step one goodwill impairment test for our Structural Systems reporting unit as of the first day of the fourth quarter of 2022. The fair value of our Structural Systems segment exceeded its carrying value and thus, was not deemed impaired. As of the date of our 2022 annual evaluation for goodwill impairment for the Electronic Systems segment, which is also our reporting unit, we performed a qualitative assessment as of the first day of the fourth quarter of 2022, which considered each of the following: 1) margin of passing most recent step one analysis, 2) actual operating results as compared to prior forecasts, 3) long-term growth rate, 4) analyzing material adverse factors/changes between valuation dates, 5) general macroeconomic factors, and 6) industry and market conditions. Based upon our qualitative assessment, we concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount and thus, goodwill was not deemed impaired. Other Intangible Assets We amortize acquired other intangible assets with finite lives over the estimated economic lives of the assets, ranging from 2 to 19 years, generally using the straight-line method. The value of other intangibles acquired through business combinations has been estimated using present value techniques which involve estimates of future cash flows. We evaluate other intangible assets for recoverability considering undiscounted cash flows when significant changes in conditions occur, and recognize impairment losses, if any, based upon the estimated fair value of the assets. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, as reflected on the consolidated balance sheets under the equity section, was comprised of cumulative pension and retirement liability adjustments, net of tax, and change in net unrealized gains and losses on cash flow hedges, net of tax. Revenue Recognition Our customers typically engage us to manufacture products based on designs and specifications provided by the end-use customer. This requires the building of tooling and manufacturing first article inspection products (prototypes) before volume manufacturing. Contracts with our customers generally include a termination for convenience clause. We have a significant number of contracts that are started and completed within the same year, as well as contracts derived from long-term agreements and programs that can span several years. We recognize revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), which utilizes a five-step model. The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment. The majority of our contracts are firm fixed-price contracts. The deliverables within a customer purchase order are analyzed to determine the number of performance obligations. In addition, at times, in order to achieve economies of scale and based on our customer’s forecasted demand, we may build in advance of receiving a purchase order from our customer. When that occurs, we would not recognize revenue until we have received the customer purchase order. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or met the series guidance. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. We manufacture most products to customer specifications and the product cannot be easily modified for another customer. As such, these products are deemed to have no alternative use once the manufacturing process begins. In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit. Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs. For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over time method. The majority of our performance obligations are satisfied over time as work progresses. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to measure progress. Our typical revenue contract is a firm fixed price contract, and the cost of raw materials could make up a significant amount of the total costs incurred. As such, we believe using the total costs incurred input method would be the most appropriate method. While the cost of raw materials could make up a significant amount of the total costs incurred, there is a direct relationship between our inputs and the transfer of control of goods or services to the customer. Contract estimates are based on various assumptions to project the outcome of future events that can span multiple months or years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; and the performance of subcontractors. As a significant change in one or more of these estimates could affect the progress completed (and related profitability) on our contracts, we review and update our contract-related estimates on a regular basis. We recognize such adjustments under the cumulative catch-up method. Under this method, the impact of the adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. Net cumulative catch-up adjustments on profit recorded were not material for both years ended December 31, 2022 and December 31, 2021. Payments under long-term contracts may be received before or after revenue is recognized. When revenue is recognized before we bill our customer, a contract asset is created for the work performed but not yet billed. Similarly, when we receive payment before we ship our products to our customer and have met the shipping terms, a contract liability is created for the advance or progress payment. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. We record provisions for the total anticipated losses on contracts, considering total estimated costs to complete the contract compared to total anticipated revenues, in the period in which such losses are identified. The provisions for estimated losses on contracts require us to make certain estimates and assumptions, including those with respect to the future revenue under a contract and the future cost to complete the contract. Our estimate of the future cost to complete a contract may include assumptions as to changes in manufacturing efficiency, operating and material costs, and our ability to resolve claims and assertions with our customers. If any of these or other assumptions and estimates do not materialize in the future, we may be required to adjust the provisions for estimated losses on contracts. The provision for estimated losses on contracts is included as part of contract liabilities on the consolidated balance sheets. As of December 31, 2022 and 2021, provision for estimated losses on contracts were $3.9 million and $2.8 million, respectively. Production cost of contracts includes non-recurring production costs, such as design and engineering costs, and tooling and other special-purpose machinery necessary to build parts as specified in a contract. Production costs of contracts are recorded to cost of sales using the over time revenue recognition model. We review the value of the production cost of contracts on a quarterly basis to ensure when added to the estimated cost to complete, the value is not greater than the estimated realizable value of the related contracts. As of December 31, 2022 and 2021, production costs of contracts were $5.7 million and $8.0 million, respectively. Contract Assets and Contract Liabilities Contract assets consist of our right to payment for work performed but not yet billed. Contract assets are transferred to accounts receivable when we bill our customers. We bill our customers when we ship the products and meet the shipping terms within the revenue contract. Contract liabilities consist of advance or progress payments received from our customers prior to the time transfer of control occurs plus the estimated losses on contracts. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. Contract assets and contract liabilities from revenue contracts with customers are as follows: (Dollars in thousands) December 31, December 31, Contract assets $ 191,290 $ 176,405 Contract liabilities $ 47,068 $ 42,077 The increase in our contract assets as of December 31, 2022 compared to December 31, 2021 was primarily due to a net increase of products in work in process. The increase in our contract liabilities as of December 31, 2022 compared to December 31, 2021 was primarily due to a net increase of advance or progress payments received from our customers in the current year. We recognized $32.7 million of the contract liabilities as of December 31, 2021 as revenues during the year ended December 31, 2022. Performance obligations are defined as customer placed purchase orders (“POs”) with firm fixed price and firm delivery dates. Our remaining performance obligations as of December 31, 2022 totaled $853.0 million. We anticipate recognizing an estimated 70% of our remaining performance obligations as revenue during the next 12 months with the remaining performance obligations being recognized in 2024 and beyond. Revenue by Category In addition to the revenue categories disclosed above, the following table reflects our revenue disaggregated by major end-use market: (Dollars in thousands) % of Net Revenues Change 2022 2021 2022 2021 Consolidated Ducommun Military and space $ (33,147) $ 420,701 $ 453,848 59.1 % 70.3 % Commercial aerospace 91,778 247,509 155,731 34.7 % 24.1 % Industrial 8,493 44,327 35,834 6.2 % 5.6 % Total $ 67,124 $ 712,537 $ 645,413 100.0 % 100.0 % Electronic Systems Military and space $ (13,730) $ 314,181 $ 327,911 71.3 % 79.5 % Commercial aerospace 33,227 82,130 48,903 18.6 % 11.8 % Industrial 8,493 44,327 35,834 10.1 % 8.7 % Total $ 27,990 $ 440,638 $ 412,648 100.0 % 100.0 % Structural Systems Military and space $ (19,417) $ 106,520 $ 125,937 39.2 % 54.1 % Commercial aerospace 58,551 165,379 106,828 60.8 % 45.9 % Total $ 39,134 $ 271,899 $ 232,765 100.0 % 100.0 % Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized, using enacted tax rates, for the expected future tax consequences of temporary differences between the book and tax bases of recorded assets and liabilities, operating losses, and tax credit carryforwards. Deferred tax assets are evaluated quarterly and are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax positions taken or expected to be taken in a tax return are recognized when it is more-likely-than-not, based on technical merits, to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement, including resolution of related appeals and/or litigation process, if any. Litigation and Commitments In the normal course of business, we are defendants in certain litigation, claims and inquiries, including matters relating to environmental laws. In addition, we make various commitments and incur contingent liabilities. Management’s estimates regarding contingent liabilities could differ from actual results. Environmental Liabilities Environmental liabilities are recorded when environmental assessments and/or remedial efforts are probable and costs can be reasonably estimated. Generally, the timing of these accruals coincides with the completion of a feasibility study or our commitment to a formal plan of action. Further, we review and update our environmental accruals as circumstances change and/or additional information is obtained that reasonably could be expected to have a meaningful effect on the outcome of a matter or the estimated cost thereof. Accounting for Stock-Based Compensation We measure and recognize compensation expense for share-based payment transactions to our employees and non-employees at their estimated fair value. The expense is measured at the grant date, based on the calculated fair value of the share-based award, and is recognized over the requisite service period (generally the vesting period of the equity award). The fair value of stock options are determined using the Black-Scholes-Merton (“Black-Scholes”) valuation model, which requires assumptions and judgments regarding stock price volatility, risk-free interest rates, and expected options terms. Management’s estimates could differ from actual results. The fair value of unvested stock awards is determined based on the closing price of the underlying common stock on the date of grant except for market condition awards for which the fair value was based on a Monte Carlo simulation model. Government Grant In November 2021, we were awarded an Aviation Manufacturing Jobs Protection Program grant from the U.S. Department of Transportation of $4.0 million. As part of the award, we had to meet, and did complete, certain requirements over a six month performance period from November 15, 2021 to May 14, 2022. As of December 31, 2022, we have received the entire $4.0 million grant balance, $2.0 million of which was received during 2021. We recorded $2.7 million and $0.3 million as a reduction of cost of sales and selling, general and administrative expenses, respectively, during 2022 and $0.9 million and $0.1 million as a reduction of cost of sales and selling, general and administrative expenses, respectively, during 2021. Charitable Contributions We contributed $0.1 million to the Ducommun Foundation during 2022. Earnings Per Share Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding in each period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus potentially dilutive shares that could be issued if exercised or converted into common stock in each period. The net income and weighted-average common shares outstanding used to compute earnings per share were as follows: (In thousands, except per share data) 2022 2021 2020 Net income $ 28,789 $ 135,536 $ 29,174 Weighted-average number of common shares outstanding Basic weighted-average common shares outstanding 12,074 11,879 11,676 Dilutive potential common shares 292 372 256 Diluted weighted-average common shares outstanding 12,366 12,251 11,932 Earnings per share Basic $ 2.38 $ 11.41 $ 2.50 Diluted $ 2.33 $ 11.06 $ 2.45 Potentially dilutive stock awards to purchase common stock, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these shares may be potentially dilutive common shares in the future. (In thousands) 2022 2021 2020 Stock options and stock units 52 3 254 Recent Accounting Pronouncements New Accounting Guidance Adopted in 2022 In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies reporting or provides clarification on various topics, including clarification that an entity should use the weighted-average share count from each quarter when calculating the year-to-date weighted-average share count. The new guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, which was our interim period beginning January 1, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides optional guidance for a limited time for contracts that reference London Interbank Offered Rate (“LIBOR”), to ease the potential burden in accounting for, or recognizing the effects, of reference rate reform on financial reporting as a result of the cessation of LIBOR. The new guidance is effective at any time after March 12, 2020 but no later than December 31, 2022. Prior to the adoption of this standard, during the three months ended October 1, 2022, we had made the following elections related to our current cash flow hedging relationships as o |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations In December, 2021, we acquired 100.0% of the outstanding equity interests of Magnetic Seal LLC (f/k/a Magnetic Seal Corporation, “MagSeal”), a privately-held leading provider of high-impact, military-proven magnetic seals for critical systems in aerospace and defense applications, offering sealing solutions that are engineered to perform in high-speed, high-vibration, and other challenging environments. MagSeal is located in Warren, Rhode Island. The acquisition of MagSeal will continue to advance our strategy to diversify and offer more customized, value-driven engineered products with aftermarket opportunities. The original purchase price for MagSeal was $69.5 million, net of cash acquired, all payable in cash. We paid a gross aggregate of $71.3 million in cash upon the closing of the transaction. Subsequent to the closing of the transaction, during the second quarter of 2022, as part of finalizing the working capital adjustment, we received $0.4 million back from the seller which lowered the purchase price to $69.1 million, net of cash acquired. We allocated the final gross purchase price of $70.9 million to the assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. The following table summarizes the final estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Estimated Cash $ 1,821 Accounts receivable 2,093 Inventories 4,546 Other current assets 98 Property and equipment 482 Operating lease right-of-use assets 1,533 Intangible assets 30,100 Goodwill 32,577 Total assets acquired 73,250 Current liabilities (907) Other non-current liabilities (1,408) Total liabilities assumed (2,315) Total purchase price allocation $ 70,935 Useful Life Estimated Intangible assets: Customer relationships 19 $ 24,800 Backlog 2 600 Trade name Indefinite 4,700 $ 30,100 The intangible assets acquired of $30.1 million were determined based on the estimated fair values using valuation techniques consistent with the income approach to measure fair value, which represented Level 3 fair value measurements. The useful lives were estimated based on the underlying agreements or the future economic benefit expected to be received from the assets. The value for customer relationships and backlog were estimated based on a multi-period excess earnings approach, while the value for trade name was assessed using the relief from royalty methodology. Inputs to the income approach models and other aspects of the allocation of the purchase price require judgment. The more significant inputs used in the customer relationships intangible asset valuation include (i) future revenue growth rates, (ii) projected gross margins, (iii) the customer attrition rate, and (iv) the discount rate. The goodwill of $32.6 million arising from the acquisition is attributable to the benefits we expect to derive from expected synergies from the transaction, including complementary products that will enhance our overall product portfolio, opportunities within new markets, and an acquired assembled workforce. All the goodwill was assigned to the Structural Systems segment. The MagSeal acquisition, for tax purposes, is deemed an asset acquisition and thus, is deductible for income tax purposes. Acquisition related transaction costs were not included as components of consideration transferred but have been expensed as incurred. Total acquisition-related transaction costs incurred by us were $0.9 million during 2021 and charged to selling, general and administrative expenses. MagSeal’s results of operations have been included in our consolidated statements of income since the date of acquisition as part of the Structural Systems segment and were immaterial since the date of acquisition. Pro forma results of operations of the MagSeal acquisition have not been presented as the effect of the MagSeal acquisition was not material to our financial results for both 2022 and 2021. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities Summary of 2022 Restructuring Plan In April 2022, management approved and commenced a restructuring plan that will better position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. During the year ended December 31, 2022, we recorded total charges of $6.7 million. As of December 31, 2022, we estimate the remaining amount of charges related to this initiative will be $12.0 million to $16.0 million in total pre-tax restructuring charges during 2023. Of these charges, we estimate $9.0 million to $12.0 million to be cash payments for employee separation and other facility consolidation related expenses, and $3.0 million to $4.0 million to be non-cash charges for impairment of long-lived assets. In the Electronics Systems segment, we recorded $3.5 million and $0.3 million during the year ended December 31, 2022, for severance and benefits that were classified as restructuring charges and accelerated depreciation of property and equipment that was classified as restructuring charges, respectively. In the Structural Systems segment, we recorded $0.5 million, $1.6 million, $0.5 million, and $0.3 million during the year ended December 31, 2022 for inventory write down that was classified as cost of sales, severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and impairment of property and equipment that was classified as restructuring charges, respectively. Our restructuring activities for 2022 were as follows (in thousands): December 31, 2021 2022 December 31, 2022 Balance Charges Cash Payments Non-Cash Payments Change in Estimates Balance Severance and benefits $ — $ 5,076 $ (2,277) $ — $ — $ 2,799 Property and equipment accelerated depreciation due to restructuring — 778 — (778) — — Property and equipment impairment due to restructuring — 304 — (304) — — Inventory write down — 528 — (528) — — Ending balance $ — $ 6,686 $ (2,277) $ (1,610) $ — $ 2,799 The restructuring activities accrual for severance and benefits of $2.8 million as of December 31, 2022 was included as part of accrued and other liabilities. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: (In thousands) 2022 2021 Raw materials and supplies $ 143,495 $ 125,334 Work in process 23,799 20,609 Finished goods 3,917 4,995 Total $ 171,211 $ 150,938 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following: (In thousands) Range of 2022 2021 Useful Lives Land $ 10,494 $ 10,494 Buildings and improvements 51,110 49,699 5 - 40 Years Machinery and equipment 179,606 180,761 2 - 20 Years Furniture and equipment 17,977 19,017 2 - 10 Years Construction in progress 18,545 10,580 277,732 270,551 Less accumulated depreciation 171,507 168,132 Total $ 106,225 $ 102,419 Depreciation expense was $14.5 million, $14.1 million, and $13.8 million, for the years ended December 31, 2022, 2021 and 2020, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Sale-Leaseback Transaction In December 2021, we entered into a sale-leaseback transaction for the building and related land for our Gardena performance center located in Carson, California (“Sale-Leaseback Agreement”). The building and related land was sold for $143.1 million and we had no continuing involvement. The carrying value of the building and related land was $9.4 million and we recognized a gain of $132.5 million. As part of the Sale-Leaseback Agreement, we entered into an initial five year lease for the usage of the just sold building and related land, with three options to renew in five year increments. The lease was classified as an operating lease and the future minimum base monthly lease payments during the initial five year period in aggregate total $19.6 million. All Leases We elected to utilize the following practical expedients that are permitted under ASC 842: • As an accounting policy election by class of underlying asset, elected not to separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component; and • As an accounting policy election not to apply the recognition requirements in ASC 842 to short term leases (a lease at commencement date has a lease term of 12 months or less and does not contain a purchase option that the lessee is reasonably certain to exercise). We have operating and finance leases for manufacturing facilities, corporate offices, and various equipment. Our leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 1 year. The components of lease expense consisted of the following: (In thousands) Years Ended December 31, 2022 December 31, 2021 Operating leases expense $ 10,521 4,283 Finance leases expense: Amortization of right-of-use assets $ 343 356 Interest on lease liabilities 53 62 Total finance lease expense $ 396 $ 418 Short term and variable lease expenses for the year ended December 31, 2022 were not material. Supplemental cash flow information related to leases was as follows: (In thousands) Years Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,669 $ 5,150 Operating cash flows from finance leases $ 53 $ 61 Financing cash flows from finance leases $ 346 $ 363 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 8,332 $ 23,317 Finance leases $ 245 $ 401 The weighted average remaining lease terms were as follows: (In years) December 31, 2022 December 31, 2021 Operating leases 5 5 Finance leases 6 6 When a lease is identified, we recognize a right-of-use asset and a corresponding lease liability based on the present value of the lease payments over the lease term discounted using our incremental borrowing rate, unless an implicit rate is readily determinable. As the discount rate in our leases is usually not readily available, we use our own incremental borrowing rate as the discount rate. Our incremental borrowing rate is based on the interest rate on our term loan, which is a secured rate. After we completed a financing of all our existing debt on July 14, 2022, the interest rate on our term loan was based on Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin. Prior to the refinancing, the interest rate on our term loans were based on London Interbank Offered Rate (“LIBOR”) plus an applicable margin. The weighted average discount rates were as follows: Years Ended December 31, 2022 December 31, 2021 Operating leases 3.0% 3.1% Finance leases 3.6% 3.6% Maturity of operating and finance lease liabilities are as follows: (In thousands) Operating Leases Finance Leases 2023 $ 8,081 $ 388 2024 7,956 321 2025 7,924 262 2026 7,595 208 2027 2,323 175 Thereafter 5,102 310 Total lease payments 38,981 1,664 Less imputed interest 2,985 161 Total $ 35,996 $ 1,503 Operating lease payments related to options to extend lease terms that are reasonably certain of being exercised are $3.3 million. As of December 31, 2022, there are no legally binding minimum lease payments for leases signed but not yet commenced. Finance lease payments related to options to extend lease terms that are reasonably certain of being exercised are not significant. As of December 31, 2022, there are no legally binding minimum lease payments for leases signed but not yet commenced. |
Leases | Leases Sale-Leaseback Transaction In December 2021, we entered into a sale-leaseback transaction for the building and related land for our Gardena performance center located in Carson, California (“Sale-Leaseback Agreement”). The building and related land was sold for $143.1 million and we had no continuing involvement. The carrying value of the building and related land was $9.4 million and we recognized a gain of $132.5 million. As part of the Sale-Leaseback Agreement, we entered into an initial five year lease for the usage of the just sold building and related land, with three options to renew in five year increments. The lease was classified as an operating lease and the future minimum base monthly lease payments during the initial five year period in aggregate total $19.6 million. All Leases We elected to utilize the following practical expedients that are permitted under ASC 842: • As an accounting policy election by class of underlying asset, elected not to separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component; and • As an accounting policy election not to apply the recognition requirements in ASC 842 to short term leases (a lease at commencement date has a lease term of 12 months or less and does not contain a purchase option that the lessee is reasonably certain to exercise). We have operating and finance leases for manufacturing facilities, corporate offices, and various equipment. Our leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 1 year. The components of lease expense consisted of the following: (In thousands) Years Ended December 31, 2022 December 31, 2021 Operating leases expense $ 10,521 4,283 Finance leases expense: Amortization of right-of-use assets $ 343 356 Interest on lease liabilities 53 62 Total finance lease expense $ 396 $ 418 Short term and variable lease expenses for the year ended December 31, 2022 were not material. Supplemental cash flow information related to leases was as follows: (In thousands) Years Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,669 $ 5,150 Operating cash flows from finance leases $ 53 $ 61 Financing cash flows from finance leases $ 346 $ 363 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 8,332 $ 23,317 Finance leases $ 245 $ 401 The weighted average remaining lease terms were as follows: (In years) December 31, 2022 December 31, 2021 Operating leases 5 5 Finance leases 6 6 When a lease is identified, we recognize a right-of-use asset and a corresponding lease liability based on the present value of the lease payments over the lease term discounted using our incremental borrowing rate, unless an implicit rate is readily determinable. As the discount rate in our leases is usually not readily available, we use our own incremental borrowing rate as the discount rate. Our incremental borrowing rate is based on the interest rate on our term loan, which is a secured rate. After we completed a financing of all our existing debt on July 14, 2022, the interest rate on our term loan was based on Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin. Prior to the refinancing, the interest rate on our term loans were based on London Interbank Offered Rate (“LIBOR”) plus an applicable margin. The weighted average discount rates were as follows: Years Ended December 31, 2022 December 31, 2021 Operating leases 3.0% 3.1% Finance leases 3.6% 3.6% Maturity of operating and finance lease liabilities are as follows: (In thousands) Operating Leases Finance Leases 2023 $ 8,081 $ 388 2024 7,956 321 2025 7,924 262 2026 7,595 208 2027 2,323 175 Thereafter 5,102 310 Total lease payments 38,981 1,664 Less imputed interest 2,985 161 Total $ 35,996 $ 1,503 Operating lease payments related to options to extend lease terms that are reasonably certain of being exercised are $3.3 million. As of December 31, 2022, there are no legally binding minimum lease payments for leases signed but not yet commenced. Finance lease payments related to options to extend lease terms that are reasonably certain of being exercised are not significant. As of December 31, 2022, there are no legally binding minimum lease payments for leases signed but not yet commenced. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The carrying amounts of goodwill, by operating segment, for the years ended December 31, 2022 and 2021 were as follows: (In thousands) Electronic Structural Consolidated Gross goodwill $ 199,157 $ 86,259 $ 285,416 Accumulated goodwill impairment (81,722) — (81,722) Balance at December 31, 2021 117,435 86,259 203,694 Purchase price allocation refinements — (287) (287) Balance at December 31, 2022 $ 117,435 $ 85,972 $ 203,407 We perform our annual goodwill impairment test as of the first day of the fourth quarter. If certain factors occur, including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter. We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a discounted cash flow model) and market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable business acquisitions and the transaction values observed and its related control premiums. Our most recent step one goodwill impairment test for our Electronic Systems reporting unit was as of the first day of the fourth quarter of 2019 where the fair value of our Electronic Systems reporting unit exceeded its carrying value. No material adverse factors/changes have occurred since the fourth quarter of 2019 and thus, for our annual goodwill impairment test of our Electronic Systems reporting unit as of the first day of the fourth quarter of 2022, we used a qualitative assessment and determined it was not more likely than not that the fair value of a reporting unit was less than its carrying amount. As our commercial aerospace end-use market business continues to be negatively impacted by the COVID-19 pandemic, we performed a step one goodwill impairment test for our Structural Systems reporting unit as of the first day of the fourth quarter of 2022, where the fair value of our Structural Systems reporting unit exceeded its carrying value. Thus, the respective goodwill amounts were not deemed impaired. In December 2021, we acquired 100% of the outstanding equity of Magnetic Seal LLC (f/k/a Magnetic Seal Corporation, “MagSeal”) for an original purchase price of $69.5 million, net of cash acquired. We allocated the final gross purchase price of $70.9 million to the assets acquired and the liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values was recorded as goodwill within the Structural Systems reporting unit. See Note 2. Other Intangible Assets Other intangible assets are related to acquisitions, including MagSeal, and recorded at fair value at the time of the acquisition. Other intangible assets with finite lives are generally amortized on the straight-line method over periods ranging from 2 to 19 years. Intangible assets are as follows: (In thousands) December 31, 2022 December 31, 2021 Wtd. Avg Life (Yrs) Gross Accumulated Net Gross Accumulated Net Finite-lived assets Customer relationships 17 $ 246,300 $ 127,999 $ 118,301 $ 246,300 $ 114,169 $ 132,131 Trade names and trademarks 14 5,500 1,670 3,830 5,500 1,263 4,237 Contract renewal 14 1,845 1,845 — 1,845 1,845 — Technology 15 400 318 82 400 291 109 Backlog 2 600 312 288 600 13 587 Total finite-lived assets 254,645 132,144 122,501 254,645 117,581 137,064 Indefinite-lived assets Trade names and trademarks 4,700 — 4,700 4,700 — 4,700 Total $ 259,345 $ 132,144 $ 127,201 $ 259,345 $ 117,581 $ 141,764 The carrying amount of other intangible assets by operating segment as of December 31, 2022 and 2021 was as follows: (In thousands) December 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Other intangible assets Electronic Systems $ 164,545 $ 99,479 $ 65,066 $ 164,545 $ 90,191 $ 74,354 Structural Systems 94,800 32,665 62,135 94,800 27,390 67,410 Total $ 259,345 $ 132,144 $ 127,201 $ 259,345 $ 117,581 $ 141,764 Amortization expense of other intangible assets was $14.6 million, $13.1 million and $13.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Future amortization expense by operating segment is expected to be as follows: (In thousands) Electronic Structural Consolidated 2023 $ 9,288 $ 5,196 $ 14,484 2024 9,288 4,673 13,961 2025 9,288 4,673 13,961 2026 9,288 4,649 13,937 2027 9,288 4,647 13,935 Thereafter 18,626 33,597 52,223 $ 65,066 $ 57,435 $ 122,501 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and Other Liabilities The components of accrued and other liabilities consisted of the following: (In thousands) 2022 2021 Accrued compensation $ 28,785 $ 24,391 Accrued income tax and sales tax 10,478 926 Other 9,557 15,974 Total $ 48,820 $ 41,291 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt and the current period interest rates were as follows: (In thousands) 2022 2021 Term loans $ 248,438 $ 287,712 Total debt 248,438 287,712 Less current portion 6,250 7,000 Total long-term debt, less current portion 242,188 280,712 Less debt issuance costs - term loans (1,593) (1,328) Total long-term debt, net of debt issuance costs - term loans $ 240,595 $ 279,384 Debt issuance costs - revolving credit facility (1) $ 2,265 $ 1,136 Weighted-average interest rate 4.36 % 3.27 % (1) Included as part of other assets. Future long-term debt payments at December 31, 2022 were as follows: (In thousands) 2023 $ 6,250 2024 7,813 2025 12,500 2026 14,063 2027 207,812 Thereafter — Total $ 248,438 On July 14, 2022, we completed a refinancing of all our existing debt by entering into a new term loan (“2022 Term Loan”) and a new revolving credit facility (“2022 Revolving Credit Facility”). The 2022 Term Loan is a $250.0 million senior secured loan that matures on July 14, 2027. The 2022 Revolving Credit Facility is a $200.0 million senior secured revolving credit facility that matures on July 14, 2027. The 2022 Term Loan and 2022 Revolving Credit Facility, collectively are the new credit facilities (“2022 Credit Facilities”). The 2022 Term Loan bears interest, at our option, at a rate equal to either (i) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.375% to 2.375% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid on a quarterly basis, on the last business day each quarter. In addition, the 2022 Term Loan requires quarterly amortization payments of 0.625% during year one and year two, 1.250% during year three and year four, and 1.875% during year five of the original outstanding principal balance of the 2022 Term Loan amount, on the last business day each quarter. The first quarterly amortization payment of $1.6 million was required to be paid and was paid during the fourth quarter of 2022. The 2022 Revolving Credit Facility bears interest, at our option, at a rate equal to either (i) Term SOFR plus an applicable margin ranging from 1.375% to 2.375% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid on a quarterly basis, on the last business day each quarter. The undrawn portion of the commitment of the 2022 Revolving Credit Facility is subject to a commitment fee ranging from 0.175% to 0.275%, based upon the consolidated total net adjusted leverage ratio, typically paid on a quarterly basis, on the last business day each quarter. However, the 2022 Revolving Credit Facility does not require any principal installment payments. In conjunction with the closing of the 2022 Credit Facilities, we utilized the entire $250.0 million of proceeds from the 2022 Term Loan plus our existing cash on hand to pay off our entire debt balance outstanding of $254.2 million under prior credit facilities (described below). As of December 31, 2022, we were in compliance with all covenants required under the 2022 Credit Facilities. In December 2019, we completed the refinancing of a portion of our then existing debt by entering into a new revolving credit facility (“2019 Revolving Credit Facility”) to replace the then existing revolving credit facility that was entered into in November 2018 (“2018 Revolving Credit Facility”) and entered into a new term loan (“2019 Term Loan”). The 2019 Revolving Credit Facility was a $100.0 million senior secured revolving credit facility that would have matured on December 20, 2024 and replaced the $100.0 million 2018 Revolving Credit Facility that would have matured on November 21, 2023. The 2019 Term Loan was a $140.0 million senior secured term loan that would have matured on December 20, 2024. We also had a then existing $240.0 million senior secured term loan that was entered into in November 2018 that would have matured on November 21, 2025 (“2018 Term Loan”). The original amounts available under the 2019 Revolving Credit Facility, 2019 Term Loan, and 2018 Term Loan (collectively, the “Existing Credit Facilities”) in aggregate, totaled $480.0 million at that time. The 2019 Term Loan bore interest, at our option, at a rate equal to either (i) the Eurodollar Rate (defined as the London Interbank Offered Rate [“LIBOR”]) plus an applicable margin ranging from 1.50% to 2.50% per year or (ii) the Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] the Eurodollar Rate plus 1.00%) plus an applicable margin ranging from 0.50% to 1.50% per year, in each case based upon the consolidated total net adjusted leverage ratio, typically payable quarterly. In addition, the 2019 Term Loan required amortization payments of 1.25% of the original outstanding principal balance of the 2019 Term Loan amount on a quarterly basis, on the last day of the calendar quarter. During 2022, we made the required quarterly payments on the 2019 Term Loan before it was refinanced, in aggregate totaling $3.5 million. The 2019 Revolving Credit Facility bore interest, at our option, at a rate equal to either (i) the Eurodollar Rate (defined as LIBOR) plus an applicable margin ranging from 1.50% to 2.50% per year or (ii) the Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] the Eurodollar Rate plus 1.00%) plus an applicable margin ranging from 0.50% to 1.50% per year, in each case based upon the consolidated total net adjusted leverage ratio, typically payable quarterly. The undrawn portion of the commitment of the 2019 Revolving Credit Facility was subject to a commitment fee ranging from 0.175% to 0.275%, based upon the consolidated total net adjusted leverage ratio. However, the 2019 Revolving Credit Facility did not require any principal installment payments. The 2018 Term Loan bore interest, at our option, at a rate equal to either (i) the Eurodollar Rate (defined as LIBOR plus an applicable margin ranging from 3.75% to 4.00% per year or (ii) the Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] the Eurodollar Rate plus 1.00%) plus an applicable margin ranging from 3.75% to 4.00% per year, in each case based upon the consolidated total net adjusted leverage ratio, typically payable quarterly. In addition, the 2018 Term Loan required amortization payments of 0.25% of the outstanding principal balance of the 2018 Term Loan amount on a quarterly basis. Further, under the then Existing Credit Facilities, if we exceeded the annual excess cash flow threshold, we were required to make an annual additional principal payment based on the consolidated adjusted leverage ratio. The annual mandatory excess cash flow payment was based on (i) 50% of the excess cash flow amount if the adjusted leverage ratio is greater than 3.25 to 1.0, (ii) 25% of the excess cash flow amount if the adjusted leverage ratio was less than or equal to 3.25 to 1.0 but greater than 2.50 to 1.0, and (iii) zero percent of the excess cash flow amount if the consolidated adjusted leverage ratio was less than or equal to 2.50 to 1.0. We did not exceed the annual excess cash flow threshold for 2021 and thus, no annual excess cash flow payment was required to be paid during the first quarter of 2022. We drew down $50.0 million on the 2019 Revolving Credit Facility during the first quarter of 2020 to hold as cash on hand, $25.0 million of which was repaid during the fourth quarter of 2020. The remaining $25.0 million was repaid during 2021. In addition, since we were paying down on the term loans during the first quarter of 2022, we were required to pay down on the 2019 Term Loan and 2018 Term Loan on a pro-rata basis and thus, we paid down $13.0 million and $17.0 million on the 2019 Term Loan and 2018 Term Loan, respectively, for an aggregate total pay down of $30.0 million. As of December 31, 2022, we had $199.8 million of unused borrowing capacity under the 2022 Revolving Credit Facility, after deducting $0.2 million for standby letters of credit. The 2022 Term Loan was considered a modification of debt for some lenders and an extinguishment of debt for other lenders, and thus, a loss of $0.2 million was recorded related to the extinguishment. In addition, the new fees incurred of $0.8 million were capitalized and will be amortized over the life of the 2022 Term Loan. Further, the remaining debt issuance costs related to the 2019 Term Loan and 2018 Term Loan of $1.0 million as of the modification date will be amortized over the life of the 2022 Term Loan, using the effective interest method. The 2022 Revolving Credit Facility that replaced the 2019 Revolving Credit Facility was considered a modification of debt except for the portion related to the creditor that is no longer a part of the 2022 Revolving Credit Facility and in which case, it was considered an extinguishment of debt. As a result, we expensed the portion of the unamortized debt issuance costs related to the 2019 Revolving Credit Facility that was considered an extinguishment of debt of $0.1 million. In addition, the new fees incurred of $1.7 million as part of the 2022 Revolving Credit Facility were capitalized and will be amortized over the life of the 2022 Revolving Credit Facility. Further, the remaining debt issuance costs related to the 2019 Revolving Credit Facility of $0.8 million as of the modification date will also be amortized over the life of the 2022 Revolving Credit Facility. The 2019 Term Loan and 2018 Term Loan were considered a modification of debt in 2019 and thus, no gain or loss was recorded at that time. Instead, the new fees paid to the lenders at that time of $0.6 million were capitalized and were being amortized over the life of the 2019 Term Loan. The remaining debt issuance costs related to the 2018 Term Loan of $1.5 million as of the modification date in 2019 were being amortized over its remaining life. The 2019 Revolving Credit Facility that replaced the 2018 Revolving Credit Facility was considered an extinguishment of debt except for the portion related to the creditors that were part of both the 2019 Revolving Credit Facility and the 2018 Revolving Credit Facility and in which case, it was considered a modification of debt in 2019. As a result, we expensed the portion of the unamortized debt issuance costs related to the 2018 Revolving Credit Facility that was considered an extinguishment of debt of $0.5 million in 2019. In addition, the new fees paid to the lenders of $0.5 million as part of the 2019 Revolving Credit Facility were capitalized and were being amortized over its remaining life. Further, the remaining debt issuance costs related to the 2018 Revolving Credit Facility of $1.1 million were also being amortized over its remaining life. In December 2021, we acquired 100.0% of the outstanding equity interests of Magnetic Seal LLC (f/k/a Magnetic Seal Corporation, “MagSeal”) for an original purchase price of $69.5 million, net of cash acquired, all payable in cash. Upon the closing of the transaction, we paid a gross total aggregate of $71.3 million in cash, $65.0 million of which was from drawing down on the 2019 Revolving Credit Facility. This draw down on the 2019 Revolving Credit Facility was paid off by December 31, 2021. See Note 2. Also in December 2021, we entered into a sale-leaseback transaction for the building and related land for our Gardena performance center located in Carson, California, for a sale price of $143.1 million. A portion of the net proceeds were used to pay down on the $65.0 million that was drawn on the 2019 Revolving Credit Facility for the MagSeal acquisition. See Note 5. The 2022 Credit Facilities were entered into by us (“Parent Company”) and guaranteed by all of our domestic subsidiaries, other than two subsidiaries that were considered minor (“Subsidiary Guarantors”). The Subsidiary Guarantors jointly and severally guarantee the 2022 Credit Facilities. The Parent Company has no independent assets or operations and therefore, no consolidating financial information for the Parent Company and its subsidiaries is presented. In November 2021, we entered into derivative contracts, U.S. dollar-one month LIBOR forward interest rate swaps designated as cash flow hedges, all with an effective date of January 1, 2024, for an aggregate total notional amount of $150.0 million, weighted average fixed rate of 1.8%, and all terminating on January 1, 2031 (“Forward Interest Rate Swaps”). The Forward Interest Rate Swaps mature on a monthly basis, with fixed amount payer payment dates on the first day of each calendar month, commencing on February 1, 2024 through January 1, 2031. The Forward Interest Rate Swaps were deemed to be highly effective upon entering into the derivative contracts and thus, hedge accounting treatment was utilized. Since the Forward Interest Rate Swaps are not effective until January 1, 2024, we only recorded the changes in the fair value of the Forward Interest Rate Swaps and recorded in other assets, deferred income taxes, and accumulated other comprehensive income (loss) of $15.8 million during December 31, 2022. See Note 1 for further information. On July 14, 2022, as a result of completing a refinancing of our existing debt, we were required to complete an amendment of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”). The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term SOFR as borrowings using LIBOR are no longer available under the 2022 Credit Facilities. Since this was an amendment of just the reference rate as a result of the cessation of LIBOR, utilizing the guidance under ASU 2020-04, we determined the Amended Forward Interest Rate Swaps as of the amendment date to continue to be highly effective. The Amended Forward Interest Rate Swaps weighted average fixed rate is 1.7%, as a result of the difference between U.S. dollar-one month LIBOR and one month Term SOFR. In October 2015, we entered into interest rate cap hedges designated as cash flow hedges with a portion of these interest rate cap hedges maturing on a quarterly basis, and a final quarterly maturity date of June 2020, in aggregate, totaling $135.0 million of our debt. We paid a total of $1.0 million in connection with entering into the interest rate cap hedges. The interest rate cap hedges matured during our second quarter of 2020 and as such, all remaining amounts related to the interest rate cap hedges were fully amortized and unrealized gains and losses recorded in accumulated other comprehensive income were also realized at that time. See Note 1 for further information. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ EquityWe are authorized to issue five million shares of preferred stock. At December 31, 2022 and 2021, no preferred shares were issued or outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Incentive Compensation Plans We currently have two active stock incentive plans: i) the Amended and Restated 2020 Stock Incentive Plan (the “2020 Plan”), which expires on April 20, 2032, and ii) the 2018 Employee Stock Purchase Plan (“ESPP”). The 2013 Stock Incentive Plan, as Amended (the “2013 Plan”) was closed to further issuances of stock awards in May 2020 and any remaining shares available were folded into the 2020 Plan as part of the approval of the 2020 Plan by shareholders at the 2020 Annual Meeting of Shareholders in May 2020. The 2020 Plan permit awards of stock options, restricted stock units, performance stock units and other stock-based awards to our officers, key employees and non-employee directors on terms determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”). The aggregate number of shares available for issuance under the 2020 Plan is 1,031,162 plus any outstanding awards issued under the 2013 Plan that are subsequently forfeited, terminated, expire or otherwise lapse without being exercised. As of December 31, 2022, shares available for future grant under the 2020 Plan are 338,061. Prior to the adoption of the 2020 Plan, we granted stock-based awards to purchase shares of our common stock under certain predecessor plans. No further awards can be granted under these predecessor plans. Employee Stock Purchase Plan The ESPP was adopted by the Board of Directors and approved by the shareholders in 2018, including 750,000 shares that can be awarded. The first offering period closed on July 31, 2019. Under the ESPP, our employees who elect to participate have the right to purchase common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each six month offering period and the discount will be treated as compensation to those employees. Employees purchase common stock using payroll deductions, which may not exceed 10% of their eligible compensation and other limitations. The Compensation Committee administers the ESPP. As of December 31, 2022, there are 549,977 shares available for future award grants. Stock Options In the years ended December 31, 2022, 2021, and 2020, we granted stock options to our officers and key employees of zero, zero, and 8,000, respectively, with weighted-average grant date fair values of zero, zero, and $16.48, respectively. Stock options have been granted with an exercise price equal to the fair market value of our stock on the date of grant and expire not more than ten years from the date of grant. The stock options typically vest over a period of three The option price and number of shares are subject to adjustment under certain dilutive circumstances. If an employee terminates employment, the non-vested portion of the stock options will not vest and all rights to the non-vested portion will terminate completely. Stock option activity for the year ended December 31, 2022 were as follows: Number Weighted- Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2022 317,779 $ 35.30 Granted — $ — Exercised (109,186) $ 31.82 Expired (2,150) $ 39.75 Forfeited (7,167) $ 42.88 Outstanding at December 31, 2022 199,276 $ 36.89 5.4 $ 2,537 Exerciseable at December 31, 2022 199,276 $ 36.89 5.4 $ 2,537 Changes in nonvested stock options for the year ended December 31, 2022 were as follows: Number of Stock Options Weighted- Nonvested at January 1, 2022 59,605 $ 15.93 Granted — $ — Vested (52,438) $ 15.90 Forfeited (7,167) $ 16.10 Nonvested at December 31, 2022 — $ — The aggregate intrinsic value of stock options represents the amount by which the market price of our common stock exceeds the exercise price of the stock option. The aggregate intrinsic value of stock options exercised for the years ended December 31, 2022, 2021 and 2020 was $2.0 million, $1.0 million, and $0.9 million, respectively. Cash received from stock options exercised for the years ended December 31, 2022, 2021 and 2020 was $3.5 million, $1.7 million, and $1.6 million, respectively, with related tax benefits of $0.8 million, $0.4 million, and $0.4 million, respectively. The total amount of stock options vested and expected to vest in the future is 199,276 shares with a weighted-average exercise price of $36.89 and an aggregate intrinsic value of $2.5 million. These stock options have a weighted-average remaining contractual term of 5.4 years. The share-based compensation cost expensed for stock options for the years ended December 31, 2022, 2021, and 2020 (before tax benefits) was $0.3 million, $1.2 million, and $1.8 million, respectively, and is included in selling, general and administrative expenses on the consolidated income statements. At December 31, 2022, there was no remaining unrecognized compensation cost related to stock options. The total fair value of stock options vested during the years ended December 31, 2022, 2021, and 2020 was $0.8 million, $1.7 million, and $2.0 million, respectively. We apply fair value accounting for stock-based compensation based on the grant date fair value estimated using a Black-Scholes-Merton (“Black-Scholes”) valuation model. The assumptions used to compute the fair value of stock option grants under the 2020 Stock Incentive Plan for years ended December 31, 2022, 2021, and 2020 were as follows: Years Ended December 31, 2022 2021 2020 Risk-free interest rate N/A N/A 1.59 % Expected volatility N/A N/A 37.75 % Expected dividends N/A N/A — Expected term (in months) N/A N/A 66 We recognize compensation expense, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award. We have award populations with option vesting terms of three based on historic exercise patterns and post-vesting termination behavior. The risk-free interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is derived from historical volatility of our common stock. We suspended payments of dividends after the first quarter of 2011. Restricted Stock Units We granted restricted stock units (“RSUs”) to certain officers, key employees and non-employee directors of 118,847, 118,995, and 118,835 RSUs during the years ended December 31, 2022, 2021, and 2020, respectively, with weighted-average grant date fair values (equal to the fair market value of our stock on the date of grant) of $51.76, $55.92, and $27.62 per share, respectively. RSUs represent a right to receive a share of stock at future vesting dates with no cash payment required from the holder. The RSUs typically have a three year vesting term of 33.3%, 33.3% and 33.4% on the first, second and third anniversaries of the date of grant, respectively. If an employee terminates employment, their non-vested portion of the RSUs will not vest and all rights to the non-vested portion will terminate. Restricted stock unit activity for the year ended December 31, 2022 was as follows: Number of Restricted Stock Units Weighted- Outstanding at January 1, 2022 202,282 $ 44.85 Granted 118,847 $ 51.76 Vested (74,222) $ 44.28 Forfeited (45,112) $ 50.72 Outstanding at December 31, 2022 201,795 $ 47.81 The share-based compensation cost expensed for RSUs for the years ended December 31, 2022, 2021, and 2020 (before tax benefits) was $3.8 million, $4.1 million, and $2.6 million respectively, and is included in selling, general and administrative expenses on the consolidated income statements. At December 31, 2022, total unrecognized compensation cost (before tax benefits) related to RSUs of $5.7 million is expected to be recognized over a weighted average period of 1.6 years. The total fair value of RSUs vested for the years ended December 31, 2022, 2021, and 2020 was $3.5 million, $4.2 million, and $2.3 million, respectively. The tax benefit realized from vested RSUs for the years ended December 31, 2022, 2021, and 2020 was $0.8 million, $1 million, and $0.5 million, respectively. Performance Stock Units We granted performance stock awards (“PSUs”) to certain key employees of 111,654, 182,886, and 159,136 PSUs during the years ended December 31, 2022, 2021, and 2020, respectively, with weighted-average grant date fair values of $48.18, $49.76, and $29.65 per share, respectively. PSU awards are subject to the attainment of performance goals established by the Compensation Committee, the periods during which performance is to be measured, and all other limitations and conditions applicable to the awarded shares. Performance goals are based on a pre-established objective formula that specifies the manner of determining the number of PSUs that will be granted if performance goals are attained. If an employee terminates employment, their non-vested portion of the PSUs will not vest and all rights to the non-vested portion will terminate. Performance stock activity for the year ended December 31, 2022 was as follows: Number of Performance Stock Units Weighted- Outstanding at January 1, 2022 299,563 $ 41.16 Granted 111,654 $ 48.18 Vested (89,309) $ 44.65 Forfeited (20,554) $ 45.61 Outstanding at December 31, 2022 301,354 $ 42.42 The share-based compensation cost expensed for PSUs for the years ended December 31, 2022, 2021, and 2020 (before tax benefits) was $5.1 million, $5.9 million and $4.9 million, respectively, and is included in selling, general and administrative expenses on the consolidated income statements. At December 31, 2022, total unrecognized compensation cost (before tax benefits) related to PSUs of $5.5 million is expected to be recognized over a weighted-average period of 1.4 years. The total fair value of PSUs vested during the years ended December 31, 2022, 2021, and 2020, was $4.4 million, $9.6 million, and $3.7 million, respectively. The tax benefit realized from PSUs for the years ended December 31, 2022, 2021, and 2020 were $1.1 million, $2.3 million, and $0.9 million, respectively. Performance-Based With Market Condition Cash Settled Long-Term Incentive Awards As permitted under the 2020 Plan, performance-based with market condition cash settled long-term incentive awards (“Performance-Based Cash LTIPs”) were granted in 2022. Performance-Based Cash LTIPs will be settled in cash and are subject to the attainment of performance goals established by the Compensation Committee (including achievement of relative total shareholder return market condition), the periods during which performance is to be measured, and all other limitations and conditions applicable to the Performance-Based Cash LTIPs’ values. Performance goals are based on a pre-established objective formula that specifies the manner of determining the value of the Performance-Based Cash LTIPs that will be issued if performance goals are attained. If an employee terminates employment, their non-vested portion of the Performance-Based Cash LTIPs will not vest and all rights to the non-vested portion of the Performance-Based Cash LTIPs will terminate. The Compensation Committee administers the Performance-Based Cash LTIPs. The share-based compensation expense recorded for the Performance-Based Cash LTIPs for the years ended December 31, 2022, 2021, and 2020 (before tax benefits) was $1.2 million, zero, and zero, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution 401(k) Plans We sponsor a 401(k) defined contribution plan for all our employees. The plan allows the employees to make annual voluntary contributions not to exceed the lesser of an amount equal to 25% of their compensation or limits established by the Internal Revenue Code. Under this plan, we generally provide a match equal to 50% of the employee’s contributions up to the first 6% of compensation, except for union employees who are not eligible to receive the match. Our provision for matching and profit sharing contributions for the three years ended December 31, 2022, 2021, and 2020 was $2.9 million, $2.8 million, and $2.6 million, respectively. Pension Plan and LaBarge Retirement Plan We have a defined benefit pension plan covering certain hourly employees of a subsidiary (the “Pension Plan”). Pension Plan benefits are generally determined on the basis of the retiree’s age and length of service. Assets of the Pension Plan are composed primarily of fixed income and equity securities. We also have a retirement plan covering certain current and retired employees (the “LaBarge Retirement Plan”). The consolidation of one of our performance centers as part of the 2022 Restructuring Plan as discussed in Note 2 resulted in the curtailment of the Pension Plan during the fourth quarter of 2022, but it had an immaterial impact on our consolidated financial statements. The components of net periodic pension cost for the Pension Plan and LaBarge Retirement Plan in aggregate are as follows: (In thousands) 2022 2021 2020 Service cost $ 625 $ 676 $ 622 Interest cost 1,089 1,010 1,209 Expected return on plan assets (2,081) (1,895) (1,761) Amortization of actuarial losses 585 1,285 993 Net periodic pension cost $ 218 $ 1,076 $ 1,063 The components of the reclassifications of net actuarial losses from accumulated other comprehensive loss to net income for 2022 were as follows: (In thousands) 2022 Amortization of actuarial loss - total before tax (1) $ 585 Tax benefit (143) Net of tax $ 442 (1) The amortization expense is included in the computation of periodic pension cost and is a decrease to net income upon reclassification from accumulated other comprehensive loss. The estimated net actuarial loss for both plans that will be amortized from accumulated other comprehensive loss into net periodic cost during 2023 is $0.6 million. The obligations, fair value of plan assets, and funded status of both plans are as follows: (In thousands) 2022 2021 Change in benefit obligation (1) Beginning benefit obligation (January 1) $ 39,805 $ 42,804 Service cost 625 676 Interest cost 1,089 1,010 Actuarial gain (9,714) (2,537) Benefits paid (1,468) (2,148) Ending benefit obligation (December 31) $ 30,337 $ 39,805 Change in plan assets Beginning fair value of plan assets (January 1) $ 33,698 $ 30,632 Return on assets (4,652) 3,122 Employer contribution 1,702 2,095 Benefits paid (1,468) (2,151) Ending fair value of plan assets (December 31) $ 29,280 $ 33,698 Funded status underfunded $ (1,057) $ (6,107) Amounts recognized in the consolidated balance sheet Current liabilities $ 416 $ 427 Non-current liabilities $ 641 $ 5,680 Unrecognized loss included in accumulated other comprehensive loss Beginning unrecognized loss, before tax (January 1) $ 7,573 $ 12,620 Amortization (582) (1,282) Liability gain (9,714) (2,537) Asset loss (gain) 6,734 (1,228) Ending unrecognized loss, before tax (December 31) 4,011 7,573 Tax impact (970) (1,827) Unrecognized loss included in accumulated other comprehensive loss, net of tax $ 3,041 $ 5,746 (1) Projected benefit obligation equals the accumulated benefit obligation for the plans. On December 31, 2022, our annual measurement date, the accumulated benefit obligation exceeded the fair value of the plans assets by $1.1 million. Such excess is referred to as an unfunded accumulated benefit obligation. We recorded an unrecognized loss included in accumulated other comprehensive loss, net of tax at December 31, 2022 and 2021 of $3.0 million and $5.7 million, respectively, which decreased shareholders’ equity. This charge to shareholders’ equity represents a net loss not yet recognized as pension expense. This charge did not affect reported earnings, and would be decreased or be eliminated if either interest rates increase or market performance and plan returns improve which will cause the Pension Plan to return to fully funded status. Our Pension Plan asset allocations at December 31, 2022 and 2021, by asset category, were as follows: December 31, 2022 2021 Equity securities 61% 69% Cash and equivalents 4% 1% Debt securities 35% 30% Total (1) 100% 100% (1) Our overall investment strategy is to achieve an asset allocation within the following ranges to achieve an appropriate rate of return relative to risk. Cash 0-10% Fixed income securities 15-75% Equities 30-80% Pension Plan assets consist primarily of listed stocks and bonds and do not include any of the Company’s securities. The return on assets assumption reflects the average rate of return expected on funds invested or to be invested to provide for the benefits included in the projected benefit obligation. We select the return on asset assumption by considering our current and target asset allocation. We consider information from various external investment managers, forward-looking information regarding expected returns by asset class and our own judgment when determining the expected returns. (In thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,078 $ — $ — $ 1,078 Fixed income securities 4,622 — — 4,622 Equities (1) 12,591 — — 12,591 Other investments 1,033 — — 1,033 Total plan assets at fair value $ 19,324 $ — $ — 19,324 Pooled funds 9,956 Total fair value of plan assets $ 29,280 (In thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 414 $ — $ — $ 414 Fixed income securities 3,648 — — 3,648 Equities (1) 7,446 — — 7,446 Other investments 1,199 — — 1,199 Total plan assets at fair value $ 12,707 $ — $ — 12,707 Pooled funds 20,991 Total fair value of plan assets $ 33,698 (1) Represents mutual funds and commingled accounts which invest primarily in equities, but may also hold fixed income securities, cash and other investments. Commingled funds with publicly quoted prices and actively traded are classified as Level 1 investments. Pooled funds are measured using the net asset value (“NAV”) as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy in accordance with ASU 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).” Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities. The assumptions used to determine the benefit obligations and expense for our two plans are presented in the tables below. The expected long-term return on assets, noted below, represents an estimate of long-term returns on investment portfolios consisting of a mixture of fixed income and equity securities. The estimated cash flows from the plans for all future years are determined based on the plans’ population at the measurement date. We used the expected benefit payouts from the plans for each year into the future and discounted them back to the present using the Wells Fargo yield curve rate for that duration. The weighted-average assumptions used to determine the net periodic benefit costs under the two plans were as follows: Years Ended December 31, 2022 2021 2020 Discount rate used to determine pension expense Pension Plan 2.85% 2.50% 3.22% LaBarge Retirement Plan 2.35% 1.85% 2.85% The weighted-average assumptions used to determine the benefit obligations under the two plans were as follows: December 31, 2022 2021 2020 Discount rate used to determine value of obligations Pension Plan 5.11% 2.85% 2.50% LaBarge Retirement Plan 5.00% 2.35% 1.85% Long-term rate of return - Pension Plan only 6.25% 6.25% 6.25% The following benefit payments under both plans, which reflect expected future service, as appropriate, are expected to be paid: (In thousands) Pension Plan LaBarge 2023 $ 1,379 $ 416 2024 $ 1,481 $ 397 2025 $ 1,555 $ 378 2026 $ 1,639 $ 359 2027 $ 1,712 $ 341 2028 - 2032 $ 9,156 $ 1,435 Our funding policy is to contribute cash to our plans so that the minimum contribution requirements established by government funding and taxing authorities are met. We expect to make contributions of $0.8 million to the plans in 2023. Supplemental Retirement Plans We have three unfunded supplemental retirement plans. The first plan was suspended in 1986, but continues to cover certain former executives. The second plan was suspended in 1997, but continues to cover certain current and retired directors. The third plan covers certain current and retired employees and further employee contributions to this plan were suspended on August 5, 2011. The liability for the third plan and interest thereon is included in accrued employee compensation and long-term liabilities were both zero at December 31, 2022, and both zero at December 31, 2021. The accumulated benefit obligations of the first two plans at December 31, 2022 and December 31, 2021 were both $0.3 million, and are included in accrued liabilities. |
Indemnifications
Indemnifications | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of Guarantees and Indemnifications [Abstract] | |
Indemnifications | Indemnifications We have made guarantees and indemnities under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions, including revenue transactions in the ordinary course of business. Additionally, we indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware and have a directors and officers insurance policy that may reduce our exposure in certain circumstances and may enable us to recover a portion of future amounts that may be payable, if any. Moreover, in connection with certain performance center leases, we have indemnified our lessors for certain claims arising from the performance center or the lease. The duration of the guarantees and indemnities varies and, in many cases is indefinite but subject to applicable statutes of limitations. The majority of guarantees and indemnities do not provide any limitations on the maximum potential future payments we could be obligated to make. Historically, payments related to these guarantees and indemnities have been immaterial. We estimate the fair value of our indemnification obligations as insignificant based on this history and insurance coverage and have, therefore, not recorded any liability for these guarantees and indemnities in the accompanying consolidated balance sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our pre-tax income attributable to foreign operations was not material. The provision for income tax expense consisted of the following: (In thousands) 2022 2021 2020 Current tax expense Federal $ 12,902 $ 31,171 $ 2,525 State 1,023 2,829 (459) 13,925 34,000 2,066 Deferred tax (benefit) expense Federal (8,624) 107 1,294 State (768) 841 (553) (9,392) 948 741 Income tax expense $ 4,533 $ 34,948 $ 2,807 We recognized net income tax benefits from deductions of share-based payments in excess of compensation cost recognized for financial reporting purposes of $0.2 million, $0.9 million, and $0.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. Deferred tax (liabilities) assets were comprised of the following: (In thousands) 2022 2021 Deferred tax assets: Accrued expenses $ 627 $ 620 Allowance for doubtful accounts 152 269 Contract overrun reserves 952 680 Deferred compensation 234 272 Deferred revenue 943 1,570 Employment-related accruals 3,932 4,028 Environmental reserves 501 499 Federal tax credit carryforwards 133 133 Inventory reserves 3,572 2,957 Operating lease liabilities 8,672 8,145 Pension obligation 28 1,550 Federal and state net operating loss carryforwards 3,397 4,243 Research expenses 10,620 — State tax credit carryforwards 6,974 7,123 Stock-based compensation 2,420 2,584 Other 1,525 2,503 Total gross deferred tax assets 44,682 37,176 Valuation allowance (7,548) (7,718) Total gross deferred tax assets, net of valuation allowance 37,134 29,458 Deferred tax liabilities: Depreciation (11,286) (11,986) Goodwill (8,630) (6,557) Intangibles (18,310) (20,337) Interest rate hedge (3,359) — Operating lease right-of-use assets (8,346) (7,931) Prepaid insurance (609) (534) Other (547) (840) Total gross deferred tax liabilities (51,087) (48,185) Net deferred tax liabilities $ (13,953) $ (18,727) We have federal and state tax net operating losses of $11.4 million and $17.3 million, respectively, as of December 31, 2022. The federal net operating losses acquired from the acquisition of Nobles are subject to an annual limitation under Internal Revenue Code Section 382; however, we expect to fully realize them under ASC Subtopic 740-10 before they begin to expire in 2036. The state net operating loss carryforwards include $10.6 million that is not expected to be realized due to various limitations and has been reduced by a valuation allowance. If not realized, the state net operating loss carryforwards, depending on the tax jurisdiction, will begin to expire between 2027 and 2038. We have federal and state tax credit carryforwards of $0.1 million and $10.9 million, respectively, as of December 31, 2022. A valuation allowance of $8.8 million has been provided on state tax credit carryforwards that are not expected to be realized under ASC Subtopic 740-10. If not realized, the federal tax carryforwards will begin to expire in 2032 and state tax credit carryforwards, depending on the tax jurisdiction, will begin to expire between 2023 and 2037. We believe it is more likely than not that we will generate sufficient taxable income to realize the benefit of the remaining deferred tax assets. The principal reasons for the variation between the statutory and effective tax rates were as follows: Years Ended December 31, 2022 2021 2020 Statutory federal income tax rate 21.0% 21.0% 21.0% State income taxes (net of federal benefit) 4.0 3.1 4.6 Foreign derived intangible income deduction (0.9) — (0.4) Stock-based compensation expense (0.6) (0.5) (1.4) Research and development tax credits (1) (14.8) (3.0) (13.8) Other tax credits (0.1) — (0.3) Changes in valuation allowance (0.5) (1.0) (0.4) Non-deductible book compensation expenses 4.4 0.7 3.3 Changes in deferred tax assets (0.2) — (0.2) Changes in tax reserves — 0.2 (4.6) Other 1.3 — 1.0 Effective income tax rate 13.6% 20.5% 8.8% (1) For 2020, (3.4)% is additional research and development tax credits related to 2019. Our total amount of unrecognized tax benefits was $4.9 million, $4.4 million, and $4.1 million at December 31, 2022, 2021, and 2020, respectively. We record interest and penalty charges, if any, related to uncertain tax positions as a component of tax expense and unrecognized tax benefits. The amounts accrued for interest and penalty charges as of December 31, 2022, 2021, and 2020 were not significant. If recognized, $2.5 million would affect the effective income tax rate. As a result of statute of limitations set to expire in 2023, we expect decreases to our unrecognized tax benefits of approximately $0.6 million in the next twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: (In thousands) 2022 2021 2020 Balance at January 1, $ 4,435 $ 4,069 $ 5,663 Additions for tax positions related to the current year 1,177 562 418 Additions for tax positions related to prior years 15 180 157 Reductions for tax positions related to prior years (13) — — Reductions for lapse of statute of limitations (670) (376) (2,169) Balance at December 31, $ 4,944 $ 4,435 $ 4,069 We file U.S. Federal and state income tax returns. We are subject to examination by the Internal Revenue Service (“IRS”) for tax years after 2018 and by state taxing authorities for tax years after 2017. While we are no longer subject to examination prior to those periods, carryforwards generated prior to those periods may still be adjusted upon examination by the IRS or state taxing authorities if they either have been or will be used in a subsequent period. We believe we have adequately accrued for tax deficiencies or reductions in tax benefits, if any, that could result from the examination and all open audit years. In March 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that provided tax relief to individuals and businesses affected by the coronavirus pandemic. We considered the provisions of the CARES Act and determined they do not have a material impact on our overall income taxes. We utilized the option to defer payment of the employer portion of payroll taxes (Social Security) that would otherwise be required to be made during the period beginning March 27, 2020 to December 31, 2020. As such, as of December 31, 2020, we deferred payment of income tax deductions related to payroll taxes of $6.1 million and recorded the related deferred tax asset of $1.4 million, which was included as part of the net deferred income taxes on the consolidated balance sheet. We were required to and made the payments for 50% of the deferred payroll taxes by December 31, 2021. We were required to and made the payments for the remaining 50% of the deferred payroll taxes by December 31, 2022. The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was signed into U.S. law in December 2017, eliminated the option to immediately deduct research and development expenditures in the year incurred under Section 174 effective January 1, 2022. The amended provision under Section 174 requires us to capitalize and amortize these expenditures over five years (for U.S.-based research). As of December 31, 2022, we recorded an increase to income taxes payable of approximately $10.6 million and a decrease to net deferred tax liabilities of a similar amount. We are monitoring legislation for any further changes to Section 174 and the potential impact to our financial statements in 2023. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) which aims to curb inflation by reducing the deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy. We considered the provisions in the IRA and determined they have no or minimal impact to our overall income taxes. On August 9, 2022, the U.S. enacted the Creating Helpful Incentives to Produce Semiconductors Act of 2022 (“CHIPS Act”) which provides new funding to boost domestic research and manufacturing of semiconductors in the United States. We are evaluating the provisions in the CHIPS Act. Any impact to our overall income taxes would be for 2023 and thereafter. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In December 2020, a representative action under California’s Private Attorneys General Act was filed against us in the Superior Court for the State of California, County of San Bernardino. We received service of process of this complaint in January 2021. The complaint alleges violations of California’s wage and hour laws relating to our current and former employees and seeks attorney’s fees and penalties. We vigorously refuted and defended these claims, and reached a tentative settlement of $0.8 million during the fourth quarter 2021, which was subject to court approval. Thus, we recorded accrued liabilities of $0.8 million as of December 31, 2021. During the second quarter of 2022, additional factual information was identified resulting in an increase in the amount of the tentative settlement to $0.9 million. Therefore, we recorded an additional accrued liabilities of $0.1 million for a total accrued liabilities amount of $0.9 million as of the end of the second quarter of 2022 and remained unchanged as of December 31, 2022 as we were awaiting final court approval of this settlement. Subsequent to December 31, 2022, we received final court approval and paid the $0.9 million on January 17, 2023. Structural Systems has been directed by California environmental agencies to investigate and take corrective action for groundwater contamination at our facilities located in El Mirage and Monrovia, California. Based on currently available information, we have established an accrual for its estimated liability for such investigation and corrective action of $1.5 million as of both December 31, 2022 and December 31, 2021, which is reflected in other long-term liabilities on our consolidated balance sheets. Structural Systems also faces liability as a potentially responsible party for hazardous waste disposed at landfills located in Casmalia and West Covina, California. Structural Systems and other companies and government entities have entered into consent decrees with respect to these landfills with the United States Environmental Protection Agency and/or California environmental agencies under which certain investigation, remediation and maintenance activities are being performed. Based on currently available information, we preliminarily estimate that the range of our future liabilities in connection with the landfill located in West Covina, California is between $0.4 million and $3.1 million. We have established an accrual for the estimated liability in connection with the West Covina landfill of $0.4 million as of both December 31, 2022 and December 31, 2021, which is reflected in other long-term liabilities on our consolidated balance sheets. Our ultimate liability in connection with these matters will depend upon a number of factors, including changes in existing laws and regulations, the design and cost of construction, operation and maintenance activities, and the allocation of liability among potentially responsible parties. In June 2020, a fire severely damaged our performance center in Guaymas, Mexico, which is part of our Structural Systems segment. There were no injuries, however, property and equipment, inventories, and tooling in this leased facility were damaged. Our Guaymas performance center is comprised of two buildings with an aggregate total of 62,000 square feet. The loss of production from the Guaymas performance center is being absorbed by our other existing performance centers. A neighboring, non-related manufacturing facility, also suffered fire damage during the same time as the fire that severely damaged our Guaymas performance center. The cause of the fire is still undetermined and as such, there is no amount of loss that is probable and reasonably estimable at this time. Our insurance covers damage, up to a capped amount, to the facility, equipment, unfinished inventory, and other assets at replacement cost, finished goods inventory at selling price, as well as business interruption, third party property damage, and recovery related expenses caused by the fire, less our per claim deductible. The anticipated insurance recoveries related to losses and incremental costs incurred are recognized when receipt is probable. The anticipated insurance recoveries in excess of net book value of the damaged operating assets and business interruption will not be recorded until all contingencies related to our claim have been resolved. During the year ended December 31, 2020, $0.8 million of revenue and $0.5 million of related cost of sales were reversed for revenue previously recognized using the over time method as the revenue recognition process for these items were deemed to be interrupted as a result of these inventory items being damaged. Also during the year ended December 31, 2020, we wrote off property and equipment and tooling with an aggregate total net book value of $7.1 million and inventory on hand of $3.4 million that were damaged by the fire. The related anticipated insurance recoveries were also presented within the same financial statement line item in the consolidated statements of income resulting in no net impact, with the anticipated insurance recoveries receivable included as part of other current assets on the consolidated balance sheets. During the year ended December 31, 2022, we received insurance recoveries in aggregate total of $5.4 million for business interruption and since the contingencies related to this amount are deemed to be resolved, we recorded this amount as other income. In addition, during the year ended December 31, 2022, we received insurance recoveries of $1.0 million for property and equipment and tooling damage and since the contingencies related to property and equipment and tooling were not deemed to be resolved, we did not recognize it as other income during the year ended December 31, 2022. Further, as of December 31, 2022, we have received $13.5 million of general insurance recoveries, all during 2020. The timing of and the remaining amounts of insurance recoveries, including for business interruption, are not known at this time. In the normal course of business, Ducommun and its subsidiaries are defendants in certain other litigation, claims and inquiries, including matters relating to environmental laws. In addition, Ducommun makes various commitments and incurs contingent liabilities in the ordinary course of business. While it is not feasible to predict the outcome of these matters, Ducommun does not presently expect that any sum it may be required to pay in connection with these matters would have a material adverse effect on its consolidated financial position, results of operations or cash flows. |
Major Customers and Concentrati
Major Customers and Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Major Customers and Concentrations of Credit Risk | Major Customers and Concentrations of Credit Risk We provide proprietary products and services to the Department of Defense and various United States Government agencies, and most of the aerospace and aircraft manufacturers who receive contracts directly from the U.S. Government as an original equipment manufacturer (“Primes”). In addition, we also service technology-driven markets in the industrial, medical and other end-use markets. As a result, we have significant net revenues from certain customers. Accounts receivable were diversified over a number of different commercial, military and space programs and were made by both operating segments. Net revenues from our top ten customers, including The Boeing Company (“Boeing”), General Dynamics Corporation (“GD”), Lockheed Martin Corporation (“Lockheed Martin”), Northrop Grumman Corporation (“Northrop”), Raytheon Technologies Corporation (“Raytheon”), Spirit AeroSystems Holdings, Inc. (“Spirit”), and Viasat, Inc. (“Viasat”), represented the following percentages of total net revenues: Years Ended December 31, 2022 2021 2020 Boeing 6.7 % 7.8 % 10.5 % GD 5.7 % 3.0 % 2.5 % Lockheed Martin 3.5 % 4.4 % 5.0 % Northrop 5.7 % 7.1 % 9.1 % Raytheon 21.6 % 24.4 % 20.9 % Spirit 5.7 % 3.8 % 3.3 % Viasat 5.4 % 2.6 % 1.7 % Top ten customers (1) 61.4 % 61.1 % 61.1 % (1) Includes Boeing, GD, Lockheed Martin, Northrop, Raytheon, and Spirit for 2022, 2021, and 2020, and Viasat for 2022 and 2021. Boeing, GD, Lockheed Martin, Northrop, Raytheon, Spirit, and Viasat represented the following percentages of total accounts receivable: December 31, 2022 2021 Boeing 3.8 % 3.5 % GD 3.4 % 4.0 % Lockheed Martin 1.0 % 0.4 % Northrop 13.0 % 10.9 % Raytheon 16.2 % 17.8 % Spirit 1.0 % 0.7 % Viasat 10.3 % 4.3 % In 2022, 2021 and 2020, net revenues from foreign customers based on the location of the customer were $60.7 million, $43.6 million and $58.5 million, respectively. No net revenues from a foreign country were greater than 3.0% of total net revenues in 2022, 2021, and 2020. We have manufacturing facilities in Thailand and Mexico. Our net revenues, profitability and identifiable long-lived assets attributable to foreign revenues activity were not material compared to our net revenues, |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We supply products and services primarily to the aerospace and defense industries. Our subsidiaries are organized into two strategic businesses, Electronic Systems and Structural Systems, each of which is an operating segment as well as a reportable segment. Financial information by reportable segment was as follows: (In thousands) 2022 2021 2020 Net Revenues Electronic Systems $ 440,638 $ 412,648 $ 392,633 Structural Systems 271,899 232,765 236,308 Total Net Revenues $ 712,537 $ 645,413 $ 628,941 Segment Operating Income (Loss) (1) Electronic Systems $ 49,876 $ 57,629 $ 51,894 Structural Systems 17,225 20,234 19,584 67,101 77,863 71,478 Corporate General and Administrative Expenses (2) (27,313) (28,982) (25,972) Operating Income $ 39,788 $ 48,881 $ 45,506 Depreciation and Amortization Expenses Electronic Systems $ 13,974 $ 13,823 $ 14,038 Structural Systems 17,212 14,331 14,559 Corporate Administration 235 235 253 Total Depreciation and Amortization Expenses $ 31,421 $ 28,389 $ 28,850 Capital Expenditures Electronic Systems $ 10,717 $ 7,471 $ 5,037 Structural Systems 8,834 8,463 8,570 Corporate Administration — — — Total Capital Expenditures $ 19,551 $ 15,934 $ 13,607 (1) The results for 2021 include MagSeal’s results of operations which have been included in our consolidated statements of income since the date of acquisition as part of the Structural Systems segment. See Note 2. (2) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments. Segment assets include assets directly identifiable with each segment. Corporate assets include assets not specifically identified with a business segment, including cash. The following table summarizes our segment assets for 2022 and 2021: (In thousands) 2022 2021 Total Assets Electronic Systems $ 543,298 $ 490,814 Structural Systems 410,565 408,118 Corporate Administration 67,643 79,803 Total Assets $ 1,021,506 $ 978,735 Goodwill and Intangibles Electronic Systems $ 182,501 $ 191,789 Structural Systems 148,107 153,669 Total Goodwill and Intangibles $ 330,608 $ 345,458 In December 2021, we acquired 100.0% of the outstanding equity interests of MagSeal for an original purchase price of $69.5 million, net of cash acquired. We allocated the final gross purchase price of $70.9 million to the assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. See Note 2. |
Consolidated Valuation and Qual
Consolidated Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Consolidated Valuation and Qualifying Accounts | CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2022, 2021, AND 2020 (Dollars in thousands) SCHEDULE II Description Balance at Charged to Deductions/(Recoveries) Other (1) Balance at End of Period 2022 Allowance for Credit Losses $ 1,098 $ (74) $ 435 $ — $ 589 Valuation Allowance on Deferred Tax Assets $ 7,718 $ (170) $ — $ — $ 7,548 2021 Allowance for Credit Losses $ 1,552 $ 227 $ 681 $ — $ 1,098 Valuation Allowance on Deferred Tax Assets $ 9,330 $ (1,612) $ — $ — $ 7,718 2020 Allowance for Credit Losses $ 1,321 $ 231 $ — $ — $ 1,552 Valuation Allowance on Deferred Tax Assets $ 9,375 $ (111) $ — $ 66 $ 9,330 (1) Includes opening balance of Nobles Worldwide, Inc. acquired in October 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and include the accounts of Ducommun Incorporated and its subsidiaries (“Ducommun,” the “Company,” “we,” “us” or “our”), after eliminating intercompany balances and transactions. Our fiscal quarters typically end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. As a result of using fiscal quarters for the first three quarters combined with leap years, our first and fourth fiscal quarters can range between 12 1/2 weeks to 13 1/2 weeks while the second and third fiscal quarters remain at a constant 13 weeks per fiscal quarter. |
Use of Estimates | Use of Estimates Certain amounts and disclosures included in the consolidated financial statements required management to make estimates and judgments that affect the amount of assets, liabilities (including forward loss reserves), revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to current year’s presentation. |
Fair Value | Fair Value Assets and liabilities that are measured, recorded or disclosed at fair value on a recurring basis are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value. Level 1, the highest level, refers to the values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant observable inputs. Level 3, the lowest level, includes fair values estimated using significant unobservable inputs. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid instruments purchased with original maturities of three months or less. These assets are valued at cost, which approximates fair value, which we classify as Level 1. See Fair Value above. |
Derivative Instruments | Derivative Instruments We recognize derivative instruments on our condensed consolidated balance sheets at their fair value. On the date that we enter into a derivative contract, we designate the derivative instrument as a fair value hedge, a cash flow hedge, or a derivative instrument that will not be accounted for using hedge accounting methods. In November 2021, we entered into forward interest rate swap agreements with an aggregate notional amount of $150.0 million, all with an effective date of January 1, 2024 (“Forward Interest Rate Swaps”) to manage our exposure to interest rate movements on a portion of our debt. As such, at the time we entered into the Forward Interest Rate Swaps, there was a high probability of forecasted interest payments on our debts occurring and the swaps are highly effective in offsetting those interest payments and therefore, we elected to apply cash flow hedge accounting. On July 14, 2022, as a result of refinancing all our existing debt, which allows borrowing based on a Secured Overnight Financing Rate (“SOFR”), we were required to complete an amendment of the Forward Interest Rate Swaps from One Month London Interbank Offered Rate (“LIBOR”) to One Month Term SOFR (“Amended Forward Interest Rate Swaps”), which occurred on the same day. After the transition of the Forward Interest Rate Swaps and debt to SOFR was completed, we determined the hedging relationship was still highly effective as of the amendment date. See Note 9. As of December 31, 2022, all of our derivative instruments were designated as cash flow hedges. We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. Since the Amended Forward Interest Rate Swaps are not effective until January 1, 2024, we only record the changes in fair value of the derivative instruments that were highly effective and that were designated and qualified as cash flow hedges. As such, during 2022, we recorded changes of $15.8 million to other assets, deferred income taxes, and accumulated other comprehensive income (loss). During the fourth quarter of 2022, we recorded an adjustment of $6.7 million to correct an understatement of the hedge asset balance as of the end of the third quarter of 2022, with a corresponding increase of $5.1 million to other comprehensive income, net of tax of $1.6 million. There was no impact to net income. When we determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings. |
Allowance for Credit Losses | Allowance for Credit Losses We maintain an allowance for credit losses for expected losses from the inability of customers to make required payments. The allowance for credit losses is evaluated periodically for expected credit losses based on the financial condition of customers and their payment history, the aging of accounts receivable, historical write-off experience and other assumptions, such as current assessment of economic conditions. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a moving average cost basis for raw materials and actual cost for work-in-process and finished goods. The majority of our inventory is charged to cost of sales as raw materials are placed into production. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle performance center expense, freight, handling costs, and wasted materials (spoilage) incurred. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. The majority of our revenues are recognized over time, however, for revenue contracts where revenue is recognized |
Property and Equipment and Depreciation | Property and Equipment and Depreciation Property and equipment, including assets recorded under operating and finance leases, are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, or the lease term if shorter for leasehold improvements. Repairs and maintenance are charged to expense as incurred. We evaluate long-lived assets for recoverability considering undiscounted cash flows, when significant changes in conditions occur, and recognize impairment losses if any, based upon the fair value of the assets. |
Business Combinations | Business Combinations When a business is acquired, we allocate the purchase price by recording the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date, with the excess cost recorded as goodwill. A preliminary fair value is determined once a business is acquired, with the final determination of fair value be completed no later than one year from the date of acquisition. To determine the estimated fair value of assets acquired and liabilities assumed requires significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies. We engage the assistance of valuation specialists in concluding on fair value measurements in determining the fair value of assets acquired and liabilities assumed in business combinations. The fair value of the intangible assets is estimated using several valuation methodologies, including the income based or market based approaches, which represent Level 3 fair value measurements. Inputs to fair value analyses and other aspects of the allocation of the purchase price require judgment. The value for customer relationships is typically estimated based on a multi-period excess earnings approach. The more significant inputs used in the customer relationships intangible asset valuation include (i) future revenue growth rates, (ii) projected gross margins, (iii) the customer attrition rate, and (iv) the discount rate. The useful lives are estimated based on the underlying agreements or the future economic benefit expected to be received from the assets. |
Goodwill | Goodwill Goodwill is evaluated for impairment on an annual basis on the first day of the fourth fiscal quarter. If certain factors occur, including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter. We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis is performed to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a discounted cash flow model) and the market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable business acquisitions and the transaction values observed and its related control premiums. In the fourth quarter of 2022, the carrying amount of goodwill at the date of the most recent annual impairment evaluation for Electronic Systems and Structural Systems was $117.4 million and $86.0 million, respectively. We acquired 100% of the equity interests of Magnetic Seal LLC (f/k/a Magnetic Seal Corporation, “MagSeal”) in December 2021, for an original purchase price of $69.5 million, net of cash acquired. We recorded goodwill of $32.6 million in our Structural Systems segment, which is also our reporting unit. See Note 2. As our commercial aerospace end-use market business continues to be negatively impacted by the COVID-19 pandemic, we performed a step one goodwill impairment test for our Structural Systems reporting unit as of the first day of the fourth quarter of 2022. The fair value of our Structural Systems segment exceeded its carrying value and thus, was not deemed impaired. As of the date of our 2022 annual evaluation for goodwill impairment for the Electronic Systems segment, which is also our reporting unit, we performed a qualitative assessment as of the first day of the fourth quarter of 2022, which considered each of the following: 1) margin of passing most recent step one analysis, 2) actual operating results as compared to prior forecasts, 3) long-term growth rate, 4) analyzing material adverse factors/changes between valuation dates, 5) general macroeconomic factors, and 6) industry and market conditions. Based upon our qualitative assessment, we concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount and thus, goodwill was not deemed impaired. |
Other Intangible Assets | Other Intangible Assets We amortize acquired other intangible assets with finite lives over the estimated economic lives of the assets, ranging from 2 to 19 years, generally using the straight-line method. The value of other intangibles acquired through business combinations has been estimated using present value techniques which involve estimates of future cash flows. We evaluate other intangible assets for recoverability considering undiscounted cash flows when significant changes in conditions occur, and recognize impairment losses, if any, based upon the estimated fair value of the assets. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, as reflected on the consolidated balance sheets under the equity section, was comprised of cumulative pension and retirement liability adjustments, net of tax, and change in net unrealized gains and losses on cash flow hedges, net of tax. |
Revenue Recognition | Revenue Recognition Our customers typically engage us to manufacture products based on designs and specifications provided by the end-use customer. This requires the building of tooling and manufacturing first article inspection products (prototypes) before volume manufacturing. Contracts with our customers generally include a termination for convenience clause. We have a significant number of contracts that are started and completed within the same year, as well as contracts derived from long-term agreements and programs that can span several years. We recognize revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), which utilizes a five-step model. The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment. The majority of our contracts are firm fixed-price contracts. The deliverables within a customer purchase order are analyzed to determine the number of performance obligations. In addition, at times, in order to achieve economies of scale and based on our customer’s forecasted demand, we may build in advance of receiving a purchase order from our customer. When that occurs, we would not recognize revenue until we have received the customer purchase order. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or met the series guidance. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. We manufacture most products to customer specifications and the product cannot be easily modified for another customer. As such, these products are deemed to have no alternative use once the manufacturing process begins. In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit. Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs. For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over time method. The majority of our performance obligations are satisfied over time as work progresses. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to measure progress. Our typical revenue contract is a firm fixed price contract, and the cost of raw materials could make up a significant amount of the total costs incurred. As such, we believe using the total costs incurred input method would be the most appropriate method. While the cost of raw materials could make up a significant amount of the total costs incurred, there is a direct relationship between our inputs and the transfer of control of goods or services to the customer. Contract estimates are based on various assumptions to project the outcome of future events that can span multiple months or years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; and the performance of subcontractors. As a significant change in one or more of these estimates could affect the progress completed (and related profitability) on our contracts, we review and update our contract-related estimates on a regular basis. We recognize such adjustments under the cumulative catch-up method. Under this method, the impact of the adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. Net cumulative catch-up adjustments on profit recorded were not material for both years ended December 31, 2022 and December 31, 2021. Payments under long-term contracts may be received before or after revenue is recognized. When revenue is recognized before we bill our customer, a contract asset is created for the work performed but not yet billed. Similarly, when we receive payment before we ship our products to our customer and have met the shipping terms, a contract liability is created for the advance or progress payment. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. We record provisions for the total anticipated losses on contracts, considering total estimated costs to complete the contract compared to total anticipated revenues, in the period in which such losses are identified. The provisions for estimated losses on contracts require us to make certain estimates and assumptions, including those with respect to the future revenue under a contract and the future cost to complete the contract. Our estimate of the future cost to complete a contract may include assumptions as to changes in manufacturing efficiency, operating and material costs, and our ability to resolve claims and assertions with our customers. If any of these or other assumptions and estimates do not materialize in the future, we may be required to adjust the provisions for estimated losses on contracts. The provision for estimated losses on contracts is included as part of contract liabilities on the consolidated balance sheets. As of December 31, 2022 and 2021, provision for estimated losses on contracts were $3.9 million and $2.8 million, respectively. Production cost of contracts includes non-recurring production costs, such as design and engineering costs, and tooling and other special-purpose machinery necessary to build parts as specified in a contract. Production costs of contracts are recorded to cost of sales using the over time revenue recognition model. We review the value of the production cost of contracts on a quarterly basis to ensure when added to the estimated cost to complete, the value is not greater than the estimated realizable value of the related contracts. As of December 31, 2022 and 2021, production costs of contracts were $5.7 million and $8.0 million, respectively. Contract Assets and Contract Liabilities Contract assets consist of our right to payment for work performed but not yet billed. Contract assets are transferred to accounts receivable when we bill our customers. We bill our customers when we ship the products and meet the shipping terms within the revenue contract. Contract liabilities consist of advance or progress payments received from our customers prior to the time transfer of control occurs plus the estimated losses on contracts. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized, using enacted tax rates, for the expected future tax consequences of temporary differences between the book and tax bases of recorded assets and liabilities, operating losses, and tax credit carryforwards. Deferred tax assets are evaluated quarterly and are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax positions taken or expected to be taken in a tax return are recognized when it is more-likely-than-not, based on technical merits, to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement, including resolution of related appeals and/or litigation process, if any. |
Litigation and Commitments | Litigation and Commitments In the normal course of business, we are defendants in certain litigation, claims and inquiries, including matters relating to environmental laws. In addition, we make various commitments and incur contingent liabilities. Management’s estimates regarding contingent liabilities could differ from actual results. |
Environmental Liabilities | Environmental Liabilities Environmental liabilities are recorded when environmental assessments and/or remedial efforts are probable and costs can be reasonably estimated. Generally, the timing of these accruals coincides with the completion of a feasibility study or our commitment to a formal plan of action. Further, we review and update our environmental accruals as circumstances change and/or additional information is obtained that reasonably could be expected to have a meaningful effect on the outcome of a matter or the estimated cost thereof. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation We measure and recognize compensation expense for share-based payment transactions to our employees and non-employees at their estimated fair value. The expense is measured at the grant date, based on the calculated fair value of the share-based award, and is recognized over the requisite service period (generally the vesting period of the equity award). The fair value of stock options are determined using the Black-Scholes-Merton (“Black-Scholes”) valuation model, which requires assumptions and judgments regarding stock price volatility, risk-free interest rates, and expected options terms. Management’s estimates |
Earnings per Share | Earnings Per Share Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding in each period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus potentially dilutive shares that could be issued if exercised or converted into common stock in each period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Guidance Adopted in 2022 In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies reporting or provides clarification on various topics, including clarification that an entity should use the weighted-average share count from each quarter when calculating the year-to-date weighted-average share count. The new guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, which was our interim period beginning January 1, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides optional guidance for a limited time for contracts that reference London Interbank Offered Rate (“LIBOR”), to ease the potential burden in accounting for, or recognizing the effects, of reference rate reform on financial reporting as a result of the cessation of LIBOR. The new guidance is effective at any time after March 12, 2020 but no later than December 31, 2022. Prior to the adoption of this standard, during the three months ended October 1, 2022, we had made the following elections related to our current cash flow hedging relationships as our current term loans mature before the expiration of the Forward Interest Rate Swaps: 1) Probability of forecasted transactions, and 2) Assessment of effectiveness. The adoption of this standard during the three months ended October 1, 2022, did not have a material impact on our consolidated financial statements. See Note 9. Recently Issued Accounting Standards In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848” (“ASU 2022-06”), which defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. Since we adopted ASU 2020-04 during 2022, ASU 2022-06 will not have a material impact on our consolidated financial statements. See Note 9. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information (Dollars in thousands) 2022 2021 2020 Interest paid $ 10,983 $ 10,135 $ 11,859 Taxes paid, net $ 3,825 $ 32,934 $ 3,810 Non-cash activities: Purchases of property and equipment not paid $ 1,195 $ 1,333 $ 2,477 |
Schedule of Contract with Customer, Asset and Liability | Contract assets and contract liabilities from revenue contracts with customers are as follows: (Dollars in thousands) December 31, December 31, Contract assets $ 191,290 $ 176,405 Contract liabilities $ 47,068 $ 42,077 |
Schedule of Disaggregation of Revenue | In addition to the revenue categories disclosed above, the following table reflects our revenue disaggregated by major end-use market: (Dollars in thousands) % of Net Revenues Change 2022 2021 2022 2021 Consolidated Ducommun Military and space $ (33,147) $ 420,701 $ 453,848 59.1 % 70.3 % Commercial aerospace 91,778 247,509 155,731 34.7 % 24.1 % Industrial 8,493 44,327 35,834 6.2 % 5.6 % Total $ 67,124 $ 712,537 $ 645,413 100.0 % 100.0 % Electronic Systems Military and space $ (13,730) $ 314,181 $ 327,911 71.3 % 79.5 % Commercial aerospace 33,227 82,130 48,903 18.6 % 11.8 % Industrial 8,493 44,327 35,834 10.1 % 8.7 % Total $ 27,990 $ 440,638 $ 412,648 100.0 % 100.0 % Structural Systems Military and space $ (19,417) $ 106,520 $ 125,937 39.2 % 54.1 % Commercial aerospace 58,551 165,379 106,828 60.8 % 45.9 % Total $ 39,134 $ 271,899 $ 232,765 100.0 % 100.0 % |
Schedule of Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share | The net income and weighted-average common shares outstanding used to compute earnings per share were as follows: (In thousands, except per share data) 2022 2021 2020 Net income $ 28,789 $ 135,536 $ 29,174 Weighted-average number of common shares outstanding Basic weighted-average common shares outstanding 12,074 11,879 11,676 Dilutive potential common shares 292 372 256 Diluted weighted-average common shares outstanding 12,366 12,251 11,932 Earnings per share Basic $ 2.38 $ 11.41 $ 2.50 Diluted $ 2.33 $ 11.06 $ 2.45 |
Schedule of Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings | Potentially dilutive stock awards to purchase common stock, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these shares may be potentially dilutive common shares in the future. (In thousands) 2022 2021 2020 Stock options and stock units 52 3 254 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the final estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Estimated Cash $ 1,821 Accounts receivable 2,093 Inventories 4,546 Other current assets 98 Property and equipment 482 Operating lease right-of-use assets 1,533 Intangible assets 30,100 Goodwill 32,577 Total assets acquired 73,250 Current liabilities (907) Other non-current liabilities (1,408) Total liabilities assumed (2,315) Total purchase price allocation $ 70,935 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Useful Life Estimated Intangible assets: Customer relationships 19 $ 24,800 Backlog 2 600 Trade name Indefinite 4,700 $ 30,100 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Activities | Our restructuring activities for 2022 were as follows (in thousands): December 31, 2021 2022 December 31, 2022 Balance Charges Cash Payments Non-Cash Payments Change in Estimates Balance Severance and benefits $ — $ 5,076 $ (2,277) $ — $ — $ 2,799 Property and equipment accelerated depreciation due to restructuring — 778 — (778) — — Property and equipment impairment due to restructuring — 304 — (304) — — Inventory write down — 528 — (528) — — Ending balance $ — $ 6,686 $ (2,277) $ (1,610) $ — $ 2,799 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: (In thousands) 2022 2021 Raw materials and supplies $ 143,495 $ 125,334 Work in process 23,799 20,609 Finished goods 3,917 4,995 Total $ 171,211 $ 150,938 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consisted of the following: (In thousands) Range of 2022 2021 Useful Lives Land $ 10,494 $ 10,494 Buildings and improvements 51,110 49,699 5 - 40 Years Machinery and equipment 179,606 180,761 2 - 20 Years Furniture and equipment 17,977 19,017 2 - 10 Years Construction in progress 18,545 10,580 277,732 270,551 Less accumulated depreciation 171,507 168,132 Total $ 106,225 $ 102,419 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease, Cost | The components of lease expense consisted of the following: (In thousands) Years Ended December 31, 2022 December 31, 2021 Operating leases expense $ 10,521 4,283 Finance leases expense: Amortization of right-of-use assets $ 343 356 Interest on lease liabilities 53 62 Total finance lease expense $ 396 $ 418 Supplemental cash flow information related to leases was as follows: (In thousands) Years Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,669 $ 5,150 Operating cash flows from finance leases $ 53 $ 61 Financing cash flows from finance leases $ 346 $ 363 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 8,332 $ 23,317 Finance leases $ 245 $ 401 The weighted average remaining lease terms were as follows: (In years) December 31, 2022 December 31, 2021 Operating leases 5 5 Finance leases 6 6 The weighted average discount rates were as follows: Years Ended December 31, 2022 December 31, 2021 Operating leases 3.0% 3.1% Finance leases 3.6% 3.6% |
Schedule of Finance Lease, Liability, Maturity | Maturity of operating and finance lease liabilities are as follows: (In thousands) Operating Leases Finance Leases 2023 $ 8,081 $ 388 2024 7,956 321 2025 7,924 262 2026 7,595 208 2027 2,323 175 Thereafter 5,102 310 Total lease payments 38,981 1,664 Less imputed interest 2,985 161 Total $ 35,996 $ 1,503 |
Schedule of Lessee, Operating Lease, Liability, Maturity | Maturity of operating and finance lease liabilities are as follows: (In thousands) Operating Leases Finance Leases 2023 $ 8,081 $ 388 2024 7,956 321 2025 7,924 262 2026 7,595 208 2027 2,323 175 Thereafter 5,102 310 Total lease payments 38,981 1,664 Less imputed interest 2,985 161 Total $ 35,996 $ 1,503 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of goodwill, by operating segment, for the years ended December 31, 2022 and 2021 were as follows: (In thousands) Electronic Structural Consolidated Gross goodwill $ 199,157 $ 86,259 $ 285,416 Accumulated goodwill impairment (81,722) — (81,722) Balance at December 31, 2021 117,435 86,259 203,694 Purchase price allocation refinements — (287) (287) Balance at December 31, 2022 $ 117,435 $ 85,972 $ 203,407 |
Schedule of Other Intangible Assets | Intangible assets are as follows: (In thousands) December 31, 2022 December 31, 2021 Wtd. Avg Life (Yrs) Gross Accumulated Net Gross Accumulated Net Finite-lived assets Customer relationships 17 $ 246,300 $ 127,999 $ 118,301 $ 246,300 $ 114,169 $ 132,131 Trade names and trademarks 14 5,500 1,670 3,830 5,500 1,263 4,237 Contract renewal 14 1,845 1,845 — 1,845 1,845 — Technology 15 400 318 82 400 291 109 Backlog 2 600 312 288 600 13 587 Total finite-lived assets 254,645 132,144 122,501 254,645 117,581 137,064 Indefinite-lived assets Trade names and trademarks 4,700 — 4,700 4,700 — 4,700 Total $ 259,345 $ 132,144 $ 127,201 $ 259,345 $ 117,581 $ 141,764 The carrying amount of other intangible assets by operating segment as of December 31, 2022 and 2021 was as follows: (In thousands) December 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Other intangible assets Electronic Systems $ 164,545 $ 99,479 $ 65,066 $ 164,545 $ 90,191 $ 74,354 Structural Systems 94,800 32,665 62,135 94,800 27,390 67,410 Total $ 259,345 $ 132,144 $ 127,201 $ 259,345 $ 117,581 $ 141,764 |
Schedule of Future Amortization Expense | Future amortization expense by operating segment is expected to be as follows: (In thousands) Electronic Structural Consolidated 2023 $ 9,288 $ 5,196 $ 14,484 2024 9,288 4,673 13,961 2025 9,288 4,673 13,961 2026 9,288 4,649 13,937 2027 9,288 4,647 13,935 Thereafter 18,626 33,597 52,223 $ 65,066 $ 57,435 $ 122,501 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The components of accrued and other liabilities consisted of the following: (In thousands) 2022 2021 Accrued compensation $ 28,785 $ 24,391 Accrued income tax and sales tax 10,478 926 Other 9,557 15,974 Total $ 48,820 $ 41,291 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long-term debt and the current period interest rates were as follows: (In thousands) 2022 2021 Term loans $ 248,438 $ 287,712 Total debt 248,438 287,712 Less current portion 6,250 7,000 Total long-term debt, less current portion 242,188 280,712 Less debt issuance costs - term loans (1,593) (1,328) Total long-term debt, net of debt issuance costs - term loans $ 240,595 $ 279,384 Debt issuance costs - revolving credit facility (1) $ 2,265 $ 1,136 Weighted-average interest rate 4.36 % 3.27 % (1) Included as part of other assets. |
Schedule of Future Long Term Debt Payments | Future long-term debt payments at December 31, 2022 were as follows: (In thousands) 2023 $ 6,250 2024 7,813 2025 12,500 2026 14,063 2027 207,812 Thereafter — Total $ 248,438 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Option Activity | Stock option activity for the year ended December 31, 2022 were as follows: Number Weighted- Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2022 317,779 $ 35.30 Granted — $ — Exercised (109,186) $ 31.82 Expired (2,150) $ 39.75 Forfeited (7,167) $ 42.88 Outstanding at December 31, 2022 199,276 $ 36.89 5.4 $ 2,537 Exerciseable at December 31, 2022 199,276 $ 36.89 5.4 $ 2,537 |
Schedule of Nonvested Options Activity | Changes in nonvested stock options for the year ended December 31, 2022 were as follows: Number of Stock Options Weighted- Nonvested at January 1, 2022 59,605 $ 15.93 Granted — $ — Vested (52,438) $ 15.90 Forfeited (7,167) $ 16.10 Nonvested at December 31, 2022 — $ — |
Schedule of Assumptions Used | The assumptions used to compute the fair value of stock option grants under the 2020 Stock Incentive Plan for years ended December 31, 2022, 2021, and 2020 were as follows: Years Ended December 31, 2022 2021 2020 Risk-free interest rate N/A N/A 1.59 % Expected volatility N/A N/A 37.75 % Expected dividends N/A N/A — Expected term (in months) N/A N/A 66 The weighted-average assumptions used to determine the net periodic benefit costs under the two plans were as follows: Years Ended December 31, 2022 2021 2020 Discount rate used to determine pension expense Pension Plan 2.85% 2.50% 3.22% LaBarge Retirement Plan 2.35% 1.85% 2.85% The weighted-average assumptions used to determine the benefit obligations under the two plans were as follows: December 31, 2022 2021 2020 Discount rate used to determine value of obligations Pension Plan 5.11% 2.85% 2.50% LaBarge Retirement Plan 5.00% 2.35% 1.85% Long-term rate of return - Pension Plan only 6.25% 6.25% 6.25% |
Schedule of Restricted Stock Units Activity | Restricted stock unit activity for the year ended December 31, 2022 was as follows: Number of Restricted Stock Units Weighted- Outstanding at January 1, 2022 202,282 $ 44.85 Granted 118,847 $ 51.76 Vested (74,222) $ 44.28 Forfeited (45,112) $ 50.72 Outstanding at December 31, 2022 201,795 $ 47.81 |
Schedule of Performance-based Units Activity | Performance stock activity for the year ended December 31, 2022 was as follows: Number of Performance Stock Units Weighted- Outstanding at January 1, 2022 299,563 $ 41.16 Granted 111,654 $ 48.18 Vested (89,309) $ 44.65 Forfeited (20,554) $ 45.61 Outstanding at December 31, 2022 301,354 $ 42.42 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Pension Cost | The components of net periodic pension cost for the Pension Plan and LaBarge Retirement Plan in aggregate are as follows: (In thousands) 2022 2021 2020 Service cost $ 625 $ 676 $ 622 Interest cost 1,089 1,010 1,209 Expected return on plan assets (2,081) (1,895) (1,761) Amortization of actuarial losses 585 1,285 993 Net periodic pension cost $ 218 $ 1,076 $ 1,063 |
Schedule of Reclassification out of Accumulated Other Comprehensive Income | The components of the reclassifications of net actuarial losses from accumulated other comprehensive loss to net income for 2022 were as follows: (In thousands) 2022 Amortization of actuarial loss - total before tax (1) $ 585 Tax benefit (143) Net of tax $ 442 (1) The amortization expense is included in the computation of periodic pension cost and is a decrease to net income upon reclassification from accumulated other comprehensive loss. |
Schedule of Obligation and Funded Status of Defined Benefit Pension Plan and Retirement Plan | The obligations, fair value of plan assets, and funded status of both plans are as follows: (In thousands) 2022 2021 Change in benefit obligation (1) Beginning benefit obligation (January 1) $ 39,805 $ 42,804 Service cost 625 676 Interest cost 1,089 1,010 Actuarial gain (9,714) (2,537) Benefits paid (1,468) (2,148) Ending benefit obligation (December 31) $ 30,337 $ 39,805 Change in plan assets Beginning fair value of plan assets (January 1) $ 33,698 $ 30,632 Return on assets (4,652) 3,122 Employer contribution 1,702 2,095 Benefits paid (1,468) (2,151) Ending fair value of plan assets (December 31) $ 29,280 $ 33,698 Funded status underfunded $ (1,057) $ (6,107) Amounts recognized in the consolidated balance sheet Current liabilities $ 416 $ 427 Non-current liabilities $ 641 $ 5,680 Unrecognized loss included in accumulated other comprehensive loss Beginning unrecognized loss, before tax (January 1) $ 7,573 $ 12,620 Amortization (582) (1,282) Liability gain (9,714) (2,537) Asset loss (gain) 6,734 (1,228) Ending unrecognized loss, before tax (December 31) 4,011 7,573 Tax impact (970) (1,827) Unrecognized loss included in accumulated other comprehensive loss, net of tax $ 3,041 $ 5,746 (1) Projected benefit obligation equals the accumulated benefit obligation for the plans. |
Schedule of Company's Pension Plan Asset Allocation, by Asset Category | Our Pension Plan asset allocations at December 31, 2022 and 2021, by asset category, were as follows: December 31, 2022 2021 Equity securities 61% 69% Cash and equivalents 4% 1% Debt securities 35% 30% Total (1) 100% 100% (1) Our overall investment strategy is to achieve an asset allocation within the following ranges to achieve an appropriate rate of return relative to risk. Cash 0-10% Fixed income securities 15-75% Equities 30-80% (In thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,078 $ — $ — $ 1,078 Fixed income securities 4,622 — — 4,622 Equities (1) 12,591 — — 12,591 Other investments 1,033 — — 1,033 Total plan assets at fair value $ 19,324 $ — $ — 19,324 Pooled funds 9,956 Total fair value of plan assets $ 29,280 (In thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 414 $ — $ — $ 414 Fixed income securities 3,648 — — 3,648 Equities (1) 7,446 — — 7,446 Other investments 1,199 — — 1,199 Total plan assets at fair value $ 12,707 $ — $ — 12,707 Pooled funds 20,991 Total fair value of plan assets $ 33,698 (1) Represents mutual funds and commingled accounts which invest primarily in equities, but may also hold fixed income securities, cash and other investments. Commingled funds with publicly quoted prices and actively traded are classified as Level 1 investments. |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | The assumptions used to compute the fair value of stock option grants under the 2020 Stock Incentive Plan for years ended December 31, 2022, 2021, and 2020 were as follows: Years Ended December 31, 2022 2021 2020 Risk-free interest rate N/A N/A 1.59 % Expected volatility N/A N/A 37.75 % Expected dividends N/A N/A — Expected term (in months) N/A N/A 66 The weighted-average assumptions used to determine the net periodic benefit costs under the two plans were as follows: Years Ended December 31, 2022 2021 2020 Discount rate used to determine pension expense Pension Plan 2.85% 2.50% 3.22% LaBarge Retirement Plan 2.35% 1.85% 2.85% The weighted-average assumptions used to determine the benefit obligations under the two plans were as follows: December 31, 2022 2021 2020 Discount rate used to determine value of obligations Pension Plan 5.11% 2.85% 2.50% LaBarge Retirement Plan 5.00% 2.35% 1.85% Long-term rate of return - Pension Plan only 6.25% 6.25% 6.25% |
Expected Future Benefit Payments Under Pension Plans | The following benefit payments under both plans, which reflect expected future service, as appropriate, are expected to be paid: (In thousands) Pension Plan LaBarge 2023 $ 1,379 $ 416 2024 $ 1,481 $ 397 2025 $ 1,555 $ 378 2026 $ 1,639 $ 359 2027 $ 1,712 $ 341 2028 - 2032 $ 9,156 $ 1,435 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Tax Expense (Benefit) | The provision for income tax expense consisted of the following: (In thousands) 2022 2021 2020 Current tax expense Federal $ 12,902 $ 31,171 $ 2,525 State 1,023 2,829 (459) 13,925 34,000 2,066 Deferred tax (benefit) expense Federal (8,624) 107 1,294 State (768) 841 (553) (9,392) 948 741 Income tax expense $ 4,533 $ 34,948 $ 2,807 |
Summary of Deferred Tax Assets (Liabilities) | Deferred tax (liabilities) assets were comprised of the following: (In thousands) 2022 2021 Deferred tax assets: Accrued expenses $ 627 $ 620 Allowance for doubtful accounts 152 269 Contract overrun reserves 952 680 Deferred compensation 234 272 Deferred revenue 943 1,570 Employment-related accruals 3,932 4,028 Environmental reserves 501 499 Federal tax credit carryforwards 133 133 Inventory reserves 3,572 2,957 Operating lease liabilities 8,672 8,145 Pension obligation 28 1,550 Federal and state net operating loss carryforwards 3,397 4,243 Research expenses 10,620 — State tax credit carryforwards 6,974 7,123 Stock-based compensation 2,420 2,584 Other 1,525 2,503 Total gross deferred tax assets 44,682 37,176 Valuation allowance (7,548) (7,718) Total gross deferred tax assets, net of valuation allowance 37,134 29,458 Deferred tax liabilities: Depreciation (11,286) (11,986) Goodwill (8,630) (6,557) Intangibles (18,310) (20,337) Interest rate hedge (3,359) — Operating lease right-of-use assets (8,346) (7,931) Prepaid insurance (609) (534) Other (547) (840) Total gross deferred tax liabilities (51,087) (48,185) Net deferred tax liabilities $ (13,953) $ (18,727) |
Principle Reasons for Variation Between Expected and Effective Tax Rate | The principal reasons for the variation between the statutory and effective tax rates were as follows: Years Ended December 31, 2022 2021 2020 Statutory federal income tax rate 21.0% 21.0% 21.0% State income taxes (net of federal benefit) 4.0 3.1 4.6 Foreign derived intangible income deduction (0.9) — (0.4) Stock-based compensation expense (0.6) (0.5) (1.4) Research and development tax credits (1) (14.8) (3.0) (13.8) Other tax credits (0.1) — (0.3) Changes in valuation allowance (0.5) (1.0) (0.4) Non-deductible book compensation expenses 4.4 0.7 3.3 Changes in deferred tax assets (0.2) — (0.2) Changes in tax reserves — 0.2 (4.6) Other 1.3 — 1.0 Effective income tax rate 13.6% 20.5% 8.8% (1) For 2020, (3.4)% is additional research and development tax credits related to 2019. |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: (In thousands) 2022 2021 2020 Balance at January 1, $ 4,435 $ 4,069 $ 5,663 Additions for tax positions related to the current year 1,177 562 418 Additions for tax positions related to prior years 15 180 157 Reductions for tax positions related to prior years (13) — — Reductions for lapse of statute of limitations (670) (376) (2,169) Balance at December 31, $ 4,944 $ 4,435 $ 4,069 |
Major Customers and Concentra_2
Major Customers and Concentrations of Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk by Major Customers | Net revenues from our top ten customers, including The Boeing Company (“Boeing”), General Dynamics Corporation (“GD”), Lockheed Martin Corporation (“Lockheed Martin”), Northrop Grumman Corporation (“Northrop”), Raytheon Technologies Corporation (“Raytheon”), Spirit AeroSystems Holdings, Inc. (“Spirit”), and Viasat, Inc. (“Viasat”), represented the following percentages of total net revenues: Years Ended December 31, 2022 2021 2020 Boeing 6.7 % 7.8 % 10.5 % GD 5.7 % 3.0 % 2.5 % Lockheed Martin 3.5 % 4.4 % 5.0 % Northrop 5.7 % 7.1 % 9.1 % Raytheon 21.6 % 24.4 % 20.9 % Spirit 5.7 % 3.8 % 3.3 % Viasat 5.4 % 2.6 % 1.7 % Top ten customers (1) 61.4 % 61.1 % 61.1 % (1) Includes Boeing, GD, Lockheed Martin, Northrop, Raytheon, and Spirit for 2022, 2021, and 2020, and Viasat for 2022 and 2021. Boeing, GD, Lockheed Martin, Northrop, Raytheon, Spirit, and Viasat represented the following percentages of total accounts receivable: December 31, 2022 2021 Boeing 3.8 % 3.5 % GD 3.4 % 4.0 % Lockheed Martin 1.0 % 0.4 % Northrop 13.0 % 10.9 % Raytheon 16.2 % 17.8 % Spirit 1.0 % 0.7 % Viasat 10.3 % 4.3 % |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | Financial information by reportable segment was as follows: (In thousands) 2022 2021 2020 Net Revenues Electronic Systems $ 440,638 $ 412,648 $ 392,633 Structural Systems 271,899 232,765 236,308 Total Net Revenues $ 712,537 $ 645,413 $ 628,941 Segment Operating Income (Loss) (1) Electronic Systems $ 49,876 $ 57,629 $ 51,894 Structural Systems 17,225 20,234 19,584 67,101 77,863 71,478 Corporate General and Administrative Expenses (2) (27,313) (28,982) (25,972) Operating Income $ 39,788 $ 48,881 $ 45,506 Depreciation and Amortization Expenses Electronic Systems $ 13,974 $ 13,823 $ 14,038 Structural Systems 17,212 14,331 14,559 Corporate Administration 235 235 253 Total Depreciation and Amortization Expenses $ 31,421 $ 28,389 $ 28,850 Capital Expenditures Electronic Systems $ 10,717 $ 7,471 $ 5,037 Structural Systems 8,834 8,463 8,570 Corporate Administration — — — Total Capital Expenditures $ 19,551 $ 15,934 $ 13,607 (1) The results for 2021 include MagSeal’s results of operations which have been included in our consolidated statements of income since the date of acquisition as part of the Structural Systems segment. See Note 2. (2) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments. |
Schedule of Segment Assets | Corporate assets include assets not specifically identified with a business segment, including cash. The following table summarizes our segment assets for 2022 and 2021: (In thousands) 2022 2021 Total Assets Electronic Systems $ 543,298 $ 490,814 Structural Systems 410,565 408,118 Corporate Administration 67,643 79,803 Total Assets $ 1,021,506 $ 978,735 Goodwill and Intangibles Electronic Systems $ 182,501 $ 191,789 Structural Systems 148,107 153,669 Total Goodwill and Intangibles $ 330,608 $ 345,458 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 13 Months Ended | ||||||
Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Jul. 02, 2022 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 16, 2021 | Nov. 30, 2021 USD ($) | Nov. 29, 2021 USD ($) | |
Significant Accounting Policies [Line Items] | ||||||||||
Number of reportable segments (in segments) | segment | 2 | |||||||||
Cash flow hedge, gain (loss) | $ 12,077,000 | $ (1,268,000) | $ 162,000 | |||||||
Other comprehensive income, net of tax | 14,778,000 | 2,567,000 | $ (1,332,000) | |||||||
Goodwill | $ 203,694,000 | $ 203,407,000 | 203,407,000 | 203,694,000 | $ 203,407,000 | |||||
Purchase price of acquisition | $ 69,100,000 | |||||||||
Provision for loss on contracts | 2,800,000 | 3,900,000 | 3,900,000 | 2,800,000 | 3,900,000 | |||||
Production cost of contracts | 8,024,000 | 5,693,000 | 5,693,000 | 8,024,000 | 5,693,000 | |||||
Contract liability revenue | 32,700,000 | |||||||||
Grants receivable | $ 4,000,000 | |||||||||
Proceeds received from grants | 2,000,000 | 4,000,000 | ||||||||
Miscellaneous expenses | 100,000 | |||||||||
Interest rate swap | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Notional amount | $ 150,000,000 | $ 150,000,000 | ||||||||
Cost of sales | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Government grant expense | 2,700,000 | 900,000 | ||||||||
Selling, general and administrative expenses | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Government grant expense | 300,000 | 100,000 | ||||||||
Designated as hedging instrument | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Cash flow hedge, gain (loss) | 15,800,000 | |||||||||
Designated as hedging instrument | Interest rate swap | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Cash flow hedge, gain (loss) | 15,800,000 | |||||||||
Adjustment of hedge asset balance | 6,700,000 | |||||||||
Increase in hedge asset balance | 5,100,000 | $ 5,100,000 | 5,100,000 | |||||||
Other comprehensive income, net of tax | 1,600,000 | |||||||||
Minimum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Estimated useful life of intangible assets (in years) | 2 years | |||||||||
Maximum | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Estimated useful life of intangible assets (in years) | 19 years | |||||||||
Magnetic seal corporation | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Goodwill | $ 32,577,000 | $ 32,577,000 | ||||||||
Percentage of outstanding common stock acquired | 100% | 100% | 100% | |||||||
Purchase price of acquisition | $ 69,500,000 | |||||||||
Electronic Systems | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Goodwill | 117,435,000 | 117,435,000 | $ 117,435,000 | $ 117,435,000 | 117,435,000 | |||||
Structural Systems | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Goodwill | 86,259,000 | 85,972,000 | 85,972,000 | 86,259,000 | 85,972,000 | |||||
Other assets | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Interest rate cap hedge premium | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |||
Interest paid | $ 10,983 | $ 10,135 | $ 11,859 |
Taxes paid, net | 3,825 | 32,934 | 3,810 |
Non-cash activities: | |||
Purchases of property and equipment not paid | $ 1,195 | $ 1,333 | $ 2,477 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Contact Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Contract assets | $ 191,290 | $ 176,405 |
Contract liabilities | $ 47,068 | $ 42,077 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Remaining Performance Obligation (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Accounting Policies [Abstract] | |
Remaining performance obligation, amount | $ 853 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 70% |
Remaining performance obligation, period | 12 months |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 67,124 | ||
Revenues | $ 712,537 | $ 645,413 | $ 628,941 |
Percentage of revenues | 100% | 100% | |
Electronic Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 27,990 | ||
Revenues | $ 440,638 | $ 412,648 | |
Percentage of revenues | 100% | 100% | |
Structural Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 39,134 | ||
Revenues | $ 271,899 | $ 232,765 | |
Percentage of revenues | 100% | 100% | |
Military and space | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ (33,147) | ||
Revenues | $ 420,701 | $ 453,848 | |
Percentage of revenues | 59.10% | 70.30% | |
Military and space | Electronic Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ (13,730) | ||
Revenues | $ 314,181 | $ 327,911 | |
Percentage of revenues | 71.30% | 79.50% | |
Military and space | Structural Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ (19,417) | ||
Revenues | $ 106,520 | $ 125,937 | |
Percentage of revenues | 39.20% | 54.10% | |
Commercial aerospace | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 91,778 | ||
Revenues | $ 247,509 | $ 155,731 | |
Percentage of revenues | 34.70% | 24.10% | |
Commercial aerospace | Electronic Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 33,227 | ||
Revenues | $ 82,130 | $ 48,903 | |
Percentage of revenues | 18.60% | 11.80% | |
Commercial aerospace | Structural Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 58,551 | ||
Revenues | $ 165,379 | $ 106,828 | |
Percentage of revenues | 60.80% | 45.90% | |
Industrial | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 8,493 | ||
Revenues | $ 44,327 | $ 35,834 | |
Percentage of revenues | 6.20% | 5.60% | |
Industrial | Electronic Systems | |||
Disaggregation of Revenue [Line Items] | |||
Change in revenue for the period | $ 8,493 | ||
Revenues | $ 44,327 | $ 35,834 | |
Percentage of revenues | 10.10% | 8.70% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Net income | $ 28,789 | $ 135,536 | $ 29,174 |
Weighted-average number of common shares outstanding | |||
Basic weighted-average common shares outstanding (in shares) | 12,074 | 11,879 | 11,676 |
Dilutive potential common shares (in shares) | 292 | 372 | 256 |
Diluted weighted-average common shares outstanding (in shares) | 12,366 | 12,251 | 11,932 |
Earnings per share | |||
Basic (in dollars per share) | $ 2.38 | $ 11.41 | $ 2.50 |
Diluted (in dollars per share) | $ 2.33 | $ 11.06 | $ 2.45 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options and stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock options and stock units (in shares) | 52 | 3 | 254 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Jul. 02, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 16, 2021 | |
Business Acquisition [Line Items] | |||||
Purchase price of acquisition | $ 69,100 | ||||
Goodwill | $ 203,694 | $ 203,694 | $ 203,407 | ||
Magnetic seal corporation | |||||
Business Acquisition [Line Items] | |||||
Percentage of outstanding common stock acquired | 100% | 100% | 100% | ||
Purchase price of acquisition | $ 69,500 | ||||
Payments to acquire business | 71,300 | ||||
Cash acquired from acquisition | 400 | ||||
Consideration transferred | $ 70,900 | ||||
Intangible assets | 30,100 | $ 30,100 | |||
Goodwill | $ 32,577 | 32,577 | |||
Acquisition related costs | $ 900 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 203,407 | $ 203,694 |
Magnetic seal corporation | ||
Business Acquisition [Line Items] | ||
Cash | 1,821 | |
Accounts receivable | 2,093 | |
Inventories | 4,546 | |
Other current assets | 98 | |
Property and equipment | 482 | |
Operating lease right-of-use assets | 1,533 | |
Intangible assets | 30,100 | |
Goodwill | 32,577 | |
Total assets acquired | 73,250 | |
Current liabilities | (907) | |
Other non-current liabilities | (1,408) | |
Total liabilities assumed | (2,315) | |
Total purchase price allocation | $ 70,935 |
Business Combinations - Estimat
Business Combinations - Estimated Fair Value of Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Useful Life (In years) | 17 years | |
Backlog | ||
Business Acquisition [Line Items] | ||
Useful Life (In years) | 2 years | |
Magnetic seal corporation | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 30,100 | |
Magnetic seal corporation | Trade name | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets | $ 4,700 | |
Magnetic seal corporation | Customer relationships | ||
Business Acquisition [Line Items] | ||
Useful Life (In years) | 19 years | |
Finite-lived intangibles | $ 24,800 | |
Magnetic seal corporation | Backlog | ||
Business Acquisition [Line Items] | ||
Useful Life (In years) | 2 years | |
Finite-lived intangibles | $ 600 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 6,158 | $ 0 | $ 2,424 |
Restructuring Plan, 2022 | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 6,686 | ||
Restructuring Reserve | 2,799 | 0 | |
Restructuring Plan, 2022 | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 12,000 | ||
Restructuring Plan, 2022 | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 16,000 | ||
Restructuring Plan, 2022 | Severance and benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 5,076 | ||
Restructuring Reserve | 2,799 | 0 | |
Restructuring Plan, 2022 | Severance and benefits | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 9,000 | ||
Restructuring Plan, 2022 | Severance and benefits | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 12,000 | ||
Restructuring Plan, 2022 | Property And Equipment Impairment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 304 | ||
Restructuring Reserve | 0 | 0 | |
Restructuring Plan, 2022 | Property And Equipment Impairment | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 3,000 | ||
Restructuring Plan, 2022 | Property And Equipment Impairment | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 4,000 | ||
Restructuring Plan, 2022 | Property and equipment accelerated depreciation due to restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 778 | ||
Restructuring Reserve | 0 | 0 | |
Restructuring Plan, 2022 | Inventory write down | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 528 | ||
Restructuring Reserve | 0 | $ 0 | |
Restructuring Plan, 2022 | Electronic Systems | Severance and benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 3,500 | ||
Restructuring Plan, 2022 | Electronic Systems | Property and equipment accelerated depreciation due to restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 300 | ||
Restructuring Plan, 2022 | Structural Systems | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 500 | ||
Restructuring Plan, 2022 | Structural Systems | Severance and benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1,600 | ||
Restructuring Plan, 2022 | Structural Systems | Property And Equipment Impairment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 300 | ||
Restructuring Plan, 2022 | Structural Systems | Inventory write down | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 500 |
Restructuring Activities - (Det
Restructuring Activities - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Charges | $ 6,158 | $ 0 | $ 2,424 |
Restructuring Plan, 2022 | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Charges | 6,686 | ||
Cash Payments | (2,277) | ||
Non-Cash Payments | (1,610) | ||
Change in Estimates | 0 | ||
Ending balance | 2,799 | 0 | |
Severance and benefits | Restructuring Plan, 2022 | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Charges | 5,076 | ||
Cash Payments | (2,277) | ||
Non-Cash Payments | 0 | ||
Change in Estimates | 0 | ||
Ending balance | 2,799 | 0 | |
Property and equipment accelerated depreciation due to restructuring | Restructuring Plan, 2022 | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Charges | 778 | ||
Cash Payments | 0 | ||
Non-Cash Payments | (778) | ||
Change in Estimates | 0 | ||
Ending balance | 0 | 0 | |
Property and equipment impairment due to restructuring | Restructuring Plan, 2022 | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Charges | 304 | ||
Cash Payments | 0 | ||
Non-Cash Payments | (304) | ||
Change in Estimates | 0 | ||
Ending balance | 0 | 0 | |
Inventory write down | Restructuring Plan, 2022 | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Charges | 528 | ||
Cash Payments | 0 | ||
Non-Cash Payments | (528) | ||
Change in Estimates | 0 | ||
Ending balance | $ 0 | $ 0 |
Inventories - (Details)
Inventories - (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 143,495 | $ 125,334 |
Work in process | 23,799 | 20,609 |
Finished goods | 3,917 | 4,995 |
Total | $ 171,211 | $ 150,938 |
Property and Equipment, Net - (
Property and Equipment, Net - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 277,732 | $ 270,551 | |
Less accumulated depreciation | 171,507 | 168,132 | |
Total | 106,225 | 102,419 | |
Depreciation expense | 14,500 | 14,100 | $ 13,800 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 10,494 | 10,494 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 51,110 | 49,699 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 40 years | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 179,606 | 180,761 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 20 years | ||
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 17,977 | 19,017 | |
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 18,545 | $ 10,580 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) renewalOption | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Proceeds from sale-leaseback | $ 143,100,000 | $ 0 | $ 143,100,000 | $ 0 |
Sale leaseback transaction, carrying value | 9,400,000 | 9,400,000 | ||
Gain on sale-leaseback | $ 132,500,000 | $ 0 | $ 132,522,000 | $ 0 |
Lease contract terms | 5 years | |||
Lease renew option (in renewal options) | renewalOption | 3 | |||
Aggregate minimum monthly lease payments | $ 19,600,000 | |||
Lease renewal term | 15 years | |||
Lease termination period | 1 year | |||
Payments due with option to extend | $ 3,300,000 | |||
Operating lease, lease not yet commenced, amount | 0 | |||
Finance lease, lease not yet commenced, amount | $ 0 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Remaining lease term | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Remaining lease term | 10 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating leases expense | $ 10,521 | $ 4,283 |
Finance leases expense: | ||
Amortization of right-of-use assets | 343 | 356 |
Interest on lease liabilities | 53 | 62 |
Total finance lease expense | $ 396 | $ 418 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 7,669 | $ 5,150 |
Operating cash flows from finance leases | 53 | 61 |
Financing cash flows from finance leases | 346 | 363 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 8,332 | 23,317 |
Finance leases | $ 245 | $ 401 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted Average Lease Term | ||
Operating leases | 5 years | 5 years |
Finance leases | 6 years | 6 years |
Weighted Average Discount Rate | ||
Operating leases | 3% | 3.10% |
Finance leases | 3.60% | 3.60% |
Leases - Undiscounted Cash Flow
Leases - Undiscounted Cash Flows (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Operating Leases | |
2023 | $ 8,081 |
2024 | 7,956 |
2025 | 7,924 |
2026 | 7,595 |
2027 | 2,323 |
Thereafter | 5,102 |
Total lease payments | 38,981 |
Less imputed interest | 2,985 |
Total | 35,996 |
Finance Leases | |
2023 | 388 |
2024 | 321 |
2025 | 262 |
2026 | 208 |
2027 | 175 |
Thereafter | 310 |
Total lease payments | 1,664 |
Less imputed interest | 161 |
Total | $ 1,503 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current And Noncurrent [Member] |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||
Gross goodwill | $ 285,416 | |
Accumulated goodwill impairment | (81,722) | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 203,694 | |
Purchase price allocation refinements | (287) | |
Goodwill, ending balance | 203,407 | |
Electronic Systems | ||
Goodwill [Line Items] | ||
Gross goodwill | 199,157 | |
Accumulated goodwill impairment | (81,722) | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 117,435 | |
Purchase price allocation refinements | 0 | |
Goodwill, ending balance | 117,435 | |
Structural Systems | ||
Goodwill [Line Items] | ||
Gross goodwill | 86,259 | |
Accumulated goodwill impairment | $ 0 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 86,259 | |
Purchase price allocation refinements | (287) | |
Goodwill, ending balance | $ 85,972 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Jul. 02, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 16, 2021 | |
Goodwill And Intangible Assets [Line Items] | ||||||
Purchase price of acquisition | $ 69.1 | |||||
Amortization expense of intangible asset | $ 14.6 | $ 13.1 | $ 13.2 | |||
Minimum | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Estimated useful life of intangible assets (in years) | 2 years | |||||
Maximum | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Estimated useful life of intangible assets (in years) | 19 years | |||||
Magnetic seal corporation | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Percentage of outstanding common stock acquired | 100% | 100% | 100% | |||
Purchase price of acquisition | $ 69.5 | |||||
Consideration transferred | $ 70.9 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Carrying Amount of Finite-lived and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-lived assets | ||
Gross Carrying Amount | $ 254,645 | $ 254,645 |
Accumulated Amortization | 132,144 | 117,581 |
Net Carrying Amount | 122,501 | 137,064 |
Indefinite-lived assets | ||
Intangible assets, gross | 259,345 | 259,345 |
Intangibles, Net | 127,201 | 141,764 |
Trade names and trademarks | ||
Indefinite-lived assets | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 4,700 | 4,700 |
Electronic Systems | ||
Finite-lived assets | ||
Accumulated Amortization | 99,479 | 90,191 |
Net Carrying Amount | 65,066 | |
Indefinite-lived assets | ||
Intangible assets, gross | 164,545 | 164,545 |
Intangibles, Net | 65,066 | 74,354 |
Structural Systems | ||
Finite-lived assets | ||
Accumulated Amortization | 32,665 | 27,390 |
Net Carrying Amount | 57,435 | |
Indefinite-lived assets | ||
Intangible assets, gross | 94,800 | 94,800 |
Intangibles, Net | $ 62,135 | 67,410 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets (in years) | 17 years | |
Finite-lived assets | ||
Gross Carrying Amount | $ 246,300 | 246,300 |
Accumulated Amortization | 127,999 | 114,169 |
Net Carrying Amount | $ 118,301 | 132,131 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets (in years) | 14 years | |
Finite-lived assets | ||
Gross Carrying Amount | $ 5,500 | 5,500 |
Accumulated Amortization | 1,670 | 1,263 |
Net Carrying Amount | $ 3,830 | 4,237 |
Contract renewal | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets (in years) | 14 years | |
Finite-lived assets | ||
Gross Carrying Amount | $ 1,845 | 1,845 |
Accumulated Amortization | 1,845 | 1,845 |
Net Carrying Amount | $ 0 | 0 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets (in years) | 15 years | |
Finite-lived assets | ||
Gross Carrying Amount | $ 400 | 400 |
Accumulated Amortization | 318 | 291 |
Net Carrying Amount | $ 82 | 109 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets (in years) | 2 years | |
Finite-lived assets | ||
Gross Carrying Amount | $ 600 | 600 |
Accumulated Amortization | 312 | 13 |
Net Carrying Amount | $ 288 | $ 587 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Future Amortization Expense of Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | $ 14,484 | |
2024 | 13,961 | |
2025 | 13,961 | |
2026 | 13,937 | |
2027 | 13,935 | |
Thereafter | 52,223 | |
Net Carrying Amount | 122,501 | $ 137,064 |
Electronic Systems | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 9,288 | |
2024 | 9,288 | |
2025 | 9,288 | |
2026 | 9,288 | |
2027 | 9,288 | |
Thereafter | 18,626 | |
Net Carrying Amount | 65,066 | |
Structural Systems | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 5,196 | |
2024 | 4,673 | |
2025 | 4,673 | |
2026 | 4,649 | |
2027 | 4,647 | |
Thereafter | 33,597 | |
Net Carrying Amount | $ 57,435 |
Accrued and Other Liabilities_2
Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 28,785 | $ 24,391 |
Accrued income tax and sales tax | 10,478 | 926 |
Other | 9,557 | 15,974 |
Total | $ 48,820 | $ 41,291 |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 248,438 | $ 287,712 |
Less current portion | 6,250 | 7,000 |
Total long-term debt, less current portion | 242,188 | 280,712 |
Total long-term debt, net of debt issuance costs | $ 240,595 | $ 279,384 |
Weighted-average interest rate | 4.36% | 3.27% |
Term loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 248,438 | $ 287,712 |
Less debt issuance costs | (1,593) | (1,328) |
Debt issuance costs - revolving credit facility | 1,593 | 1,328 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Less debt issuance costs | (2,265) | (1,136) |
Debt issuance costs - revolving credit facility | $ 2,265 | $ 1,136 |
Long-Term Debt - Future Long-Te
Long-Term Debt - Future Long-Term Debt Payment (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2023 | $ 6,250 |
2024 | 7,813 |
2025 | 12,500 |
2026 | 14,063 |
2027 | 207,812 |
Thereafter | 0 |
Total Debt | $ 248,438 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||
Jul. 14, 2022 | Dec. 20, 2019 | Dec. 31, 2021 | Nov. 30, 2018 | Oct. 31, 2015 | Dec. 31, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Dec. 31, 2020 | Mar. 28, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 16, 2021 | Nov. 30, 2021 | Nov. 29, 2021 | |
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of debt | $ 344,000 | $ 362,000 | $ 288,000 | ||||||||||||||
Repayments of secured debt | 289,274,000 | 7,926,000 | 14,362,000 | ||||||||||||||
Loss on extinguishment of debt | 295,000 | 0 | 0 | ||||||||||||||
Purchase price of acquisition | $ 69,100,000 | ||||||||||||||||
Proceeds from sale-leaseback | $ 143,100,000 | 0 | 143,100,000 | 0 | |||||||||||||
Cash flow hedge, gain (loss) | 12,077,000 | $ (1,268,000) | $ 162,000 | ||||||||||||||
Designated as hedging instrument | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Cash flow hedge, gain (loss) | 15,800,000 | ||||||||||||||||
Interest rate swap | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Notional amount | $ 150,000,000 | $ 150,000,000 | |||||||||||||||
Average fixed interest rate | 1.70% | 1.80% | |||||||||||||||
Interest rate swap | Designated as hedging instrument | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Cash flow hedge, gain (loss) | $ 15,800,000 | ||||||||||||||||
Interest rate cap premiums | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate hedge | $ 135,000,000 | ||||||||||||||||
Payments made for interest rate hedge | $ 1,000,000 | ||||||||||||||||
Magnetic seal corporation | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of outstanding common stock acquired | 100% | 100% | 100% | ||||||||||||||
Purchase price of acquisition | $ 69,500,000 | ||||||||||||||||
Payments to acquire business | 71,300,000 | ||||||||||||||||
Credit facilities | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt amount | $ 480,000,000 | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 100,000,000 | ||||||||||||||||
Repayments of debt | 65,000,000 | ||||||||||||||||
Proceeds from lines of credit | $ 65,000,000 | $ 50,000,000 | |||||||||||||||
Repayments of lines of credit | $ 25,000,000 | $ 25,000,000 | |||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Federal funds rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 0.50% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Eurodollar rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 1% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Commitment fee | 0.175% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Minimum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.50% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Minimum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.50% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Commitment fee | 0.275% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Maximum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 2.50% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility | Maximum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.50% | ||||||||||||||||
Revolving credit facility | 2018 revolving credit facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 100,000,000 | ||||||||||||||||
Percentage of excess cash flow payment when leverage ratio is greater than 3.25 | 50% | ||||||||||||||||
Percentage of excess cash flow payment when leverage ratio is less than or equal to 3.25 | 25% | ||||||||||||||||
Percentage of excess cash flow payment when leverage ratio is less than or equal to 2.50 | 0% | ||||||||||||||||
Fees paid to lenders to be capitalized | $ 500,000 | $ 500,000 | |||||||||||||||
Amortization of debt issuance costs | 500,000 | ||||||||||||||||
Debt issuance costs, line of credit arrangements | 1,100,000 | 1,100,000 | |||||||||||||||
Revolving credit facility | 2018 revolving credit facility | Covenant, 50% in excess, cash flow amount | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Adjusted leverage ratio, minimum | 3.25 | ||||||||||||||||
Revolving credit facility | 2018 revolving credit facility | Covenant, 25% in excess, cash flow amount | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Adjusted leverage ratio, minimum | 2.50 | ||||||||||||||||
Adjusted leverage ratio, maximum | 3.25 | ||||||||||||||||
Revolving credit facility | 2018 revolving credit facility | Covenant, 0% in excess, cash flow amount | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Adjusted leverage ratio, maximum | 2.50 | ||||||||||||||||
Revolving credit facility | 2018 term loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fees paid to lenders to be capitalized | $ 1,000,000 | 1,500,000 | 1,500,000 | ||||||||||||||
Revolving credit facility | 2022 revolving credit facilities | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Remaining borrowing capacity | 199,800,000 | 199,800,000 | |||||||||||||||
Outstanding standby letters of credit | 200,000 | $ 200,000 | |||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 200,000,000 | ||||||||||||||||
Fees paid to lenders to be capitalized | 1,700,000 | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Federal funds rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.50% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 1% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Commitment fee | 0.175% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Minimum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.375% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Minimum | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.375% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Commitment fee | 0.275% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Maximum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.375% | ||||||||||||||||
Revolving credit facility | 2022 revolving credit facility due July 14, 2027 | Maximum | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 2.375% | ||||||||||||||||
Revolving credit facility | 2019 revolving credit facility due December 20, 2024 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Amortization of debt issuance costs | 100,000 | ||||||||||||||||
Debt issuance costs, line of credit arrangements | 800,000 | ||||||||||||||||
Secured debt | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of secured debt | $ 30,000,000 | ||||||||||||||||
Secured debt | New term loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt amount | $ 140,000,000 | ||||||||||||||||
Prepayment amount of principal outstanding | 1.25% | ||||||||||||||||
Repayments of debt | $ 3,500,000 | ||||||||||||||||
Fees paid to lenders to be capitalized | 600,000 | 600,000 | |||||||||||||||
Secured debt | New term loan | Federal funds rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 0.50% | ||||||||||||||||
Secured debt | New term loan | Eurodollar rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 1% | ||||||||||||||||
Secured debt | New term loan | Minimum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.50% | ||||||||||||||||
Secured debt | New term loan | Minimum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.50% | ||||||||||||||||
Secured debt | New term loan | Maximum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 2.50% | ||||||||||||||||
Secured debt | New term loan | Maximum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.50% | ||||||||||||||||
Secured debt | 2018 term loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt amount | $ 240,000,000 | ||||||||||||||||
Prepayment amount of principal outstanding | 0.25% | ||||||||||||||||
Repayments of secured debt | 17,000,000 | ||||||||||||||||
Secured debt | 2018 term loan | Federal funds rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 0.50% | ||||||||||||||||
Secured debt | 2018 term loan | Eurodollar rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 1% | ||||||||||||||||
Secured debt | 2018 term loan | Minimum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 3.75% | ||||||||||||||||
Secured debt | 2018 term loan | Minimum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 3.75% | ||||||||||||||||
Secured debt | 2018 term loan | Maximum | LIBOR rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 4% | ||||||||||||||||
Secured debt | 2018 term loan | Maximum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 4% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt amount | 250,000,000 | ||||||||||||||||
Repayments of debt | $ 1,600,000 | 254,200,000 | |||||||||||||||
Proceeds from lines of credit | $ 250,000,000 | ||||||||||||||||
Loss on extinguishment of debt | 200,000 | ||||||||||||||||
Fees paid to lenders to be capitalized | $ 800,000 | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Year one and two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment amount of principal outstanding | 62.50% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Year three and four | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment amount of principal outstanding | 1.25% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Year five | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment amount of principal outstanding | 1.875% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Federal funds rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.50% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on base rate | 1% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Minimum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 0.375% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Minimum | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.375% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Maximum | Base rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 1.375% | ||||||||||||||||
Secured debt | 2022 term loan maturing July 14, 2027 | Maximum | Secured overnight financing rate (SOFR) overnight index swap rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Spread on variable rate | 2.375% | ||||||||||||||||
Secured debt | 2019 term loan maturing December 20, 2024 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of secured debt | $ 13,000,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) plan $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of incentive plans (in plans) | plan | 2 | ||
Granted (in shares) | shares | 0 | ||
Grants (in dollars per share) | $ / shares | $ 0 | ||
Weighted average remaining contractual term | 5 years 4 months 24 days | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | shares | 750,000 | ||
Shares reserved for future issuance (in shares) | shares | 549,977 | ||
Discount from market price, offering date | 15% | ||
Share-based offering period | 6 months | ||
Maximum percentage of employee compensation for purchase of common stock | 10% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | shares | 0 | 0 | 8,000 |
Grants (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 16.48 |
Expiration period from date of grant | 10 years | ||
Aggregate intrinsic value of stock options exercised | $ 2,000,000 | $ 1,000,000 | $ 900,000 |
Cash received from the exercise of options | 3,500,000 | 1,700,000 | 1,600,000 |
Tax benefits realized for the tax deductions from options exercised | $ 800,000 | 400,000 | 400,000 |
Options vested (in shares) | shares | 199,276 | ||
Weighted average exercise price (in dollars per share) | $ / shares | $ 36.89 | ||
Aggregate intrinsic value | $ 2,500,000 | ||
Weighted average remaining contractual term | 5 years 4 months 24 days | ||
Share-based compensation expense | $ 300,000 | 1,200,000 | 1,800,000 |
Remaining unrecognized compensation cost | 0 | ||
Total fair value of options expensed before tax benefits | $ 800,000 | 1,700,000 | 2,000,000 |
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option vesting term | 3 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option vesting term | 4 years | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option vesting term | 3 years | ||
Share-based compensation expense | $ 3,800,000 | $ 4,100,000 | $ 2,600,000 |
Weighted average period | 1 year 7 months 6 days | ||
Granted (in shares) | shares | 118,847 | 118,995 | 118,835 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 51.76 | $ 55.92 | $ 27.62 |
Compensation not yet recognized | $ 5,700,000 | ||
Fair value of awards vested in period | 3,500,000 | $ 4,200,000 | $ 2,300,000 |
Tax benefit realized on vesting of options | $ 800,000 | 1,000,000 | 500,000 |
Restricted Stock Units | First Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.30% | ||
Restricted Stock Units | Second Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.30% | ||
Restricted Stock Units | Third Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.40% | ||
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 5,100,000 | $ 5,900,000 | $ 4,900,000 |
Weighted average period | 1 year 4 months 24 days | ||
Granted (in shares) | shares | 111,654 | 182,886 | 159,136 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 48.18 | $ 49.76 | $ 29.65 |
Compensation not yet recognized | $ 5,500,000 | ||
Fair value of awards vested in period | 4,400,000 | $ 9,600,000 | $ 3,700,000 |
Tax benefit realized on vesting of options | 1,100,000 | 2,300,000 | 900,000 |
Performance-Based with Market Condition Cash Settled Long-Term Incentive Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 1,200,000 | $ 0 | $ 0 |
2020 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | shares | 1,031,162 | ||
Shares reserved for future issuance (in shares) | shares | 338,061 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Stock Options | |
Beginning balance (in shares) | shares | 317,779 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (109,186) |
Expired (in shares) | shares | (2,150) |
Forfeited (in shares) | shares | (7,167) |
Ending balance (in shares) | shares | 199,276 |
Exercisable at end of period (in shares) | shares | 199,276 |
Weighted- Average Exercise Price Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 35.30 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 31.82 |
Expired (in dollars per share) | $ / shares | 39.75 |
Forfeited (in dollars per share) | $ / shares | 42.88 |
Ending balance (in dollars per share) | $ / shares | 36.89 |
Exercisable at end of period (in dollars per share) | $ / shares | $ 36.89 |
Weighted-Average Remaining Contractual Life (Years) | |
Outstanding | 5 years 4 months 24 days |
Exercisable | 5 years 4 months 24 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 2,537 |
Exercisable | $ | $ 2,537 |
Stock-Based Compensation - Chan
Stock-Based Compensation - Changes in Nonvested Stock Options (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Stock Options | |
Beginning balance (in shares) | shares | 59,605 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (52,438) |
Forfeited (in shares) | shares | (7,167) |
Ending balance (in shares) | shares | 0 |
Weighted- Average Grant Date Fair Value | |
Beginning balance, (in dollars per share) | $ / shares | $ 15.93 |
Granted, (in dollars per share) | $ / shares | 0 |
Vested, (in dollars per share) | $ / shares | 15.90 |
Forfeited, (in dollars per share) | $ / shares | 16.10 |
Ending balance, (in dollars per share) | $ / shares | $ 0 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used for Estimating Fair Value of Share Based Payment Award (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.59% |
Expected volatility | 37.75% |
Expected dividends | $ 0 |
Expected term (in months) | 66 months |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock Units | |||
Outstanding | |||
Beginning of period (in shares) | 202,282 | ||
Granted (in shares) | 118,847 | 118,995 | 118,835 |
Vested (in shares) | (74,222) | ||
Forfeited (in shares) | (45,112) | ||
Ending of period (in shares) | 201,795 | 202,282 | |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of period (in dollars per share) | $ 44.85 | ||
Granted (in dollars per share) | 51.76 | $ 55.92 | $ 27.62 |
Vested (in dollars per share) | 44.28 | ||
Forfeited (in dollars per share) | 50.72 | ||
Outstanding at ending of period (in dollars per share) | $ 47.81 | $ 44.85 | |
Performance Stock Units | |||
Outstanding | |||
Beginning of period (in shares) | 299,563 | ||
Granted (in shares) | 111,654 | 182,886 | 159,136 |
Vested (in shares) | (89,309) | ||
Forfeited (in shares) | (20,554) | ||
Ending of period (in shares) | 301,354 | 299,563 | |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of period (in dollars per share) | $ 41.16 | ||
Granted (in dollars per share) | 48.18 | $ 49.76 | $ 29.65 |
Vested (in dollars per share) | 44.65 | ||
Forfeited (in dollars per share) | 45.61 | ||
Outstanding at ending of period (in dollars per share) | $ 42.42 | $ 41.16 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) compensation_plan plan | Dec. 31, 2021 USD ($) compensation_plan | Dec. 31, 2020 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Number of company sponsored 401(K) defined contribution plans (in compensation plans) | compensation_plan | 1 | ||
Provision for matching and profit sharing contribution | $ 2,900,000 | $ 2,800,000 | $ 2,600,000 |
Estimated net actuarial loss for the defined benefit pension plan | 600,000 | ||
Excess of accumulated benefit obligation over fair value of plan assets | 1,100,000 | ||
Pension liability | $ 3,000,000 | 5,700,000 | |
Number of active plans (in plans) | plan | 2 | ||
Estimated employer Contribution to pension plan in next fiscal year | $ 800,000 | ||
Number of unfunded supplemental retirement plans (in compensation plans) | compensation_plan | 3 | ||
Accumulated benefit obligations | $ 300,000 | $ 300,000 | |
Plan One covering all employees, other than employees of Miltec | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution by employee towards defined benefit plan | 25% | ||
Contribution by employer towards defined benefit plan | 50% | ||
Employee contribution compensation limit | 6% | ||
Executives and Directors | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of unfunded supplemental retirement plans (in compensation plans) | compensation_plan | 2 | 2 | |
Deferred Compensation Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Liability for labarge deferred compensation plan | $ 0 | $ 0 | |
Interest on labarge deferred compensation plan | $ 0 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Pension Cost for Defined Benefit Pension Plan and Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 625 | $ 676 | $ 622 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | Interest Expense | Interest Expense |
Interest cost | $ 1,089 | $ 1,010 | $ 1,209 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | Interest Expense | Interest Expense |
Expected return on plan assets | $ (2,081) | $ (1,895) | $ (1,761) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | Interest Expense | Interest Expense |
Amortization of actuarial losses | $ 585 | $ 1,285 | $ 993 |
Net periodic pension cost | $ 218 | $ 1,076 | $ 1,063 |
Employee Benefit Plans - Reclas
Employee Benefit Plans - Reclassifications from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Amortization of actuarial loss - total before tax | $ 585 | ||
Tax benefit | (143) | $ (309) | $ (236) |
Net of tax | $ 442 | $ 976 | $ 757 |
Employee Benefit Plans - Obliga
Employee Benefit Plans - Obligation and Funded Status of Defined Benefit Pension Plan and Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in benefit obligation | |||
Beginning benefit obligation | $ 39,805 | $ 42,804 | |
Service cost | 625 | 676 | $ 622 |
Interest cost | 1,089 | 1,010 | 1,209 |
Actuarial gain | (9,714) | (2,537) | |
Benefits paid | (1,468) | (2,148) | |
Ending benefit obligation | 30,337 | 39,805 | 42,804 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 33,698 | 30,632 | |
Return on assets | (4,652) | 3,122 | |
Employer contribution | 1,702 | 2,095 | |
Benefits paid | (1,468) | (2,151) | |
Fair value of plan assets at end of year | 29,280 | 33,698 | 30,632 |
Funded status underfunded | (1,057) | (6,107) | |
Amounts recognized in the consolidated balance sheet | |||
Current liabilities | 416 | 427 | |
Non-current liabilities | 641 | 5,680 | |
Unrecognized loss included in accumulated other comprehensive loss | |||
Unrecognized loss before tax, beginning balance | 7,573 | 12,620 | |
Amortization | (582) | (1,282) | |
Liability gain | (9,714) | (2,537) | |
Asset loss (gain) | 6,734 | (1,228) | |
Unrecognized loss before tax, ending balance | 4,011 | 7,573 | $ 12,620 |
Tax impact | (970) | (1,827) | |
Unrecognized loss included in accumulated other comprehensive loss, net of tax | $ 3,041 | $ 5,746 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Plan Asset Allocations (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 100% | 100% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 61% | 69% |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 4% | 1% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 35% | 30% |
Employee Benefit Plans - Asset
Employee Benefit Plans - Asset Allocation Ranges (Details) | Dec. 31, 2022 |
Minimum | Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 0% |
Minimum | Fixed income securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 15% |
Minimum | Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 30% |
Maximum | Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 10% |
Maximum | Fixed income securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 75% |
Maximum | Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation percentage | 80% |
Employee Benefit Plans - Return
Employee Benefit Plans - Return on Current and Target Asset Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total plan assets at fair value | $ 19,324 | $ 12,707 | |
Pooled funds | 9,956 | 20,991 | |
Total fair value of plan assets | 29,280 | 33,698 | $ 30,632 |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1,078 | 414 | |
Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 4,622 | 3,648 | |
Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 12,591 | 7,446 | |
Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1,033 | 1,199 | |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total plan assets at fair value | 19,324 | 12,707 | |
Level 1 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1,078 | 414 | |
Level 1 | Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 4,622 | 3,648 | |
Level 1 | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 12,591 | 7,446 | |
Level 1 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 1,033 | 1,199 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total plan assets at fair value | 0 | 0 | |
Level 2 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 2 | Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 2 | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 2 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total plan assets at fair value | 0 | 0 | |
Level 3 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 3 | Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 3 | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | 0 | 0 | |
Level 3 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan assets | $ 0 | $ 0 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted-average Assumptions Used to Determine Benefit Obligations (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension Plan | |||
Discount rate used to determine pension expense | |||
Discount rate | 2.85% | 2.50% | 3.22% |
Discount rate used to determine value of obligations | |||
Discount rate | 5.11% | 2.85% | 2.50% |
Long term rate of return | 6.25% | 6.25% | 6.25% |
LaBarge Retirement Plan | |||
Discount rate used to determine pension expense | |||
Discount rate | 2.35% | 1.85% | 2.85% |
Discount rate used to determine value of obligations | |||
Discount rate | 5% | 2.35% | 1.85% |
Employee Benefit Plans - Future
Employee Benefit Plans - Future Benefit Payments Under Pension Plans (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Pension Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | $ 1,379 |
2024 | 1,481 |
2025 | 1,555 |
2026 | 1,639 |
2027 | 1,712 |
2028 - 2032 | 9,156 |
LaBarge Retirement Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | 416 |
2024 | 397 |
2025 | 378 |
2026 | 359 |
2027 | 341 |
2028 - 2032 | $ 1,435 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax expense | |||
Federal | $ 12,902 | $ 31,171 | $ 2,525 |
State | 1,023 | 2,829 | (459) |
Current tax expense | 13,925 | 34,000 | 2,066 |
Deferred tax (benefit) expense | |||
Federal | (8,624) | 107 | 1,294 |
State | (768) | 841 | (553) |
Deferred tax (benefit) expense | (9,392) | 948 | 741 |
Income tax expense | $ 4,533 | $ 34,948 | $ 2,807 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Tax Credit Carryforward [Line Items] | ||||
Excess tax benefit over compensation cost recognized, amount | $ 200 | $ 900 | $ 400 | |
Operating loss carryforward not expected to be realized under ASC subtopic 740-10 | 10,600 | |||
Tax credit carryforwards | 133 | 133 | ||
Tax credit carryforwards valuation allowance | 7,548 | 7,718 | ||
Unrecognized tax benefits | 4,944 | $ 4,435 | 4,069 | $ 5,663 |
Unrecognized tax benefits that would impact effective tax rate | 2,500 | |||
Decrease in unrecognized tax benefits is reasonably possible | 600 | |||
Deferred income tax deduction related to payroll taxes | 6,100 | |||
Deferred tax assets, tax deferred expense | $ 1,400 | |||
Increase in income taxes payable | 10,600 | |||
Federal | ||||
Tax Credit Carryforward [Line Items] | ||||
Net operating loss carryforwards | 11,400 | |||
Tax credit carryforwards | 100 | |||
State | ||||
Tax Credit Carryforward [Line Items] | ||||
Net operating loss carryforwards | 17,300 | |||
Tax credit carryforwards | 10,900 | |||
Tax credit carryforwards valuation allowance | $ 8,800 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 627 | $ 620 |
Allowance for doubtful accounts | 152 | 269 |
Contract overrun reserves | 952 | 680 |
Deferred compensation | 234 | 272 |
Deferred revenue | 943 | 1,570 |
Employment-related accruals | 3,932 | 4,028 |
Environmental reserves | 501 | 499 |
Federal tax credit carryforwards | 133 | 133 |
Inventory reserves | 3,572 | 2,957 |
Operating lease liabilities | 8,672 | 8,145 |
Pension obligation | 28 | 1,550 |
Federal and state net operating loss carryforwards | 3,397 | 4,243 |
Research expenses | 10,620 | 0 |
State tax credit carryforwards | 6,974 | 7,123 |
Stock-based compensation | 2,420 | 2,584 |
Other | 1,525 | 2,503 |
Total gross deferred tax assets | 44,682 | 37,176 |
Valuation allowance | (7,548) | (7,718) |
Total gross deferred tax assets, net of valuation allowance | 37,134 | 29,458 |
Deferred tax liabilities: | ||
Depreciation | (11,286) | (11,986) |
Goodwill | (8,630) | (6,557) |
Intangibles | (18,310) | (20,337) |
Interest rate hedge | (3,359) | 0 |
Operating lease right-of-use assets | (8,346) | (7,931) |
Prepaid insurance | (609) | (534) |
Other | (547) | (840) |
Total gross deferred tax liabilities | (51,087) | (48,185) |
Net deferred tax liabilities | $ (13,953) | $ (18,727) |
Income Taxes - Variation Betwee
Income Taxes - Variation Between Expected and Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21% | 21% | 21% |
State income taxes (net of federal benefit) | 4% | 3.10% | 4.60% |
Foreign derived intangible income deduction | (0.90%) | 0% | (0.40%) |
Stock-based compensation expense | (0.60%) | (0.50%) | (1.40%) |
Research and development tax credits | (14.80%) | (3.00%) | (13.80%) |
Other tax credits | (0.10%) | 0% | (0.30%) |
Changes in valuation allowance | (0.50%) | (1.00%) | (0.40%) |
Non-deductible book compensation expenses | 4.40% | 0.70% | 3.30% |
Changes in deferred tax assets | (0.20%) | 0% | (0.20%) |
Changes in tax reserves | 0% | 0.20% | (4.60%) |
Other | 1.30% | 0% | 1% |
Effective income tax rate | 13.60% | 20.50% | 8.80% |
Tax credit, percent | (3.40%) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | $ 4,435 | $ 4,069 | $ 5,663 |
Additions for tax positions related to the current year | 1,177 | 562 | 418 |
Additions for tax positions related to prior years | 15 | 180 | 157 |
Reductions for tax positions related to prior years | (13) | 0 | 0 |
Reductions for lapse of statute of limitations | (670) | (376) | (2,169) |
Ending Balance | $ 4,944 | $ 4,435 | $ 4,069 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jan. 17, 2023 USD ($) | Jul. 02, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2020 ft² building | |
Loss Contingencies [Line Items] | ||||||
Estimated litigation liability | $ 900 | |||||
Net Revenues | $ 712,537 | $ 645,413 | $ 628,941 | |||
Cost of Sales | 568,240 | 502,953 | 491,203 | |||
Subsequent Event | ||||||
Loss Contingencies [Line Items] | ||||||
Payments for legal settlements | $ 900 | |||||
Property, Plant and Equipment | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, receivable, proceeds | 1,000 | |||||
Damage from Facility Fire | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, receivable, proceeds | 5,400 | |||||
Facility Fire In Guaymas, Mexico | Damage from Facility Fire | ||||||
Loss Contingencies [Line Items] | ||||||
Number of buildings (in buildings) | building | 2 | |||||
Real estate property (in sqft) | ft² | 62 | |||||
Loss contingency, receivable, proceeds | 13,500 | |||||
Facility Fire In Guaymas, Mexico | Damage from Facility Fire | Property, Plant and Equipment | ||||||
Loss Contingencies [Line Items] | ||||||
Carrying value of impaired assets | 7,100 | |||||
Facility Fire In Guaymas, Mexico | Damage from Facility Fire | Inventories | ||||||
Loss Contingencies [Line Items] | ||||||
Carrying value of impaired assets | 3,400 | |||||
Facility Fire In Guaymas, Mexico | Damage from Facility Fire | Revision of Prior Period, Reclassification, Adjustment | ||||||
Loss Contingencies [Line Items] | ||||||
Net Revenues | 800 | |||||
Cost of Sales | $ 500 | |||||
Structural Systems | ||||||
Loss Contingencies [Line Items] | ||||||
Net Revenues | 271,899 | 232,765 | ||||
Structural Systems | El Mirage and Monrovia, California | ||||||
Loss Contingencies [Line Items] | ||||||
Reserve for estimated liability | 1,500 | 1,500 | ||||
Structural Systems | Casmalia and West Covina, California | ||||||
Loss Contingencies [Line Items] | ||||||
Reserve for estimated liability | 400 | 400 | ||||
Structural Systems | Casmalia and West Covina, California | Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Possible loss | 400 | |||||
Structural Systems | Casmalia and West Covina, California | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Possible loss | $ 3,100 | |||||
Accrued and other liabilities | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated litigation liability | 900 | $ 800 | ||||
Additional accrued liabilities | $ 100 |
Major Customers and Concentra_3
Major Customers and Concentrations of Credit Risk - Sales to Major Customers (Details) - Customer Concentration Risk - Revenue from Contract with Customer Benchmark | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Boeing | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 6.70% | 7.80% | 10.50% |
GD | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 5.70% | 3% | 2.50% |
Lockheed Martin | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 3.50% | 4.40% | 5% |
Northrop | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 5.70% | 7.10% | 9.10% |
Raytheon | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 21.60% | 24.40% | 20.90% |
Spirit | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 5.70% | 3.80% | 3.30% |
Viasat | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 5.40% | 2.60% | 1.70% |
Top ten customers | |||
Revenue, Major Customer [Line Items] | |||
Concentration percentage | 61.40% | 61.10% | 61.10% |
Major Customers and Concentra_4
Major Customers and Concentrations of Credit Risk - Receivables from Customers (Details) - Customer Concentration Risk - Accounts Receivable | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Boeing | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 3.80% | 3.50% |
GD | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 3.40% | 4% |
Lockheed Martin | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 1% | 0.40% |
Northrop | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 13% | 10.90% |
Raytheon | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 16.20% | 17.80% |
Spirit | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 1% | 0.70% |
Viasat | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 10.30% | 4.30% |
Major Customers and Concentra_5
Major Customers and Concentrations of Credit Risk - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||
Revenues | $ 712,537 | $ 645,413 | $ 628,941 |
Non-Us | |||
Concentration Risk [Line Items] | |||
Revenues | $ 60,700 | $ 43,600 | $ 58,500 |
Maximum | Non-Us | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 3% | 3% | 3% |
Business Segment Information -
Business Segment Information - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 USD ($) | Jul. 02, 2022 USD ($) | Dec. 31, 2022 segment | Dec. 16, 2021 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments (in segments) | segment | 2 | |||
Purchase price of acquisition | $ 69,100 | |||
Magnetic seal corporation | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of outstanding common stock acquired | 100% | 100% | ||
Purchase price of acquisition | $ 69,500 | |||
Gross purchase price | $ 70,935 |
Business Segment Information _2
Business Segment Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net Revenues | $ 712,537 | $ 645,413 | $ 628,941 |
Segment Operating Income (Loss) | 39,788 | 48,881 | 45,506 |
Depreciation and Amortization Expenses | 31,421 | 28,389 | 28,850 |
Capital Expenditures | 19,551 | 15,934 | 13,607 |
Electronic Systems | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 440,638 | 412,648 | |
Structural Systems | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 271,899 | 232,765 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment Operating Income (Loss) | 67,101 | 77,863 | 71,478 |
Operating Segments | Electronic Systems | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 440,638 | 412,648 | 392,633 |
Segment Operating Income (Loss) | 49,876 | 57,629 | 51,894 |
Depreciation and Amortization Expenses | 13,974 | 13,823 | 14,038 |
Capital Expenditures | 10,717 | 7,471 | 5,037 |
Operating Segments | Structural Systems | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 271,899 | 232,765 | 236,308 |
Segment Operating Income (Loss) | 17,225 | 20,234 | 19,584 |
Depreciation and Amortization Expenses | 17,212 | 14,331 | 14,559 |
Capital Expenditures | 8,834 | 8,463 | 8,570 |
Corporate Administration | |||
Segment Reporting Information [Line Items] | |||
Corporate General and Administrative Expenses | (27,313) | (28,982) | (25,972) |
Depreciation and Amortization Expenses | 235 | 235 | 253 |
Capital Expenditures | $ 0 | $ 0 | $ 0 |
Business Segment Information _3
Business Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 1,021,506 | $ 978,735 |
Goodwill and Intangibles | 330,608 | 345,458 |
Operating Segments | Electronic Systems | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 543,298 | 490,814 |
Goodwill and Intangibles | 182,501 | 191,789 |
Operating Segments | Structural Systems | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 410,565 | 408,118 |
Goodwill and Intangibles | 148,107 | 153,669 |
Corporate Administration | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 67,643 | $ 79,803 |
Consolidated Valuation and Qu_2
Consolidated Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for Credit Losses, Doubtful Accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 1,098 | $ 1,552 | $ 1,321 |
Charged to (Reduction of) Costs and Expenses | (74) | 227 | 231 |
Deductions | 435 | 681 | |
Recoveries | 0 | ||
Other | 0 | 0 | 0 |
Balance at End of Period | 589 | 1,098 | 1,552 |
Valuation Allowance on Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 7,718 | 9,330 | 9,375 |
Charged to (Reduction of) Costs and Expenses | (170) | (1,612) | (111) |
Deductions | 0 | 0 | 0 |
Other | 0 | 0 | 66 |
Balance at End of Period | $ 7,548 | $ 7,718 | $ 9,330 |