Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-04041 | |
Entity Registrant Name | ALLIENT INC | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 84-0518115 | |
Entity Address, Address Line One | 495 Commerce Drive | |
Entity Address, City or Town | Amherst | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14228 | |
City Area Code | 716 | |
Local Phone Number | 242-8634 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | ALNT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,211,259 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000046129 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 23,836 | $ 30,614 |
Trade receivables, net of provision for credit losses of $1,220 and $1,192 at September 30, 2023 and December 31, 2022, respectively | 90,631 | 76,213 |
Inventories | 117,291 | 117,108 |
Prepaid expenses and other assets | 13,045 | 12,072 |
Total current assets | 244,803 | 236,007 |
Property, plant, and equipment, net | 67,895 | 68,640 |
Deferred income taxes | 3,447 | 4,199 |
Intangible assets, net | 113,791 | 119,075 |
Goodwill | 130,298 | 126,366 |
Operating lease assets | 24,977 | 22,807 |
Other long-term assets | 11,380 | 11,253 |
Total Assets | 596,591 | 588,347 |
Current liabilities: | ||
Accounts payable | 42,470 | 39,467 |
Accrued liabilities | 52,237 | 48,121 |
Total current liabilities | 94,707 | 87,588 |
Long-term debt | 224,364 | 235,454 |
Deferred income taxes | 5,804 | 6,262 |
Pension and post-retirement obligations | 2,893 | 3,009 |
Operating lease liabilities | 20,291 | 18,795 |
Other long-term liabilities | 6,391 | 21,774 |
Total liabilities | 354,450 | 372,882 |
Stockholders' Equity: | ||
Common stock, no par value, authorized 50,000 shares; 16,280 and 15,978 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 94,742 | 83,852 |
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding | ||
Retained earnings | 161,953 | 143,576 |
Accumulated other comprehensive loss | (14,554) | (11,963) |
Total stockholders' equity | 242,141 | 215,465 |
Total Liabilities and Stockholders' Equity | $ 596,591 | $ 588,347 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade receivables, provision for credit losses | $ 1,220 | $ 1,192 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized shares | 50,000 | 50,000 |
Common stock, shares issued | 16,280 | 15,978 |
Common stock, shares outstanding | 16,280 | 15,978 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized shares | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) | ||||
Revenues | $ 145,319 | $ 134,405 | $ 437,637 | $ 371,912 |
Cost of goods sold | 97,821 | 91,108 | 298,328 | 255,381 |
Gross profit | 47,498 | 43,297 | 139,309 | 116,531 |
Operating costs and expenses: | ||||
Selling | 6,021 | 5,497 | 18,354 | 16,336 |
General and administrative | 14,642 | 13,148 | 43,624 | 37,239 |
Engineering and development | 10,702 | 9,702 | 31,041 | 28,879 |
Business development | 1,194 | 199 | 1,791 | 2,464 |
Amortization of intangible assets | 3,075 | 3,054 | 9,226 | 8,133 |
Total operating costs and expenses | 35,634 | 31,600 | 104,036 | 93,051 |
Operating income | 11,864 | 11,697 | 35,273 | 23,480 |
Other expense, net: | ||||
Interest expense | 3,164 | 2,337 | 9,309 | 4,900 |
Other expense, net | 42 | 243 | 187 | 9 |
Total other expense, net | 3,206 | 2,580 | 9,496 | 4,909 |
Income before income taxes | 8,658 | 9,117 | 25,777 | 18,571 |
Income tax provision | (1,992) | (2,508) | (6,027) | (4,878) |
Net income | $ 6,666 | $ 6,609 | $ 19,750 | $ 13,693 |
Basic earnings per share: | ||||
Earnings per share | $ 0.42 | $ 0.42 | $ 1.24 | $ 0.89 |
Basic weighted average common shares | 15,979 | 15,661 | 15,940 | 15,373 |
Diluted earnings per share: | ||||
Earnings per share | $ 0.41 | $ 0.41 | $ 1.22 | $ 0.86 |
Diluted weighted average common shares | 16,237 | 16,169 | 16,198 | 15,929 |
Net income | $ 6,666 | $ 6,609 | $ 19,750 | $ 13,693 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (2,923) | (9,603) | (1,995) | (19,535) |
(Loss) gain on derivatives, net of tax | (170) | 2,042 | (596) | 5,617 |
Comprehensive income (loss) | $ 3,573 | $ (952) | $ 17,159 | $ (225) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock and Paid-in Capital | Common Stock | Retained Earnings | Foreign Currency Translation Adjustments | Accumulated income (loss) on derivatives | Pension Adjustments | Total |
Balance at the beginning at Dec. 31, 2021 | $ 68,097 | $ 127,757 | $ (7,409) | $ 180 | $ (863) | $ 187,762 | |
Balance at the beginning (in shares) at Dec. 31, 2021 | 15,361 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Stock transactions under employee benefit stock plans | 1,217 | 1,217 | |||||
Stock transactions under employee benefit stock plans (in shares) | 36 | ||||||
Issuance of restricted stock, net of forfeitures | (4) | (4) | |||||
Issuance of restricted stock, net of forfeitures (in shares) | 141 | ||||||
Stock-based compensation expense | 1,349 | 1,349 | |||||
Shares withheld for payment of employee payroll taxes | (137) | (137) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (4) | ||||||
Comprehensive (loss) income | (1,233) | 3,423 | 2,190 | ||||
Tax effect of derivative transactions | (822) | (822) | |||||
Net income | 2,504 | 2,504 | |||||
Dividends to stockholders | (388) | (388) | |||||
Balance at the ending at Mar. 31, 2022 | 70,522 | 129,873 | (8,642) | 2,781 | (863) | 193,671 | |
Balance at the ending (in shares) at Mar. 31, 2022 | 15,534 | ||||||
Balance at the beginning at Dec. 31, 2021 | 68,097 | 127,757 | (7,409) | 180 | (863) | 187,762 | |
Balance at the beginning (in shares) at Dec. 31, 2021 | 15,361 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 13,693 | ||||||
Balance at the ending at Sep. 30, 2022 | 82,830 | 140,277 | (26,944) | 5,797 | (863) | 201,097 | |
Balance at the ending (in shares) at Sep. 30, 2022 | 15,982 | ||||||
Balance at the beginning at Mar. 31, 2022 | 70,522 | 129,873 | (8,642) | 2,781 | (863) | 193,671 | |
Balance at the beginning (in shares) at Mar. 31, 2022 | 15,534 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock, net of forfeitures | (1) | (1) | |||||
Issuance of restricted stock, net of forfeitures (in shares) | 16 | ||||||
Share issuance in connection with acquisitions | 11,103 | 11,103 | |||||
Share issuance in connection with acquisitions (in shares) | 463 | ||||||
Stock-based compensation expense | 1,141 | 1,141 | |||||
Shares withheld for payment of employee payroll taxes | (1,103) | (1,103) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (35) | ||||||
Comprehensive (loss) income | (8,699) | 1,284 | (7,415) | ||||
Tax effect of derivative transactions | (310) | (310) | |||||
Net income | 4,581 | 4,581 | |||||
Dividends to stockholders | (388) | (388) | |||||
Balance at the ending at Jun. 30, 2022 | 81,662 | 134,066 | (17,341) | 3,755 | (863) | 201,279 | |
Balance at the ending (in shares) at Jun. 30, 2022 | 15,978 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock, net of forfeitures (in shares) | 7 | ||||||
Stock-based compensation expense | 1,262 | 1,262 | |||||
Shares withheld for payment of employee payroll taxes | (94) | (94) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (3) | ||||||
Comprehensive (loss) income | (9,603) | 2,687 | (6,916) | ||||
Tax effect of derivative transactions | (645) | (645) | |||||
Net income | 6,609 | 6,609 | |||||
Dividends to stockholders | (398) | (398) | |||||
Balance at the ending at Sep. 30, 2022 | 82,830 | 140,277 | (26,944) | 5,797 | (863) | 201,097 | |
Balance at the ending (in shares) at Sep. 30, 2022 | 15,982 | ||||||
Balance at the beginning at Dec. 31, 2022 | 83,852 | 143,576 | (16,925) | 5,556 | (594) | $ 215,465 | |
Balance at the beginning (in shares) at Dec. 31, 2022 | 15,978 | 15,978 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Stock transactions under employee benefit stock plans | 1,246 | $ 1,246 | |||||
Stock transactions under employee benefit stock plans (in shares) | 31 | ||||||
Issuance of restricted stock, net of forfeitures | (34) | (34) | |||||
Issuance of restricted stock, net of forfeitures (in shares) | 103 | ||||||
Share issuance in connection with acquisitions | 6,250 | 6,250 | |||||
Share issuance in connection with acquisitions (in shares) | 185 | ||||||
Stock-based compensation expense | 1,267 | 1,267 | |||||
Shares withheld for payment of employee payroll taxes | (146) | (146) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (4) | ||||||
Comprehensive (loss) income | 1,354 | (1,565) | (211) | ||||
Tax effect of derivative transactions | 432 | 432 | |||||
Net income | 6,315 | 6,315 | |||||
Dividends to stockholders | (403) | (403) | |||||
Balance at the ending at Mar. 31, 2023 | 92,435 | 149,488 | (15,571) | 4,423 | (594) | 230,181 | |
Balance at the ending (in shares) at Mar. 31, 2023 | 16,293 | ||||||
Balance at the beginning at Dec. 31, 2022 | 83,852 | 143,576 | (16,925) | 5,556 | (594) | $ 215,465 | |
Balance at the beginning (in shares) at Dec. 31, 2022 | 15,978 | 15,978 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | $ 19,750 | ||||||
Balance at the ending at Sep. 30, 2023 | 94,742 | 161,953 | (18,920) | 4,960 | (594) | $ 242,141 | |
Balance at the ending (in shares) at Sep. 30, 2023 | 16,280 | 16,280 | |||||
Balance at the beginning at Mar. 31, 2023 | 92,435 | 149,488 | (15,571) | 4,423 | (594) | $ 230,181 | |
Balance at the beginning (in shares) at Mar. 31, 2023 | 16,293 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock, net of forfeitures | 11 | 11 | |||||
Issuance of restricted stock, net of forfeitures (in shares) | 14 | ||||||
Stock-based compensation expense | 1,544 | 1,544 | |||||
Shares withheld for payment of employee payroll taxes | (1,507) | (1,507) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (39) | ||||||
Comprehensive (loss) income | (426) | 930 | 504 | ||||
Tax effect of derivative transactions | (223) | (223) | |||||
Net income | 6,769 | 6,769 | |||||
Dividends to stockholders | (485) | (485) | |||||
Balance at the ending at Jun. 30, 2023 | 92,483 | 155,772 | (15,997) | 5,130 | (594) | 236,794 | |
Balance at the ending (in shares) at Jun. 30, 2023 | 16,268 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock, net of forfeitures (in shares) | (18) | ||||||
Share issuance in connection with acquisitions | 1,079 | 1,079 | |||||
Share issuance in connection with acquisitions (in shares) | 35 | ||||||
Stock-based compensation expense | 1,354 | 1,354 | |||||
Shares withheld for payment of employee payroll taxes | (174) | (174) | |||||
Shares withheld for payment of employee payroll taxes (in shares) | (5) | ||||||
Comprehensive (loss) income | (2,923) | (224) | (3,147) | ||||
Tax effect of derivative transactions | 54 | 54 | |||||
Net income | 6,666 | 6,666 | |||||
Dividends to stockholders | (485) | (485) | |||||
Balance at the ending at Sep. 30, 2023 | $ 94,742 | $ 161,953 | $ (18,920) | $ 4,960 | $ (594) | $ 242,141 | |
Balance at the ending (in shares) at Sep. 30, 2023 | 16,280 | 16,280 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||
Dividends to stockholders (in dollars per share) | $ 0.03 | $ 0.03 | $ 0.025 | $ 0.025 | $ 0.025 | $ 0.025 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows From Operating Activities: | ||
Net income | $ 19,750 | $ 13,693 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 18,956 | 19,222 |
Deferred income taxes | 122 | 2,775 |
Stock-based compensation expense | 4,165 | 3,752 |
Debt issue cost amortization recorded in interest expense | 225 | 127 |
Other | 987 | 785 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade receivables | (14,358) | (27,560) |
Inventories | (1,344) | (25,782) |
Prepaid expenses and other assets | (1,553) | (3,133) |
Accounts payable | 2,871 | 6,501 |
Accrued liabilities | (2,689) | 3,796 |
Net cash provided by (used in) operating activities | 27,132 | (5,824) |
Cash Flows From Investing Activities: | ||
Consideration paid for acquisitions, net of cash acquired | (11,004) | (44,596) |
Purchase of property and equipment | (7,850) | (11,026) |
Net cash used in investing activities | (18,854) | (55,622) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of long-term debt | 11,000 | 69,952 |
Principal payments of long-term debt and finance lease obligations | (22,325) | (6,514) |
Dividends paid to stockholders | (1,348) | (1,147) |
Tax withholdings related to net share settlements of restricted stock | (1,827) | (1,334) |
Net cash (used in) provided by financing activities | (14,500) | 60,957 |
Effect of foreign exchange rate changes on cash | (556) | (2,269) |
Net (decrease) increase in cash and cash equivalents | (6,778) | (2,758) |
Cash and cash equivalents at beginning of period | 30,614 | 22,463 |
Cash and cash equivalents at end of period | $ 23,836 | $ 19,705 |
Supplemental disclosure of cash flow information: | ||
Stock issued for acquisition | 7,329 | 11,103 |
Property, plant and equipment purchases in accounts payable or accrued expenses | $ 1,960 | $ 719 |
Accrued consideration for acquisitions | $ 185 |
BASIS OF PREPARATION AND PRESEN
BASIS OF PREPARATION AND PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
BASIS OF PREPARATION AND PRESENTATION | |
BASIS OF PREPARATION AND PRESENTATION | 1. BASIS OF PREPARATION AND PRESENTATION |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | 2. ACQUISITIONS On September 22, 2023, the Company acquired 100% of the ownership interest in Sierramotion Inc. (“Sierramotion”), a company headquartered in California, that specializes in designing and engineering turn-key motion components and mechatronic solutions for robotic, medical, industrial, defense, semiconductor, and other precision applications. The preliminary purchase price for Sierramotion of million includes contingent consideration payable (Note 12) and at closing consisted of a combination of cash and Company stock. The intangible assets and goodwill are expected to be deductible for tax purposes. The preliminary purchase price allocation is subject to adjustments based on a determination of closing net working capital and certain tax matters. Transaction costs for the acquisition were not material. The operating results of this acquisition are included in the condensed consolidated financial statements beginning on the acquisition date and the revenue and earnings in the current year interim periods presented are not material. On May 30, 2022, the Company acquired 100% of the direct and indirect legal and beneficial ownership of the shares of FPH Group Inc., a corporation incorporated pursuant to the laws of the Province of Ontario and the membership interests of Transtar International, LLC, a Michigan limited liability company, collectively “FPH”. The final purchase price for FPH was . Cash and cash equivalents $ 1,755 Trade receivables 3,100 Inventories 3,496 Other assets, net 174 Property, plant, and equipment 624 Right of use assets 4,165 Intangible assets 22,611 Goodwill 15,840 Other current liabilities (1,577) Deferred revenue (776) Lease liabilities (4,165) Net deferred income tax liabilities (3,931) Net purchase price $ 41,316 On May 24, 2022, the Company acquired 100% of the outstanding stock of ThinGap, Inc. (“ThinGap”), a privately-owned California headquartered developer and manufacturer of high performance, zero cogging slotless motors for use in aerospace, defense, and medical applications that require precise performance in a compact, yet high-torque-to-volume solutions. On June 17, 2022, the Company acquired 100% of the membership interests of Airex, LLC (“Airex”), a privately-owned New Hampshire headquartered developer of high precision electromagnetic components and solutions for the aerospace and defense, life sciences, semiconductor, and commercial industrial applications. The purchase price, collectively, for ThinGap and Airex was . There were no additional measurement period adjustments during the six months ended June 30, 2023 related to the ThinGap and Airex acquisitions. The purchase price allocations of each of these acquisitions are final. The December 30, 2021 acquisition of Spectrum Controls, Inc. (“Spectrum Controls”) included two deferred acquisition payments of which $12,500 (comprised of 50% cash and 50% Company stock) was paid in January 2023. The following pro forma financial information presents the combined resulted of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021: Three months ended Nine months ended September 30, September 30, 2022 2022 Revenues $ 134,405 $ 382,727 Income before income taxes $ 9,693 $ 22,766 The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments, together with related income tax effects. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expected to or has subsequently achieved as a result of these acquisitions. The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would have been had these transactions actually occurred on the date presented or to project the combined company’s results of operations or financial position for future periods. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION Performance Obligations The Company considers control of most products to transfer at a single point in time when control is transferred to the customer, generally when the products are shipped in accordance with an agreement and/or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product. The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for monetary consideration from the customer. The Company considers the customer’s purchase order, and the Company’s corresponding sales order acknowledgment as the contract with the customer. For some customers, control, and a sale, is transferred at a point in time when the product is delivered to a customer. For a limited number of contracts, for which revenue derived is not material in the periods presented, the Company recognizes revenue over time in proportion to costs incurred. Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Nature of Goods and Services The Company designs, manufactures, and sells precision motion, control, power, and structural components to provide integrated system solutions as well as individual products to end customers and original equipment manufacturers (“OEM’s”) through the Company’s own direct sales force and authorized manufacturers’ representatives and distributors. The Company’s products include brushed and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gearmotors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, active and passive filters for power quality and harmonic issues, and other controlled motion-related products. The Company’s target markets include Industrial, Vehicle, Medical, and Aerospace & Defense Determining the Transaction Price The majority of the Company’s contracts have an original duration of less than one year. For these contracts, the Company applies the practical expedient and therefore does not consider the effects of the time value of money. For multiyear contracts, the Company uses judgment to determine whether there is a significant financing component. These contracts are generally those in which the customer has made an up-front payment. Contracts that management determines to include a significant financing component are discounted at the Company’s incremental borrowing rate. The Company incurs interest expense and accrues a contract liability. As the Company satisfies performance obligations and recognizes revenue from these contracts, interest expense is recognized simultaneously. Management does not have any contracts that include a significant financing component as of September 30, 2023 and December 31, 2022. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into geographical regions and target markets. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted below in Note 18, Segment Information A disaggregation of revenue by target market and geography is provided below: Three months ended Nine months ended September 30, September 30, Target Market 2023 2022 2023 2022 Industrial $ 64,921 $ 49,134 $ 193,766 $ 142,044 Vehicle 32,989 35,342 98,559 100,479 Medical 21,693 21,958 66,254 63,471 Aerospace & Defense 19,972 21,510 60,237 48,103 Distribution and Other 5,744 6,461 18,821 17,815 Total $ 145,319 $ 134,405 $ 437,637 $ 371,912 Three months ended Nine months ended September 30, September 30, Geography 2023 2022 2023 2022 North America (primarily U.S.) $ 102,502 $ 92,896 $ 300,834 $ 249,329 Europe 35,456 31,901 113,679 97,771 Asia-Pacific 7,361 9,608 23,124 24,812 Total $ 145,319 $ 134,405 $ 437,637 $ 371,912 Contract Balances When the timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Typically, contracts are paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists. The opening and closing balances of the Company’s contract liabilities are as follows: September 30, December 31, 2023 2022 Contract liabilities in accrued liabilities $ 2,701 $ 4,807 Contract liabilities in other long-term liabilities 11 19 $ 2,712 $ 4,826 The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. Significant Payment Terms The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payments are typically due in full within 30-60 days of delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the majority of contracts do not contain variable consideration. Returns, Refunds, and Warranties In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The Company establishes provisions for estimated returns and warranties. All contracts include a standard warranty clause to guarantee that the product complies with agreed specifications. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows: September 30, December 31, 2023 2022 Parts and raw materials $ 85,633 $ 89,100 Work-in-process 11,678 11,686 Finished goods 19,980 16,322 $ 117,291 $ 117,108 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2023 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 5. PROPERTY, PLANT AND EQUIPMENT Property, plant, and equipment is classified as follows: September 30, December 31, 2023 2022 Land $ 963 $ 965 Building and improvements 25,689 25,093 Machinery, equipment, tools and dies 96,682 89,144 Construction work in progress 11,253 14,197 Furniture, fixtures and other 24,234 22,461 158,821 151,860 Less accumulated depreciation (90,926) (83,220) Property, plant, and equipment, net $ 67,895 $ 68,640 Depreciation expense was $3,346 and $3,135 for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, depreciation expense was $9,730 and $9,539 , respectively. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL | |
GOODWILL | 6. GOODWILL The change in the carrying amount of goodwill for the nine months ended September 30, 2023 is as follows: September 30, 2023 Beginning balance $ 126,366 Goodwill acquired 2,923 Impact of measurement period adjustments of acquisitions (Note 2) 1,356 Effect of foreign currency translation (347) Ending balance $ 130,298 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 7. INTANGIBLE ASSETS Intangible assets on the Company’s condensed consolidated balance sheets consist of the following: September 30, 2023 December 31, 2022 Gross Accumulated Net Book Gross Accumulated Net Book Life Amount Amortization Value Amount Amortization Value Customer lists 5 – 18 years $ 116,184 $ (40,156) $ 76,028 $ 112,378 $ (34,377) $ 78,001 Trade name 10 – 19 years 15,441 (7,676) 7,765 15,320 (6,900) 8,420 Design and technologies 10 – 15 years 41,129 (11,131) 29,998 41,212 (8,558) 32,654 Total $ 172,754 $ (58,963) $ 113,791 $ 168,910 $ (49,835) $ 119,075 Amortization expense for intangible assets was $3,075 and $3,054 for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, amortization expense was Estimated future intangible asset amortization expense as of September 30, 2023 is as follows: Year ending December 31, Total Estimated Amortization Expense Remainder of 2023 $ 3,044 2024 12,144 2025 12,129 2026 12,032 2027 11,589 Thereafter 62,853 Total estimated amortization expense $ 113,791 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION Stock Incentive Plans The Company’s Stock Incentive Plans provide for the granting of stock awards, including restricted stock, stock options and stock appreciation rights, to employees and non-employees, including directors of the Company. Restricted Stock For the nine months ended September 30, 2023, 123,601 shares of unvested restricted stock were awarded at a weighted average market value of $41.53 . Of the restricted shares granted, shares have performance-based vesting conditions. The value of the shares expected to vest is amortized to compensation expense over the related service period, which is normally , or over the estimated performance period. Shares of unvested restricted stock are generally forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards. The following is a summary of restricted stock activity for the nine months ended September 30, 2023: Number of shares Outstanding at beginning of period 403,974 Awarded 123,601 Vested (129,541) Forfeited (21,034) Outstanding at end of period 377,000 Stock-based compensation expense, net of forfeitures, was $1,354 and $1,262 was recorded for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, stock based compensation expense, net of forfeitures, was |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 9 . ACCRUED LIABILITIES Accrued liabilities consist of the following: September 30, December 31, 2023 2022 Compensation and fringe benefits $ 15,396 $ 15,818 Accrued business acquisition consideration 12,657 12,500 Warranty reserve 2,284 2,160 Income taxes payable 1,454 3,934 Operating lease liabilities – current 5,100 4,224 Finance lease obligations – current 403 377 Contract liabilities 2,701 4,807 Contingent consideration 4,960 — Other accrued expenses 7,282 4,301 $ 52,237 $ 48,121 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2023 | |
DEBT OBLIGATIONS | |
DEBT OBLIGATIONS | 10. DEBT OBLIGATIONS Debt obligations consisted of the following: September 30, December 31, 2023 2022 Long-term Debt Revolving Credit Facility, long-term (1) $ 216,052 $ 227,060 Unamortized debt issuance costs (400) (625) Finance lease obligations – noncurrent 8,712 9,019 Long-term debt $ 224,364 $ 235,454 (1) The effective rate of the Amended Revolving Facility is 5.10% at September 30, 2023. Amended Revolving Credit Facility The Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”), effective August 23, 2022, includes a $280 million revolving credit facility (the “Amended Revolving Facility”). In the Amended Credit Agreement, the referenced index was amended to the Term Standard Overnight Financing Rate (“SOFR”), whereas the previous credit agreement utilized the London Interbank Offering Rate (LIBOR) as the referenced interest rate. The Amended Credit Agreement has a maturity date of February 2025. Borrowings under the Amended Revolving Facility bear interest at an annual rate equal to the Adjusted SOFR (as defined in the Amended Credit Agreement) which is subject to a floor of 0.00% plus an applicable margin spread ranging from 1.00% to 2.25% (1.625% at September 30, 2023) based on the Company’s ratio of total funded indebtedness to consolidated trailing twelve-month EBITDA (the “Total Leverage Ratio”). In addition, the Company is required to pay a commitment fee of between annually on the unused portion of the Amended Revolving Facility, also based on the Company’s Total Leverage Ratio. The Amended Revolving Facility is secured by substantially all of the Company’s non-realty assets and is fully and unconditionally guaranteed by certain of the Company’s subsidiaries. The Amended Credit Agreement includes covenants and restrictions that limit the Company’s ability to incur additional indebtedness, make certain investments, create, incur or assume certain liens, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the Amended Credit Agreement, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The Amended Credit Agreement contains financial covenants that require that the Company maintain a minimum interest coverage ratio of at least 3.0 to 1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than (reduced to 3.5 :1.0 for quarters ending on or after December 31, 2023); provided that the Company may elect to temporarily increase the Leverage Ratio by 0.5 x during the twelve-month period following a material acquisition under the Amended Credit Agreement (“acquisition leverage increase”), subject to certain exceptions. The Company was in compliance with all covenants as of September 30, 2023 As of September 30, 2023, the unused Amended Revolving Facility was $63,948 . The amount available to borrow may be limited by the Company’s debt and EBITDA levels, which impacts its covenant calculations |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 11. DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, and foreign exchange risk primarily through the use of derivative financial instruments. The Company enters into foreign currency contracts with 30-day The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable-rate debt. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In March 2020, the Company entered into that matures in December 2026. In March 2023, the Company executed amendments to the existing swaps to amend the index on the interest rate derivatives from LIBOR to SOFR, in line with the existing Amended Revolving Facility. These amendments had no material financial impact to the Company’s operations or financial position. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The Company estimates that $4,008 will be reclassified as a decrease to interest expense over the next twelve months related to its interest rate derivatives. The Company does not use derivatives for trading or speculative purposes. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022: Asset Derivatives Fair value as of: Derivatives designated as Balance Sheet September 30, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Prepaid expenses and other assets $ 25 $ 48 Interest rate swaps Other long-term assets 6,452 7,236 $ 6,477 $ 7,284 Liability Derivatives Fair value as of: Derivatives designated as Balance Sheet September 30, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Accrued liabilities $ 7 $ — The tables below present the effect of cash flow hedge accounting on other comprehensive income (loss) (“OCI”) for the three and nine months ended September 30, 2023 and 2022: Amount of pre-tax gain recognized Amount of pre-tax gain recognized in OCI on derivatives in OCI on derivatives Derivatives in cash flow hedging relationships Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Interest rate swaps $ 790 $ 2,916 $ 1,995 $ 7,335 Amount of pre-tax gain (loss) reclassified Amount of pre-tax gain (loss) reclassified from accumulated OCI into income from accumulated OCI into income Location of gain (loss) reclassified Three months ended September 30, Nine months ended September 30, from accumulated OCI into income 2023 2022 2023 2022 Interest expense $ 1,014 $ 229 $ 2,854 $ (59) The table below presents the line items that reflect the effect of the Company’s derivative financial instruments on the condensed consolidated statements of income and comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022: Total amounts of income and expense Total amounts of income and expense line items presented that reflect the line items presented that reflect the effects of cash flow hedges recorded effects of cash flow hedges recorded Three months ended September 30, Nine months ended September 30, Derivatives designated as hedging instruments Income Statement Location 2023 2022 2023 2022 Interest rate swaps Interest Expense $ 3,164 $ 2,337 $ 9,309 $ 4,900 The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2023 and December 31, 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented in the condensed consolidated balance sheets: Derivative assets: Net amounts Gross amounts of assets Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets September 30, of recognized consolidated consolidated Financial Cash collateral 2023 assets balance sheets balance sheets instruments received Net amount Derivatives $ 6,477 $ — $ 6,477 $ — $ — $ 6,477 Net amounts Gross amounts of assets Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets December 31, of recognized consolidated consolidated Financial Cash collateral 2022 assets balance sheets balance sheets instruments received Net amount Derivatives $ 7,284 $ — $ 7,284 $ — $ — $ 7,284 Derivative liabilities: Net amounts Gross amounts of liabilities Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets September 30, of recognized consolidated consolidated Financial Cash collateral 2023 liabilities balance sheets balance sheets instruments received Net amount Derivatives $ — $ — $ 7 $ — $ — $ 7 Net amounts Gross amounts of liabilities Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets December 31, of recognized consolidated consolidated Financial Cash collateral 2022 liabilities balance sheets balance sheets instruments received Net amount Derivatives $ — $ — $ — $ — $ — $ — The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE | |
FAIR VALUE | 12. FAIR VALUE Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a framework for measuring fair value which utilizes observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs. These two types of inputs create the following three – level fair value hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model – derived valuations whose inputs or significant value drivers are observable. Level 3: Significant inputs to the valuation model that are unobservable. The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities. The carrying amounts reported in the condensed consolidated balance sheets for these assets and liabilities approximate their fair value because of the immediate or short-term maturities of these financial instruments. The following tables presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, respectively, by level within the fair value hierarchy: September 30, 2023 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,431 $ — $ — Deferred compensation plan assets 3,989 — — Foreign currency hedge contract assets — 25 — Foreign currency hedge contract liabilities — (7) — Interest rate swaps, net — 6,452 — Contingent consideration — — (5,930) December 31, 2022 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,324 $ — $ — Deferred compensation plan assets 3,870 — — Foreign currency hedge contracts — 48 — Interest rate swaps, net — 7,236 — Contingent consideration — — (4,100) The contingent consideration fair value measurement represents amounts in connection with the acquisitions of Sierramotion, which has a maximum amount of $2,000 and ALIO Industries (“ALIO”), which does not have a maximum amount. The measurements are based on significant inputs not observable in the market and therefore constitute Level 3 inputs within the fair value hierarchy. The Company determines the initial fair value of contingent consideration liabilities using a Monte Carlo valuation model, which involves a simulation of future earnings generated during the earn-out period using management’s best estimates, or a probability-weighted discounted cash flow analysis. The contingent consideration for the acquisition of Sierramotion consists of Company stock and, if earned, would be settled in the first half of 2024. The contingent consideration of ALIO is settled cash, the current portion of which is expected to be settled in the first half of 2024. Changes to contingent consideration since December 31, 2022 include a of the estimated fair value of contingent consideration during the three and nine months ended September 30, 2023 related to updated inputs to the timing of anticipated earnings of the acquired entity. Of the total contingent consideration, |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws, settlements with taxing authorities and foreign currency fluctuations. The effective income tax rate was 23.1% and 27.5% for the three months ended September 30, 2023 and 2022, respectively. The effective tax rate for both the three months ended September 30, 2023 and 2022 does not include any discrete tax items that had a significant impact on tax rates . For the nine months ended September 30, 2023 and 2022, the effective income tax rate was , respectively. The effective tax rate for the nine months ended September 30, 2023 and September 30, 2022 includes discrete tax benefits of of prior year uncertain tax positions. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
LEASES | |
LEASES | 14. LEASES The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes. Supplemental cash flow information related to the Company’s operating and finance leases for the nine months ended September 30, 2023 and 2022 was as follows: September 30, 2023 2022 Cash paid for operating leases $ 4,195 $ 3,884 Cash paid for interest on finance lease obligations $ 318 $ 329 Assets acquired under operating leases $ 6,578 $ 8,133 Assets acquired under finance leases $ — $ 5,053 ROU assets obtained in acquisitions $ 224 $ 9,471 The Company’s finance lease obligations relate to a manufacturing facility. Finance lease assets of , net. As of September 30, 2023, finance lease obligations of accrued liabilities long-term debt on the condensed consolidated balance sheet. As of December 31, 2022, finance lease obligations of accrued liabilities long-term debt The following table presents the maturity of the Company’s operating and finance lease liabilities as of September 30, 2023: Operating Leases Finance Leases Remainder of 2023 1,561 266 2024 5,878 815 2025 4,860 831 2026 4,280 848 2027 3,675 867 Thereafter 8,493 8,770 Total undiscounted cash flows $ 28,747 $ 12,397 Less: present value discount (3,356) (3,216) Total lease liabilities $ 25,391 $ 9,181 The Company has operating leases certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made fixed minimum lease payments to the lessor of $242 and $706 during the three and nine months ended September 30, 2023 and is obligated to make payments of $404 during the remainder of 2023. Future fixed minimum lease payments under these leases as of September 30, 2023 are |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 9 Months Ended |
Sep. 30, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 15. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the three months ended September 30, 2023 and 2022 is comprised of the following: Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At June 30, 2023 $ (594) $ 6,675 $ (1,545) $ (15,997) $ (11,461) Unrealized gain (loss) on cash flow hedges — 790 (189) — 601 Amounts reclassified from AOCI — (1,014) 243 — (771) Foreign currency translation loss — — — (2,923) (2,923) At September 30, 2023 $ (594) $ 6,451 $ (1,491) $ (18,920) $ (14,554) Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At June 30, 2022 $ (863) $ 4,928 $ (1,173) $ (17,341) $ (14,449) Unrealized gain (loss) on cash flow hedges — 2,916 (700) — 2,216 Amounts reclassified from AOCI — (229) 55 — (174) Foreign currency translation loss — — — (9,603) (9,603) At September 30, 2022 $ (863) $ 7,615 $ (1,818) $ (26,944) $ (22,010) AOCI for the nine months ended September 30, 2023 and 2022 is comprised of the following: Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At December 31, 2022 $ (594) $ 7,310 $ (1,754) $ (16,925) $ (11,963) Unrealized gain (loss) on cash flow hedges — 1,995 (455) — 1,540 Amounts reclassified from AOCI — (2,854) 718 — (2,136) Foreign currency translation loss — — — (1,995) (1,995) At September 30, 2023 $ (594) $ 6,451 $ (1,491) $ (18,920) $ (14,554) Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At December 31, 2021 $ (863) $ 221 $ (41) $ (7,409) $ (8,092) Unrealized gain (loss) on cash flow hedges — 7,335 (1,762) — 5,573 Amounts reclassified from AOCI — 59 (15) — 44 Foreign currency translation loss — — — (19,535) (19,535) At September 30, 2022 $ (863) $ 7,615 $ (1,818) $ (26,944) $ (22,010) The realized gains and losses relating to the Company’s interest rate swap hedges were reclassified from AOCI and included in interest expense in the condensed consolidated statements of income and comprehensive income. |
DIVIDENDS PER SHARE
DIVIDENDS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
DIVIDENDS PER SHARE | |
DIVIDENDS PER SHARE | 16. DIVIDENDS PER SHARE The Company declared a quarterly dividend of $0.03 per share in the third and second quarters of 2023 and $0.025 per share in first quarter of 2023 and each of the first, second, and third quarters of 2022. Total dividends declared were |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE Basic and diluted weighted-average shares outstanding are as follows: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 Basic weighted average shares outstanding 15,979 15,661 15,940 15,373 Dilutive effect of potential common shares 258 508 258 556 Diluted weighted average shares outstanding 16,237 16,169 16,198 15,929 For the three and nine months ended September 30, 2023 and 2022, the anti-dilutive common shares excluded from the calculation of diluted earnings per share were immaterial. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION The Company operates in one segment for the manufacture and marketing of specialty-controlled motion products and solutions for end user and OEM applications. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services in which the entity holds material assets and reports revenue. Revenue for the three months ended September 30, 2023 and 2022 was comprised of 61% and 59% , respectively, shipped to U.S. customers. For each of the nine months ended September 30, 2023 and 2022, revenues was comprised of shipped to U.S. customers. The remainder of revenues for all periods were shipped to foreign customers, primarily in Europe, Canada, and Asia-Pacific. Identifiable foreign fixed assets were $35,708 and $34,879 as of September 30, 2023 and December 31, 2022, respectively. Identifiable assets outside of the U.S. are attributable to Europe, China, Mexico, and Asia-Pacific. For the three months ended September 30, 2023, one customer (Customer A) accounted for 14% of revenues and one customer (Customer B) accounted for 10% of revenues. of revenues, respectively, for the nine months ended September 30, 2023. For the three and nine months ended September 30, 2022, Customer B accounted for of revenues, respectively. As of September 30, 2023, Customer A represented |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ACQUISITIONS | |
Schedule of purchase price allocation and estimated fair value of the assets acquired | The final allocation of the purchase price paid for FPH is based on fair values of the assets acquired and liabilities assumed of FPH and is as follows (in thousands): Cash and cash equivalents $ 1,755 Trade receivables 3,100 Inventories 3,496 Other assets, net 174 Property, plant, and equipment 624 Right of use assets 4,165 Intangible assets 22,611 Goodwill 15,840 Other current liabilities (1,577) Deferred revenue (776) Lease liabilities (4,165) Net deferred income tax liabilities (3,931) Net purchase price $ 41,316 |
Schedule of unaudited pro forma financial information | The following pro forma financial information presents the combined resulted of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021: Three months ended Nine months ended September 30, September 30, 2022 2022 Revenues $ 134,405 $ 382,727 Income before income taxes $ 9,693 $ 22,766 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
REVENUE RECOGNITION | |
Schedule of reconciliation of disaggregated revenue by target market and geography | Three months ended Nine months ended September 30, September 30, Target Market 2023 2022 2023 2022 Industrial $ 64,921 $ 49,134 $ 193,766 $ 142,044 Vehicle 32,989 35,342 98,559 100,479 Medical 21,693 21,958 66,254 63,471 Aerospace & Defense 19,972 21,510 60,237 48,103 Distribution and Other 5,744 6,461 18,821 17,815 Total $ 145,319 $ 134,405 $ 437,637 $ 371,912 Three months ended Nine months ended September 30, September 30, Geography 2023 2022 2023 2022 North America (primarily U.S.) $ 102,502 $ 92,896 $ 300,834 $ 249,329 Europe 35,456 31,901 113,679 97,771 Asia-Pacific 7,361 9,608 23,124 24,812 Total $ 145,319 $ 134,405 $ 437,637 $ 371,912 |
Schedule of opening and closing balances of the Company's receivables, contract asset, and contract liability | September 30, December 31, 2023 2022 Contract liabilities in accrued liabilities $ 2,701 $ 4,807 Contract liabilities in other long-term liabilities 11 19 $ 2,712 $ 4,826 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
Schedule of inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value | September 30, December 31, 2023 2022 Parts and raw materials $ 85,633 $ 89,100 Work-in-process 11,678 11,686 Finished goods 19,980 16,322 $ 117,291 $ 117,108 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of classification of property, plant and equipment | September 30, December 31, 2023 2022 Land $ 963 $ 965 Building and improvements 25,689 25,093 Machinery, equipment, tools and dies 96,682 89,144 Construction work in progress 11,253 14,197 Furniture, fixtures and other 24,234 22,461 158,821 151,860 Less accumulated depreciation (90,926) (83,220) Property, plant, and equipment, net $ 67,895 $ 68,640 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL | |
Schedule of change in the carrying amount of goodwill | September 30, 2023 Beginning balance $ 126,366 Goodwill acquired 2,923 Impact of measurement period adjustments of acquisitions (Note 2) 1,356 Effect of foreign currency translation (347) Ending balance $ 130,298 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | September 30, 2023 December 31, 2022 Gross Accumulated Net Book Gross Accumulated Net Book Life Amount Amortization Value Amount Amortization Value Customer lists 5 – 18 years $ 116,184 $ (40,156) $ 76,028 $ 112,378 $ (34,377) $ 78,001 Trade name 10 – 19 years 15,441 (7,676) 7,765 15,320 (6,900) 8,420 Design and technologies 10 – 15 years 41,129 (11,131) 29,998 41,212 (8,558) 32,654 Total $ 172,754 $ (58,963) $ 113,791 $ 168,910 $ (49,835) $ 119,075 |
Schedule of estimated amortization expense for intangible assets | Year ending December 31, Total Estimated Amortization Expense Remainder of 2023 $ 3,044 2024 12,144 2025 12,129 2026 12,032 2027 11,589 Thereafter 62,853 Total estimated amortization expense $ 113,791 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
STOCK-BASED COMPENSATION | |
Summary of restricted stock activity | The following is a summary of restricted stock activity for the nine months ended September 30, 2023: Number of shares Outstanding at beginning of period 403,974 Awarded 123,601 Vested (129,541) Forfeited (21,034) Outstanding at end of period 377,000 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | September 30, December 31, 2023 2022 Compensation and fringe benefits $ 15,396 $ 15,818 Accrued business acquisition consideration 12,657 12,500 Warranty reserve 2,284 2,160 Income taxes payable 1,454 3,934 Operating lease liabilities – current 5,100 4,224 Finance lease obligations – current 403 377 Contract liabilities 2,701 4,807 Contingent consideration 4,960 — Other accrued expenses 7,282 4,301 $ 52,237 $ 48,121 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
DEBT OBLIGATIONS | |
Schedule of debt obligations | September 30, December 31, 2023 2022 Long-term Debt Revolving Credit Facility, long-term (1) $ 216,052 $ 227,060 Unamortized debt issuance costs (400) (625) Finance lease obligations – noncurrent 8,712 9,019 Long-term debt $ 224,364 $ 235,454 (1) The effective rate of the Amended Revolving Facility is 5.10% at September 30, 2023. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of fair value of the Company's derivative financial instruments as well as classification on the condensed consolidated balance sheets | Asset Derivatives Fair value as of: Derivatives designated as Balance Sheet September 30, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Prepaid expenses and other assets $ 25 $ 48 Interest rate swaps Other long-term assets 6,452 7,236 $ 6,477 $ 7,284 Liability Derivatives Fair value as of: Derivatives designated as Balance Sheet September 30, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Accrued liabilities $ 7 $ — |
Schedule of effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) | Amount of pre-tax gain recognized Amount of pre-tax gain recognized in OCI on derivatives in OCI on derivatives Derivatives in cash flow hedging relationships Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Interest rate swaps $ 790 $ 2,916 $ 1,995 $ 7,335 Amount of pre-tax gain (loss) reclassified Amount of pre-tax gain (loss) reclassified from accumulated OCI into income from accumulated OCI into income Location of gain (loss) reclassified Three months ended September 30, Nine months ended September 30, from accumulated OCI into income 2023 2022 2023 2022 Interest expense $ 1,014 $ 229 $ 2,854 $ (59) |
Schedule of effect of the Company's derivative financial instruments on the condensed consolidated statements of income and comprehensive (loss) income | Total amounts of income and expense Total amounts of income and expense line items presented that reflect the line items presented that reflect the effects of cash flow hedges recorded effects of cash flow hedges recorded Three months ended September 30, Nine months ended September 30, Derivatives designated as hedging instruments Income Statement Location 2023 2022 2023 2022 Interest rate swaps Interest Expense $ 3,164 $ 2,337 $ 9,309 $ 4,900 |
Schedule of fair value provides the location that derivative assets and liabilities | Derivative assets: Net amounts Gross amounts of assets Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets September 30, of recognized consolidated consolidated Financial Cash collateral 2023 assets balance sheets balance sheets instruments received Net amount Derivatives $ 6,477 $ — $ 6,477 $ — $ — $ 6,477 Net amounts Gross amounts of assets Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets December 31, of recognized consolidated consolidated Financial Cash collateral 2022 assets balance sheets balance sheets instruments received Net amount Derivatives $ 7,284 $ — $ 7,284 $ — $ — $ 7,284 Derivative liabilities: Net amounts Gross amounts of liabilities Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets September 30, of recognized consolidated consolidated Financial Cash collateral 2023 liabilities balance sheets balance sheets instruments received Net amount Derivatives $ — $ — $ 7 $ — $ — $ 7 Net amounts Gross amounts of liabilities Gross amounts not offset in the consolidated As of Gross amounts offset in the presented in the balance sheets December 31, of recognized consolidated consolidated Financial Cash collateral 2022 liabilities balance sheets balance sheets instruments received Net amount Derivatives $ — $ — $ — $ — $ — $ — |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE | |
Schedule of financial assets that are accounted for at fair value on a recurring basis | September 30, 2023 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,431 $ — $ — Deferred compensation plan assets 3,989 — — Foreign currency hedge contract assets — 25 — Foreign currency hedge contract liabilities — (7) — Interest rate swaps, net — 6,452 — Contingent consideration — — (5,930) December 31, 2022 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,324 $ — $ — Deferred compensation plan assets 3,870 — — Foreign currency hedge contracts — 48 — Interest rate swaps, net — 7,236 — Contingent consideration — — (4,100) |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
LEASES | |
Schedule of supplemental cash flow information related to the operating leases | September 30, 2023 2022 Cash paid for operating leases $ 4,195 $ 3,884 Cash paid for interest on finance lease obligations $ 318 $ 329 Assets acquired under operating leases $ 6,578 $ 8,133 Assets acquired under finance leases $ — $ 5,053 ROU assets obtained in acquisitions $ 224 $ 9,471 |
Schedule of maturity of the operating lease liabilities | The following table presents the maturity of the Company’s operating and finance lease liabilities as of September 30, 2023: Operating Leases Finance Leases Remainder of 2023 1,561 266 2024 5,878 815 2025 4,860 831 2026 4,280 848 2027 3,675 867 Thereafter 8,493 8,770 Total undiscounted cash flows $ 28,747 $ 12,397 Less: present value discount (3,356) (3,216) Total lease liabilities $ 25,391 $ 9,181 |
Schedule of maturity of the financing lease liabilities | The following table presents the maturity of the Company’s operating and finance lease liabilities as of September 30, 2023: Operating Leases Finance Leases Remainder of 2023 1,561 266 2024 5,878 815 2025 4,860 831 2026 4,280 848 2027 3,675 867 Thereafter 8,493 8,770 Total undiscounted cash flows $ 28,747 $ 12,397 Less: present value discount (3,356) (3,216) Total lease liabilities $ 25,391 $ 9,181 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
Schedule of accumulated other comprehensive (loss) income ("AOCI") | Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At June 30, 2023 $ (594) $ 6,675 $ (1,545) $ (15,997) $ (11,461) Unrealized gain (loss) on cash flow hedges — 790 (189) — 601 Amounts reclassified from AOCI — (1,014) 243 — (771) Foreign currency translation loss — — — (2,923) (2,923) At September 30, 2023 $ (594) $ 6,451 $ (1,491) $ (18,920) $ (14,554) Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At June 30, 2022 $ (863) $ 4,928 $ (1,173) $ (17,341) $ (14,449) Unrealized gain (loss) on cash flow hedges — 2,916 (700) — 2,216 Amounts reclassified from AOCI — (229) 55 — (174) Foreign currency translation loss — — — (9,603) (9,603) At September 30, 2022 $ (863) $ 7,615 $ (1,818) $ (26,944) $ (22,010) Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At December 31, 2022 $ (594) $ 7,310 $ (1,754) $ (16,925) $ (11,963) Unrealized gain (loss) on cash flow hedges — 1,995 (455) — 1,540 Amounts reclassified from AOCI — (2,854) 718 — (2,136) Foreign currency translation loss — — — (1,995) (1,995) At September 30, 2023 $ (594) $ 6,451 $ (1,491) $ (18,920) $ (14,554) Foreign Currency Defined Benefit Tax Effect of Translation Plan Liability Cash Flow Hedges Cash Flow Hedges Adjustment Total At December 31, 2021 $ (863) $ 221 $ (41) $ (7,409) $ (8,092) Unrealized gain (loss) on cash flow hedges — 7,335 (1,762) — 5,573 Amounts reclassified from AOCI — 59 (15) — 44 Foreign currency translation loss — — — (19,535) (19,535) At September 30, 2022 $ (863) $ 7,615 $ (1,818) $ (26,944) $ (22,010) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted weighted-average shares outstanding | Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 Basic weighted average shares outstanding 15,979 15,661 15,940 15,373 Dilutive effect of potential common shares 258 508 258 556 Diluted weighted average shares outstanding 16,237 16,169 16,198 15,929 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jan. 03, 2024 USD ($) payment | Sep. 22, 2023 USD ($) | May 30, 2022 USD ($) | Dec. 30, 2021 USD ($) payment | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jun. 17, 2022 | May 24, 2022 | |
ACQUISITIONS | ||||||||||||
Adjustments to purchase price | $ 0 | |||||||||||
Reduction in consideration | $ 130 | 130 | ||||||||||
Assets Acquired and Liabilities Assumed | ||||||||||||
Goodwill | $ 130,298 | 130,298 | $ 126,366 | |||||||||
Pro forma Condensed Combined Financial Information | ||||||||||||
Revenues | $ 134,405 | $ 382,727 | ||||||||||
Income before income taxes | $ 9,693 | $ 22,766 | ||||||||||
FPH Group | ||||||||||||
ACQUISITIONS | ||||||||||||
Business acquisition percentage of voting interests acquired | 100% | |||||||||||
Purchase price | $ 41,316 | |||||||||||
Decrease to inventories | $ 1,080 | |||||||||||
Increase to purchase price | 276 | |||||||||||
Increase to goodwill | $ 1,356 | |||||||||||
Assets Acquired and Liabilities Assumed | ||||||||||||
Cash and cash equivalents | 1,755 | |||||||||||
Trade receivables | 3,100 | |||||||||||
Inventories | 3,496 | |||||||||||
Other assets, net | 174 | |||||||||||
Property, plant, and equipment | 624 | |||||||||||
Right of use assets | 4,165 | |||||||||||
Intangible assets | 22,611 | |||||||||||
Goodwill | 15,840 | |||||||||||
Other current liabilities | (1,577) | |||||||||||
Deferred revenue | (776) | |||||||||||
Lease liabilities | 4,165 | |||||||||||
Net deferred income tax liabilities | (3,931) | |||||||||||
Net purchase price | $ 41,316 | |||||||||||
ThinGap and Airex | ||||||||||||
ACQUISITIONS | ||||||||||||
Purchase price | 16,618 | |||||||||||
ThinGap | ||||||||||||
ACQUISITIONS | ||||||||||||
Business acquisition percentage of voting interests acquired | 100% | |||||||||||
Airex LLC | ||||||||||||
ACQUISITIONS | ||||||||||||
Business acquisition percentage of voting interests acquired | 100% | |||||||||||
Spectrum Controls | ||||||||||||
ACQUISITIONS | ||||||||||||
Number of remaining payments | payment | 1 | 2 | ||||||||||
Amount payable at each payment | $ 12,500 | $ 12,500 | ||||||||||
Percentage of remaining consideration in cash | 50% | 50% | ||||||||||
Percentage of remaining consideration in stock | 50% | 50% | ||||||||||
Spectrum Controls | Accrued liabilities. | ||||||||||||
ACQUISITIONS | ||||||||||||
Amount payable at each payment | $ 12,472 | 12,500 | ||||||||||
Spectrum Controls | Other long-term liabilities | ||||||||||||
ACQUISITIONS | ||||||||||||
Amount payable at each payment | $ 12,277 | |||||||||||
Sierramotion Inc | ||||||||||||
ACQUISITIONS | ||||||||||||
Business acquisition percentage of voting interests acquired | 100% | |||||||||||
Purchase price | $ 8,400 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Number of reportable segment | segment | 1 | |||
Revenues | $ 145,319 | $ 134,405 | $ 437,637 | $ 371,912 |
Industrial | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 64,921 | 49,134 | 193,766 | 142,044 |
Vehicle | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 32,989 | 35,342 | 98,559 | 100,479 |
Medical | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 21,693 | 21,958 | 66,254 | 63,471 |
Aerospace & Defense | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 19,972 | 21,510 | 60,237 | 48,103 |
Distribution and Other | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 5,744 | 6,461 | 18,821 | 17,815 |
United States | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 102,502 | 92,896 | 300,834 | 249,329 |
Europe | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | 35,456 | 31,901 | 113,679 | 97,771 |
Asia-Pacific | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Revenues | $ 7,361 | $ 9,608 | $ 23,124 | $ 24,812 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
REVENUE RECOGNITION | |||
Contract liabilities in accrued liabilities | $ 2,701 | $ 4,807 | |
Contract liabilities in other long-term liabilities | 11 | 19 | |
Contract liabilities | 2,712 | $ 4,826 | |
Revenue recognized | $ 4,053 | $ 2,217 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Parts and raw materials | $ 85,633 | $ 89,100 |
Work-in-process | 11,678 | 11,686 |
Finished goods | 19,980 | 16,322 |
Inventories | $ 117,291 | $ 117,108 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, plant and equipment | |||||
Property, plant and equipment, gross | $ 158,821 | $ 158,821 | $ 151,860 | ||
Less accumulated depreciation | (90,926) | (90,926) | (83,220) | ||
Property, plant and equipment, net | 67,895 | 67,895 | 68,640 | ||
Depreciation expense | 3,346 | $ 3,135 | 9,730 | $ 9,539 | |
Land | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 963 | 963 | 965 | ||
Building and improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 25,689 | 25,689 | 25,093 | ||
Machinery, equipment, tools and dies | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 96,682 | 96,682 | 89,144 | ||
Construction work in progress | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 11,253 | 11,253 | 14,197 | ||
Furniture, fixtures and other | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | $ 24,234 | $ 24,234 | $ 22,461 |
GOODWILL - Change in the carryi
GOODWILL - Change in the carrying amount of goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Change in goodwill | |
Beginning balance | $ 126,366 |
Goodwill acquired | 2,923 |
Impact of measurement period adjustments of acquisitions (Note 2) | 1,356 |
Effect of foreign currency translation | (347) |
Ending balance | $ 130,298 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Intangible assets subject to amortization | |||||
Gross Amount | $ 172,754 | $ 172,754 | $ 168,910 | ||
Accumulated amortization | (58,963) | (58,963) | (49,835) | ||
Total estimated amortization expense | 113,791 | 113,791 | 119,075 | ||
Amortization expense for intangible assets | 3,075 | $ 3,054 | 9,226 | $ 8,133 | |
Estimated amortization expense | |||||
Remainder of 2023 | 3,044 | 3,044 | |||
2024 | 12,144 | 12,144 | |||
2025 | 12,129 | 12,129 | |||
2026 | 12,032 | 12,032 | |||
2027 | 11,589 | 11,589 | |||
Thereafter | 62,853 | 62,853 | |||
Total estimated amortization expense | 113,791 | 113,791 | 119,075 | ||
Customer lists | |||||
Intangible assets subject to amortization | |||||
Gross Amount | 116,184 | 116,184 | 112,378 | ||
Accumulated amortization | (40,156) | (40,156) | (34,377) | ||
Total estimated amortization expense | 76,028 | 76,028 | 78,001 | ||
Estimated amortization expense | |||||
Total estimated amortization expense | $ 76,028 | $ 76,028 | 78,001 | ||
Customer lists | Minimum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 5 years | 5 years | |||
Customer lists | Maximum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 18 years | 18 years | |||
Trade name | |||||
Intangible assets subject to amortization | |||||
Gross Amount | $ 15,441 | $ 15,441 | 15,320 | ||
Accumulated amortization | (7,676) | (7,676) | (6,900) | ||
Total estimated amortization expense | 7,765 | 7,765 | 8,420 | ||
Estimated amortization expense | |||||
Total estimated amortization expense | $ 7,765 | $ 7,765 | 8,420 | ||
Trade name | Minimum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 10 years | 10 years | |||
Trade name | Maximum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 19 years | 19 years | |||
Design and technologies | |||||
Intangible assets subject to amortization | |||||
Gross Amount | $ 41,129 | $ 41,129 | 41,212 | ||
Accumulated amortization | (11,131) | (11,131) | (8,558) | ||
Total estimated amortization expense | 29,998 | 29,998 | 32,654 | ||
Estimated amortization expense | |||||
Total estimated amortization expense | $ 29,998 | $ 29,998 | $ 32,654 | ||
Design and technologies | Minimum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 10 years | 10 years | |||
Design and technologies | Maximum | |||||
Intangible assets subject to amortization | |||||
Estimated Life | 15 years | 15 years |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Additional disclosures | ||||
Stock based compensation expense, net of forfeitures | $ 4,165 | $ 3,752 | ||
Restricted Stock | ||||
STOCK-BASED COMPENSATION | ||||
Restricted stock grants | 123,601 | |||
Weighted average grant date fair value (in dollars per share) | $ 41.53 | |||
Service period over which value of the shares is amortized to compensation expense | 3 years | |||
Number of Non-vested Restricted Shares | ||||
Outstanding at beginning of period (in shares) | 403,974 | |||
Awarded (in shares) | 123,601 | |||
Vested (in shares) | (129,541) | |||
Forfeited (in shares) | (21,034) | |||
Outstanding at end of period (in shares) | 377,000 | 377,000 | ||
Additional disclosures | ||||
Stock based compensation expense, net of forfeitures | $ 1,354 | $ 1,262 | $ 4,165 | $ 3,752 |
Restricted Stock | Performance based vesting | ||||
STOCK-BASED COMPENSATION | ||||
Restricted stock grants | 74,495 | |||
Number of Non-vested Restricted Shares | ||||
Awarded (in shares) | 74,495 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ACCRUED LIABILITIES | ||
Compensation and fringe benefits | $ 15,396 | $ 15,818 |
Accrued business acquisition consideration | 12,657 | 12,500 |
Warranty reserve | 2,284 | 2,160 |
Income taxes payable | 1,454 | 3,934 |
Operating lease liabilities - current | $ 5,100 | $ 4,224 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Finance lease obligations, current | $ 403 | $ 377 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Contract liabilities | $ 2,701 | $ 4,807 |
Contingent consideration | 4,960 | |
Other accrued expenses | 7,282 | 4,301 |
Accrued liabilities | $ 52,237 | $ 48,121 |
DEBT OBLIGATIONS (Details)
DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
DEBT OBLIGATIONS | ||
Unamortized debt issuance costs | $ (400) | $ (625) |
Finance lease obligations - noncurrent | 8,712 | 9,019 |
Long-term debt | 224,364 | 235,454 |
Revolving Credit Facility | ||
DEBT OBLIGATIONS | ||
Revolving Credit Facility, long-term | $ 216,052 | $ 227,060 |
Effective rate (as a percent) | 5.10% | |
Amended Revolving Facility | ||
DEBT OBLIGATIONS | ||
Maximum borrowing capacity | $ 280,000 | |
Minimum interest coverage ratio | 3% | |
Leverage ratio | 4% | |
Increase in leverage ratio | 0.50% | |
Unused amount of credit facility | $ 63,948 | |
Amended Revolving Facility | Minimum | ||
DEBT OBLIGATIONS | ||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.10% | |
Amended Revolving Facility | Maximum | ||
DEBT OBLIGATIONS | ||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.275% | |
Amended Revolving Facility | For quarter ending on or after December 31, 2023 | ||
DEBT OBLIGATIONS | ||
Leverage ratio | 3.50% | |
Amended Revolving Facility | Base Rate | ||
DEBT OBLIGATIONS | ||
Applicable margin (as a percent) | 0% | |
Amended Revolving Facility | Adjusted SOFR | ||
DEBT OBLIGATIONS | ||
Applicable margin (as a percent) | 1.625% | |
Amended Revolving Facility | Adjusted SOFR | Minimum | ||
DEBT OBLIGATIONS | ||
Applicable margin (as a percent) | 1% | |
Amended Revolving Facility | Adjusted SOFR | Maximum | ||
DEBT OBLIGATIONS | ||
Applicable margin (as a percent) | 2.25% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2020 USD ($) derivative | |
Derivative financial instruments | |||||||
Term of contract | 30 days | ||||||
Other (income) expense | |||||||
Derivative financial instruments | |||||||
Gain (loss) on foreign currency contracts | $ (174) | $ (82) | $ (270) | $ (149) | |||
Interest Rate Swaps | |||||||
Derivative financial instruments | |||||||
Notional amount | $ 40,000 | ||||||
Number of derivative instruments | derivative | 2 | ||||||
Notional amount of interest rate swap derivatives | $ 60,000 | $ 20,000 | |||||
Estimated amount to be reclassified as an increase to interest expense | 4,008 | ||||||
Foreign currency contracts | |||||||
Derivative financial instruments | |||||||
Notional amount | 20,851 | 20,851 | $ 18,891 | ||||
Derivatives in cash flow hedging relationships | Interest Rate Swaps | |||||||
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income | |||||||
Amount of pre-tax (loss) gain recognized in OCI on derivatives | 790 | 2,916 | 1,995 | 7,335 | |||
Derivatives in cash flow hedging relationships | Interest Rate Swaps | Interest expense | |||||||
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income | |||||||
Amount of pre-tax gain (loss) reclassified from accumulated OCI into income | 1,014 | 229 | 2,854 | (59) | |||
Derivatives designated as hedging instruments | |||||||
Derivative financial instruments | |||||||
Fair value of derivative assets | 6,477 | 6,477 | 7,284 | ||||
Derivatives designated as hedging instruments | Interest Rate Swaps | Interest expense | |||||||
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income | |||||||
Total amounts of income and expense line items presented that reflect the effects of cash flow hedges recorded | 3,164 | $ 2,337 | 9,309 | $ 4,900 | |||
Derivatives designated as hedging instruments | Interest Rate Swaps | Other long-term assets | |||||||
Derivative financial instruments | |||||||
Fair value of derivative assets | 6,452 | 6,452 | 7,236 | ||||
Derivatives designated as hedging instruments | Foreign currency contracts | Prepaid expenses and other assets | |||||||
Derivative financial instruments | |||||||
Fair value of derivative assets | 25 | 25 | $ 48 | ||||
Derivatives designated as hedging instruments | Foreign currency contracts | Accrued liabilities. | |||||||
Derivative financial instruments | |||||||
Fair value of derivative liability | $ 7 | $ 7 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Effects of offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative assets: | ||
Gross amounts of recognized assets | $ 6,477 | $ 7,284 |
Net amounts of assets presented in the consolidated balance sheets | 6,477 | 7,284 |
Gross amounts not offset in the consolidated balance sheets: Net amount | 6,477 | $ 7,284 |
Derivative liabilities: | ||
Net amounts of liabilities presented in the consolidated balance sheets | 7 | |
Gross amounts not offset in the consolidated balance sheets: Net amount | $ 7 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 22, 2023 | Dec. 31, 2022 | |
Assets (liabilities) | ||||
Increase in contingent consideration due to current period acquisition | $ 1,960 | $ 1,960 | ||
Reduction in consideration | 130 | 130 | ||
Accrued liabilities. | ||||
Assets (liabilities) | ||||
Contingent consideration | (4,960) | (4,960) | ||
Other long-term liabilities | ||||
Assets (liabilities) | ||||
Contingent consideration | $ (970) | $ (970) | $ (4,100) | |
ALIO | ||||
Assets (liabilities) | ||||
Contingent consideration settled in company stock (as percentage) | 50% | 50% | ||
Contingent consideration settled in cash (as percentage) | 50% | 50% | ||
Sierramotion Inc | ||||
Assets (liabilities) | ||||
Contingent consideration fair value measurement, acquisition | $ 2,000 | |||
Recurring basis | Level 1 | ||||
Assets (liabilities) | ||||
Pension plan assets | $ 5,431 | $ 5,431 | 5,324 | |
Deferred compensation plan assets | 3,989 | 3,989 | 3,870 | |
Recurring basis | Level 2 | ||||
Assets (liabilities) | ||||
Foreign currency hedge contract assets | 25 | 25 | 48 | |
Foreign currency hedge contract liabilities | (7) | (7) | ||
Interest rate swaps, net | 6,452 | 6,452 | 7,236 | |
Recurring basis | Level 3 | ||||
Assets (liabilities) | ||||
Contingent consideration | $ (5,930) | $ (5,930) | $ (4,100) |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Effective income tax rate | ||||
Discrete tax provision (benefit) (as a percent) | (1.5) | (1.7) | ||
Effective income tax rate (as a percent) | 23.10% | 27.50% | 23.40% | 26.30% |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
LEASES | |||
Options to terminate the leases | true | ||
Operating lease option to terminate period | 30 days | ||
Supplemental cash flow information related to the operating leases | |||
Cash paid for operating leases | $ 4,195 | $ 3,884 | |
Cash paid for interest on finance lease obligations | 318 | 329 | |
Assets acquired under operating leases | 6,578 | 8,133 | |
Assets acquired under finance leases | 5,053 | ||
ROU assets obtained in acquisitions | 224 | $ 9,471 | |
Lease assets and liabilities | |||
Finance lease assets | $ 8,366 | $ 8,839 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | |
Finance lease obligations, current | $ 403 | $ 377 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current | |
Finance lease obligations - noncurrent | $ 8,712 | $ 9,019 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term Debt, Excluding Current Maturities | Long-term Debt, Excluding Current Maturities | |
Maturity of the operating lease liabilities | |||
Remainder of 2023 | $ 1,561 | ||
2024 | 5,878 | ||
2025 | 4,860 | ||
2026 | 4,280 | ||
2027 | 3,675 | ||
Thereafter | 8,493 | ||
Total undiscounted cash flows | 28,747 | ||
Less: present value discount | (3,356) | ||
Total lease liabilities | 25,391 | ||
Maturity of the financing lease liabilities | |||
Remainder of 2023 | 266 | ||
2024 | 815 | ||
2025 | 831 | ||
2026 | 848 | ||
2027 | 867 | ||
Thereafter | 8,770 | ||
Total undiscounted cash flows | 12,397 | ||
Less: present value discount | (3,216) | ||
Total lease liabilities | $ 9,181 |
LEASES - Related party (Details
LEASES - Related party (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | |||
Lease payments | $ 4,195 | $ 3,884 | |
Remainder of 2023 | $ 1,561 | 1,561 | |
Future minimum lease payments | 25,391 | 25,391 | |
Executive Officer | |||
Lessee, Lease, Description [Line Items] | |||
Lease payments | 242 | 706 | |
Remainder of 2023 | 404 | 404 | |
Future minimum lease payments | $ 11,433 | $ 11,433 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | $ 236,794 | $ 201,279 | $ 215,465 | $ 187,762 |
Balance at the ending | 242,141 | 201,097 | 242,141 | 201,097 |
Accumulated Other Comprehensive Income | ||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | (11,461) | (14,449) | (11,963) | (8,092) |
Unrealized (loss) gain on cash flow hedges | 601 | 2,216 | 1,540 | 5,573 |
Amounts reclassified from AOCI | (771) | (174) | (2,136) | 44 |
Foreign currency translation gain (loss) | (2,923) | (9,603) | (1,995) | (19,535) |
Balance at the ending | (14,554) | (22,010) | (14,554) | (22,010) |
Pension Adjustments | ||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | (594) | (863) | (594) | (863) |
Balance at the ending | (594) | (863) | (594) | (863) |
Cash Flow Hedges | ||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | 6,675 | 4,928 | 7,310 | 221 |
Unrealized (loss) gain on cash flow hedges | 790 | 2,916 | 1,995 | 7,335 |
Amounts reclassified from AOCI | (1,014) | (229) | (2,854) | 59 |
Balance at the ending | 6,451 | 7,615 | 6,451 | 7,615 |
Tax effect of Cash Flow Hedges | ||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | (1,545) | (1,173) | (1,754) | (41) |
Unrealized (loss) gain on cash flow hedges, Tax effect | (189) | (700) | (455) | (1,762) |
Amounts reclassified from AOCI, Tax effect | 243 | 55 | 718 | (15) |
Balance at the ending | (1,491) | (1,818) | (1,491) | (1,818) |
Foreign Currency Translation Adjustments | ||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||||
Balance at the beginning | (15,997) | (17,341) | (16,925) | (7,409) |
Foreign currency translation gain (loss) | (2,923) | (9,603) | (1,995) | (19,535) |
Balance at the ending | $ (18,920) | $ (26,944) | $ (18,920) | $ (26,944) |
DIVIDENDS PER SHARE (Details)
DIVIDENDS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
DIVIDENDS PER SHARE | ||||||||
Dividends declared (in dollars per share) | $ 0.03 | $ 0.03 | $ 0.025 | $ 0.025 | $ 0.025 | $ 0.025 | ||
Total dividends declared | $ 1,373 | $ 1,174 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Basic and diluted weighted-average shares outstanding | ||||
Basic weighted average shares outstanding | 15,979 | 15,661 | 15,940 | 15,373 |
Dilutive effect of potential common shares | 258 | 508 | 258 | 556 |
Diluted weighted average shares outstanding | 16,237 | 16,169 | 16,198 | 15,929 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) customer | Sep. 30, 2022 | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 | Dec. 31, 2022 USD ($) | |
Segment information | |||||
Number of operating segments | segment | 1 | ||||
Identifiable assets | $ | $ 596,591 | $ 596,591 | $ 588,347 | ||
Total revenues | Customer Concentration Risk | Customer A | |||||
Segment information | |||||
Number of customers | customer | 1 | ||||
Percentage of concentration risk | 14% | 11% | |||
Total revenues | Customer Concentration Risk | Customer B | |||||
Segment information | |||||
Number of customers | customer | 1 | ||||
Percentage of concentration risk | 10% | 11% | 10% | 12% | |
Trade receivables | Customer Concentration Risk | Customer A | |||||
Segment information | |||||
Percentage of concentration risk | 18% | ||||
Europe, China, Mexico, and Asia-Pacific | |||||
Segment information | |||||
Identifiable assets | $ | $ 35,708 | $ 35,708 | $ 34,879 | ||
United States | Total revenues | Geographic Concentration Risk | |||||
Segment information | |||||
Percentage of concentration risk | 61% | 59% | 58% | 58% |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |