Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 05, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 546,737,334 | ||
Entity Common Stock, Shares Outstanding | 16,593,329 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Williamsville, New York | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000046129 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 31,901 | $ 30,614 |
Trade receivables, net of provision for credit losses of $1,240 and $1,192 at December 31, 2023 and December 31, 2022, respectively | 85,127 | 76,213 |
Inventories | 117,686 | 117,108 |
Prepaid expenses and other assets | 13,437 | 12,072 |
Total current assets | 248,151 | 236,007 |
Property, plant, and equipment, net | 67,463 | 68,640 |
Deferred income taxes | 7,760 | 4,199 |
Intangible assets, net | 111,373 | 119,075 |
Goodwill | 131,338 | 126,366 |
Operating lease assets | 24,032 | 22,807 |
Other long-term assets | 7,425 | 11,253 |
Total Assets | 597,542 | 588,347 |
Current liabilities: | ||
Accounts payable | 39,129 | 39,467 |
Accrued liabilities | 56,488 | 48,121 |
Total current liabilities | 95,617 | 87,588 |
Long-term debt | 218,402 | 235,454 |
Deferred income taxes | 4,337 | 6,262 |
Pension and post-retirement obligations | 2,679 | 3,009 |
Operating lease liabilities | 19,532 | 18,795 |
Other long-term liabilities | 5,400 | 21,774 |
Total liabilities | 345,967 | 372,882 |
Stockholders' Equity: | ||
Common stock, no par value, authorized 50,000 shares; 16,308 and 15,978 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 95,937 | 83,852 |
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding | ||
Retained earnings | 165,813 | 143,576 |
Accumulated other comprehensive loss | (10,175) | (11,963) |
Total stockholders' equity | 251,575 | 215,465 |
Total Liabilities and Stockholders' Equity | $ 597,542 | $ 588,347 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade receivables, provision for credit losses | $ 1,240 | $ 1,192 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized shares | 50,000 | 50,000 |
Common stock, shares issued | 16,308 | 15,978 |
Common stock, shares outstanding | 16,308 | 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 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||
Revenues | $ 578,634 | $ 502,988 | $ 403,516 |
Cost of goods sold | 394,951 | 345,729 | 282,460 |
Gross profit | 183,683 | 157,259 | 121,056 |
Operating costs and expenses: | |||
Selling | 24,713 | 21,877 | 17,249 |
General and administrative | 58,403 | 50,677 | 42,419 |
Engineering and development | 41,665 | 38,561 | 27,818 |
Business development | 4,275 | 3,319 | 1,299 |
Amortization of intangible assets | 12,313 | 11,169 | 6,245 |
Total operating costs and expenses | 141,369 | 125,603 | 95,030 |
Operating income | 42,314 | 31,656 | 26,026 |
Other expense, net: | |||
Interest expense | 12,383 | 7,692 | 3,236 |
Other expense (income), net | 231 | 283 | (323) |
Total other expense, net | 12,614 | 7,975 | 2,913 |
Income before income taxes | 29,700 | 23,681 | 23,113 |
Income tax (provision) benefit | (5,603) | (6,292) | 981 |
Net income | $ 24,097 | $ 17,389 | $ 24,094 |
Basic earnings per share: | |||
Earnings per share | $ 1.51 | $ 1.13 | $ 1.67 |
Basic weighted average common shares | 15,963 | 15,448 | 14,413 |
Diluted earnings per share: | |||
Earnings per share | $ 1.48 | $ 1.09 | $ 1.66 |
Diluted weighted average common shares | 16,272 | 15,951 | 14,517 |
Net income | $ 24,097 | $ 17,389 | $ 24,094 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 3,669 | (9,516) | (7,193) |
Change in accumulated (loss) income on derivatives, net of tax | (2,131) | 5,376 | 1,618 |
Pension adjustments, net of tax | 250 | 269 | 770 |
Comprehensive income | $ 25,885 | $ 13,518 | $ 19,289 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Foreign Currency Translation Adjustments | Accumulated income (loss) on derivatives | Pension Adjustments | Total |
Balance at the beginning at Dec. 31, 2020 | $ 41,278 | $ 105,065 | $ (216) | $ (1,438) | $ (1,633) | $ 143,056 |
Balance at the beginning (in shares) at Dec. 31, 2020 | 14,632 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock transactions under employee benefit stock plans | $ 988 | 988 | ||||
Stock transactions under employee benefit stock plans (in shares) | 32 | |||||
Issuance of restricted stock, net of forfeitures | $ 102 | 102 | ||||
Issuance of restricted stock, net of forfeitures (in shares) | 96 | |||||
Share issuance in connection with acquisitions | $ 23,496 | 23,496 | ||||
Share issuance in connection with acquisitions (in shares) | 653 | |||||
Stock-based compensation expense | $ 4,161 | 4,161 | ||||
Shares withheld for payment of employee payroll taxes | $ (1,928) | (1,928) | ||||
Shares withheld for payment of employee payroll taxes (in shares) | (52) | |||||
Comprehensive (loss) income | (7,193) | 2,110 | 997 | (4,086) | ||
Tax effect | (492) | (227) | (719) | |||
Net income | 24,094 | 24,094 | ||||
Dividends to stockholders | (1,402) | (1,402) | ||||
Balance at the ending at Dec. 31, 2021 | $ 68,097 | 127,757 | (7,409) | 180 | (863) | 187,762 |
Balance at the ending (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 | $ (5) | (5) | ||||
Issuance of restricted stock, net of forfeitures (in shares) | 168 | |||||
Share issuance in connection with acquisitions | $ 11,103 | 11,103 | ||||
Share issuance in connection with acquisitions (in shares) | 463 | |||||
Stock-based compensation expense | $ 5,073 | 5,073 | ||||
Shares withheld for payment of employee payroll taxes | $ (1,633) | (1,633) | ||||
Shares withheld for payment of employee payroll taxes (in shares) | (50) | |||||
Comprehensive (loss) income | (9,516) | 7,089 | 361 | (2,066) | ||
Tax effect | (1,713) | (92) | (1,805) | |||
Net income | 17,389 | 17,389 | ||||
Dividends to stockholders | (1,570) | (1,570) | ||||
Balance at the ending at Dec. 31, 2022 | $ 83,852 | 143,576 | (16,925) | 5,556 | (594) | $ 215,465 |
Balance at the ending (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 | $ 129 | 129 | ||||
Issuance of restricted stock, net of forfeitures (in shares) | 107 | |||||
Share issuance in connection with acquisitions | $ 7,329 | 7,329 | ||||
Share issuance in connection with acquisitions (in shares) | 250 | |||||
Stock-based compensation expense | $ 5,477 | 5,477 | ||||
Shares withheld for payment of employee payroll taxes | $ (2,096) | (2,096) | ||||
Shares withheld for payment of employee payroll taxes (in shares) | (58) | |||||
Comprehensive (loss) income | 3,669 | (2,879) | 333 | 1,123 | ||
Tax effect | 748 | (83) | 665 | |||
Net income | 24,097 | 24,097 | ||||
Dividends to stockholders | (1,860) | (1,860) | ||||
Balance at the ending at Dec. 31, 2023 | $ 95,937 | $ 165,813 | $ (13,256) | $ 3,425 | $ (344) | $ 251,575 |
Balance at the ending (in shares) at Dec. 31, 2023 | 16,308 | 16,308 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Dividends to stockholders (in dollars per share) | $ 0.115 | $ 0.100 | $ 0.095 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | |||
Net income | $ 24,097 | $ 17,389 | $ 24,094 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization | 25,068 | 25,486 | 18,107 |
Deferred income taxes | (5,036) | (3,722) | (6,135) |
Provision for excess and obsolete inventory | 2,487 | 1,628 | 534 |
Stock-based compensation expense | 5,477 | 5,073 | 4,161 |
Debt issue cost amortization recorded in interest expense | 300 | 202 | 141 |
Other | 1,424 | 393 | 415 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Trade receivables | (5,568) | (22,202) | (170) |
Inventories | (1,781) | (27,800) | (22,874) |
Prepaid expenses and other assets | 1,324 | 887 | (3,670) |
Accounts payable | (935) | 2,791 | 8,293 |
Accrued liabilities | (1,819) | 5,471 | 2,506 |
Net cash provided by operating activities | 45,038 | 5,596 | 25,402 |
Cash Flows From Investing Activities: | |||
Consideration paid for acquisitions, net of cash acquired | (11,004) | (44,101) | (47,254) |
Purchase of property and equipment | (11,603) | (15,910) | (13,716) |
Net cash used in investing activities | (22,607) | (60,011) | (60,970) |
Cash Flows From Financing Activities: | |||
Proceeds from issuance of long-term debt | 11,000 | 74,731 | 51,379 |
Principal payments of long-term debt and finance lease obligations | (28,395) | (7,585) | (12,248) |
Payment of debt issuance costs | (391) | ||
Dividends paid to stockholders | (1,826) | (1,536) | (1,371) |
Tax withholdings related to net share settlements of restricted stock | (2,096) | (1,614) | (1,928) |
Net cash (used in) provided by financing activities | (21,317) | 63,605 | 35,832 |
Effect of foreign exchange rate changes on cash | 173 | (1,039) | (932) |
Net increase (decrease) in cash and cash equivalents | 1,287 | 8,151 | (668) |
Cash and cash equivalents at beginning of period | 30,614 | 22,463 | 23,131 |
Cash and cash equivalents at end of period | $ 31,901 | $ 30,614 | $ 22,463 |
Supplemental disclosure of cash flow information: | |||
Stock issued for acquisitions | 7,329 | 11,103 | 23,496 |
Property, plant and equipment purchases in accounts payable or accrued expenses | $ 1,427 | $ 620 | $ 835 |
BUSINESS AND SUMMARY OF SIGNIFI
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Effective August 23, 2023, Allied Motion Technologies Inc. (“Allied Motion”) changed its name to Allient Inc. (“Allient” or the “Company”). In conjunction with the name change, Allient’s ticker symbol has changed from “AMOT” to “ALNT”. The name change reflects the Company’s evolution of its business to transform from a products-based business in motion control to a solutions-oriented company that addresses its customers’ requirements for Motion, Controls and Power technologies for a multitude of applications. The Company is engaged in the business of designing, manufacturing, and selling precision motion, control, power and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. For business combinations, net assets acquired, and liabilities assumed are recorded at their estimated fair values. Cash and Cash Equivalents Cash and cash equivalents include instruments which are readily convertible into cash (original maturities of three months or less) and which are not subject to significant risk of changes in interest rates. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The provision for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional provisions in the future. Activity in the provision for credit losses for 2023 and 2022 was as follows (in thousands): December 31, 2023 December 31, 2022 Beginning balance $ 1,192 $ 506 Additional reserves 267 803 Write-offs (225) (107) Effect of foreign currency translation 6 (10) Ending balance $ 1,240 $ 1,192 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 (in thousands): December 31, 2023 December 31, 2022 Parts and raw materials $ 87,381 $ 89,100 Work-in-process 11,456 11,686 Finished goods 18,849 16,322 $ 117,686 $ 117,108 Property, Plant and Equipment Property, plant and equipment is classified as follows (in thousands): December 31, December 31, Useful lives 2023 2022 Land $ 973 $ 965 Building and improvements 5 - 39 years 26,201 25,093 Machinery, equipment, tools and dies 3 - 15 years 99,711 89,144 Construction in progress 9,300 14,197 Furniture, fixtures and other 3 - 10 years 24,439 22,461 160,624 151,860 Less accumulated depreciation (93,161) (83,220) Property, plant, and equipment, net $ 67,463 $ 68,640 Depreciation expense is provided using the straight-line method over the estimated useful lives of the assets. Amortization of building improvements is provided using the straight-line method over the life of the lease term or the life of the asset, whichever is shorter. Maintenance and repair costs are charged to operations as incurred. Major additions and improvements are capitalized. The cost and related accumulated depreciation of retired or sold property are removed from the accounts and the resulting gain or loss, if any, is reflected in earnings. Depreciation expense was $12,755, $12,676 and $11,862 in 2023, 2022 and 2021, respectively. Intangible Assets Intangible assets, other than goodwill, are initially recorded at fair value and are amortized over their estimated useful lives using an accelerated or straight-line method which approximates the pattern of expected cash flows over the remaining useful lives of the intangible assets. Impairment of Long-Lived Assets The Company reviews the carrying values of its long-lived assets, including property, plant and equipment and intangible assets, on an annual basis and whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Long-lived assets are recorded at their carrying amounts if the projected cash flows from their use will recover their carrying amounts on an undiscounted basis and without considering interest. If projected cash flows are less than their carrying value, the long-lived assets must be reduced to their estimated fair value. Judgment is required to project such cash flows and, if required, estimate the fair value of the impaired long-lived assets. The Company did not record any impairment charges for the years ended December 31, 2023, 2022 or 2021. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. The Company has defined reporting unit that is the same as its operating segment. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than its carrying amount, or if significant adverse changes in the Company’s future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. At October 31, 2023, the Company performed its annual goodwill impairment test and determined, after performing a qualitative test of the reporting unit, that it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed. The Company did not record any goodwill impairment charges for the years ended December 31, 2023, 2022 or 2021. Other Long-Term Assets Other long-term assets include the noncurrent portion of interest rate derivatives of $2,177 that the Company has entered into in response to the variable interest rate exposure on long-term debt, as well as securities that the Company has purchased with the intent of funding the deferred compensation arrangements for certain executives of the Company. These items are accounted for at fair value on a recurring basis. Any changes in value are included in net income in the Company’s consolidated statements of income and comprehensive income. Warranty The Company offers warranty coverage for its products. The length of the warranty period for its products is generally three months to two years and varies based on the product sold. The Company estimates the costs of repairing products under warranty based on the historical average cost of the repairs. The assumptions used to estimate warranty accruals are re-evaluated periodically in light of actual experience and, when appropriate, the accruals are adjusted. Estimated warranty costs are recorded at the time of sale of the related product, and are considered a cost of goods sold. Changes in the Company’s reserve for product warranty claims during 2023, 2022 and 2021 were as follows (in thousands): December 31, December 31, December 31, 2023 2022 2021 Beginning balance $ 2,160 $ 1,869 $ 1,571 Warranty reserves acquired — 45 15 Provision (296) (66) 543 Warranty expenditures 243 409 (204) Effect of foreign currency translation 32 (97) (56) Ending balance $ 2,139 $ 2,160 $ 1,869 Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, December 31, 2023 2022 Compensation and fringe benefits $ 17,251 $ 15,818 Accrued business acquisition consideration 12,638 12,500 Warranty reserve 2,139 2,160 Income taxes payable 2,483 3,934 Operating lease liabilities – current 5,142 4,224 Finance lease obligations – current 412 377 Contract liabilities 2,137 4,807 Contingent consideration – current 7,720 — Other accrued expenses 6,566 4,301 $ 56,488 $ 48,121 Foreign Currency Translation The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end of period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included in accumulated other comprehensive loss, a component of stockholders’ equity in the accompanying consolidated statements of stockholders’ equity. Revenue and expense transactions use an average rate prevailing during the month of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of each of the operating locations are included in the other expense (income), net as incurred. Revenue Recognition Refer to Note 3, Revenue Recognition Engineering and Development Costs The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. Engineering and design as well as research and development costs are expensed as incurred. Basic and Diluted Earnings per Share Basic earnings per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding. Diluted earnings per share is determined by dividing the net income by the sum of: (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of potential common shares determined utilizing the treasury stock method. Basic and diluted weighted-average shares outstanding are as follows (in thousands): Year ended December 31, 2023 2022 2021 Basic weighted average shares outstanding 15,963 15,448 14,413 Dilutive effect of potential common shares 309 503 104 Diluted weighted average shares outstanding 16,272 15,951 14,517 For 2023, 2022 and 2021, the anti-dilutive common shares excluded from the calculation of diluted income per share were 22,000, 15,000, and 2,000, respectively. Comprehensive Income The Company’s comprehensive income as reported in the Consolidated Statements of Income and Comprehensive Income includes net income, foreign currency translation adjustments, the net change in cash flow hedges, net of tax, and defined benefit plan liability adjustments, net of tax. The Consolidated Statements of Income and Comprehensive Income and Note 13, Accumulated Other Comprehensive Income , contain additional information on the computation of the Company’s comprehensive income. Fair Value Accounting 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 consolidated balance sheets for these assets approximate fair value because of the immediate or short-term maturities of these financial instruments. The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of December 31, 2023 and 2022, respectively, by level within the fair value hierarchy (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,859 $ — $ — Deferred compensation plan assets 4,305 — — Foreign currency hedge contracts — 54 — Interest rate swaps, net — 4,431 — Contingent consideration — — (7,990) 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, 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 contingent consideration at December 31, 2023 for the acquisition of Sierramotion consists of Company stock and was paid in January 2024 at the maximum amount of $2,000. The contingent consideration at December 31, 2023 for the acquisition of ALIO is paid 50% in Company stock and 50% cash, the current portion of which was $5,720 and has been paid in February 2024. Changes to contingent consideration since December 31, 2022 include a $2,000 increase due to the acquisition of Sierramotion in the current period and an increase of $1,890, which is included in business development in the consolidated statements of income and comprehensive income, of the estimated fair value of the ALIO contingent consideration related to updated inputs to the timing of anticipated earnings of the acquired entity. Of the total contingent consideration payable as of December 31, 2023, $7,720 was paid in January and February 2024 and is included in accrued liabilities and $270 is payable, if earned, in the first half of 2025 and included in other long-term liabilities on the consolidated balance sheet as of December 31, 2023. Contingent consideration of $4,100 is included in other long-term liabilities as of December 31, 2022. Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") No. 815, Derivatives and Hedging ("ASC 815"), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting. Income Taxes The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. A valuation allowance may be provided to the extent management deems it is more likely than not that deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income, in the appropriate taxing jurisdictions, during the periods in which temporary differences, net operating losses and tax credits and incentives become realizable. Management believes that it is more likely than not that the Company will realize the benefits of these temporary differences and operating loss and tax credit carryforwards, net of valuation allowances. It is the Company's policy to include interest and penalties related to income tax liabilities in income tax expense on the consolidated statements of income and comprehensive Income. In addition, the Company records uncertain tax positions in accordance with ASC 740, Income Taxes Pension and Postretirement Welfare Plans The Company records the service cost component of net benefit costs in cost of goods sold, selling, and general and administrative expenses. The interest cost component of net benefit costs is recorded in interest expense and the remaining components of net benefit costs, amortization of net losses and expected return on plan assets is recorded in other expense, net. Concentration of Credit Risk Trade receivables subject the Company to the potential for credit risk. To reduce this risk, the Company performs evaluations of its customers’ financial condition and creditworthiness at the time of sale, and updates those evaluations when necessary. See Note 14, Segment Information, Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Developments - Not Yet Adopted In November 2023, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU relates to required disclosures of certain information about reportable segments. The update adds additional required disclosures on an annual basis as well as expands the requirements for quarterly disclosures. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This enhances the disclosures around rate reconciliation, income taxes paid, and other related topics. The standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | 2. ACQUISITIONS Sierramotion 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 $8.4 million includes $2.0 million of contingent consideration payable which was paid in January 2024 (Note 1) and at closing consisted of a combination of cash and Company stock. The intangible assets of $4,100 and goodwill of $2,876 are expected to be deductible for tax purposes. The preliminary purchase price allocation is subject to adjustments based on a determination of certain tax matters. Transaction costs for the acquisition were not material. The operating results of this acquisition are included in the consolidated financial statements beginning on the acquisition date and the revenue and earnings in the current year interim periods presented are not material. The revenue and earnings of Sierramotion included within the consolidated statement of income and comprehensive income for the year ended December 31, 2023 is not material. FPH 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 $41,316 , including a measurement period adjustment during 2023, resulting in a decrease to inventories of $1,080 , an increase to purchase price of $276 , and an increase to goodwill of $1,356 . 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 Operating lease assets 4,165 Intangible assets 22,611 Goodwill 15,840 Other current liabilities (1,577) Deferred revenue (776) Operating lease liabilities (4,165) Net deferred income tax liabilities (3,931) Net purchase price $ 41,316 The intangible assets acquired consist of customer lists of $16,173, technology of $5,731, and a trade name of $707, which are being amortized over 12, 10 and 10 years, respectively. ThinGap and Airex 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 $16,618. The initial purchase price, collectively, for ThinGap and Airex was $16,527, comprised of $8,224 in cash funded through borrowings under the Amended Revolving Credit Facility and $8,303 in Company stock (376,500 shares, of which 29,631 shares are subject to an indemnification holdback, at a weighted average stock price of $22.05). Subsequent to the acquisition dates, the Company made measurement period adjustments to the initial purchase price allocation due to adjustments to closing working capital which resulted in an increase of purchase price of $91, an increase in deferred revenue of $181, and an increase to goodwill of $272. There were no measurement period adjustments during 2023 related to the ThinGap and Airex acquisitions. The purchase price allocations of each of these acquisitions are final. The intangible assets acquired consist of customer lists of $3,800, technology of $2,000 and trade names of $200, which are being amortized over weighted average useful lives of 10, 12.5 and 10 years, respectively. Goodwill generated in the above acquisitions is related to the assembled workforce, synergies with Allient’s other operations that are expected to occur as a result of the combined engineering knowledge, the ability of the operations to integrate products into more fully integrated system solutions and Allient’s ability to utilize ThinGap and Airex management knowledge in providing complementary product offerings to the Company’s customers. Spectrum Controls 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. One remaining payment as of December 31, 2023 of $12,500 was paid in January 2024, comprised of 50% cash and 50% in Company stock. As of December 31, 2023, $12,500 is included in accrued liabilities on the consolidated balance sheet. As of December 31, 2022, $12,500 is included in accrued liabilities and $12,277 is included in other long-term liabilities on the consolidated balance sheet The estimated fair value of these identifiable intangible assets were based upon discounted cash flow models, which include assumptions such as forecasted cash flows, customer attrition rates, discount rates, and royalty rates. Goodwill generated in the acquisitions are related to the assembled workforce, synergies between Allient’s other operations and the acquired company that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to integrate each other’s products into more fully integrated system solutions and Allient’s ability to utilize acquired management knowledge in providing complementary product offerings to the Company’s customers. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information presents the combined results of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021. Year ended December 31, 2022 2021 Revenues $ 513,803 $ 470,589 Income before income taxes 28,032 22,883 The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve 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 any future period. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION Performance Obligations Performance Obligations Satisfied at a Point in Time 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 generally 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. 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 sells component and integrated controlled motion solutions 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 December 31, 2023. 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 in Note 14, Segment Information The revenues by geography in the table below are revenues derived from the Company’s foreign subsidiaries as provided in Note 14. A reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions is provided in Note 14. Year ended December 31, Target Market 2023 2022 2021 Industrial $ 257,004 $ 193,290 $ 135,440 Vehicle 133,488 130,436 129,835 Medical 84,515 85,113 86,129 Aerospace & Defense 78,175 70,193 31,746 Distribution and Other 25,452 23,956 20,366 Total $ 578,634 $ 502,988 $ 403,516 Year ended December 31, Geography 2023 2022 2021 North America (primarily U.S.) $ 399,224 $ 337,768 $ 239,528 Europe 150,608 130,018 129,414 Asia-Pacific 28,802 35,202 34,574 Total $ 578,634 $ 502,988 $ 403,516 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. Backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog as of December 31, 2023 was . The Company expects to recognize one The opening and closing balances of the Company’s contract liability are as follows (in thousands): December 31, December 31, 2023 2022 Contract liabilities in accrued liabilities $ 2,137 $ 4,807 Contract liabilities in other long-term liabilities 8 19 $ 2,145 $ 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 as well as balances assumed in acquisitions. In the years ended December 31, 2023 and 2022, the Company recognized revenue of 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. Practical Expedients Incremental costs of obtaining a contract Time value of money |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL | |
GOODWILL | 4. GOODWILL The change in the carrying amount of goodwill for 2023 and 2022 is as follows (in thousands): December 31, December 31, 2023 2022 Beginning balance $ 126,366 106,633 Goodwill acquired 2,876 21,556 Impact of measurement period adjustments of acquisitions (Note 2) 1,356 291 Effect of foreign currency translation 740 (2,114) Ending balance $ 131,338 $ 126,366 The purchase price allocation for Sierramotion is not final as of December 31, 2023. Adjustments to this allocation may result in changes to the amounts recorded for goodwill in future periods. The purchase price allocation was finalized for FPH, ThinGap, and Airex during 2023. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets on the Company’s consolidated balance sheets consist of the following (in thousands): Weighted Average December 31, 2023 December 31, 2022 Amortization Gross Accumulated Net Book Gross Accumulated Net Book Period Amount Amortization Value Amount Amortization Value Customer lists 14.3 $ 116,831 $ (42,421) $ 74,410 $ 112,378 $ (34,377) $ 78,001 Trade name 13.9 15,572 (7,916) 7,656 15,320 (6,900) 8,420 Design and technologies 10.6 41,480 (12,173) 29,307 41,212 (8,558) 32,654 Total $ 173,883 $ (62,510) $ 111,373 $ 168,910 $ (49,835) $ 119,075 Intangible assets resulting from the 2023 acquisition of Sierramotion was $4,100 and from the 2022 acquisitions of FPH, ThinGap, and Airex were $28,611 (Note 2). The intangible assets acquired consist of customer lists, technology, and trade names. Total amortization expense for intangible assets for the years 2023, 2022 and 2021 was $12,313, $11,169 and $6,245, respectively. Estimated amortization expense for intangible assets is as follows (in thousands): Year ending December 31, Total Estimated Amortization Expense 2024 $ 12,216 2025 12,200 2026 12,103 2027 11,659 2028 10,929 Thereafter 52,266 Total estimated amortization expense $ 111,373 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2023 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | 6. STOCK-BASED COMPENSATION PLANS Stock Incentive Plans The Company’s Stock Incentive Plans provide for the granting of stock awards, including stock options, stock appreciation rights, and restricted stock, to employees and non-employees, including directors of the Company. As of December 31, 2023, the Company had 745,260 shares of common stock available for grant under stock incentive plans. Restricted Stock The following is a summary of restricted stock grants, fair value and performance based awards: Awards with Unvested Weighted average performance restricted stock grant date fair vesting For the year ended December 31, awards value requirements 2023 129,328 $ 40.85 74,495 2022 182,497 $ 33.21 111,251 2021 109,462 $ 32.06 63,432 The value at the date of award is amortized to compensation expense over the related service period, which is generally three years for time vested grants. Performance-based grants are generally subject to a service period. Shares of non-vested restricted stock are forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards. For performance-based awards, the Company assesses the probability of the achievement of the awards during the year and recognizes expense accordingly. The following is a summary of restricted stock activity during years 2023, 2022 and 2021: Number of shares Unvested Balance, December 31, 2020 357,342 Awarded 109,462 Vested (162,419) Forfeited (10,808) Unvested Balance, December 31, 2021 293,577 Awarded 182,497 Vested (156,847) Forfeited (14,280) Unvested Balance, December 31, 2022 304,947 Awarded 129,328 Vested (154,208) Forfeited (25,957) Unvested Balance, December 31, 2023 254,110 Share-Based Compensation Expense During 2023, 2022 and 2021 compensation expense net of forfeitures of $5,477, $5,073 and $4,161 was recorded, respectively. As of December 31, 2023, there was $6,876 of total unrecognized compensation expense related to restricted stock awards, of which approximately $4,890 is expected to be recognized in 2024. Employee Stock Ownership Plan The Company sponsors an Employee Stock Ownership Plan (“ESOP”) that covers all non-union U.S. employees who work over 1,000 hours per year. The terms of the ESOP require the Company to make an annual contribution equal to the greater of: i) the Board established percentage of pretax income before the contribution (5% in 2023, 2022, and 2021) or ii) the annual interest payable on any loan outstanding to the Company from the ESOP. Company contributions to the Plan accrued for 2023, 2022 and 2021, were $1,591, $1,248, and $1,206, respectively. These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income. Defined Contribution Plan The Company sponsors the Allient 401(k) Tax Advantaged Investment Plan (“401(k)”) which covers substantially all its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2023, 2022, and 2021 this match was 100% per dollar of the first 3% of participant deferral and 50% per dollar of the next 2% contribution, up to 4% of a total 5% participant deferral. Net costs related to this defined contribution plan were $2,590, $2,146, and $1,672 in 2023, 2022, and 2021, respectively. These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income. Dividends For the years ended December 31, 2023, 2022 and 2021 a total of $0.115, $0.100, and $0.095 per share on all outstanding shares was declared and paid, respectively. Total dividends paid for the years ended December 31, 2023, 2022 and 2021 were $1,826, $1,536, and $1,371, respectively. Based on the terms of the Company’s Credit Agreement, dividends paid to shareholders are acceptable, subject to the Company’s compliance with the covenants under the Credit Agreement. |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2023 | |
DEBT OBLIGATIONS | |
DEBT OBLIGATIONS | 7. DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands): December 31, December 31, 2023 2022 Long-term Debt Revolving Credit Facility, long-term (1) $ 210,120 $ 227,060 Unamortized debt issuance costs (325) (625) Finance lease obligations – noncurrent 8,607 9,019 Long-term debt $ 218,402 $ 235,454 (1) The effective rate of the Revolving Credit Facility is 4.96% at December 31, 2023 including the impact of the Company's interest rate swaps. Amended Revolving Credit Facility The Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”), dated as of August 23, 2022, includes a $280 million revolving credit facility (the “Amended Revolving Facility”), increased from $225 million in the previous credit agreement. Additionally, the referenced index was amended to be 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 eliminates the previous million accordion feature and maintains the original maturity date of February 2025. As indicated in Note 15, Subsequent Events 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 appicable rate ranging from 1.00% to 2.25% (1.625% as of December 31, 2023) based on the Company’s ratio of total funded indebtedness to consolidated trailing twelve-month EBITDA (the “Total Leverage Ratio”). A credit spread adjustment of 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 ; 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. As of December 31, 2023, the unused Amended Revolving Facility was $69,880 . The amount available to borrow may be reduced based upon the Company’s debt and EBITDA levels, which impacts its covenant calculations. Other The China Credit Facility provides credit of $1,450 (Chinese Renminbi 10,000 ) (“the China Facility”). The China Facility was a demand revolving facility used for working capital and capital equipment needs at the Company’s China operations. There were borrowings under the China Facility during 2023 or 2022. The Company closed the China Facility during 2023. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 8. 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. Beginning in 2021, the Company began entering into foreign currency contracts with 30-day on foreign currency contracts which is included in other expense (income), net and generally offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other expense (income), net. 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. 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. As of December 31, 2023, the Company holds notional amounts of The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (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 an additional $3,367 will be reclassified as a reduction to interest expense over the next twelve months. Additionally, 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 consolidated balance sheets as of December 31, 2023 and 2022 (in thousands): Asset Derivatives Fair value as of: Derivatives designated as Balance Sheet December 31, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Prepaid expenses and other assets $ 54 $ 48 Interest rate swaps Prepaid expenses and other assets 2,254 — Interest rate swaps Other long-term assets 2,177 7,236 $ 4,485 $ 7,284 The table below presents the effect of cash flow hedge accounting on other comprehensive (loss) income (OCI) for the years ended December 31, 2023, 2022 and 2021 (in thousands): Amount of pre-tax (gain) loss recognized in OCI on derivatives Derivatives in cash flow hedging relationships Year ended December 31, 2023 2022 2021 Interest rate swaps $ (935) $ 7,621 $ 1,180 Location of gain (loss) reclassified Amount of pre-tax gain (loss) reclassified from accumulated OCI into income from accumulated OCI into income Year ended December 31, 2023 2022 2021 Interest expense $ 3,814 $ 532 $ (929) The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income and comprehensive income for the years ended December 31, 2023, 2022 and 2021 (in thousands): Total amounts of income and expense line items presented that reflect the effects of cash flow hedges recorded Year ended December 31, Derivatives designated as hedging instruments Income Statement Location 2023 2022 2021 Interest rate swaps Interest Expense $ 12,383 $ 7,692 $ 3,236 The Company does not have any offsetting of derivatives as of December 31, 2023 and 2022. 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The provision for income taxes is based on income before income taxes as follows (in thousands): For the year ended December 31, December 31, December 31, 2023 2022 2021 Domestic $ 18,630 $ 7,707 $ 10,642 Foreign 11,070 15,974 12,471 Income before income taxes $ 29,700 $ 23,681 $ 23,113 Components of the total income tax provision (benefit) are as follows (in thousands): For the year ended December 31, December 31, December 31, 2023 2022 2021 Current provision Domestic $ 7,805 $ 5,903 $ 1,866 Foreign 2,834 4,111 3,288 Total current provision 10,639 10,014 5,154 Deferred benefit Domestic (4,087) (3,915) 649 Foreign (949) 193 (6,784) Total deferred benefit (5,036) (3,722) (6,135) Income tax provision (benefit) $ 5,603 $ 6,292 $ (981) The provision (benefit) for income taxes differs from the amount determined by applying the federal statutory rate as follows: For the year ended December 31, December 31, December 31, 2023 2022 2021 Tax provision, computed at statutory rate 21.0 % 21.0 % 21.0 % State tax, net of federal impact 1.7 % 1.3 % 2.2 % Change in valuation allowance (1.5) % (0.1) % 7.2 % Effect of foreign tax rate differences 1.9 % 3.9 % 3.9 % Section 162(m) compensation 2.4 % 3.1 % 3.0 % R&D Credit and incentives (6.1) % (3.9) % (2.8) % Effect of Tax Cuts and Jobs Act 0.3 % 0.1 % 1.2 % Subpart F income 0.0 % (0.1) % (1.0) % Investment tax credits 0.0 % 0.0 % (5.6) % Net operating loss carryforwards 0.0 % 0.0 % (37.2) % Unrecognized tax benefits (0.7) % 0.0 % 4.9 % Other (0.1) % 1.3 % (1.0) % Provision for income taxes 18.9 % 26.6 % (4.2) % The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands): December 31, December 31, 2023 2022 Noncurrent deferred tax assets: Employee benefit plans $ 2,241 $ 2,122 Net operating loss and tax credit carryforwards 7,277 8,277 Accrued expenses and reserves 2,494 1,672 Research and development costs 8,363 4,520 Other 502 328 Total noncurrent deferred tax assets 20,877 16,919 Valuation allowance (2,648) (3,031) Net noncurrent deferred tax assets: $ 18,229 $ 13,888 Net noncurrent deferred tax liabilities: Property and equipment $ 2,949 $ 3,187 Goodwill and intangibles 10,754 10,944 Interest rate swap derivatives 1,019 1,678 Other 84 142 Total noncurrent deferred tax liabilities $ 14,806 $ 15,951 Net deferred tax asset/(deferred tax liability) $ 3,423 $ (2,063) Presented as follows: Noncurrent deferred income tax assets $ 7,760 $ 4,199 Noncurrent deferred income tax liabilities (4,337) (6,262) Net deferred tax asset (liability) $ 3,423 $ (2,063) As of December 31, 2023, the Company has the following gross carryforwards available (in thousands): Amount Jurisdiction Tax Attribute (in thousands) Begin to expire U.S. State Net Operating Losses (1) $ 8,597 2024 International Net Operating Losses - Unlimited Carryforward (1) $ 20,059 No expiration U.S. Federal Foreign Tax Credits $ 1,002 2028 International Investment Tax Credits $ 919 2030 U.S. Federal R&D Tax Credits $ 38 2036 (1) Net operating losses (NOL’s) are presented as pre-tax amounts. Realization of the Company’s recorded deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses and tax credit carryforwards. Management considers the scheduled reversal of deferred tax liabilities, projected verifiable future taxable income and tax planning strategies in making this assessment. Starting in 2022, noncurrent deferred tax assets includes the effects of capitalization and amortization of R&D expenses as required by the 2017 Tax Cuts and Jobs Act. The Company generated excess foreign tax credits in 2017 due to the one-time transition tax required by enactment of the Tax Cuts and Jobs Act in the amount of The Company files income tax returns in various U.S. and foreign taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before 2020. With few exceptions, the Company is no longer subject to tax examinations in the foreign jurisdictions for periods prior to 2018. Due to a New Zealand tax legislation change in 2021 allowing for the use of pre-acquisition net operating loss carryforwards to be utilized on the acquirer's future period tax returns, the Company recognized, in 2021, $8,328 of net operating loss carryforwards generated in pre-acquisition periods by the Dynamic Controls New Zealand entities. The net operating loss carryforwards are now available for use by the Company beginning with the New Zealand tax returns filed for the 2020 tax period. The Company evaluated the tax legislation and considered the tax periods open for adjustment by the tax authorities which include the 2016-2020 tax years and has determined it is more likely than not it will not realize a benefit on $1,125 of the net operating loss carryforwards. The Company reduced the unrecognized tax benefit in 2021 as a result of the seller filing its 2020 New Zealand tax return and utilizing $68 of the net operating loss carryforwards. The Company will adjust this unrecognized tax benefit in light of changing facts and circumstances and with the lapse of the statute of limitations. The lapse of the statute of limitations would be recorded as an adjustment to the provision for income taxes in the period of the statute closure. The summary of changes to the unrecognized tax benefit for the year ended December 31, 2023 is as follows (in thousands): December 31, December 31, December 31, 2023 2022 2021 Beginning balance $ 786 $ 1,057 $ — Additions from tax legislation changes for net operating loss carryforwards — — 1,125 Reductions related to the lapse of the statute of limitations (207) (192) (68) Effect of foreign currency translation 7 (79) — Ending balance $ 586 $ 786 $ 1,057 It is reasonably possible that a reduction of approximately $0.2 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations. As of December 31, 2023, approximately It is the Company’s policy to include interest and penalties related to income tax liabilities in income tax expense in the consolidated statements of income and comprehensive income. In addition, the Company records uncertain tax positions in accordance with ASC 740. No material interest or penalties related to income tax liabilities were recognized for the years ended December 31, 2023, 2022, and 2021. In general, it is the practice and intention of the Company to reinvest the earnings of its non-domestic subsidiaries in activities outside the United States. Exceptions may be made on a year-by-year basis to repatriate earnings of certain foreign subsidiaries based on cash needs in the United States. In 2021, the Company distributed a portion of these foreign earnings which have been previously taxed in the United States and remitted $236 of foreign withholding taxes. In 2021, the Company made distributions between its German subsidiaries and remitted $1,493 of foreign withholding taxes. deferred tax liabilities have been recorded for these distributions as the foreign withholding taxes are refundable on the German income tax return filed in 2022. No further withholding taxes are anticipated to be paid in future years related to this distribution and it is not anticipated to be remitted to the United States. The Company does not intend to distribute the remaining previously taxed earnings resulting from the one-time transition tax under the Tax Cuts and Jobs Act or capital in foreign subsidiaries, and has not recorded any deferred taxes related to such amounts. The remaining excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is permanently reinvested, and the determination of any deferred tax liability on this amount is not practicable. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | 10. 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. The Company’s finance lease obligations relate to a manufacturing facility. As of December 31, 2023, finance lease assets of property, plant, and equipment accrued liabilities long-term debt For the years ended December 31, 2023 and 2022, the components of operating lease expense were as follows (in thousands): December 31, December 31, 2023 2022 Fixed operating lease expense $ 6,748 $ 5,507 Variable operating lease expense 646 187 Short-term lease expense 1,375 1,246 $ 8,769 $ 6,940 Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2023 and 2022 are as follows (in thousands): December 31, December 31, 2023 2022 Cash paid for operating leases $ 5,765 $ 5,191 Cash paid for interest on finance lease obligations $ 376 $ 736 Assets acquired under operating leases $ 6,517 $ 9,592 Assets acquired under finance leases $ — $ 9,471 Operating lease assets obtained in acquisitions $ 224 $ 5,053 The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2023 and 2022: December 31, 2023 2022 Weighted average remaining lease term (in years) 6.00 6.75 Weighted average discount rate 4.25 % 3.66 % The following table presents the maturity of the Company’s operating and finance lease liabilities as of December 31, 2023 (in thousands): Operating Leases Finance Leases 2024 $ 6,085 $ 815 2025 4,965 831 2026 4,365 848 2027 3,726 867 2028 2,818 886 Thereafter 5,861 7,883 Total undiscounted cash flows $ 27,820 $ 12,130 Less: present value discount (3,146) (3,111) Total lease liabilities $ 24,674 $ 9,019 The Company leases certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made payments to the lessor of $1,631 and $1,529 during the years ended December 31, 2023 and 2022, respectively. Future minimum lease payments under these leases as of December 31, 2023 are |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Severance Benefit Agreements As of December 31, 2023, the Company has annually renewable employment agreements with certain of its executive officers. Among other things, the agreements provide for payments and other benefits if the employee’s employment terminates under certain circumstances, including the employee’s death, disability, voluntary resignation with good reason and involuntary termination without cause, as well as voluntary resignation with good reason and involuntary termination without cause within 90 days prior to or 24 months following a change in control of the Company. Litigation The Company is involved in certain actions that have arisen out of the ordinary course of business. Management believes that resolution of the actions will not have a significant adverse effect on the Company’s consolidated financial statements. |
DEFERRED COMPENSATION ARRANGEME
DEFERRED COMPENSATION ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2023 | |
DEFERRED COMPENSATION ARRANGEMENTS | |
DEFERRED COMPENSATION ARRANGEMENTS | 12. DEFERRED COMPENSATION ARRANGEMENTS The Company has a deferred compensation arrangement with its Chief Executive Officer. This arrangement provides the Board and its committees with another mechanism to provide pay for performance based incentive compensation. It also allows for the Chief Executive Officer to make certain deferrals into the plan. The amount of the liability is comprised of liabilities from previous contributions. Amounts accrued relating to previous periods are $4,305 and $3,870 as of December 31, 2023 and 2022, respectively, which is included in other long-term liabilities in the consolidated balance sheets at December 31, 2023 and 2022. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 13. ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the years ended December 31, 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 — 935 (200) — 735 Amounts reclassified from AOCI — (3,814) 948 — (2,866) Pension adjustments, net of tax 250 — — — 250 Foreign currency translation gain — — — 3,669 3,669 At December 31, 2023 $ (344) $ 4,431 $ (1,006) $ (13,256) $ (10,175) 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 — 7,621 (1,782) — 5,839 Amounts reclassified from AOCI — (532) 69 — (463) Pension adjustments, net of tax 269 — — — 269 Foreign currency translation loss — — — (9,516) (9,516) At December 31, 2022 $ (594) $ 7,310 $ (1,754) $ (16,925) $ (11,963) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 14. SEGMENT INFORMATION The Company operates in one segment for the manufacture and marketing of controlled motion products and solutions for OEM and end user applications. The Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, 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, major customers, and the countries in which the entity holds material assets and reports revenue. Financial information related to the foreign subsidiaries is summarized below (in thousands): For the year ended December 31, 2023 2022 2021 Revenues derived from foreign subsidiaries $ 179,410 $ 165,220 $ 163,988 Identifiable foreign fixed assets were $35,751 and $34,879 as of December 31, 2023 and 2022, respectively. Revenues derived from foreign subsidiaries and identifiable assets outside of the United States are primarily attributable to Europe, China, Mexico and New Zealand. Sales to customers outside of the United States by all subsidiaries were $239,897, $214,017 and $185,288 during 2023, 2022, and 2021, respectively. For 2023, 2022, and 2021 one customer (Customer A) accounted for 10%, 11%, and 15% of revenues, respectively, and one customer (Customer B) accounted for 12% in 2023 and less than 10% in 2022 and 2021. As of December 31, 2023 and 2022 Customer B accounted for 15% and 10% of trade receivables, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS Credit Agreement Amendment On March 1, 2024, the Company entered into a Third Amended and Restated Credit Agreement (the “2024 Amended Credit Agreement”) for a $280 million revolving credit facility (the “2024 Amended Revolving Facility”). The significant changes made to the Company’s existing credit facility by the 2024 Amended Credit Agreement include: i) providing for a $50 million accordion amount and ii) extending the term to March 1, 2029. Additionally, the Company has entered into a $150 million fixed-rate private shelf facility (the “2024 Note Payable Agreement”) under which no note borrowings have occurred to date. These agreements, collectively, are referred to as the “2024 Credit and Note Payable Agreements”. Borrowings under the 2024 Amended Revolving Facility will bear interest at the Term SOFR Rate (as defined in the 2024 Amended Credit Agreement) plus a margin of 1.25% to 2.50% or the Alternative Base Rate (as defined in the Amended Credit Agreement) plus a margin of 0.25% to 1.50%, in each case depending on the Company’s ratio of Funded Indebtedness (as defined in the 2024 Amended Credit Agreement) to Consolidated EBITDA (the “Leverage Ratio”). In addition, the Company is required to pay a commitment fee of between 0.15% and 0.325% quarterly (currently 0.275%) on the unused portion of the 2024 Amended Revolving Facility, also based on the Company’s Leverage Ratio. The 2024 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. Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0:1.0 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 4.25:1.0 through December 31, 2024 or greater than 3.75 to 1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio to by 0.5:1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, 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 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The 2024 Credit and Note Payable Agreements also include customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, if any representation or warranty made by the Company is false or misleading in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, the occurrence of certain ERISA events, the invalidity of the loan documents or a change in control of the Company. The amounts outstanding under the Amended Revolving Facility may be accelerated upon certain events of default. Acquisition On January 11, 2024, the Company acquired 100% of the outstanding shares of SNC Manufacturing Co., Inc. (a Wisconsin corporation) and Acutran de Mexico, S.A. de C.V. (a Mexican corporation), (collectively “SNC”), a premier designer and global manufacturer of electrical transformers serving blue-chip customers in defense, industrial automation, alternative power generation and energy, including electric utilities and renewable energy. The purchase price consisted of $20.0 million in cash paid at closing, subject to customary post-closing working capital adjustments. The Company expects to determine the preliminary purchase price allocation prior to the end of the first quarter of 2024. |
BUSINESS AND SUMMARY OF SIGNI_2
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Effective August 23, 2023, Allied Motion Technologies Inc. (“Allied Motion”) changed its name to Allient Inc. (“Allient” or the “Company”). In conjunction with the name change, Allient’s ticker symbol has changed from “AMOT” to “ALNT”. The name change reflects the Company’s evolution of its business to transform from a products-based business in motion control to a solutions-oriented company that addresses its customers’ requirements for Motion, Controls and Power technologies for a multitude of applications. The Company is engaged in the business of designing, manufacturing, and selling precision motion, control, power and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. For business combinations, net assets acquired, and liabilities assumed are recorded at their estimated fair values. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include instruments which are readily convertible into cash (original maturities of three months or less) and which are not subject to significant risk of changes in interest rates. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The provision for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional provisions in the future. Activity in the provision for credit losses for 2023 and 2022 was as follows (in thousands): December 31, 2023 December 31, 2022 Beginning balance $ 1,192 $ 506 Additional reserves 267 803 Write-offs (225) (107) Effect of foreign currency translation 6 (10) Ending balance $ 1,240 $ 1,192 |
Inventories | December 31, 2023 December 31, 2022 Beginning balance $ 1,192 $ 506 Additional reserves 267 803 Write-offs (225) (107) Effect of foreign currency translation 6 (10) Ending balance $ 1,240 $ 1,192 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is classified as follows (in thousands): December 31, December 31, Useful lives 2023 2022 Land $ 973 $ 965 Building and improvements 5 - 39 years 26,201 25,093 Machinery, equipment, tools and dies 3 - 15 years 99,711 89,144 Construction in progress 9,300 14,197 Furniture, fixtures and other 3 - 10 years 24,439 22,461 160,624 151,860 Less accumulated depreciation (93,161) (83,220) Property, plant, and equipment, net $ 67,463 $ 68,640 Depreciation expense is provided using the straight-line method over the estimated useful lives of the assets. Amortization of building improvements is provided using the straight-line method over the life of the lease term or the life of the asset, whichever is shorter. Maintenance and repair costs are charged to operations as incurred. Major additions and improvements are capitalized. The cost and related accumulated depreciation of retired or sold property are removed from the accounts and the resulting gain or loss, if any, is reflected in earnings. Depreciation expense was $12,755, $12,676 and $11,862 in 2023, 2022 and 2021, respectively. |
Intangible Assets | Intangible Assets Intangible assets, other than goodwill, are initially recorded at fair value and are amortized over their estimated useful lives using an accelerated or straight-line method which approximates the pattern of expected cash flows over the remaining useful lives of the intangible assets. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying values of its long-lived assets, including property, plant and equipment and intangible assets, on an annual basis and whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Long-lived assets are recorded at their carrying amounts if the projected cash flows from their use will recover their carrying amounts on an undiscounted basis and without considering interest. If projected cash flows are less than their carrying value, the long-lived assets must be reduced to their estimated fair value. Judgment is required to project such cash flows and, if required, estimate the fair value of the impaired long-lived assets. The Company did not record any impairment charges for the years ended December 31, 2023, 2022 or 2021. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. The Company has defined reporting unit that is the same as its operating segment. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than its carrying amount, or if significant adverse changes in the Company’s future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. At October 31, 2023, the Company performed its annual goodwill impairment test and determined, after performing a qualitative test of the reporting unit, that it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed. The Company did not record any goodwill impairment charges for the years ended December 31, 2023, 2022 or 2021. |
Other Long-Term Assets | Other Long-Term Assets Other long-term assets include the noncurrent portion of interest rate derivatives of $2,177 that the Company has entered into in response to the variable interest rate exposure on long-term debt, as well as securities that the Company has purchased with the intent of funding the deferred compensation arrangements for certain executives of the Company. These items are accounted for at fair value on a recurring basis. Any changes in value are included in net income in the Company’s consolidated statements of income and comprehensive income. |
Warranty | Warranty The Company offers warranty coverage for its products. The length of the warranty period for its products is generally three months to two years and varies based on the product sold. The Company estimates the costs of repairing products under warranty based on the historical average cost of the repairs. The assumptions used to estimate warranty accruals are re-evaluated periodically in light of actual experience and, when appropriate, the accruals are adjusted. Estimated warranty costs are recorded at the time of sale of the related product, and are considered a cost of goods sold. Changes in the Company’s reserve for product warranty claims during 2023, 2022 and 2021 were as follows (in thousands): December 31, December 31, December 31, 2023 2022 2021 Beginning balance $ 2,160 $ 1,869 $ 1,571 Warranty reserves acquired — 45 15 Provision (296) (66) 543 Warranty expenditures 243 409 (204) Effect of foreign currency translation 32 (97) (56) Ending balance $ 2,139 $ 2,160 $ 1,869 |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, December 31, 2023 2022 Compensation and fringe benefits $ 17,251 $ 15,818 Accrued business acquisition consideration 12,638 12,500 Warranty reserve 2,139 2,160 Income taxes payable 2,483 3,934 Operating lease liabilities – current 5,142 4,224 Finance lease obligations – current 412 377 Contract liabilities 2,137 4,807 Contingent consideration – current 7,720 — Other accrued expenses 6,566 4,301 $ 56,488 $ 48,121 |
Foreign Currency Translation | December 31, December 31, 2023 2022 Compensation and fringe benefits $ 17,251 $ 15,818 Accrued business acquisition consideration 12,638 12,500 Warranty reserve 2,139 2,160 Income taxes payable 2,483 3,934 Operating lease liabilities – current 5,142 4,224 Finance lease obligations – current 412 377 Contract liabilities 2,137 4,807 Contingent consideration – current 7,720 — Other accrued expenses 6,566 4,301 $ 56,488 $ 48,121 |
Revenue Recognition | Revenue Recognition Refer to Note 3, Revenue Recognition |
Engineering and Development Costs | Engineering and Development Costs The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. Engineering and design as well as research and development costs are expensed as incurred. |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share Basic earnings per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding. Diluted earnings per share is determined by dividing the net income by the sum of: (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of potential common shares determined utilizing the treasury stock method. Basic and diluted weighted-average shares outstanding are as follows (in thousands): Year ended December 31, 2023 2022 2021 Basic weighted average shares outstanding 15,963 15,448 14,413 Dilutive effect of potential common shares 309 503 104 Diluted weighted average shares outstanding 16,272 15,951 14,517 For 2023, 2022 and 2021, the anti-dilutive common shares excluded from the calculation of diluted income per share were 22,000, 15,000, and 2,000, respectively. |
Fair Value Accounting | Fair Value Accounting 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 consolidated balance sheets for these assets approximate fair value because of the immediate or short-term maturities of these financial instruments. The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of December 31, 2023 and 2022, respectively, by level within the fair value hierarchy (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,859 $ — $ — Deferred compensation plan assets 4,305 — — Foreign currency hedge contracts — 54 — Interest rate swaps, net — 4,431 — Contingent consideration — — (7,990) 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, 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 contingent consideration at December 31, 2023 for the acquisition of Sierramotion consists of Company stock and was paid in January 2024 at the maximum amount of $2,000. The contingent consideration at December 31, 2023 for the acquisition of ALIO is paid 50% in Company stock and 50% cash, the current portion of which was $5,720 and has been paid in February 2024. Changes to contingent consideration since December 31, 2022 include a $2,000 increase due to the acquisition of Sierramotion in the current period and an increase of $1,890, which is included in business development in the consolidated statements of income and comprehensive income, of the estimated fair value of the ALIO contingent consideration related to updated inputs to the timing of anticipated earnings of the acquired entity. Of the total contingent consideration payable as of December 31, 2023, $7,720 was paid in January and February 2024 and is included in accrued liabilities and $270 is payable, if earned, in the first half of 2025 and included in other long-term liabilities on the consolidated balance sheet as of December 31, 2023. Contingent consideration of $4,100 is included in other long-term liabilities as of December 31, 2022. |
Derivative Financial Instruments | Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") No. 815, Derivatives and Hedging ("ASC 815"), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting. |
Income Taxes | Income Taxes The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. A valuation allowance may be provided to the extent management deems it is more likely than not that deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income, in the appropriate taxing jurisdictions, during the periods in which temporary differences, net operating losses and tax credits and incentives become realizable. Management believes that it is more likely than not that the Company will realize the benefits of these temporary differences and operating loss and tax credit carryforwards, net of valuation allowances. It is the Company's policy to include interest and penalties related to income tax liabilities in income tax expense on the consolidated statements of income and comprehensive Income. In addition, the Company records uncertain tax positions in accordance with ASC 740, Income Taxes |
Pension and Postretirement Welfare Plans | Pension and Postretirement Welfare Plans The Company records the service cost component of net benefit costs in cost of goods sold, selling, and general and administrative expenses. The interest cost component of net benefit costs is recorded in interest expense and the remaining components of net benefit costs, amortization of net losses and expected return on plan assets is recorded in other expense, net. |
Concentration of Credit Risk | Concentration of Credit Risk Trade receivables subject the Company to the potential for credit risk. To reduce this risk, the Company performs evaluations of its customers’ financial condition and creditworthiness at the time of sale, and updates those evaluations when necessary. See Note 14, Segment Information, |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Twinsburg Consolidation | Recent Accounting Developments - Not Yet Adopted In November 2023, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU relates to required disclosures of certain information about reportable segments. The update adds additional required disclosures on an annual basis as well as expands the requirements for quarterly disclosures. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This enhances the disclosures around rate reconciliation, income taxes paid, and other related topics. The standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements. |
BUSINESS AND SUMMARY OF SIGNI_3
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of activity in the allowance for doubtful accounts | Activity in the provision for credit losses for 2023 and 2022 was as follows (in thousands): December 31, 2023 December 31, 2022 Beginning balance $ 1,192 $ 506 Additional reserves 267 803 Write-offs (225) (107) Effect of foreign currency translation 6 (10) Ending balance $ 1,240 $ 1,192 |
Schedule of inventories including 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 | 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 (in thousands): December 31, 2023 December 31, 2022 Parts and raw materials $ 87,381 $ 89,100 Work-in-process 11,456 11,686 Finished goods 18,849 16,322 $ 117,686 $ 117,108 |
Schedule of classification of property, plant and equipment | Property, plant and equipment is classified as follows (in thousands): December 31, December 31, Useful lives 2023 2022 Land $ 973 $ 965 Building and improvements 5 - 39 years 26,201 25,093 Machinery, equipment, tools and dies 3 - 15 years 99,711 89,144 Construction in progress 9,300 14,197 Furniture, fixtures and other 3 - 10 years 24,439 22,461 160,624 151,860 Less accumulated depreciation (93,161) (83,220) Property, plant, and equipment, net $ 67,463 $ 68,640 |
Schedule of changes in the reserve for product warranty claims | Changes in the Company’s reserve for product warranty claims during 2023, 2022 and 2021 were as follows (in thousands): December 31, December 31, December 31, 2023 2022 2021 Beginning balance $ 2,160 $ 1,869 $ 1,571 Warranty reserves acquired — 45 15 Provision (296) (66) 543 Warranty expenditures 243 409 (204) Effect of foreign currency translation 32 (97) (56) Ending balance $ 2,139 $ 2,160 $ 1,869 |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): December 31, December 31, 2023 2022 Compensation and fringe benefits $ 17,251 $ 15,818 Accrued business acquisition consideration 12,638 12,500 Warranty reserve 2,139 2,160 Income taxes payable 2,483 3,934 Operating lease liabilities – current 5,142 4,224 Finance lease obligations – current 412 377 Contract liabilities 2,137 4,807 Contingent consideration – current 7,720 — Other accrued expenses 6,566 4,301 $ 56,488 $ 48,121 |
Schedule of basic and diluted weighted-average shares outstanding | Basic and diluted weighted-average shares outstanding are as follows (in thousands): Year ended December 31, 2023 2022 2021 Basic weighted average shares outstanding 15,963 15,448 14,413 Dilutive effect of potential common shares 309 503 104 Diluted weighted average shares outstanding 16,272 15,951 14,517 |
Schedule of financial assets that are accounted for at fair value on a recurring basis | The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of December 31, 2023 and 2022, respectively, by level within the fair value hierarchy (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Assets (liabilities) Pension plan assets $ 5,859 $ — $ — Deferred compensation plan assets 4,305 — — Foreign currency hedge contracts — 54 — Interest rate swaps, net — 4,431 — Contingent consideration — — (7,990) 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) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS | |
Schedule of unaudited pro forma financial information | The following unaudited pro forma financial information presents the combined results of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021. Year ended December 31, 2022 2021 Revenues $ 513,803 $ 470,589 Income before income taxes 28,032 22,883 |
FPH Group | |
ACQUISITIONS | |
Schedule of purchase price allocation and estimated fair value of the assets acquired | Cash and cash equivalents $ 1,755 Trade receivables 3,100 Inventories 3,496 Other assets, net 174 Property, plant, and equipment 624 Operating lease assets 4,165 Intangible assets 22,611 Goodwill 15,840 Other current liabilities (1,577) Deferred revenue (776) Operating lease liabilities (4,165) Net deferred income tax liabilities (3,931) Net purchase price $ 41,316 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
Schedule of reconciliation of disaggregated revenue by target market and geography | The Company’s disaggregated revenues are as follows (in thousands): Year ended December 31, Target Market 2023 2022 2021 Industrial $ 257,004 $ 193,290 $ 135,440 Vehicle 133,488 130,436 129,835 Medical 84,515 85,113 86,129 Aerospace & Defense 78,175 70,193 31,746 Distribution and Other 25,452 23,956 20,366 Total $ 578,634 $ 502,988 $ 403,516 Year ended December 31, Geography 2023 2022 2021 North America (primarily U.S.) $ 399,224 $ 337,768 $ 239,528 Europe 150,608 130,018 129,414 Asia-Pacific 28,802 35,202 34,574 Total $ 578,634 $ 502,988 $ 403,516 |
Schedule of opening and closing balances of the Company's receivables, contract asset, and contract liability | The opening and closing balances of the Company’s contract liability are as follows (in thousands): December 31, December 31, 2023 2022 Contract liabilities in accrued liabilities $ 2,137 $ 4,807 Contract liabilities in other long-term liabilities 8 19 $ 2,145 $ 4,826 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL | |
Schedule of change in the carrying amount of goodwill | The change in the carrying amount of goodwill for 2023 and 2022 is as follows (in thousands): December 31, December 31, 2023 2022 Beginning balance $ 126,366 106,633 Goodwill acquired 2,876 21,556 Impact of measurement period adjustments of acquisitions (Note 2) 1,356 291 Effect of foreign currency translation 740 (2,114) Ending balance $ 131,338 $ 126,366 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | Intangible assets on the Company’s consolidated balance sheets consist of the following (in thousands): Weighted Average December 31, 2023 December 31, 2022 Amortization Gross Accumulated Net Book Gross Accumulated Net Book Period Amount Amortization Value Amount Amortization Value Customer lists 14.3 $ 116,831 $ (42,421) $ 74,410 $ 112,378 $ (34,377) $ 78,001 Trade name 13.9 15,572 (7,916) 7,656 15,320 (6,900) 8,420 Design and technologies 10.6 41,480 (12,173) 29,307 41,212 (8,558) 32,654 Total $ 173,883 $ (62,510) $ 111,373 $ 168,910 $ (49,835) $ 119,075 |
Schedule of estimated amortization expense for intangible assets | Estimated amortization expense for intangible assets is as follows (in thousands): Year ending December 31, Total Estimated Amortization Expense 2024 $ 12,216 2025 12,200 2026 12,103 2027 11,659 2028 10,929 Thereafter 52,266 Total estimated amortization expense $ 111,373 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
STOCK-BASED COMPENSATION PLANS | |
Summary of restricted stock grants, fair value and performance based awards | Awards with Unvested Weighted average performance restricted stock grant date fair vesting For the year ended December 31, awards value requirements 2023 129,328 $ 40.85 74,495 2022 182,497 $ 33.21 111,251 2021 109,462 $ 32.06 63,432 |
Summary of restricted stock activity | Number of shares Unvested Balance, December 31, 2020 357,342 Awarded 109,462 Vested (162,419) Forfeited (10,808) Unvested Balance, December 31, 2021 293,577 Awarded 182,497 Vested (156,847) Forfeited (14,280) Unvested Balance, December 31, 2022 304,947 Awarded 129,328 Vested (154,208) Forfeited (25,957) Unvested Balance, December 31, 2023 254,110 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DEBT OBLIGATIONS | |
Schedule of debt obligations | Debt obligations consisted of the following (in thousands): December 31, December 31, 2023 2022 Long-term Debt Revolving Credit Facility, long-term (1) $ 210,120 $ 227,060 Unamortized debt issuance costs (325) (625) Finance lease obligations – noncurrent 8,607 9,019 Long-term debt $ 218,402 $ 235,454 (1) The effective rate of the Revolving Credit Facility is 4.96% at December 31, 2023 including the impact of the Company's interest rate swaps. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 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 | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2023 and 2022 (in thousands): Asset Derivatives Fair value as of: Derivatives designated as Balance Sheet December 31, December 31, hedging instruments Location 2023 2022 Foreign currency contracts Prepaid expenses and other assets $ 54 $ 48 Interest rate swaps Prepaid expenses and other assets 2,254 — Interest rate swaps Other long-term assets 2,177 7,236 $ 4,485 $ 7,284 |
Schedule of effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) | The table below presents the effect of cash flow hedge accounting on other comprehensive (loss) income (OCI) for the years ended December 31, 2023, 2022 and 2021 (in thousands): Amount of pre-tax (gain) loss recognized in OCI on derivatives Derivatives in cash flow hedging relationships Year ended December 31, 2023 2022 2021 Interest rate swaps $ (935) $ 7,621 $ 1,180 Location of gain (loss) reclassified Amount of pre-tax gain (loss) reclassified from accumulated OCI into income from accumulated OCI into income Year ended December 31, 2023 2022 2021 Interest expense $ 3,814 $ 532 $ (929) |
Schedule of effect of the Company's derivative financial instruments on the condensed consolidated statements of income and comprehensive (loss) income | The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income and comprehensive income for the years ended December 31, 2023, 2022 and 2021 (in thousands): Total amounts of income and expense line items presented that reflect the effects of cash flow hedges recorded Year ended December 31, Derivatives designated as hedging instruments Income Statement Location 2023 2022 2021 Interest rate swaps Interest Expense $ 12,383 $ 7,692 $ 3,236 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of provision for income taxes based on income before income taxes | The provision for income taxes is based on income before income taxes as follows (in thousands): For the year ended December 31, December 31, December 31, 2023 2022 2021 Domestic $ 18,630 $ 7,707 $ 10,642 Foreign 11,070 15,974 12,471 Income before income taxes $ 29,700 $ 23,681 $ 23,113 |
Schedule of components of the total income tax provision (benefit) | Components of the total income tax provision (benefit) are as follows (in thousands): For the year ended December 31, December 31, December 31, 2023 2022 2021 Current provision Domestic $ 7,805 $ 5,903 $ 1,866 Foreign 2,834 4,111 3,288 Total current provision 10,639 10,014 5,154 Deferred benefit Domestic (4,087) (3,915) 649 Foreign (949) 193 (6,784) Total deferred benefit (5,036) (3,722) (6,135) Income tax provision (benefit) $ 5,603 $ 6,292 $ (981) |
Schedule of differences in the provision (benefit) for income taxes from the amount determined by applying the federal statutory rate | For the year ended December 31, December 31, December 31, 2023 2022 2021 Tax provision, computed at statutory rate 21.0 % 21.0 % 21.0 % State tax, net of federal impact 1.7 % 1.3 % 2.2 % Change in valuation allowance (1.5) % (0.1) % 7.2 % Effect of foreign tax rate differences 1.9 % 3.9 % 3.9 % Section 162(m) compensation 2.4 % 3.1 % 3.0 % R&D Credit and incentives (6.1) % (3.9) % (2.8) % Effect of Tax Cuts and Jobs Act 0.3 % 0.1 % 1.2 % Subpart F income 0.0 % (0.1) % (1.0) % Investment tax credits 0.0 % 0.0 % (5.6) % Net operating loss carryforwards 0.0 % 0.0 % (37.2) % Unrecognized tax benefits (0.7) % 0.0 % 4.9 % Other (0.1) % 1.3 % (1.0) % Provision for income taxes 18.9 % 26.6 % (4.2) % |
Schedule of tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities | The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands): December 31, December 31, 2023 2022 Noncurrent deferred tax assets: Employee benefit plans $ 2,241 $ 2,122 Net operating loss and tax credit carryforwards 7,277 8,277 Accrued expenses and reserves 2,494 1,672 Research and development costs 8,363 4,520 Other 502 328 Total noncurrent deferred tax assets 20,877 16,919 Valuation allowance (2,648) (3,031) Net noncurrent deferred tax assets: $ 18,229 $ 13,888 Net noncurrent deferred tax liabilities: Property and equipment $ 2,949 $ 3,187 Goodwill and intangibles 10,754 10,944 Interest rate swap derivatives 1,019 1,678 Other 84 142 Total noncurrent deferred tax liabilities $ 14,806 $ 15,951 Net deferred tax asset/(deferred tax liability) $ 3,423 $ (2,063) Presented as follows: Noncurrent deferred income tax assets $ 7,760 $ 4,199 Noncurrent deferred income tax liabilities (4,337) (6,262) Net deferred tax asset (liability) $ 3,423 $ (2,063) |
Schedule of operating loss and tax credit gross carryforwards | As of December 31, 2023, the Company has the following gross carryforwards available (in thousands): Amount Jurisdiction Tax Attribute (in thousands) Begin to expire U.S. State Net Operating Losses (1) $ 8,597 2024 International Net Operating Losses - Unlimited Carryforward (1) $ 20,059 No expiration U.S. Federal Foreign Tax Credits $ 1,002 2028 International Investment Tax Credits $ 919 2030 U.S. Federal R&D Tax Credits $ 38 2036 (1) Net operating losses (NOL’s) are presented as pre-tax amounts. |
Schedule of changes to the unrecognized tax benefit | The summary of changes to the unrecognized tax benefit for the year ended December 31, 2023 is as follows (in thousands): December 31, December 31, December 31, 2023 2022 2021 Beginning balance $ 786 $ 1,057 $ — Additions from tax legislation changes for net operating loss carryforwards — — 1,125 Reductions related to the lapse of the statute of limitations (207) (192) (68) Effect of foreign currency translation 7 (79) — Ending balance $ 586 $ 786 $ 1,057 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of components of operating lease expense | For the years ended December 31, 2023 and 2022, the components of operating lease expense were as follows (in thousands): December 31, December 31, 2023 2022 Fixed operating lease expense $ 6,748 $ 5,507 Variable operating lease expense 646 187 Short-term lease expense 1,375 1,246 $ 8,769 $ 6,940 |
Schedule of supplemental cash flow information related to the operating leases | Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2023 and 2022 are as follows (in thousands): December 31, December 31, 2023 2022 Cash paid for operating leases $ 5,765 $ 5,191 Cash paid for interest on finance lease obligations $ 376 $ 736 Assets acquired under operating leases $ 6,517 $ 9,592 Assets acquired under finance leases $ — $ 9,471 Operating lease assets obtained in acquisitions $ 224 $ 5,053 |
Schedule of Lease assets and liabilities and other quantitative information | The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2023 and 2022: December 31, 2023 2022 Weighted average remaining lease term (in years) 6.00 6.75 Weighted average discount rate 4.25 % 3.66 % |
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 December 31, 2023 (in thousands): Operating Leases Finance Leases 2024 $ 6,085 $ 815 2025 4,965 831 2026 4,365 848 2027 3,726 867 2028 2,818 886 Thereafter 5,861 7,883 Total undiscounted cash flows $ 27,820 $ 12,130 Less: present value discount (3,146) (3,111) Total lease liabilities $ 24,674 $ 9,019 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Schedule of accumulated other comprehensive (Loss) income ("AOCI") | Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the years ended December 31, 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 — 935 (200) — 735 Amounts reclassified from AOCI — (3,814) 948 — (2,866) Pension adjustments, net of tax 250 — — — 250 Foreign currency translation gain — — — 3,669 3,669 At December 31, 2023 $ (344) $ 4,431 $ (1,006) $ (13,256) $ (10,175) 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 — 7,621 (1,782) — 5,839 Amounts reclassified from AOCI — (532) 69 — (463) Pension adjustments, net of tax 269 — — — 269 Foreign currency translation loss — — — (9,516) (9,516) At December 31, 2022 $ (594) $ 7,310 $ (1,754) $ (16,925) $ (11,963) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT INFORMATION | |
Schedule of revenue related to foreign subsidiaries | Financial information related to the foreign subsidiaries is summarized below (in thousands): For the year ended December 31, 2023 2022 2021 Revenues derived from foreign subsidiaries $ 179,410 $ 165,220 $ 163,988 |
BUSINESS AND SUMMARY OF SIGNI_4
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Activity in the allowance for doubtful accounts | ||
Beginning balance | $ 1,192 | $ 506 |
Additional reserves | 267 | 803 |
Writeoffs | (225) | (107) |
Effect of foreign currency translation | 6 | (10) |
Ending balance | 1,240 | 1,192 |
Inventories | ||
Parts and raw materials | 87,381 | 89,100 |
Work-in-process | 11,456 | 11,686 |
Finished goods | 18,849 | 16,322 |
Inventories | $ 117,686 | $ 117,108 |
BUSINESS AND SUMMARY OF SIGNI_5
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 160,624 | $ 151,860 | |
Less accumulated depreciation | (93,161) | (83,220) | |
Property, plant and equipment, net | 67,463 | 68,640 | |
Depreciation expense | 12,755 | 12,676 | $ 11,862 |
Land | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | 973 | 965 | |
Building and improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 26,201 | $ 25,093 | |
Building and improvements | Minimum | |||
Property, plant and equipment | |||
Useful lives | 5 years | 5 years | |
Building and improvements | Maximum | |||
Property, plant and equipment | |||
Useful lives | 39 years | 39 years | |
Machinery, equipment, tools and dies | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 99,711 | $ 89,144 | |
Machinery, equipment, tools and dies | Minimum | |||
Property, plant and equipment | |||
Useful lives | 3 years | 3 years | |
Machinery, equipment, tools and dies | Maximum | |||
Property, plant and equipment | |||
Useful lives | 15 years | 15 years | |
Construction work in progress | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 9,300 | $ 14,197 | |
Furniture, fixtures and other | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 24,439 | $ 22,461 | |
Furniture, fixtures and other | Minimum | |||
Property, plant and equipment | |||
Useful lives | 3 years | 3 years | |
Furniture, fixtures and other | Maximum | |||
Property, plant and equipment | |||
Useful lives | 10 years | 10 years |
BUSINESS AND SUMMARY OF SIGNI_6
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Goodwill | |||
Number of reporting units | item | 1 | ||
Goodwill impairment | $ | $ 0 | $ 0 | $ 0 |
BUSINESS AND SUMMARY OF SIGNI_7
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Long-Term Assets (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Fair value of derivative assets | $ 2,177 |
BUSINESS AND SUMMARY OF SIGNI_8
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warranty, Accrued Liabilities, and Basic and Diluted Income per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 29, 2024 | |
Changes in the reserve for product warranty claims | ||||
Warranty reserve at beginning of the year | $ 2,160 | $ 1,869 | $ 1,571 | |
Warranty reserves acquired | 45 | 15 | ||
Provision | (296) | (66) | 543 | |
Warranty expenditures | 243 | 409 | (204) | |
Effect of foreign currency translation | 32 | (97) | (56) | |
Warranty reserve at end of year | 2,139 | 2,160 | 1,869 | |
ACCRUED LIABILITIES | ||||
Compensation and fringe benefits | 17,251 | 15,818 | ||
Accrued business acquisition consideration | 12,638 | 12,500 | ||
Warranty reserve | 2,139 | 2,160 | $ 1,869 | |
Income taxes payable | 2,483 | 3,934 | ||
Operating lease liabilities - current | $ 5,142 | $ 4,224 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities | ||
Finance lease obligations, current | $ 412 | $ 377 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities | ||
Contract liabilities | $ 2,137 | $ 4,807 | ||
Contingent consideration-current | 7,720 | $ 5,720 | ||
Other accrued expenses | 6,566 | 4,301 | ||
Accrued liabilities | $ 56,488 | $ 48,121 | ||
Basic and Diluted Income per Share | ||||
Basic weighted average shares outstanding | 15,963,000 | 15,448,000 | 14,413,000 | |
Dilutive effect of potential common shares | 309,000 | 503,000 | 104,000 | |
Diluted weighted average shares outstanding | 16,272,000 | 15,951,000 | 14,517,000 | |
Stock awards excluded from the calculation of diluted income per share (in shares) | 22,000 | 15,000 | 2,000 | |
Minimum | ||||
Warranty | ||||
Warranty period | 3 months | |||
Maximum | ||||
Warranty | ||||
Warranty period | 2 years |
BUSINESS AND SUMMARY OF SIGNI_9
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Business development | $ 4,275 | $ 3,319 | $ 1,299 |
BUSINESS AND SUMMARY OF SIGN_10
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Accounting (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets (liabilities) | ||
Deferred compensation plan assets | $ 7,425 | $ 11,253 |
Interest rate swaps, net/assets | 2,177 | |
Recurring basis | Level 1 | ||
Assets (liabilities) | ||
Pension plan assets | 5,859 | 5,324 |
Deferred compensation plan assets | 4,305 | 3,870 |
Recurring basis | Level 2 | ||
Assets (liabilities) | ||
Foreign currency hedge contracts | 54 | 48 |
Interest rate swaps, net/assets | 4,431 | 7,236 |
Recurring basis | Level 3 | ||
Assets (liabilities) | ||
Contingent consideration | $ (7,990) | $ (4,100) |
BUSINESS AND SUMMARY OF SIGN_11
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Accounting - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Feb. 29, 2024 | Jan. 31, 2024 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Contingent consideration-current | $ 7,720 | $ 5,720 | ||
Other long-term liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Contingent consideration | 270 | $ 4,100 | ||
Accrued liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Contingent consideration-current | 7,720 | |||
Sierramotion Inc | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Contingent consideration fair value measurement, acquisition | 2,000 | $ 2,000 | ||
Increase in contingent consideration due to current period acquisition | $ 2,000 | |||
ALIO | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Contingent consideration settled in company stock (as percentage) | 50% | |||
Contingent consideration settled in cash (as percentage) | 50% | |||
Increase in contingent consideration due to current period acquisition | $ 1,890 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Sep. 22, 2023 USD ($) | Jun. 17, 2022 USD ($) $ / shares shares | May 30, 2022 USD ($) | Dec. 30, 2021 USD ($) payment | Jan. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) payment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | May 24, 2022 | |
ACQUISITIONS | |||||||||
Goodwill | $ 131,338 | $ 126,366 | $ 106,633 | ||||||
Cash paid for acquisition | 11,004 | 44,101 | 47,254 | ||||||
Increase (decrease) in goodwill | 1,356 | 291 | |||||||
Assets Acquired and Liabilities Assumed | |||||||||
Earnings | 24,097 | 17,389 | 24,094 | ||||||
Revenues | 578,634 | 502,988 | 403,516 | ||||||
Amortization of intangible assets | 12,313 | 11,169 | 6,245 | ||||||
Goodwill | 131,338 | 126,366 | 106,633 | ||||||
Pro forma Condensed Combined Financial Information | |||||||||
Revenues | 513,803 | 470,589 | |||||||
Income before income taxes | 28,032 | $ 22,883 | |||||||
Other long-term liabilities | |||||||||
ACQUISITIONS | |||||||||
Fair value of contingent consideration | $ 270 | 4,100 | |||||||
Customer lists | |||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Estimated Life | 14 years 3 months 18 days | ||||||||
Trade name | |||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Estimated Life | 13 years 10 months 24 days | ||||||||
FPH Group | |||||||||
ACQUISITIONS | |||||||||
Business acquisition percentage of voting interests acquired | 100% | ||||||||
Purchase price | $ 41,316 | ||||||||
Intangible assets | 22,611 | ||||||||
Goodwill | 15,840 | ||||||||
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 | ||||||||
Operating lease assets | 4,165 | ||||||||
Intangible assets | 22,611 | ||||||||
Goodwill | 15,840 | ||||||||
Other current liabilities | (1,577) | ||||||||
Deferred revenue | (776) | ||||||||
Operating lease liabilities | 4,165 | ||||||||
Net deferred income tax liabilities | (3,931) | ||||||||
Net purchase price | 41,316 | ||||||||
FPH Group | Technology | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | 5,731 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 5,731 | ||||||||
Estimated Life | 10 years | ||||||||
FPH Group | Customer lists | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | $ 16,173 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 16,173 | ||||||||
Estimated Life | 12 years | ||||||||
FPH Group | Trade name | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | $ 707 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 707 | ||||||||
Estimated Life | 10 years | ||||||||
ThinGap and Airex | |||||||||
ACQUISITIONS | |||||||||
Purchase price | $ 16,527 | 16,618 | |||||||
Cash paid for acquisition | 8,224 | ||||||||
Adjustments to purchase price | 91 | $ 0 | |||||||
Increase in deferred revenue | 181 | ||||||||
Increase (decrease) in goodwill | 272 | ||||||||
Shares issued for acquisition | $ 8,303 | ||||||||
Number of share issued for consideration | shares | 376,500 | ||||||||
Shares subject to indemnification holdback | shares | 29,631 | ||||||||
Stock price | $ / shares | $ 22.05 | ||||||||
ThinGap and Airex | Technology | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | $ 2,000 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 2,000 | ||||||||
Estimated Life | 12 years 6 months | ||||||||
ThinGap and Airex | Customer lists | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | $ 3,800 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 3,800 | ||||||||
Estimated Life | 10 years | ||||||||
ThinGap and Airex | Trade name | |||||||||
ACQUISITIONS | |||||||||
Intangible assets | $ 200 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | $ 200 | ||||||||
Estimated Life | 10 years | ||||||||
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 | 2 | 1 | |||||||
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 | $ 12,500 | 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 | ||||||||
Contingent Consideration Payable | 2,000 | ||||||||
Intangible assets | 4,100 | ||||||||
Goodwill | 2,876 | ||||||||
Assets Acquired and Liabilities Assumed | |||||||||
Intangible assets | 4,100 | ||||||||
Goodwill | $ 2,876 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Number of reportable segment | segment | 1 | ||
Revenues | $ 578,634 | $ 502,988 | $ 403,516 |
Industrial | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 257,004 | 193,290 | 135,440 |
Vehicle | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 133,488 | 130,436 | 129,835 |
Medical | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 84,515 | 85,113 | 86,129 |
Aerospace & Defense | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 78,175 | 70,193 | 31,746 |
Other | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 25,452 | 23,956 | 20,366 |
United States | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 399,224 | 337,768 | 239,528 |
Europe | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | 150,608 | 130,018 | 129,414 |
Asia-Pacific | |||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | |||
Revenues | $ 28,802 | $ 35,202 | $ 34,574 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Performance obligations | $ 276,093 | |
Percentage of performance obligations | 85% | |
Contract liabilities in accrued liabilities | $ 2,137 | $ 4,807 |
Contract liabilities in other long-term liabilities | 8 | 19 |
Contract liabilities | 2,145 | 4,826 |
Revenue recognized | $ 4,211 | $ 2,307 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Performance obligations that are satisfied over periods exceeding | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Minimum | ||
Performance obligations that are satisfied over periods exceeding | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Maximum | ||
Performance obligations that are satisfied over periods exceeding | 2 years |
REVENUE RECOGNITION - Practical
REVENUE RECOGNITION - Practical Expedients (Details) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
Incremental costs of obtaining a contract | true |
The time value of money | true |
GOODWILL - Change in the carryi
GOODWILL - Change in the carrying amount of goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Change in goodwill | ||
Beginning balance | $ 126,366 | $ 106,633 |
Goodwill acquired | 2,876 | 21,556 |
Impact of measurement period adjustments of acquisitions (Note 2) | 1,356 | 291 |
Effect of foreign currency translation | 740 | (2,114) |
Ending balance | $ 131,338 | $ 126,366 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 22, 2023 | |
Intangible assets subject to amortization | ||||
Gross Amount | $ 173,883 | $ 168,910 | ||
Accumulated amortization | (62,510) | (49,835) | ||
Total estimated amortization expense | 111,373 | 119,075 | ||
Amortization expense for intangible assets | 12,313 | 11,169 | $ 6,245 | |
Estimated amortization expense | ||||
2024 | 12,216 | |||
2025 | 12,200 | |||
2026 | 12,103 | |||
2027 | 11,659 | |||
2028 | 10,929 | |||
Thereafter | 52,266 | |||
Total estimated amortization expense | 111,373 | 119,075 | ||
Sierramotion Inc | ||||
Intangible assets subject to amortization | ||||
Intangible assets | $ 4,100 | |||
Intangible assets resulting from the acquisitions | $ 4,100 | |||
FPH, ThinGap and Airex | ||||
Intangible assets subject to amortization | ||||
Intangible assets resulting from the acquisitions | 28,611 | |||
Customer lists | ||||
Intangible assets subject to amortization | ||||
Estimated Life | 14 years 3 months 18 days | |||
Gross Amount | $ 116,831 | 112,378 | ||
Accumulated amortization | (42,421) | (34,377) | ||
Total estimated amortization expense | 74,410 | 78,001 | ||
Estimated amortization expense | ||||
Total estimated amortization expense | $ 74,410 | 78,001 | ||
Trade name | ||||
Intangible assets subject to amortization | ||||
Estimated Life | 13 years 10 months 24 days | |||
Gross Amount | $ 15,572 | 15,320 | ||
Accumulated amortization | (7,916) | (6,900) | ||
Total estimated amortization expense | 7,656 | 8,420 | ||
Estimated amortization expense | ||||
Total estimated amortization expense | $ 7,656 | 8,420 | ||
Design and technologies | ||||
Intangible assets subject to amortization | ||||
Estimated Life | 10 years 7 months 6 days | |||
Gross Amount | $ 41,480 | 41,212 | ||
Accumulated amortization | (12,173) | (8,558) | ||
Total estimated amortization expense | 29,307 | 32,654 | ||
Estimated amortization expense | ||||
Total estimated amortization expense | $ 29,307 | $ 32,654 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |||
Shares of common stock available for grant under stock incentive plans | 745,260 | ||
Additional disclosures | |||
Stock based compensation expense, net of forfeitures | $ 5,477 | $ 5,073 | $ 4,161 |
Restricted Stock | |||
STOCK-BASED COMPENSATION | |||
Restricted stock grants | 129,328 | 182,497 | 109,462 |
Weighted average grant date fair value (in dollars per share) | $ 40.85 | $ 33.21 | $ 32.06 |
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) | 304,947 | 293,577 | 357,342 |
Awarded (in shares) | 129,328 | 182,497 | 109,462 |
Vested (in shares) | (154,208) | (156,847) | (162,419) |
Forfeited (in shares) | (25,957) | (14,280) | (10,808) |
Outstanding at end of period (in shares) | 254,110 | 304,947 | 293,577 |
Additional disclosures | |||
Stock based compensation expense, net of forfeitures | $ 5,477 | $ 5,073 | $ 4,161 |
Unrecognized compensation expense | 6,876 | ||
Unrecognized compensation expense, expected to be recognized in next fiscal year | $ 4,890 | ||
Restricted Stock | Minimum | |||
STOCK-BASED COMPENSATION | |||
Service period of earned grants | 3 years | ||
Restricted Stock | Maximum | |||
STOCK-BASED COMPENSATION | |||
Service period of earned grants | 5 years | ||
Restricted Stock | Performance based vesting | |||
STOCK-BASED COMPENSATION | |||
Restricted stock grants | 74,495 | 111,251 | 63,432 |
Number of Non-vested Restricted Shares | |||
Awarded (in shares) | 74,495 | 111,251 | 63,432 |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Employee Stock Ownership Plan (Details) - ESOP $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) h / yr | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Employee Stock Ownership Plan | |||
Minimum hours of work per year for employees to be covered under Employee Stock Ownership Plan (ESOP) | h / yr | 1,000 | ||
Annual contribution by employer as a percentage of pretax income before the contribution | 5% | 5% | 5% |
Company contributions | $ | $ 1,591 | $ 1,248 | $ 1,206 |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - Defined Contribution Plan and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan | |||
Matching percentage per dollar of the first 3% of participant deferral | 100% | 100% | 100% |
First specified percentage of participant deferral upon which employer matches 100% contribution per dollar | 3% | 3% | 3% |
Matching percentage per dollar of the next 2% contribution | 50% | 50% | 50% |
Next specified percentage of employee contribution upon which employer matches 50% contribution per dollar | 2% | 2% | 2% |
Participant deferral (as a percent) | 5% | 5% | 5% |
Net costs related to defined contribution plan | $ 2,590 | $ 2,146 | $ 1,672 |
Dividends | |||
Dividends paid (in dollars per share) | $ 0.115 | $ 0.100 | $ 0.095 |
Total dividends paid | $ 1,826 | $ 1,536 | $ 1,371 |
Maximum | |||
Defined Contribution Plan | |||
Specified percentage of employee contribution upon which employer matches contribution | 4% | 4% | 4% |
STOCK-BASED COMPENSATION PLAN_5
STOCK-BASED COMPENSATION PLANS (Details) - Restricted Stock - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Non-vested Restricted Shares | |||
Outstanding at beginning of period (in shares) | 304,947 | 293,577 | 357,342 |
Awarded (in shares) | 129,328 | 182,497 | 109,462 |
Vested (in shares) | (154,208) | (156,847) | (162,419) |
Forfeited (in shares) | (25,957) | (14,280) | (10,808) |
Outstanding at end of period (in shares) | 254,110 | 304,947 | 293,577 |
Performance based vesting | |||
Number of Non-vested Restricted Shares | |||
Awarded (in shares) | 74,495 | 111,251 | 63,432 |
DEBT OBLIGATIONS (Details)
DEBT OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 01, 2024 USD ($) | Feb. 29, 2024 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 CNY (¥) | Jun. 30, 2022 USD ($) | |
DEBT OBLIGATIONS | ||||||
Unamortized debt issuance costs | $ (325) | $ (625) | ||||
Finance lease obligations - noncurrent | $ 8,607 | $ 9,019 | ||||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt | Long-term debt | |||
Long-term debt | $ 218,402 | $ 235,454 | ||||
Revolving Credit Facility | ||||||
DEBT OBLIGATIONS | ||||||
Revolving Credit Facility, long-term | $ 210,120 | 227,060 | ||||
Effective rate (as a percent) | 4.96% | 4.96% | ||||
Amended Revolving Facility | ||||||
DEBT OBLIGATIONS | ||||||
Maximum borrowing capacity | 280,000 | $ 225,000 | ||||
Available borrowing capacity | 75,000 | |||||
Minimum interest coverage ratio | 3% | |||||
Leverage ratio | 3.50% | |||||
Increase in leverage ratio | 0.50% | |||||
Unused amount of credit facility | $ 69,880 | |||||
Amended Revolving Facility | Minimum | ||||||
DEBT OBLIGATIONS | ||||||
Adjusted applicable margin (as a percent) | 0.10% | |||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.10% | |||||
Amended Revolving Facility | Maximum | ||||||
DEBT OBLIGATIONS | ||||||
Adjusted applicable margin (as a percent) | 0.275% | |||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.275% | |||||
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% | |||||
Amended Revolving Facility | Subsequent Event | ||||||
DEBT OBLIGATIONS | ||||||
Maximum borrowing capacity | $ 280,000 | |||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.275% | |||||
Amended Revolving Facility | Subsequent Event | Base Rate | Minimum | ||||||
DEBT OBLIGATIONS | ||||||
Applicable margin (as a percent) | 0.25% | |||||
Amended Revolving Facility | Subsequent Event | Base Rate | Maximum | ||||||
DEBT OBLIGATIONS | ||||||
Applicable margin (as a percent) | 1.50% | |||||
Amended Revolving Facility | Subsequent Event | Adjusted SOFR | Minimum | ||||||
DEBT OBLIGATIONS | ||||||
Applicable margin (as a percent) | 1.25% | |||||
Amended Revolving Facility | Subsequent Event | Adjusted SOFR | Maximum | ||||||
DEBT OBLIGATIONS | ||||||
Applicable margin (as a percent) | 2.50% | |||||
China Credit Facility | ||||||
DEBT OBLIGATIONS | ||||||
Maximum borrowing capacity | $ 1,450 | ¥ 10,000 | ||||
Average outstanding borrowings | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2020 USD ($) derivative | |
Derivative financial instruments | ||||||
Term of contract | 30 days | |||||
Fair value of derivative assets | $ 2,177 | |||||
Other (income) expense | ||||||
Derivative financial instruments | ||||||
Gain (loss) on foreign currency contracts | (281) | |||||
Interest Rate Swaps | ||||||
Derivative financial instruments | ||||||
Notional amount | 100,000 | $ 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 | 3,367 | |||||
Foreign currency contracts | ||||||
Derivative financial instruments | ||||||
Notional amount | 22,193 | $ 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 | (935) | 7,621 | $ 1,180 | |||
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 | 3,814 | 532 | $ (929) | |||
Derivatives designated as hedging instruments | ||||||
Derivative financial instruments | ||||||
Fair value of derivative assets | 4,485 | 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 | 12,383 | 7,692 | $ 3,236 | |||
Derivatives designated as hedging instruments | Interest Rate Swaps | Prepaid expenses and other assets | ||||||
Derivative financial instruments | ||||||
Fair value of derivative assets | 2,254 | |||||
Derivatives designated as hedging instruments | Interest Rate Swaps | Other long-term assets | ||||||
Derivative financial instruments | ||||||
Fair value of derivative assets | 2,177 | 7,236 | ||||
Derivatives designated as hedging instruments | Foreign currency contracts | Prepaid expenses and other assets | ||||||
Derivative financial instruments | ||||||
Fair value of derivative assets | $ 54 | $ 48 |
INCOME TAXES - Tax Effects and
INCOME TAXES - Tax Effects and Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of income before income taxes | |||
Domestic | $ 18,630 | $ 7,707 | $ 10,642 |
Foreign | 11,070 | 15,974 | 12,471 |
Income before income taxes | 29,700 | 23,681 | 23,113 |
Current provision | |||
Domestic | 7,805 | 5,903 | 1,866 |
Foreign | 2,834 | 4,111 | 3,288 |
Total current provision | 10,639 | 10,014 | 5,154 |
Deferred provision | |||
Domestic | (4,087) | (3,915) | 649 |
Foreign | (949) | 193 | (6,784) |
Total deferred (benefit) provision | (5,036) | (3,722) | (6,135) |
Income tax provision (benefit) | $ 5,603 | $ 6,292 | $ (981) |
Differences in the provision (benefit) for income taxes from the amount determined by applying the federal statutory rate | |||
Tax provision, computed at statutory rate (as a percent) | 21% | 21% | 21% |
State tax, net of federal impact (as a percent) | 1.70% | 1.30% | 2.20% |
Change in valuation allowance (as a percent) | (1.50%) | (0.10%) | 7.20% |
Effect of foreign tax rate differences (as a percent) | 1.90% | 3.90% | 3.90% |
Section 162(m) compensation | 2.40% | 3.10% | 3% |
R&D Credits (as a percent) | (6.10%) | (3.90%) | (2.80%) |
Effect of Tax Cuts and Jobs Act (as a percent) | 0.30% | 0.10% | 1.20% |
Subpart F income (as a percent) | 0% | (0.10%) | (1.00%) |
Investment tax credits (as a percent) | (0.00%) | (0.00%) | (5.60%) |
Net operating loss carryforwards (as a percent) | (0.00%) | (0.00%) | (37.20%) |
Unrecognized tax benefits (as a percent) | (0.70%) | 0% | 4.90% |
Other (as a percent) | (0.10%) | 1.30% | (1.00%) |
Provision for income taxes (as a percent) | 18.90% | 26.60% | (4.20%) |
Noncurrent deferred tax assets: | |||
Employee benefit plans | $ 2,241 | $ 2,122 | |
Net operating loss and tax credit carryforwards | 7,277 | 8,277 | |
Accrued expenses and reserves | 2,494 | 1,672 | |
Research and development costs | 8,363 | 4,520 | |
Other | 502 | 328 | |
Total noncurrent deferred tax assets | 20,877 | 16,919 | |
Valuation allowance | (2,648) | (3,031) | |
Net noncurrent deferred tax assets: | 18,229 | 13,888 | |
Net noncurrent deferred tax liabilities: | |||
Property and equipment | 2,949 | 3,187 | |
Goodwill and intangibles | 10,754 | 10,944 | |
Interest rate swap derivatives | 1,019 | 1,678 | |
Other | 84 | 142 | |
Total noncurrent deferred tax liabilities | 14,806 | 15,951 | |
Noncurrent deferred income tax assets | 7,760 | 4,199 | |
Noncurrent deferred income tax liabilities | (4,337) | (6,262) | |
Net deferred tax asset/(deferred tax liability) | 3,423 | ||
Net deferred tax asset/(deferred tax liability) | (2,063) | ||
Foreign Tax Credits | |||
Net noncurrent deferred tax liabilities: | |||
Tax Credits Carryforwards | $ 92 | ||
Domestic | |||
Net noncurrent deferred tax liabilities: | |||
Net Operating Losses | 8,597 | ||
Domestic | Foreign Tax Credits | |||
Net noncurrent deferred tax liabilities: | |||
Tax Credits Carryforwards | 1,002 | ||
Domestic | R&D Tax Credits | |||
Net noncurrent deferred tax liabilities: | |||
Tax Credits Carryforwards | 38 | ||
International | |||
Net noncurrent deferred tax liabilities: | |||
Net Operating Losses - Unlimited Carryforward | 20,059 | ||
International | Investment Tax Credits | |||
Net noncurrent deferred tax liabilities: | |||
Tax Credits Carryforwards | $ 919 |
INCOME TAXES - Summary of chang
INCOME TAXES - Summary of changes to unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes to the unrecognized tax benefit | |||
Beginning balance | $ 786 | $ 1,057 | |
Additions from tax legislation changes for net operating loss carryforwards | $ 1,125 | ||
Reductions related to net operating loss usage on 2020 tax returns | (207) | (192) | (68) |
Effect of foreign currency translation | 7 | ||
Effect of foreign currency translation | (79) | ||
Ending balance | $ 586 | $ 786 | $ 1,057 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Foreign tax credits | $ 910 | ||
Income tax expense (benefit) | $ 5,603 | 6,292 | $ (981) |
Reduction in unrecognized tax benefit | 207 | 192 | 68 |
Result of the lapse in the statute of limitations | 200 | ||
Unrecognized tax benefits | 600 | ||
Other unrecognized tax benefits | 586 | 786 | 1,057 |
Interest and penalties related to unrecognized tax positions | 0 | 0 | 0 |
Deferred tax liabilities | 2,063 | ||
Foreign tax credits | |||
INCOME TAXES | |||
Tax credits dividend paid | 92 | ||
New Zealand | Foreign tax credits | |||
INCOME TAXES | |||
Reduction in unrecognized tax benefit | 68 | ||
Foreign | |||
INCOME TAXES | |||
Provision for income taxes | 1,328 | ||
Foreign withholding taxes remitted | 236 | ||
Foreign | New Zealand | |||
INCOME TAXES | |||
Net operating loss carryforwards | 8,328 | ||
Income tax expense (benefit) | 1,125 | ||
Foreign | German | |||
INCOME TAXES | |||
Foreign withholding taxes remitted | $ 1,493 | ||
Deferred tax liabilities | $ 0 | ||
States | |||
INCOME TAXES | |||
Provision for income taxes | $ 318 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
LEASES | ||
Options to terminate the leases | true | |
Operating lease option to terminate period | 30 days | |
Fixed operating lease expense | $ 6,748 | $ 5,507 |
Variable operating lease expense | 646 | 187 |
Short-term lease expense | 1,375 | 1,246 |
Total operating lease expense | 8,769 | 6,940 |
Supplemental cash flow information related to the operating leases | ||
Cash paid for operating leases | 5,765 | 5,191 |
Cash paid for interest on finance lease obligations | 376 | 736 |
Assets acquired under operating leases | 6,517 | 9,592 |
Assets acquired under finance leases | 9,471 | |
Operating lease assets obtained in acquisitions | 224 | 5,053 |
Lease assets and liabilities | ||
Finance lease assets | $ 8,208 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | |
Finance lease obligations, current | $ 412 | $ 377 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Finance lease obligations - noncurrent | $ 8,607 | $ 9,019 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term Debt, Excluding Current Maturities | Long-term Debt, Excluding Current Maturities |
Weighted average remaining lease term (in years) | 6 years | 6 years 9 months |
Weighted average discount rate | 4.25% | 3.66% |
Maturity of the operating lease liabilities | ||
2024 | $ 6,085 | |
2025 | 4,965 | |
2026 | 4,365 | |
2027 | 3,726 | |
2028 | 2,818 | |
Thereafter | 5,861 | |
Total undiscounted cash flows | 27,820 | |
Less: present value discount | (3,146) | |
Total lease liabilities | 24,674 | |
Maturity of the financing lease liabilities | ||
2024 | 815 | |
2025 | 831 | |
2026 | 848 | |
2027 | 867 | |
2028 | 886 | |
Thereafter | 7,883 | |
Total undiscounted cash flows | 12,130 | |
Less: present value discount | (3,111) | |
Total lease liabilities | $ 9,019 |
LEASES - Related party (Details
LEASES - Related party (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Lease payments | $ 5,765 | $ 5,191 |
Future minimum lease payments | 24,674 | |
Executive Officer | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments | 1,631 | $ 1,529 |
Future minimum lease payments | $ 12,914 |
DEFERRED COMPENSATION ARRANGE_2
DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other long-term liabilities | ||
Deferred compensation arrangements | ||
Amount accrued included in other long-term liabilities | $ 4,305 | $ 3,870 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | $ 215,465 | $ 187,762 | $ 143,056 |
Balance at the ending | 251,575 | 215,465 | 187,762 |
Accumulated Other Comprehensive Income | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | (11,963) | (8,092) | |
Unrealized (loss) gain on cash flow hedges | 735 | 5,839 | |
Amounts reclassified from AOCI | (2,866) | (463) | |
Pension adjustments, net of tax | 250 | 269 | |
Foreign currency translation gain | 3,669 | (9,516) | |
Balance at the ending | (10,175) | (11,963) | (8,092) |
Defined Benefit Plan Liability | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | (594) | (863) | (1,633) |
Pension adjustments, net of tax | 250 | 269 | |
Balance at the ending | (344) | (594) | (863) |
Cash Flow Hedges | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | 7,310 | 221 | |
Unrealized (loss) gain on cash flow hedges | 935 | 7,621 | |
Amounts reclassified from AOCI | (3,814) | (532) | |
Balance at the ending | 4,431 | 7,310 | 221 |
Tax effect of Cash Flow Hedges | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | (1,754) | (41) | |
Unrealized (loss) gain on cash flow hedges | (200) | (1,782) | |
Amounts reclassified from AOCI | 948 | 69 | |
Balance at the ending | (1,006) | (1,754) | (41) |
Foreign Currency Translation Adjustments | |||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |||
Balance at the beginning | (16,925) | (7,409) | (216) |
Foreign currency translation gain | 3,669 | (9,516) | |
Balance at the ending | $ (13,256) | $ (16,925) | $ (7,409) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2023 USD ($) customer segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Segment information | ||||
Number of operating segments | segment | 1 | |||
Identifiable assets | $ 597,542 | $ 588,347 | $ 588,347 | |
Revenues derived from foreign subsidiaries | $ 578,634 | $ 502,988 | $ 403,516 | |
Total revenues | Customer one | ||||
Segment information | ||||
Number of customers | customer | 1 | |||
Total revenues | Customer Concentration Risk | Customer one | ||||
Segment information | ||||
Percentage of concentration risk | 10% | 11% | 15% | |
Total revenues | Customer B | Customer one | ||||
Segment information | ||||
Percentage of concentration risk | 12% | 10% | ||
Trade receivables | Customer B | Customer one | ||||
Segment information | ||||
Percentage of concentration risk | 15% | 10% | ||
Europe, China, Mexico, and Asia-Pacific | ||||
Segment information | ||||
Identifiable assets | $ 35,751 | $ 34,879 | $ 34,879 | |
Revenues derived from foreign subsidiaries | 239,897 | 214,017 | $ 185,288 | |
United States | ||||
Segment information | ||||
Revenues derived from foreign subsidiaries | 399,224 | 337,768 | 239,528 | |
Wholly owned foreign subsidiaries | ||||
Segment information | ||||
Revenues derived from foreign subsidiaries | $ 179,410 | $ 165,220 | $ 163,988 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Mar. 01, 2024 | Jan. 11, 2024 | Feb. 29, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
SUBSEQUENT EVENT | |||||||
Cash paid for acquisition | $ 11,004 | $ 44,101 | $ 47,254 | ||||
Amended Revolving Facility | |||||||
SUBSEQUENT EVENT | |||||||
Maximum borrowing capacity | 280,000 | $ 225,000 | |||||
Available borrowing capacity | $ 75,000 | ||||||
Minimum interest coverage ratio | 3% | ||||||
Leverage ratio | 3.50% | ||||||
Increase in leverage ratio | 0.50% | ||||||
Amended Revolving Facility | Minimum | |||||||
SUBSEQUENT EVENT | |||||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.10% | ||||||
Amended Revolving Facility | Maximum | |||||||
SUBSEQUENT EVENT | |||||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.275% | ||||||
Amended Revolving Facility | Adjusted SOFR | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 1.625% | ||||||
Amended Revolving Facility | Adjusted SOFR | Minimum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 1% | ||||||
Amended Revolving Facility | Adjusted SOFR | Maximum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 2.25% | ||||||
Amended Revolving Facility | Base Rate | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 0% | ||||||
Subsequent Event | S N C Manufacturing Co Inc | |||||||
SUBSEQUENT EVENT | |||||||
Acquired outstanding stock percentage | 100% | ||||||
Cash paid for acquisition | $ 20,000 | ||||||
Subsequent Event | Amended Revolving Facility | |||||||
SUBSEQUENT EVENT | |||||||
Maximum borrowing capacity | $ 280,000 | ||||||
Additional Borrowing Capacity | $ 50,000 | ||||||
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent) | 0.275% | ||||||
Subsequent Event | Amended Revolving Facility | Minimum | |||||||
SUBSEQUENT EVENT | |||||||
Unused commitment fee (as a percent) | 0.15% | ||||||
Subsequent Event | Amended Revolving Facility | Maximum | |||||||
SUBSEQUENT EVENT | |||||||
Unused commitment fee (as a percent) | 0.325% | ||||||
Subsequent Event | Amended Revolving Facility | Adjusted SOFR | Minimum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 1.25% | ||||||
Subsequent Event | Amended Revolving Facility | Adjusted SOFR | Maximum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 2.50% | ||||||
Subsequent Event | Amended Revolving Facility | Base Rate | Minimum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 0.25% | ||||||
Subsequent Event | Amended Revolving Facility | Base Rate | Maximum | |||||||
SUBSEQUENT EVENT | |||||||
Applicable margin (as a percent) | 1.50% | ||||||
Subsequent Event | Credit And Note Payable 2024 | |||||||
SUBSEQUENT EVENT | |||||||
Minimum interest coverage ratio | 3% | ||||||
Leverage ratio | 3.75% | ||||||
Increase in leverage ratio | 0.50% | ||||||
Subsequent Event | Credit And Note Payable 2024 | For Year Ending December Twenty Twenty Four | |||||||
SUBSEQUENT EVENT | |||||||
Leverage ratio | 4.25% |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 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 |