Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 26, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | KAMAN CORPORATION | ||
Entity Central Index Key | 54,381 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 27,801,851 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,358,278,098 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 36,904 | $ 41,205 |
Accounts receivable, net | 313,451 | 230,864 |
Inventories | 367,437 | 393,814 |
Income tax refunds receivable | 2,889 | 6,065 |
Other current assets | 27,188 | 26,605 |
Total current assets | 747,869 | 698,553 |
Property, plant and equipment, net of accumulated depreciation of $252,611 and $226,366, respectively | 185,452 | 176,521 |
Goodwill | 351,717 | 337,894 |
Other intangible assets, net | 117,118 | 126,444 |
Deferred income taxes | 27,603 | 59,373 |
Other assets | 25,693 | 27,501 |
Total assets | 1,455,452 | 1,426,286 |
Current liabilities: | ||
Current portion of long-term debt | 7,500 | 119,548 |
Accounts payable – trade | 127,591 | 116,663 |
Accrued salaries and wages | 48,352 | 43,165 |
Advances on contracts | 8,527 | 13,356 |
Income taxes payable | 1,517 | 1,165 |
Other current liabilities | 52,812 | 59,989 |
Total current liabilities | 246,299 | 353,886 |
Long-term debt, excluding current portion | 391,651 | 296,598 |
Deferred income taxes | 8,024 | 6,875 |
Underfunded pension | 126,924 | 156,427 |
Other long-term liabilities | 46,898 | 44,916 |
Commitments and contingencies (Note 15) | ||
Temporary equity, convertible notes | 0 | 1,797 |
Shareholders’ equity: | ||
Preferred stock, $1 par value, 200,000 shares authorized; none outstanding | 0 | 0 |
Common stock, $1 par value, 50,000,000 shares authorized; voting; 29,141,467 and 28,162,497 shares issued, respectively | 29,141 | 28,162 |
Additional paid-in capital | 185,332 | 171,162 |
Retained earnings | 587,877 | 560,200 |
Accumulated other comprehensive income (loss) | (115,814) | (156,393) |
Less 1,325,975 and 1,054,364 shares of common stock, respectively, held in treasury, at cost | (50,880) | (37,344) |
Total shareholders’ equity | 635,656 | 565,787 |
Total liabilities and shareholders’ equity | $ 1,455,452 | $ 1,426,286 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 252,611 | $ 226,366 |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 29,141,467 | 28,162,497 |
Shares of common stock held in treasury at cost (in shares) | 1,325,975 | 1,054,364 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Statement [Abstract] | ||||
Net sales | [1] | $ 1,805,909 | $ 1,808,376 | $ 1,775,125 |
Cost of sales | 1,258,437 | 1,259,284 | 1,257,891 | |
Gross profit | 547,472 | 549,092 | 517,234 | |
Selling, general and administrative expenses | 430,892 | 442,126 | 411,547 | |
Restructuring costs | 2,661 | 1,032 | 1,496 | |
Net (gain) loss on sale of assets | (256) | 11 | (328) | |
Operating income | 114,175 | 105,923 | 104,519 | |
Interest expense, net | 20,581 | 15,747 | 13,144 | |
Other (income) expense, net | (784) | 472 | 3,386 | |
Earnings before income taxes | 94,378 | 89,704 | 87,989 | |
Income tax expense | 44,552 | 30,850 | 27,551 | |
Net earnings | $ 49,826 | $ 58,854 | $ 60,438 | |
Earnings per share: | ||||
Earnings Per Share, Basic (in dollars per share) | $ 1.80 | $ 2.17 | $ 2.22 | |
Diluted earnings per share (in dollars per share) | $ 1.75 | $ 2.10 | $ 2.17 | |
Weighted average shares outstanding: | ||||
Basic (in shares) | 27,611 | 27,107 | 27,177 | |
Diluted (in shares) | 28,418 | 28,072 | 27,868 | |
Dividends declared per share (in dollars per share) | $ 0.80 | $ 0.72 | $ 0.72 | |
[1] | Service revenue was not material for the years ended December 31, 2017, 2016 and 2015. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 49,826 | $ 58,854 | $ 60,438 |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustments | 27,840 | (12,271) | (1,949) |
Change in unrealized loss on derivative instruments, net of tax expense of $31, $6, and $158, respectively | 51 | 9 | 263 |
Pension plan adjustments, net of tax expense (benefit) of $7,661, ($2,412), and ($7,382), respectively | 12,688 | (3,993) | (12,191) |
Other comprehensive income (loss) | 40,579 | (16,255) | (13,877) |
Total comprehensive income | $ 90,405 | $ 42,599 | $ 46,561 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized loss on derivative instruments, net of tax expense | $ 31 | $ 6 | $ 158 |
Pension plan adjustments, net of tax expense (benefit) | $ 7,661 | $ (2,412) | $ (7,382) |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2014 | 27,518,226 | |||||
Beginning Balance at Dec. 31, 2014 | $ 517,665 | $ 27,518 | $ 145,845 | $ 479,984 | $ (126,261) | $ (9,421) |
Beginning Balance (in shares) at Dec. 31, 2014 | 385,942 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 60,438 | 60,438 | ||||
Other comprehensive income | (13,877) | (13,877) | ||||
Dividends | (19,557) | (19,557) | ||||
Purchase of treasury shares (in shares) | 319,234 | |||||
Purchase of treasury shares | (12,836) | $ (12,836) | ||||
Employee stock plans (in shares) | 137,037 | |||||
Employee stock plans | 4,856 | $ 137 | 4,649 | |||
Employee stock plans (in shares) | (8,857) | |||||
Employee stock plans | $ 70 | |||||
Share-based compensation expense (in shares) | 80,494 | |||||
Share-based compensation expense | 6,388 | $ 81 | 6,309 | |||
Share-based compensation expense (in shares) | 1,864 | |||||
Share-based compensation expense | $ (2) | |||||
Ending Balance (in shares) at Dec. 31, 2015 | 27,735,757 | |||||
Ending Balance at Dec. 31, 2015 | 543,077 | $ 27,736 | 156,803 | 520,865 | (140,138) | $ (22,189) |
Ending Balance (in shares) at Dec. 31, 2015 | 698,183 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 58,854 | 58,854 | ||||
Other comprehensive income | (16,255) | (16,255) | ||||
Dividends | (19,519) | (19,519) | ||||
Changes due to convertible notes transactions | (1,797) | |||||
Purchase of treasury shares (in shares) | 316,545 | |||||
Purchase of treasury shares | (13,792) | $ (13,792) | ||||
Employee stock plans (in shares) | 344,221 | |||||
Employee stock plans | 9,533 | $ 344 | 10,541 | |||
Employee stock plans (in shares) | (28,672) | |||||
Employee stock plans | $ (1,352) | |||||
Share-based compensation expense (in shares) | 82,519 | |||||
Share-based compensation expense | 5,686 | $ 82 | 5,615 | |||
Share-based compensation expense (in shares) | 10,964 | |||||
Share-based compensation expense | $ (11) | |||||
Ending Balance (in shares) at Dec. 31, 2016 | 28,162,497 | |||||
Ending Balance at Dec. 31, 2016 | $ 565,787 | $ 28,162 | 171,162 | 560,200 | (156,393) | $ (37,344) |
Ending Balance (in shares) at Dec. 31, 2016 | 1,054,364 | 1,054,364 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | $ 49,826 | |||||
Other comprehensive income | 40,579 | 40,579 | ||||
Dividends | (22,149) | (22,149) | ||||
Changes due to convertible notes transactions | 1,797 | 1,797 | ||||
Changes due to convertible notes transactions (in shares) | 624,044 | |||||
Changes due to convertible notes transactions | (1,958) | $ 624 | (2,582) | |||
Purchase of treasury shares (in shares) | 218,235 | |||||
Purchase of treasury shares | (11,552) | $ (11,552) | ||||
Employee stock plans (in shares) | 265,886 | |||||
Employee stock plans | 7,370 | $ 266 | 9,074 | |||
Employee stock plans (in shares) | 39,647 | |||||
Employee stock plans | $ (1,970) | |||||
Share-based compensation expense (in shares) | 89,040 | |||||
Share-based compensation expense | 5,956 | $ 89 | 5,881 | |||
Share-based compensation expense (in shares) | 13,729 | |||||
Share-based compensation expense | $ (14) | |||||
Ending Balance (in shares) at Dec. 31, 2017 | 29,141,467 | |||||
Ending Balance at Dec. 31, 2017 | $ 635,656 | $ 29,141 | $ 185,332 | $ 587,877 | $ (115,814) | $ (50,880) |
Ending Balance (in shares) at Dec. 31, 2017 | 1,325,975 | 1,325,975 |
Consolidated Statement of Shar8
Consolidated Statement of Shareholders' Equity (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Shareholders' Equity Parenthetical [Abstract] | |||
Employee stock plans, tax expense | $ 0 | $ 0 | $ 327 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net earnings | $ 49,826 | $ 58,854 | $ 60,438 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 42,471 | 43,393 | 36,181 |
Amortization of debt issuance costs | 2,014 | 1,536 | 1,548 |
Accretion of convertible notes discount | 3,410 | 2,144 | 2,035 |
Provision for doubtful accounts | 1,094 | 2,635 | 1,694 |
Net (gain) loss on sale of assets | (256) | 11 | (328) |
Loss on debt extinguishment | 137 | 0 | 0 |
Net (gain) loss on derivative instruments | (1,126) | 1,007 | 579 |
Stock compensation expense | 5,956 | 5,686 | 6,388 |
Excess tax benefit from share-based compensation arrangements | 0 | 0 | (327) |
Deferred income taxes | 24,555 | 7,928 | (1,281) |
Changes in assets and liabilities, excluding effects of acquisitions/divestitures: | |||
Accounts receivable | (77,560) | (778) | 4,556 |
Inventories | 31,095 | (11,891) | (2,928) |
Income tax refunds receivable | 3,180 | (2,474) | (3,463) |
Other current assets | 1,747 | 4,859 | (2,823) |
Accounts payable - trade | 10,164 | 693 | 4,697 |
Accrued contract losses | (957) | 745 | 2 |
Accrued restructuring costs | 1,122 | (1,029) | 1,029 |
Advances on contracts | (4,829) | 2,082 | 8,868 |
Other current liabilities | (366) | 2,078 | (2,173) |
Income taxes payable | 212 | 351 | (2,403) |
Pension liabilities | (11,318) | (9,087) | (2,300) |
Other long-term liabilities | (686) | (1,036) | (405) |
Net cash provided by operating activities | 79,885 | 107,707 | 109,584 |
Cash flows from investing activities: | |||
Proceeds from sale of assets | 618 | 201 | 719 |
Expenditures for property, plant & equipment | (27,631) | (29,777) | (29,932) |
Acquisition of businesses including earn out adjustments, net of cash acquired | (1,365) | (6,631) | (201,252) |
Other, net | (3,457) | (1,376) | (2,143) |
Cash used in investing activities | (31,835) | (37,583) | (232,608) |
Cash flows from financing activities: | |||
Net (repayments) borrowings under revolving credit agreements | (75,988) | (15,147) | 143,025 |
Borrowings under Term Loan Facility | 0 | 0 | 100,000 |
Debt repayment | (6,875) | (5,000) | (83,750) |
Proceeds from issuance of 2024 convertible notes | 200,000 | 0 | 0 |
Repayment of 2017 convertible notes | (175,151) | 0 | 0 |
Purchase of capped call - 2024 convertible notes | (20,500) | 0 | 0 |
Proceeds from bond hedge settlement - 2017 convertible notes | 58,564 | 0 | 0 |
Bank overdraft | (1,146) | 275 | (3,462) |
Proceeds from exercise of employee stock awards | 7,370 | 9,533 | 4,856 |
Purchase of treasury shares | (11,552) | (13,792) | (12,836) |
Dividends paid | (21,462) | (19,510) | (19,026) |
Debt and equity issuance costs | (7,473) | 0 | (1,348) |
Windfall tax benefit | 0 | 0 | 327 |
Other | (523) | (318) | (198) |
Cash (used in) provided by financing activities | (54,736) | (43,959) | 127,588 |
Net (decrease) increase in cash and cash equivalents | (6,686) | 26,165 | 4,564 |
Effect of exchange rate changes on cash and cash equivalents | 2,385 | (1,422) | (513) |
Cash and cash equivalents at beginning of period | 41,205 | 16,462 | 12,411 |
Cash and cash equivalents at end of period | $ 36,904 | $ 41,205 | $ 16,462 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Kaman Corporation, headquartered in Bloomfield, Connecticut, was incorporated in 1945 and is a diversified company that conducts business in the aerospace and distribution markets. Kaman Corporation reports information for itself and its subsidiaries (collectively, the "Company") in two business segments, Distribution and Aerospace. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the carrying amount of property, plant and equipment, goodwill and other intangible assets; valuation allowances for receivables, inventories and income taxes; valuation of share-based compensation; vendor incentives; assets and obligations related to employee benefits; estimates of environmental remediation costs; and accounting for long-term contracts including claims. Actual results could differ from those estimates. Foreign Currency Translation The Company has certain operations outside the United States that prepare financial statements in currencies other than the U.S. dollar. For these operations, results of operations and cash flows are translated using the average exchange rate throughout the period. Assets and liabilities are generally translated at end of period rates. The gains and losses associated with these translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable. The carrying amounts of these items, as well as trade accounts payable and notes payable, approximate fair value due to the short-term maturity of these instruments. At December 31, 2017 , one customer accounted for more than 10% of consolidated accounts receivable. At December 31, 2016 , no individual customer accounted for more than 10% of consolidated accounts receivable. At December 31, 2017 and 2016 , no individual customer accounted for more than 10.0% of consolidated net sales. Foreign sales were approximately 18.8% , 18.1% and 15.6% of the Company’s net sales in 2017 , 2016 and 2015 , respectively, and are concentrated in the United Kingdom, Germany, Canada, New Zealand, the Middle East and Asia. Additional Cash Flow Information Non-cash investing activities in 2017 include an accrual of $3.6 million for purchases of property and equipment (including capital lease obligations). Non-cash financing activities in 2017 include 624,044 common shares issued for the partial unwind of warrant transactions during the second quarter of 2017 that had a value of approximately $30.3 million , the receipt of 136,369 shares with an approximate value of $7.5 million to unwind the remaining bond hedge transactions during the fourth quarter of 2017 and the issuance to bond holders of 136,347 shares with an approximate value of $7.5 million upon conversion of the remaining 2017 Notes. Other non-cash financing activities in 2017 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $12.7 million , net of tax of $7.7 million . Additionally, non-cash financing activities in 2017 include $5.6 million of dividends declared but not yet paid. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additional Cash Flow Information - continued Non-cash investing activities in 2016 include an accrual of $2.3 million for purchases of property and equipment (including capital lease obligations), $1.4 million in earn-out payments to the former owners of an aerospace acquisition and an adjustment of $0.2 million for a certain tax matter. Non-cash financing activities in 2016 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $4.0 million , net of tax of $2.5 million . Additionally, non-cash financing activities in 2016 include $4.9 million of dividends declared but not yet paid. Non-cash investing activities in 2015 include $5.4 million in earn-out payments to the former owners of an aerospace acquisition. Non-cash financing activities in 2015 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $11.9 million , net of tax of $7.2 million . Additionally, non-cash financing activities in 2015 include $4.9 million of dividends declared but not yet paid. The Company describes its pension obligations in more detail in Note 13, Pension Plans . The Company describes the convertible notes transactions in more detail in Note 10, Debt. Revenue Recognition Sales and estimated profits under long-term contracts are generally recognized using the percentage-of-completion method of accounting, using as a measurement basis either the ratio that costs incurred bear to estimated total costs (after giving effect to estimates of costs to complete based upon most recent information for each contract) or units-of-delivery. Reviews of contracts are made routinely throughout their lives and the impact of revisions in profit estimates are recorded in the accounting period in which the revisions are made. Anticipated contract losses are charged to operations when they are probable. In cases where the Company has multiple contracts with a single customer, each contract is generally treated as a separate profit center and accounted for as such. Except in the case of contracts accounted for using the cost-to-cost method of percentage-of-completion accounting, revenues are recognized when the product has been shipped or delivered, depending upon when title and risk of loss have passed. For certain U.S. Government ("USG") contracts delivery is deemed to have occurred when work is substantially complete and acceptance by the customer has occurred by execution of a Material Inspection and Receiving Report, DD Form 250 or Memorandum of Shipment. Sales contracts are initially reviewed to ascertain if they involve multiple element arrangements. If such an arrangement exists and there is no evidence of stand-alone value for each element of the undelivered items, recognition of sales for the arrangement is deferred until all elements of the arrangement are delivered and risk of loss and title have passed (except in the case of contracts accounted for using the percentage-of-completion method of accounting). For elements that do have stand-alone value or contracts that are not considered multiple element arrangements, sales and related costs of sales are recognized as services are performed or when the product has been shipped or delivered depending upon when title and risk of loss have passed. Pre-contract costs incurred for items such as materials or tooling for anticipated contracts are included in inventory if recovery of such costs is considered probable. Thereafter, if the Company determines it will not be awarded an anticipated contract and the associated pre-contract costs cannot be applied to another program the costs are expensed immediately. As of December 31, 2017 and 2016 , approximately $2.3 million and $2.0 million , respectively, of pre-contract costs were included in inventory, which, in both cases, represented less than 1% of total inventory. Learning or start-up costs incurred in connection with existing or anticipated follow-on contracts are charged to the existing contract unless the terms of the contract permit recovery of these costs over a specific contractual term and provide for reimbursement if the contract is canceled. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition - continued If it is probable that a claim with respect to change orders will result in additional contract revenue and the amount of such additional revenue can be reliably estimated, then the additional contract revenue is considered in our accounting for the program, but only if the contract provides a legal basis for the claim, the additional costs were unforeseen and not caused by deficiencies in our performance, the costs are identifiable and reasonable in view of the work performed and the evidence supporting the claim is objective and verifiable. If these requirements are met, the claim portion of the program is accounted for separately to ensure revenue from the claim is recorded only to the extent claim related costs have been incurred; accordingly, no profit with respect to such costs is recorded until the change order is formally approved. If these requirements are not met, the forecast of total contract cost at completion (which is used to calculate the gross margin rate) for the basic contract is generally increased to include all incurred and anticipated claim related costs. Recognition of sales not accounted for under the cost-to-cost method of percentage-of-completion accounting occurs when the sales price is fixed, collectability is reasonably assured and the product’s title and risk of loss has transferred to the customer. The Company includes freight costs charged to customers in net sales and the correlating expense as a cost of sales. Sales tax collected from customers is excluded from net sales in the accompanying Consolidated Statements of Operations. Cost of Sales and Selling, General and Administrative Expenses Cost of sales includes costs of products and services sold (i.e., purchased product, raw material, direct labor, engineering labor, outbound freight charges, depreciation and amortization, indirect costs and overhead charges). Selling expenses primarily consist of advertising, promotion, bid and proposal, employee payroll and corresponding benefits and commissions paid to sales and marketing personnel. General and administrative expenses primarily consist of employee payroll including executive, administrative and financial personnel and corresponding benefits, incentive compensation, independent research and development, consulting expenses, warehousing costs, depreciation and amortization. Legal costs are expensed as incurred and are generally included in general and administrative expenses. The Aerospace segment includes general and administrative expenses as an element of program cost and inventory for certain government contracts. Certain inventory related costs, including purchasing costs, receiving costs and inspection costs, for the Distribution segment are not included in cost of sales. For the years ended December 31, 2017 , 2016 and 2015 , $3.5 million , $3.5 million and $3.2 million , respectively, of such costs are included in general and administrative expenses. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments. These investments are liquid in nature and have original maturities of three months or less. Bank overdraft positions, which occur when total outstanding issued checks exceed available cash balances at a single financial institution at the end of a reporting period, are reclassified to other current liabilities within the consolidated balance sheets. At December 31, 2017 and 2016 , the Company had bank overdrafts of $3.1 million and $4.3 million , respectively, included in other current liabilities. Accounts Receivable The Company has three types of accounts receivable: (a) Trade receivables, which consist of amounts billed and currently due from customers; (b) USG contracts, which consist of (1) amounts billed, and (2) costs and accrued profit – not billed; and (c) Commercial and other government contracts, which consist of (1) amounts billed, and (2) costs and accrued profit – not billed. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade accounts receivable and billed contracts balance. Management determines the allowance based on known troubled accounts, historical experience and other currently available evidence. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Inventories Inventory of merchandise for resale is stated at cost (using the average costing method) or net realizable value, whichever is lower. Contracts and other work in process and finished goods are valued at production cost represented by raw material, labor and overhead. For certain government contracts, allowable general and administrative expenses are also included in inventory. Initial tooling and startup costs may be included, where applicable. Contracts and other work in process and finished goods are not reported at amounts in excess of net realizable values. The Company includes raw material amounts in the contracts in process and other work in process balances. Raw material includes certain general stock materials but primarily relates to purchases that were made in anticipation of specific programs for which production has not been started as of the balance sheet date. Property, Plant and Equipment Property, plant and equipment is recorded at cost. Depreciation is computed primarily on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives for buildings range from 15 to 40 years and for leasehold improvements range from 1 to 20 years, whereas machinery, office furniture and equipment generally have useful lives ranging from 3 to 15 years. At the time of retirement or disposal, the acquisition cost of the asset and related accumulated depreciation are eliminated and any gain or loss is credited to or charged against income. Long-lived assets, such as property, plant and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Maintenance and repair items are charged against income as incurred, whereas renewals and betterments are capitalized and depreciated. Goodwill and Other Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination and is reviewed for impairment at least annually. Accounting Standards Codification Topic 350, "Intangibles - Goodwill and Other," ("ASC 350") permits the assessment of qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-step goodwill impairment test required under ASC 350. The qualitative assessment management performs takes into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting units, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. In the first step of the two-step test, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). In Step 2, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using an income methodology based on management’s estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks associated with those cash flows. In addition, management uses a market-based valuation method involving analysis of market multiples of revenues and earnings before interest, taxes, depreciation and amortization ("EBITDA") for (i) a group of comparable public companies and (ii) recent transactions, if any, involving comparable companies. If the fair value of the reporting unit exceeds its carrying value, step two need not be performed. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Goodwill and Other Intangible Assets - continued Goodwill and intangible assets with indefinite lives are evaluated annually for impairment in the fourth quarter, based on annual forecast information. Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit. Goodwill and other intangible assets are reviewed for possible impairment whenever changes in conditions indicate that the fair value of a reporting unit is more likely than not below its carrying value. No such charges were recorded in 2017 , 2016 or 2015 . Vendor Incentives The Company’s Distribution segment enters into agreements with certain vendors providing for inventory purchase incentives that are generally earned upon achieving specified volume-purchasing levels. The Company recognizes rebate income relative to specific rebate programs as a reduction of the cost of inventory based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions that results in progress toward earning the rebate, provided that the amounts are probable and reasonably estimable. As of December 31, 2017 and 2016 , total vendor incentive receivables, included in other current assets, were approximately $14.5 million and $13.3 million , respectively. Self-Insured Retentions To limit exposure to losses related to group health, workers’ compensation, auto and product general liability claims, the Company obtains third-party insurance coverage. The Company has varying levels of deductibles for these claims. The total liability/deductible for group health is limited to $0.3 million per claim, workers’ compensation is limited to $0.4 million per claim and for product/general liability and auto liability the limit is $0.3 million per claim. The cost of such benefits is recognized as expense based on claims filed in each reporting period and an estimate of claims incurred but not reported (“IBNR”) during such period. The estimates for the IBNR are based upon historical trends and information provided to us by the claims administrators, and are periodically revised to reflect changes in loss trends. These amounts are included in other accruals and payables on the Consolidated Balance Sheets. Liabilities associated with these claims are estimated in part by considering historical claims experience, severity factors and other actuarial assumptions. Projections of future losses are inherently uncertain because of the random nature of insurance claim occurrences and the potential for differences between actual developments and actuarial assumptions. Such self-insurance accruals will likely include claims for which the ultimate losses will be settled over a period of years. Research and Development Customer funded research expenditures (which are included in cost of sales) were $1.1 million in 2017 , $0.9 million in 2016 and $0.4 million in 2015 . Research and development costs not specifically covered by contracts are recognized as expense as incurred and included in selling, general and administrative expenses. Such costs amounted to $8.2 million , $7.7 million and $6.7 million in 2017 , 2016 and 2015 , respectively. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The deferred income taxes were significantly impacted by the enactment of the Tax Cuts and Jobs Act of 2017 ("Tax Reform"), as further discussed in Note 12, Income Taxes . The Company records a benefit for uncertain tax positions in the financial statements only when it determines it is more likely than not that such a position will be sustained upon examination by taxing authorities based on the technical merits of the position. Unrecognized tax benefits represent the difference between the position taken in the tax return and the benefit reflected in the financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Share-Based Payment Arrangements The Company records compensation expense for share-based awards based upon an assessment of the grant date fair value of the awards. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. A number of assumptions are used to determine the fair value of options granted. These include expected term, dividend yield, volatility of the options and the risk free interest rate. See Note 17, Share-Based Arrangements, for further information. Derivative Financial Instruments The Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are recognized on the Consolidated Balance Sheets as either assets or liabilities and are measured at fair value. Changes in the fair values of derivatives are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is effective as part of a hedged transaction. Gains and losses on derivative instruments reported in accumulated other comprehensive income are subsequently included in earnings in the periods in which earnings are affected by the hedged item. The Company does not use derivative instruments for speculative purposes. See Note 5, Derivative Financial Instruments , for further information. Pension Accounting The Company accounts for its defined benefit pension plan by recognizing the overfunded or underfunded status of the plan, calculated as the difference between the plan assets and the projected benefit obligation, as an asset or liability on the balance sheet, with changes in the funded status recognized in comprehensive income in the year in which they occur. Expenses and liabilities associated with the plan are determined based upon actuarial valuations. Integral to the actuarial valuations are a variety of assumptions including expected return on plan assets and discount rate. The Company regularly reviews the assumptions, which are updated at the measurement date, December 31 st . The impact of differences between actual results and the assumptions are accumulated and generally amortized over future periods, which will affect expense recognized in future periods. See Note 13, Pension Plans , for further information. Recent Accounting Standards In February 2018, the FASB issued Accounting Standards Update ("ASU") 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The objective of this standard is to address the concern that tax effects of items within accumulated other comprehensive income do not appropriately reflect the tax rate because Tax Reform required the adjustment of deferred taxes be recorded to income. This ASU provides an entity the election to reclassify stranded tax effects resulting from Tax Reform to retained earnings from accumulated other comprehensive income. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the potential impact this standard update might have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities". The objective of this standard update is to improve the financial reporting of hedging relationships to better reflect the economic results of an entity's risk management activities in its financial statements. This ASU expands hedge accounting for both nonfinancial and financial risk components and refines the measurement of hedge results to better reflect an entity's hedging strategies. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting". The objective of this standard update is to address the diversity in practice and reduce the cost and complexity of applying guidance for a change to the terms or conditions of a share-based payment award. This ASU provides guidance on when an entity should apply modification accounting for stock compensation. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Standards - continued In March 2017, the FASB issued ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities”. Under this ASU, the amortization period for certain callable debt securities held at a premium is shortened to more closely align the amortization period with expectations incorporated in market pricing on the underlying securities. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The adoption of this standard will not have an impact on the Company's consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715) - Improving the Net Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The objective of this standard update is to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. This standard update requires employers to disaggregate the service cost component from the other components of net benefit cost. This ASU also provides guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. The other components of net benefit cost, which are expected to more than offset the service cost component, are required to be presented in the income statement separately from the service cost component and outside of operating profit. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. This ASU will be applied retrospectively for the presentation of the service cost component and the other components of net benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component and the other components of net benefit cost in assets. The standard update allows for a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company intends to apply this practical expedient for prior period presentation. The Company currently estimates that the service cost component to be included in operating profit will be approximately $4.9 million and the other components of net benefit cost will have a favorable impact to other (income) expense, net of approximately $11.5 million in 2018. In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)". The objective of this standard update is to clarify the scope of asset derecognition guidance and to provide new guidance for partial sales of nonfinancial assets. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted; however, an entity is required to apply the amendments in this ASU in the same period that it applies the amendments for ASU 2014-09. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The objective of this standard update is to simplify the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Under this ASU, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, assuming the loss recognized does not exceed the total amount of goodwill for the reporting unit. The standard update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The impact of the adoption of this standard update is dependent on the Company's goodwill impairment assessment. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash". The objective of this standard update is to address the diversity in classification and presentation of changes in restricted cash on the statement of cash flows. Under this ASU, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory". Under this ASU, income tax |
Restructuring Costs Restructuri
Restructuring Costs Restructuring Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | RESTRUCTURING COSTS During the third quarter of 2017, the Company initiated restructuring activities at its Aerospace segment to support the ongoing effort of improving capacity utilization and operating efficiency to better position the Company for increased profitability and growth. Such actions include workforce reductions and the consolidation of operations, which began in the third quarter of 2017 and will continue through the planned completion of restructuring activities in the fourth quarter of 2018. The Company currently expects these actions to result in approximately $7.0 million to $8.5 million in pre-tax restructuring and transition charges. The Company anticipates these actions will result in total cost savings of approximately $4.0 million annually beginning in 2019. The following table summarizes the accrual balances by cost type for the restructuring actions: Severance Other (1) Total In thousands Restructuring accrual balance at December 31, 2016 $ — $ — $ — Provision 1,369 178 1,547 Cash payments (202 ) — (202 ) Changes in foreign currency exchange rates 5 1 6 Restructuring accrual balance at December 31, 2017 $ 1,172 $ 179 $ 1,351 (1) Includes costs associated with consolidation of facilities. The above accrual balance was included in other current liabilities on the Company's Consolidated Balance Sheets. For the year ended December 31, 2017, restructuring expense, totaling $2.7 million , was included in restructuring costs on the Company's Consolidated Statements of Operations. Included in this expense is approximately $1.0 million of cost that primarily relates to the write-off of inventory for various small order programs that the Company will no longer continue to manufacture as a result of the consolidation of operations. In addition to the restructuring activity, the Distribution segment and Aerospace segment incurred $0.5 million and $0.4 million , respectively, of other severance expense in 2017. There was also $2.8 million in separation costs associated with two senior executives recorded in accrued salaries and wages on the Company's Consolidated Balance Sheets as of December 31, 2017. These amounts are not included in the table above. During the third quarter of 2016, the Company offered a voluntary retirement program to certain employees of its Distribution segment. This program resulted in $0.3 million of expense, all of which was included in "Selling, general and administrative expenses" on the Company's Consolidated Statements of Operations for the year ended December 31, 2016. In addition to the restructuring activity, the Distribution segment and Aerospace segment incurred $0.7 million and $2.5 million of severance expense in 2016, respectively. These amounts are not included in the table above. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | ACCOUNTS RECEIVABLE, NET Accounts receivable consist of the following: At December 31, 2017 2016 In thousands Trade receivables $ 152,078 $ 143,471 U.S. Government contracts: Billed 26,093 17,244 Costs and accrued profit – not billed 862 1,478 Commercial and other government contracts: Billed 107,962 50,560 Costs and accrued profit – not billed 30,590 22,234 Less allowance for doubtful accounts (4,134 ) (4,123 ) Total $ 313,451 $ 230,864 3. ACCOUNTS RECEIVABLE, NET (CONTINUED) The increase in commercial and other government contracts billed is primarily related to receivables due under a JPF DCS program, secured by a letter of credit from our customer. Additionally, $3.7 million of unbilled receivables and accrued profit for the K-MAX® program were included in Other assets on the Company's Consolidated Balance Sheet as of December 31, 2016, as the amounts due were expected to be collected more than one year after the balance sheet date. At December 31, 2017, all receivables for the K-MAX® program were included in accounts receivable, net, as the amounts due are expected to be collected within one year of the balance sheet date. Accounts receivable, net includes amounts for matters such as contract changes, negotiated settlements and claims for unanticipated contract costs. These amounts are as follows: At December 31, 2017 2016 In thousands Contract changes, negotiated settlements and claims for unanticipated contract costs $ 900 $ 900 Total $ 900 $ 900 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or the price paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following table provides the carrying value and fair value of financial instruments that are not carried at fair value at December 31, 2017 and 2016 : 2017 2016 In thousands Carrying Value Fair Value Carrying Value Fair Value Long-term debt: Level 1 $ — $ — $ 113,203 $ 170,935 Level 2 405,602 428,432 303,855 279,582 Total $ 405,602 $ 428,432 $ 417,058 $ 450,517 The above fair values were computed based on quoted market prices (Level 1 and 2) and discounted future cash flows (Level 2 observable inputs), as applicable. Differences from carrying values are attributable to interest rate changes subsequent to when the transactions occurred. The fair values of cash and cash equivalents, accounts receivable, net, and accounts payable - trade approximate their carrying amounts due to the short-term maturities of these instruments. 4. FAIR VALUE MEASUREMENTS (CONTINUED) Recurring Fair Value Measurements The Company holds derivative instruments for foreign exchange contracts and interest rate swaps that are measured at fair value using observable market inputs such as forward rates and our counterparties’ credit risks. Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy and have been included in Other current assets and Other assets on the Consolidated Balance Sheet at December 31, 2017 and 2016 . Based on the continued ability to trade and enter into forward contracts and interest rate swaps, the Company considers the markets for the fair value instruments to be active. The Company evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of December 31, 2017 , such credit risks have not had an adverse impact on the fair value of these instruments. Nonrecurring Fair Value Measurements Goodwill and indefinite-lived intangible assets are tested for possible impairment during the fourth quarter of each year. The nonrecurring fair value measurement for goodwill was developed using significant unobservable inputs (Level 3). For step-one of the impairment analysis, the primary valuation technique used was an income methodology based on management’s estimates of forecasted cash flows for each business unit, with those cash flows discounted to present value using rates commensurate with the risks associated with those cash flows. In addition, management used a market-based valuation method involving analysis of market multiples of revenues and EBITDA for a group of comparable public companies. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are reported on the Consolidated Balance Sheets at fair value. Changes in the fair values of derivatives are reported each period in earnings or accumulated other comprehensive income, depending on whether a derivative is effective as part of a hedged transaction. Gains and losses on derivative instruments reported in accumulated other comprehensive income are subsequently included in earnings in the periods in which earnings are affected by the hedged item. The Company does not use derivative instruments for speculative purposes. The Company held forward exchange contracts designed to hedge forecasted transactions denominated in foreign currencies and to minimize the impact of foreign currency fluctuations on the Company’s earnings and cash flows. Some of those contracts were designated as cash flow hedges. The Company will include in earnings amounts currently included in accumulated other comprehensive income upon recognition of cost of sales related to the underlying transaction. Cash Flow Hedges Interest Rate Swaps The Company’s Term Loan Facility (“Term Loan”) contains floating rate obligations and is subject to interest rate fluctuations. During 2015, the Company entered into interest rate swap agreements for the purposes of hedging the eight quarterly variable-rate Term Loan interest payments due in 2016 and 2017. Additionally, the Company entered into interest rate swap agreements to effectively convert $83.8 million of our variable rate revolving credit facility debt to a fixed interest rate. These interest rate swap agreements were designated as cash flow hedges and intended to manage interest rate risk associated with our variable-rate borrowings and minimize the impact on our earnings and cash flows of interest rate fluctuations attributable to changes in LIBOR rates. These agreements were not material to the Company's Consolidated Balance Sheets for the years ended December 31, 2017 and 2016 . As of December 31, 2017, these interest rate swap agreements had all matured and were no longer outstanding. The activity related to these contracts was not material to the Company's Consolidated Financial Statements for the year ended December 31, 2017 . The Company reclassified $0.9 million of expense from other comprehensive income for the year ended 2016 , respectively. No amounts related to cash flow hedges are expected to be reclassified from other comprehensive income over the next twelve months. 5. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) Derivatives Not Designated as Hedges Forward Exchange Contracts From time to time, the Company will enter into foreign exchange contracts that are not designated as hedging instruments. These contracts are entered into in order to minimize the impact of foreign currency fluctuations on the Company's earnings and cash flows. The Company reports expense related to these contracts in Other (income) expense, net on the Consolidated Statements of Operations. During the fourth quarter of 2015, the Company entered into forward exchange contracts to minimize the impact of foreign currency fluctuations on the Company's earnings and cash flows. These contracts were entered into as a result of forecasted foreign currency transactions associated with a portion of the purchase price of GRW in the amount of €135.0 million . For the year ended December 31, 2015, the Company reported expense of $2.2 million in Other (income) expense, net related to the change in the value of these contracts from the date the Company entered into them to their settlement date. At the settlement date, the Company took delivery of the Euros and further decreases in the exchange rate resulted in expense of $0.8 million , reported in Other (income) expense, net for the period of time between the settlement of the contracts and the closing of the acquisition. In addition to the forward exchange contract mentioned above, the Company held forward exchange contracts to mitigate the risk associated with foreign currencies that were not designated as hedging instruments as of December 31, 2017 and 2016 . The balances associated with the contracts and the gains or losses reported in Other (income) expense, net were not material for the years ended December 31, 2017 , 2016 or 2015 . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consist of the following: At December 31, 2017 2016 In thousands Merchandise for resale $ 151,520 $ 158,618 Raw materials 18,871 20,592 Contracts in process: U.S. Government, net of progress payments of $10,810 and $28,824 in 2017 and 2016, respectively 75,448 85,779 Commercial and other government contracts 55,510 81,420 Other work in process (including certain general stock materials) 40,445 22,096 Finished goods 25,643 25,309 Total $ 367,437 $ 393,814 General and administrative costs charged to inventory by Aerospace segment operations during 2017 and 2016 were $14.7 million and $13.0 million , respectively. The estimated amounts of general and administrative costs remaining in contracts in process at December 31, 2017 and 2016 , were $10.6 million and $11.0 million , respectively. These estimates are based on the ratio of such costs to total costs of production. The Company had inventory of $5.2 million and $6.4 million as of December 31, 2017 and 2016 , respectively, on consignment at customer locations, the majority of which is held by Distribution segment customers. Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for unanticipated contract costs, which totaled $4.4 million and $3.6 million at December 31, 2017 and 2016 , respectively. 6. INVENTORIES (CONTINUED) At December 31, 2017 and 2016 , $25.5 million and $32.0 million , respectively, of K-MAX® inventory, including inventory associated with the new build aircraft, was included in contracts and other work in process inventory and finished goods on the Company's Consolidated Balance Sheets. Management believes that approximately $15.7 million of the K-MAX® inventory will be sold after December 31, 2018 , based upon the anticipation of additional aircraft manufacturing and supporting the fleet for the foreseeable future. At December 31, 2017 and 2016 , $6.2 million and $7.2 million , respectively, of SH-2G(I), formerly SH-2G(A), inventory was included on the Company's balance sheet in contracts and other work in process inventory. Management believes that approximately $3.3 million of the SH-2G(I) inventory will be sold after December 31, 2018. This balance represents spares requirements and inventory to be used in SH-2G programs. At December 31, 2017 , backlog for the A-10 program with Boeing was $1.2 million , representing 3 shipsets, and total program inventory was $8.7 million , of which $7.0 million is associated with nonrecurring costs and $0.5 million represents materials to be utilized on future shipset orders. Through December 31, 2017 , the Company has delivered 170 shipsets over the life of the program. In 2017, the U.S Air Force ("USAF") confirmed that the A-10 fleet would continue indefinitely due to its unique close-air support functions, with support from both Congress and the White House. The government budget released in May 2017 outlined the plan to maintain the fleet and the defense bill signed in December 2017 authorized wing replacements. Although Congress must authorize the spending requirement, lawmakers have pushed for approval as the grounding of these aircraft would result in a significant capability gap for U.S. service members. The Company has not received any orders for additional shipsets in 2017; however, the customer has not given any indication that this program will be terminated. Final production and deliveries of existing orders under this contract are anticipated to be completed during 2018. Tooling and nonrecurring costs on this program are being amortized over 242 shipsets, the number of shipsets under the program of record. These nonrecurring costs may not be recoverable in the event of an extended break in production or program termination. |
Property Plant and Equipment, N
Property Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment, Net | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is summarized as follows: At December 31, 2017 2016 In thousands Land $ 15,163 $ 14,921 Buildings 104,763 97,265 Leasehold improvements 20,746 20,068 Machinery, office furniture and equipment 269,417 249,068 Construction in process 27,974 21,565 Total 438,063 402,887 Less accumulated depreciation (252,611 ) (226,366 ) Property, plant and equipment, net $ 185,452 $ 176,521 Depreciation expense was $27.7 million , $27.5 million and $24.1 million for 2017 , 2016 and 2015 , respectively. The Company is currently implementing new enterprise resource planning ("ERP") systems at both its Aerospace segment and its Distribution segment. For the years ended December 31, 2017 , 2016 and 2015 , expenses incurred totaled approximately $1.2 million , $2.0 million and $1.2 million , respectively, and capital expenditures totaled $3.6 million , $4.1 million , and $6.4 million , respectively. Total to date ERP system capital expenditures as of December 31, 2017 , were $48.2 million . Depreciation expense for the ERP systems for the years ended December 31, 2017 , 2016 and 2015 , totaled $3.3 million , $3.9 million and $3.8 million , respectively. 7. PROPERTY, PLANT AND EQUIPMENT, NET (CONTINUED) Capital Leases For the year ended December 31, 2017 , $7.2 million of assets purchased under the Company's master leasing agreement with PNC Equipment Finance ("PNC") and accounted for as capital leases was included in machinery, office furniture and equipment and construction in process, with accumulated depreciation of $0.8 million . For the year ended December 31, 2016 , $3.6 million of assets purchased under the Company's master leasing agreement with PNC and accounted for as capital leases was included in machinery, office furniture and equipment with accumulated depreciation of $0.4 million . Depreciation expense associated with the capital leases was $0.4 million , $0.3 million and $0.1 million for 2017 , 2016 and 2015 , respectively. See Note 15, Commitments and Contingencies , for a discussion on the master leasing agreement. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company: 2017 2016 Distribution Aerospace Total Distribution Aerospace Total In thousands Gross balance at beginning of period $ 149,204 $ 204,942 $ 354,146 $ 149,204 $ 219,758 $ 368,962 Accumulated impairment — (16,252 ) (16,252 ) — (16,252 ) (16,252 ) Net balance at beginning of period 149,204 188,690 337,894 149,204 203,506 352,710 Additions — — — — 2,138 2,138 Impairments — — — — — — Foreign currency translation — 13,823 13,823 — (7,342 ) (7,342 ) Purchase price adjustment (1) — — — — (9,612 ) (9,612 ) Net balance at end of period $ 149,204 $ 202,513 $ 351,717 $ 149,204 $ 188,690 $ 337,894 Accumulated impairment at end of period $ — $ (16,252 ) $ (16,252 ) $ — $ (16,252 ) $ (16,252 ) (1) During the purchase price measurement period, the Company made adjustments to the purchase price allocation related to the GRW acquisition. These adjustments were for the finalization of certain tax matters and the reduction of the accrual related to the environmental remediation at the Rimpar, Germany facility. 2017 Analysis In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment on at least an annual basis. Upon completion of the 2017 qualitative assessment of events and circumstances affecting recorded goodwill as described in Note 1, Summary of Significant Accounting Policies , the Company concluded that the Aerosystems and Distribution reporting units should receive a Step 1 analysis, while qualitative assessments should be performed for the Specialty Bearings and Engineered Products and KPP - Orlando reporting units. The qualitative assessment performed for Specialty Bearings and Engineered Products and KPP - Orlando took into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting unit, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. The results of these analyses indicated that these reporting units did not need to proceed to the two-step impairment test. 8. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED) Goodwill - continued 2017 Analysis - continued A Step 1 analysis was performed for the Distribution and Aerosystems reporting units. The results of the Step 1 analyses indicated that the Company did not need to proceed to Step 2, as the percentage by which the fair value exceeds the carrying value was greater than 68% and 25% for the Distribution and Aerosystems reporting units, respectively. The increase in fair value for these reporting units, as compared to 2016, was partially driven by a benefit to future cash flows as a result of the enactment of Tax Reform during the fourth quarter of 2017. The Company performed a sensitivity analysis relative to the discount rate and growth rate selected and determined a decrease of one percentage point in the terminal growth rate or an increase of one percentage point in the discount rate would not result in a fair value calculation less than the carrying value for both reporting units. 2016 Analysis The Company performed a reevaluation of its reporting units for the purposes of its annual goodwill assessment. As previously disclosed in our 2015 Form 10-K, RWG, EXTEX and GRW were reorganized under the single management team of Kaman Specialty Bearings and Engineered Products. The Company tested the new reporting unit for impairment immediately after its creation by comparing the sum of the fair values of the entities moved into the new reporting unit to the carrying value of the new reporting unit, noting the fair value exceeded the carrying value. Prior to the reorganization, these reporting units were stand-alone reporting units. The fair value of RWG was assessed as part of our 2015 annual test for goodwill impairment, prepared during the fourth quarter of 2015. EXTEX and GRW were acquired during the fourth quarter of 2015 and as such were not included in the 2015 annual test for goodwill impairment. There were no significant changes to the conditions of the entities in the new reporting unit that would have impacted the results of the analysis as of January 1, 2016. Since this was the first year the Company assessed goodwill at this reporting unit level, the two-step impairment test was performed. Upon completion of our 2016 qualitative assessment of events and circumstances affecting recorded goodwill as described in Note 1, Summary of Significant Accounting Policies , the Company concluded that all reporting units, other than KPP - Orlando, should receive a Step 1 analysis. The qualitative assessment performed for KPP - Orlando took into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting unit, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. The results of this analysis indicated that this reporting unit did not need to proceed to the two-step impairment test. For the remaining reporting units the Company performed a Step 1 analysis. The results of the Step 1 analyses indicated that the Company did not need to proceed to Step 2, as the percentage by which the fair value exceeds the carrying value was greater than 25% for all reporting units other than Aerosystems, whose fair value exceeded carrying value by 4% . The Company performed a sensitivity analysis relative to the discount rate and growth rate selected and determined a decrease of one percentage point in the terminal growth rate or an increase of one percentage point in the discount rate would not result in a fair value calculation less than the carrying value for the Kaman Specialty Bearings and Engineered Products and Kaman Distribution reporting units. An increase of one percentage point in the discount rate would result in a fair value approximately 5% less than the carrying value for the Kaman Aerosystems reporting unit. A decrease of one percentage point in the terminal growth rate would not result in a fair value calculation less than the carrying value for the Kaman Aerosystems reporting unit. 8. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED) Other Intangible Assets Other intangible assets consisted of: At December 31, At December 31, 2017 2016 Amortization Period Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization In thousands Customer lists / relationships 6-26 years $ 159,592 $ (65,036 ) $ 154,745 $ (51,800 ) Developed technologies 10-20 years 20,148 (2,790 ) 19,049 (1,394 ) Trademarks / trade names 3-15 years 8,995 (3,905 ) 8,344 (3,250 ) Non-compete agreements and other 1-9 years 8,345 (8,319 ) 8,096 (7,444 ) Patents 17 years 523 (435 ) 523 (425 ) Total $ 197,603 $ (80,485 ) $ 190,757 $ (64,313 ) The decrease in the other intangible assets, net balance at December 31, 2017 , as compared to December 31, 2016 , was primarily due to amortization. Intangible asset amortization expense was $14.6 million , $15.6 million and $11.8 million in 2017 , 2016 and 2015 , respectively. 2017 Analysis In accordance with ASC 360 - Property, Plant, and Equipment ("ASC 360"), the Company is required to evaluate long-lived assets for possible impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. As a result of operating losses, the Company identified a triggering event during the fourth quarter of 2017. The Company evaluated certain long-lived assets associated with the U.K. and Engineering Services facilities, for which the primary assets within the asset groups were intangible assets. The total amount of intangible assets at the U.K. and Engineering Services businesses at December 31, 2017 was $11.3 million and $1.2 million , respectively. The Company compared the carrying amount of these long-lived assets to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. The carrying value did not exceed the fair value, indicating there was no impairment of long-lived assets held by the U.K. and Engineering Services businesses. 2016 Analysis During the fourth quarter of 2016, the Company evaluated certain long-lived assets associate with the U.K. Composites facility. The Company compared the carrying amount of these long-lived assets to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. The carrying value did not exceed the fair value, indicating there was no impairment of long-lived assets held by the U.K. Composites business. Estimated amortization expense for the next five years associated with intangible assets existing as of December 31, 2017 , is as follows: In thousands 2018 $ 13,866 2019 $ 12,456 2020 $ 11,957 2021 $ 11,435 2022 $ 11,042 8. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED) Other Intangible Assets - continued In order to determine the useful life of acquired intangible assets, the Company considers numerous factors, most importantly the industry considerations associated with the acquired entities. The Company determines the amortization period for acquired intangible assets, such as customer relationships based primarily on an analysis of their historical customer sales attrition information and the period over which the assets are expected to deliver meaningful cash flow generation in support of the fair value of the asset. |
Environmental Costs
Environmental Costs | 12 Months Ended |
Dec. 31, 2017 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Costs | ENVIRONMENTAL COSTS The following table displays the activity and balances associated with accruals related to environmental costs included in other accruals and payables and other long-term liabilities: 2017 2016 In thousands Balance at January 1 $ 6,635 $ 11,609 Additions to accrual 442 314 Payments (1,062 ) (1,543 ) Other (1) — (3,779 ) Changes in foreign currency exchange rates 42 34 Balance at December 31 $ 6,057 $ 6,635 (1) In 2015, the Company recorded approximately $4.2 million related to environmental remediation at the newly acquired Rimpar, Germany facility. During 2016, the Company reduced this liability to approximately $0.5 million based on the results of the Phase II assessment. See Note 15, Commitments and Contingencies for further detail on this matter. Bloomfield In August 2008, the Company completed its purchase of the portion of the Bloomfield campus that Kaman Aerospace Corporation had leased from NAVAIR for many years. In connection with the purchase, the Company has assumed responsibility for environmental remediation at the facility as may be required under the Connecticut Transfer Act (the “Transfer Act”) and it continues the effort to define the scope of the remediation that will be required by the Connecticut Department of Environmental Protection (“CTDEP”). The transaction was recorded by taking the undiscounted estimated remediation liability of $20.8 million and discounting it at a rate of 8% to its present value. The fair value of the Navy Property asset, which at that time approximated the discounted present value of the assumed environmental liability of $10.3 million , is included in Property, plant and equipment, net. This remediation process will take many years to complete. The following represents estimated future payments for the undiscounted environmental remediation liability related to the Bloomfield campus as of December 31, 2017 : In thousands 2018 $ 403 2019 451 2020 171 2021 513 2022 151 Thereafter 4,524 Total $ 6,213 9. ENVIRONMENTAL COSTS (CONTINUED) Other During 2014, the Company sold its former manufacturing facility in Moosup, Connecticut to TD Development, LLC. In connection with the sale, the Company agreed to contribute $4.0 million in cash to an escrow account over a four -year period to fund TD's environmental remediation work performed on the site. The Company funded $1.6 million to the escrow account between 2014 and 2015. TD stopped work on the site in 2016 and is in default of its obligations under the sale agreements. The accrual related to this matter remained at $ 2.4 million as of December 31, 2017, unchanged from the prior year. The Company's environmental accrual also includes estimated environmental remediation costs that the Company expects to incur at the former Music segment’s New Hartford, CT facility and the Aerospace segment’s facility in Rimpar, Germany. The Company continues to assess the work that may be required at each of these facilities, which may result in a change to this accrual. For further discussion of these matters, see Note 15, Commitments and Contingencies . |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Long-Term Debt The Company has long-term debt as follows: At December 31, 2017 2016 In thousands Revolving credit agreement $ 140,074 $ 212,605 Term loan 84,375 91,250 Convertible notes 181,153 113,203 Total 405,602 417,058 Less current portion 7,500 120,078 Total excluding current portion $ 398,102 $ 296,980 At December 31, 2017 and 2016 , the Company's Consolidated Balance Sheets were net of debt issuance costs of $6.5 million and $0.9 million , respectively. The weighted average interest rate on long-term borrowings outstanding as of December 31, 2017 and 2016 , was 3.02% and 2.48% , respectively. For the years ended December 31, 2017 and 2016 , $ 5.0 million and $2.6 million , respectively, of liabilities associated with our capital leases are included in other long-term liabilities. See Note 15, Commitments and Contingencies, for a discussion of the master leasing agreement. The aggregate annual maturities of long-term debt for each of the next five years are approximately as follows: In thousands 2018 $ 7,500 2019 $ 9,375 2020 $ 207,574 2021 $ — 2022 $ — 10. DEBT (CONTINUED) Convertible Notes Overview During the fiscal quarter ended June 30, 2017, the Company issued $200.0 million aggregate principal amount of convertible senior unsecured notes due May 2024 (the "2024 Notes") pursuant to an indenture (the "Indenture"), dated May 12, 2017, between the Company and U.S. Bank National Association, as trustee. In connection therewith, the Company entered into certain capped call transactions that cover, collectively, the number of shares of the Company's common stock underlying the 2024 Notes. In a separate transaction, the Company repurchased $103.5 million aggregate principal amount of its existing convertible senior unsecured notes due November 15, 2017 (the "2017 Notes"). In connection with the repurchase and conversion transactions of the 2017 Notes, the Company settled the associated outstanding bond hedge transactions and a portion of the associated warrant transactions it entered into in 2010 in connection with their issuance. The remaining portion of the 2017 Notes were convertible at the option of the noteholders until the close of business on the second Scheduled Trading Day (as defined in the 2017 Notes indenture) immediately preceding the maturity date. On November 10, 2017 and November 13, 2017, the Company received conversion notices from bondholders, totaling the remaining $11.5 million principal amount outstanding under the 2017 Notes. The Company also settled the remaining portion of the bond hedge. The existing warrant transactions associated with the 2017 Notes remained outstanding, with scheduled expiration dates between February 13, 2018 and June 21, 2018, unless earlier settled, which will result in a reduction in additional paid-in-capital. The Company anticipates settling the outstanding warrants with approximately 90,000 shares of the Company's common stock. See below for further discussion on the issuance of the 2024 Notes, the repurchase of the 2017 Notes and the related transactions. 2024 Notes On May 12, 2017, the Company issued $175.0 million in principal amount of 2024 Notes, in a private placement offering. On May 24, 2017, the Company issued an additional $25.0 million in principal amount of 2024 Notes pursuant to the initial purchasers' exercise of their overallotment option, resulting in the issuance of an aggregate $200.0 million principal amount of 2024 Notes. The 2024 Notes bear 3.25% interest per annum on the principal amount, payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2017. The 2024 Notes will mature on May 1, 2024, unless earlier repurchased by the Company or converted. The Company will settle any conversions of the 2024 Notes in cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. Use of proceeds from the issuance of the 2024 Notes was as follows: In thousands Proceeds: Gross proceeds $ 200,000 Commission fees and other expenses (1) (7,348 ) Net proceeds $ 192,652 Use of Proceeds: Cost to repurchase $103.5 million aggregate principal amount of 2017 Notes (2) $ (106,744 ) Cost for capped call transaction related to 2024 Notes (20,500 ) Payment made to reduce revolving credit facility (3 ) (65,408 ) Total use of proceeds $ (192,652 ) (1) Debt issuance fees paid to the counterparties and other expenses (i.e. legal and accounting fees) related to the issuance of the 2024 Notes were capitalized. (2) The total aggregate cost to repurchase 90% of the 2017 Notes was $165.3 million , of which $58.6 million was repaid using the proceeds received from the unwind of the bond hedge transactions. Included in this balance is $1.7 million of related accrued interest payments. (3) Additional payments to the revolving credit facility were made from proceeds received as part of the bond hedge settlement related to the repurchase of the 2017 Notes. See the 2017 Notes section below for further discussion. 10. DEBT (CONTINUED) Convertible Notes - continued 2024 Notes - continued The following table illustrates the conversion rate at the date of issuance of the 2024 Notes: 2024 Notes Conversion Rate per $1,000 principal amount (1) 15.3227 Conversion Price (2) $ 65.2626 Contingent Conversion Price (3) $ 84.84 Aggregate shares to be issued upon conversion (4) 3,064,540 (1) Represents the number of shares of Common Stock hypothetically issuable per each $1,000 principal amount of 2024 Notes, subject to adjustments upon the occurrence of certain specified events in accordance with the terms of the Indenture. (2) Represents $1,000 divided by the conversion rate as of such date. The conversion price reflects the strike price of the embedded option within the 2024 Notes. If the Company's share price exceeds the conversion price at conversion, the noteholders would be entitled to receive additional consideration either in cash, shares or a combination thereof, the form of which is at the sole discretion of the Company. (3) Prior to November 1, 2023, the notes are convertible only in the following circumstances: (1) during any fiscal quarter commencing after July 1, 2017, and only during any such fiscal quarter, if the last reported sale price of the Company's common stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter, (2) during the five consecutive business day period following any ten consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day or (3) upon the occurrence of specified corporate events. On or after November 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. If the Company undergoes a fundamental change (as defined in the Indenture), holders of the notes may require the Company to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount to be repurchased, plus any accrued and unpaid interest. As of December 31, 2017, none of the conditions permitting the holders of the 2024 Notes to convert had been met. Therefore, the 2024 Notes are classified as long-term debt. (4) This represents the number of shares hypothetically issuable upon conversion of 100% of the outstanding aggregate principal amount of the 2024 Notes at each date; however, the terms of the 2024 Notes state that the Company may pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. The Company currently intends to settle the aggregate principal amount in cash. Amounts due in excess of the principal, if any, also may be settled in cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. In connection with the 2024 Notes offering, the Company entered into capped call transactions with certain of the initial purchasers or their respective affiliates. These transactions are intended to reduce the potential dilution to the Company's shareholders and/or offset the cash payments the Company is required to make in excess of the principal amount upon any future conversion of the notes in the event that the market price per share of the Company's common stock is greater than the strike price of the capped call transactions, with such reduction and/or offset subject to a cap based on the cap price of the capped call transactions. Under the terms of the capped call transactions, the strike price ( $65.2626 ) and the cap price ( $88.7570 ) are each subject to adjustment in certain circumstances. In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates entered into various derivative transactions with respect to the Company’s common stock concurrently with or shortly after the pricing of the notes. The capped call transactions, which cost an aggregate $20.5 million , were recorded as a reduction of additional paid-in capital. Accounting Standards Codification ("ASC") Topic 815 - Derivatives and Hedging ("ASC 815") provides that contracts are initially classified as equity if (1) the contract requires physical settlement or net-share settlement, or (2) the contract gives the company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The settlement terms of our capped call transactions require net-share settlement. Based on the guidance in ASC 815, the capped call transactions were recorded as a reduction of equity as of the trade date. ASC 815 states that a reporting entity shall not consider contracts to be derivative instruments if the contract issued or held by the reporting entity is both indexed to its own stock and classified in shareholders' equity in its balance sheet. The Company concluded the capped call transactions should be accounted for in shareholders' equity and are, therefore, not to be considered a derivative instrument. 10. DEBT (CONTINUED) Convertible Notes - continued 2024 Notes - continued ASC 470-20 "Debt with Conversion and Other Options " (“ASC 470-20”) clarifies the accounting for convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement. ASC 470-20 specifies that an issuer of such instruments should separately account for the liability and equity components of the instruments in a manner that reflects the issuer's non-convertible debt borrowing rate which interest costs are to be recognized in subsequent periods. The note payable principal balance for the 2024 Notes at the date of issuance of $200.0 million was bifurcated into the debt component of $179.5 million and the equity component of $20.5 million . The difference between the note payable principal balance and the fair value of the debt component representing the debt discount is being accreted to interest expense over the term of the 2024 Notes. The fair value of the debt component was recognized using a 5.0% discount rate, representing the Company's borrowing rate at the date of issuance for a similar debt instrument without a conversion feature with an expected life of seven years. The Company incurred $7.4 million of debt issuance costs in connection with the sale of the 2024 Notes, which was allocated between the debt and equity components of the instrument. Of the total amount, $0.7 million was recorded as an offset to additional paid-in capital. The balance, $6.7 million , was recorded as a contra-debt balance and is being amortized over the term of the 2024 Notes. Total amortization expense for the year ended December 31, 2017 was $0.5 million . The carrying amount of the equity component and the principal amount of the liability component, the unamortized discount and the net carrying value of the liability are as follows: 2024 Notes December 31, 2017 December 31, 2016 In thousands Principal amount of liability $ 200,000 $ — Unamortized discount 18,847 — Carrying value of liability $ 181,153 $ — Equity component $ 20,459 $ — Because the embedded conversion option is indexed to the Company’s own stock and would be classified in shareholders’ equity, it does not meet the criterion under ASC 815 that would require separate accounting as a derivative instrument. As of December 31, 2017 , the "if converted value" did not exceed the principal amount of the 2024 Notes since the closing sales price of the Company's common stock was less than the conversion price of the 2024 Notes. Interest expense associated with the 2024 Notes consisted of the following: For the year ended December 31, 2017 2016 2015 In thousands Contractual coupon rate of interest $ 4,207 $ — $ — Accretion of convertible notes discount 1,612 — — Interest expense - convertible notes $ 5,819 $ — $ — 10. DEBT (CONTINUED) Convertible Notes - continued 2017 Notes 2017 Notes December 31, December 31, In thousands Principal amount of liability $ — $ 115,000 Unamortized discount — 1,797 Carrying value of liability $ — $ 113,203 In November 2010, the Company issued convertible senior unsecured notes due on November 15, 2017, in the aggregate principal amount of $115.0 million in a private placement offering. These notes bore 3.25% interest per annum on the principal amount, payable semiannually in arrears on May 15 and November 15 of each year, beginning in 2011. In May 2017, the Company used a portion of the net proceeds from the issuance of the 2024 Notes, along with cash received from the counterparties in connection with the termination of the existing convertible note hedge transactions referred to below, to repurchase $103.5 million principal amount of the 2017 Notes from a limited number of holders in an arm's length transaction. This repurchase represented approximately 90% of the aggregate principal amount of 2017 Notes. The repurchases were accounted for as an extinguishment of the outstanding instrument. Of the total aggregate cost of $165.3 million , $60.0 million was allocated to the equity component of the 2017 Notes and was recorded as a reduction to additional paid-in capital. The remainder of the cost was attributed to the outstanding principal repurchased and accrued interest. The repayment of a portion of the 2017 Notes was not contingent upon the issuance of the 2024 Notes. As such, the repurchase of the 2017 Notes was accounted for as a debt extinguishment. See below for further details on the loss on extinguishment: In thousands Carrying value of 2017 Notes $ 113,943 Carrying value of Redeemed Debt $ 102,548 Fair value of consideration transferred allocated to debt component (1) 103,637 Loss on extinguishment of 2017 Notes (2) $ (1,089 ) Acceleration of the related portion of debt issuance cost (3) (297 ) Total loss on extinguishment of 2017 Notes (4) $ (1,386 ) ( 1 ) The fair value of consideration transferred was calculated using a discount rate of 3% , representing the Company's borrowing rate at the date of issuance for a similar debt instrument with a remaining expected life of six months (for the 2017 Notes). (2) The majority of this balance relates to the write-off of approximately $1.0 million , 90% of the unamortized debt discount. (3) The Company determined that in connection with the repurchase of the 2017 Notes, 90% of the unamortized debt issuance costs should be written off, representing the approximate outstanding portion of these costs related to the notes repurchased. (4) This loss is included in interest expense, net on the Company's Consolidated Statement of Operations. In connection with the 2017 Notes, the Company had entered into convertible note hedge transactions and warrant transactions ("existing call spread transactions") with certain financial institutions. These transactions were accounted for as equity instruments at the time of issuance in 2010. With the intention of repurchasing the 2017 Notes, the Company entered into agreements with these financial institutions to terminate a portion of the existing call spread transactions concurrently with the offering. In connection with these transactions, the Company received $58.6 million in payments related to the unwind of 90% of the convertible note hedge transactions and made deliveries of 624,044 shares of the Company's common stock in connection with the partial unwind of the warrant transactions. The Company used a portion of the proceeds from the bond hedge settlement to repurchase the 2017 Notes as described above and to make a payment to the revolving credit facility. The cash proceeds received were recorded as an increase of additional paid-in-capital which was partially offset by the delivery of shares. 10. DEBT (CONTINUED) Convertible Notes - continued 2017 Notes - continued The remaining portion of the 2017 Notes were convertible at the option of the bondholders until the close of business on the second Scheduled Trading Day (as defined in the 2017 Notes indenture) immediately preceding the maturity date. On November 10, 2017 and November 13, 2017, the Company received conversion notices from bondholders, totaling the remaining $11.5 million principal amount outstanding under the 2017 Notes. The Company settled the principal amount of $11.5 million in cash, with the excess settled in shares, delivering 136,347 shares of the Company's common stock with an approximate value of $7.5 million , and any fractional shares settled in cash. Additionally, the Company received 136,369 shares to settle the remaining 10% of the convertible note hedge transactions associated with the 2017 Notes. The cash proceeds received were recorded as an increase of additional paid-in-capital which were offset by the delivery of shares. The existing warrant transactions associated with the 2017 Notes remained outstanding, with scheduled expiration dates between February 13, 2018 and June 21, 2018, unless earlier settled, which will result in a reduction in additional paid-in-capital. Interest expense associated with the 2017 Notes consisted of the following: For the year ended December 31, 2017 2016 2015 In thousands Contractual coupon rate of interest $ 3,270 $ 3,738 $ 3,738 Accretion of convertible notes discount 1,797 2,144 2,035 Interest expense - convertible notes $ 5,067 $ 5,882 $ 5,773 Revolving Credit and Term Loan Agreements The Company has a $700.0 million Credit Agreement (the "Credit Agreement"), as amended, with JPMorgan Chase Bank N.A., as Administrative Agent, Bank of America, N.A. and Citizens Bank, N.A. as Co-Syndication Agents and SunTrust Bank, KeyBank N.A., TD Bank, N.A., BB&T and Fifth Third Bank, as Co-Documentation Agents. The Credit Agreement matures on May 6, 2020 and has revolving commitments of $600.0 million and a Term Loan commitment of $100.0 million . Capitalized terms used but not defined within this Note 10, Debt , have the meanings ascribed thereto in the Credit Agreement. The Term Loan commitment requires quarterly payments of principal (which commenced on June 30, 2015) at the rate of $1.25 million , increasing to $1.875 million on June 30, 2017, and then to $2.5 million on June 30, 2019, with $65.0 million payable in the final quarter of the facility's term. The facility includes an accordion feature that allows the Company to increase the aggregate amount available up to $900.0 million with additional commitments from the Lenders. The revolving credit facility permits the Company to pay cash dividends. The Lenders have been granted a security interest in substantially all of the Company’s and its domestic subsidiaries’ personal property and other assets (including intellectual property but excluding real estate), including a pledge of 66% of the Company’s equity interest in certain foreign subsidiaries and 100% of the Company’s equity interest in its domestic subsidiaries, as collateral for the Company’s obligations under the Credit Agreement. 10. DEBT (CONTINUED) Revolving Credit and Term Loan Agreements - continued The following table shows the amounts available for borrowing under the Company's revolving credit facility: At December 31, 2017 2016 In thousands Total facility $ 600,000 $ 600,000 Amounts outstanding, excluding letters of credit 140,074 212,605 Amounts available for borrowing, excluding letters of credit 459,926 387,395 Letters of credit under the credit facility 6,455 5,655 Amounts available for borrowing $ 453,471 $ 381,740 Amounts available for borrowing subject to EBITDA, as defined by the Credit Agreement $ 246,031 $ 209,467 Interest rates on amounts outstanding under the Credit Agreement are variable, and are determined based on the Consolidated Senior Secured Leverage Ratio, as defined in the Credit Agreement. In addition, the Company is required to pay a quarterly commitment fee on the unused revolving loan commitment amount at a rate ranging from 0.175% to 0.300% per annum, based on the Consolidated Senior Secured Leverage Ratio. Fees for outstanding letters of credit range from 1.25% to 2.00% , based on the Consolidated Senior Secured Leverage Ratio. The interest rate for the outstanding amounts on both the revolving credit facility and term loan commitment are as follows: At December 31, 2017 2016 Interest rate 2.84 % 2.19 % The financial covenants associated with the Credit Agreement include a requirement that (i) the Consolidated Senior Secured Leverage Ratio cannot be greater than 3.50 to 1.00 , with an election to increase the maximum to 3.75 to 1.00 for four consecutive quarters, in connection with a Permitted Acquisition with consideration in excess of $125.0 million ; (ii) the Consolidated Total Leverage Ratio, as defined in the Credit Agreement, cannot be greater than 4.00 to 1.00 , with an election to increase the maximum to 4.25 to 1.00 for four consecutive quarters, in connection with a Permitted Acquisition with consideration in excess of $125.0 million ; (iii) the Consolidated Interest Coverage Ratio cannot be less than 4.00 to 1.00 ; and (iv) Liquidity: (a) as of the last day of the fiscal quarter of the Company ending two full fiscal quarters prior to the stated maturity of the 2017 Convertible Notes, cannot be less than an amount equal to 50% of the outstanding principal amount of the 2017 Convertible Notes, and (b) as of the last day of each fiscal quarter of the Company ending thereafter, cannot be less than an amount equal to the outstanding principal amount of the 2017 Convertible Notes as of such day. The Company was in compliance with those financial covenants as of and for the quarter ended December 31, 2017 , and management does not anticipate noncompliance in the foreseeable future. Debt Issuance Costs In 2015, the Company incurred an additional $2.3 million in debt issuance costs in connection with the Credit Agreement. These costs have been capitalized and will be amortized over the term of the agreement. Total amortization expense for the years ended December 31, 2017 , 2016 and 2015 was $1.0 million each period. Interest Payments Cash payments for interest were $17.9 million , $14.3 million and $11.4 million in 2017 , 2016 and 2015 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) are shown below: 2017 2016 In thousands Foreign currency translation: Beginning balance $ (34,896 ) $ (22,625 ) Net gain (loss) on foreign currency translation 27,840 (12,271 ) Ending balance $ (7,056 ) $ (34,896 ) Pension and other post-retirement benefits (a) : Beginning balance $ (121,448 ) $ (117,455 ) Reclassification to net income Amortization of net loss, net of tax expense of $5,304 and $4,849, respectively 8,785 8,027 Change in net gain (loss), net of tax expense (benefit) of $2,357 and ($7,261), respectively 3,903 (12,020 ) Other comprehensive gain (loss), net of tax benefit 12,688 (3,993 ) Ending balance $ (108,760 ) $ (121,448 ) Derivative instruments (b) : Beginning balance $ (49 ) $ (58 ) Net gain (loss) on derivative instruments, net of tax expense (benefit) of $73 and ($354), respectively 121 (587 ) Reclassification to net income, net of tax (benefit) expense of ($42) and $360, respectively (70 ) 596 Other comprehensive income, net of tax 51 9 Ending balance $ 2 $ (49 ) Total accumulated other comprehensive income (loss) $ (115,814 ) $ (156,393 ) (a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 13, Pension Plans for additional information) (b) See Note 5, Derivative Financial Instruments , for additional information regarding the Company's derivative instruments. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The components of income tax expense (benefit) are as follows: For the year ended December 31, 2017 2016 2015 In thousands Current: Federal $ 16,979 $ 20,405 $ 25,170 State 1,301 2,312 349 Foreign 2,362 738 931 20,642 23,455 26,450 Deferred: Federal 23,498 10,133 5,474 State 251 (1,023 ) (2,682 ) Foreign 161 (1,715 ) (1,691 ) 23,910 7,395 1,101 Total $ 44,552 $ 30,850 $ 27,551 12. INCOME TAXES (CONTINUED) During the fourth quarter of 2017, Tax Reform was enacted by the federal government. The SEC issued Staff Accounting Bulletin 118 ("SAB 118") in December 2017, which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period in which to finalize the accounting under Accounting Standards Codification 740, Income Taxes ("ASC 740") as it relates to Tax Reform. This measurement period should not extend beyond one year from the Tax Reform enactment date. In accordance with SAB 118, the Company is required to reflect the income tax effects of those aspects of the legislation for which the accounting under ASC 740 is complete. To the extent that the Company's accounting for certain of the income tax effects is incomplete, but the Company is capable of reasonably estimating the effects, the Company must record a provisional amount in the Company's Consolidated Financial Statements based on this estimate. To the extent the Company could not reasonably estimate the provisional impacts of Tax Reform, the Company is required to apply ASC 740 on the basis of tax law in place immediately prior to the enactment. In accordance with SAB 118, the revaluation of U.S. net deferred tax assets, the U.S. income tax attributable to Tax Reform's deemed repatriation provision (currently estimated to be zero) and the tax consequences relating to states with current conformity to the Internal Revenue Code are provisional amounts due to the enactment date and the complexities of Tax Reform. The new tax legislation provides for significant changes in corporate taxation, including a reduction in the applicable corporate tax rate from 35% to 21% , effective January 1, 2018. As a result of this rate reduction, the Company's U.S. net deferred tax assets were required to be revalued as of December 31, 2017. This resulted in a one-time charge to tax expense of $9.7 million in the fourth quarter of 2017. Other Tax Reform provisions that will impact the Company include the elimination of the deduction for manufacturing activities, changes to the deductibility of executive compensation and various international tax law changes. One of the international tax law changes provided for with Tax Reform relates to the taxation of a corporation's global intangible low-taxed income ("GILTI") for tax years beginning after December 31, 2017. Due to the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of Tax Reform and the application of ASC 740. Under U.S. GAAP, the Company is allowed to make an accounting policy change for either (1) treated taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred ("period cost method"), or (2) factoring such amounts into the Company's measurement of its deferred taxes ("deferred method"). The Company's selection of an accounting policy will depend, in part, on analyzing the Company's global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, the expected impact. Whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends not only on the Company's current structure and estimated future results of global operations, but also on the intent and ability to modify the Company's structure and/or business. As a result, the Company was not able to determine a reasonable estimate of the effect of this provision as of December 31, 2017. The Company has not made a policy decision regarding whether to record deferred taxes on GILTI and, therefore, the Company has not made any adjustments related to the potential GILTI tax on the Company's Consolidated Financial Statements. The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below: At December 31, 2017 2016 In thousands Deferred tax assets: Deferred employee benefits $ 46,539 $ 82,836 Inventories 5,528 9,694 Tax loss and credit carryforwards 20,813 19,216 Accrued liabilities and other items 7,031 12,433 Total deferred tax assets 79,911 124,179 Deferred tax liabilities: Property, plant and equipment (10,756 ) (15,653 ) Intangibles (40,258 ) (48,785 ) Other items (4,020 ) (3,100 ) Total deferred tax liabilities (55,034 ) (67,538 ) Net deferred tax assets before valuation allowance 24,877 56,641 Valuation allowance (5,298 ) (4,143 ) Net deferred tax assets after valuation allowance $ 19,579 $ 52,498 12. INCOME TAXES (CONTINUED) The $1.2 million change in the valuation allowance from December 31, 2016 to December 31, 2017 , primarily relates to additional losses incurred by the Kaman UK entities and the cumulative tax effect of the reduction in the federal rate from 35% to 21% as a result of Tax Reform. Valuation allowances reduced the deferred tax asset attributable to these state and foreign loss and credit carryforwards to an amount that, based upon all available information, is more likely than not to be realized. Reversal of the valuation allowance is contingent upon the recognition of future taxable income in the respective jurisdictions or changes in circumstances which cause the realization of the benefits of carryforwards to become more likely than not. A portion of the net deferred tax assets, $1.6 million , is related to a capital loss recorded on the disposition of the Company's Distribution segment’s Mexico operations. The realization of these benefits is dependent in part on future taxable capital gains. Pre-tax income from foreign operations amounted to $0.7 million in 2017 , while pre-tax losses from foreign operations amounted to $5.0 million and $4.3 million in 2016 and 2015 , respectively. U.S. income taxes have not been provided on $23.2 million of undistributed earnings of foreign subsidiaries since it is the Company’s intention to permanently reinvest such earnings or to distribute them only when it is tax efficient to do so. It is impracticable to estimate the total tax liability, if any, that would be created by the future distribution of these earnings. The Company is evaluating the impact of Tax Reform on its existing accounting position related to undistributed earnings. Due to the inherent complexities in determining any incremental U.S. Federal and State taxes and the non-U.S. taxes that may be due if the earnings were remitted to the U.S. and in accordance with SAB 118, this evaluation has not been completed and no provisional amount has been recorded in regards to this amount. The provision for income taxes differs from that computed at the federal statutory corporate tax rate as follows: For the year ended December 31, 2017 2016 2015 In thousands Federal tax at 35% statutory rate $ 33,032 $ 31,396 $ 30,796 State income taxes, net of federal benefit 917 999 (1,517 ) Tax effect of: Section 199 Manufacturing deduction (1,616 ) (2,153 ) (2,275 ) Impact of tax rate changes, including Tax Reform 10,032 613 (224 ) Other, net 2,187 (5 ) 771 Income tax expense $ 44,552 $ 30,850 $ 27,551 During the fourth quarter of 2016, the Company elected to early adopt ASU 2016-09, "Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting". The objective of this standard update is to simplify several aspects of the accounting for share-based payment transactions, including, but not limited to, income tax consequences. The standard update was effective for fiscal years, and interim periods within those years, beginning after December 31, 2016. Pursuant to this standard the Company recorded tax benefits of $0.8 million and 0.5 million in 2017 and 2016, respectively. The Company records a benefit for uncertain tax positions in the financial statements only when it determines it is more likely than not that such a position will be sustained upon examination by taxing authorities. Unrecognized tax benefits represent the difference between the position taken and the benefit reflected in the financial statements. On December 31, 2017 , 2016 and 2015 , the total liability for unrecognized tax benefits was $3.4 million , $2.8 million and $3.0 million , respectively (including interest and penalties of $0.4 million in 2017 , $0.2 million in 2016 and $0.5 million in 2015 ). 12. INCOME TAXES (CONTINUED) The change in the liability for 2017 , 2016 and 2015 is explained as follows: 2017 2016 2015 In thousands Balance at January 1 $ 2,832 $ 2,996 $ 2,441 Additions based on current year tax positions 381 211 117 Changes for tax positions of prior years 152 (96 ) (160 ) Settlements 58 (155 ) 19 Additions due to acquired business — — 954 Reductions due to lapses in statutes of limitation — (124 ) (375 ) Balance at December 31 $ 3,423 $ 2,832 $ 2,996 Included in unrecognized tax benefits at December 31, 2017 , were items approximating $3.0 million that, if recognized, would favorably affect the Company’s effective tax rate in future periods. The Company files tax returns in numerous U.S. and foreign jurisdictions, with returns subject to examination for varying periods, but generally back to and including 2013. During 2017 , 2016 and 2015 , $0.1 million or less of interest and penalties was recognized each year as a component of income tax expense. It is the Company’s policy to record interest and penalties on unrecognized tax benefits as income taxes. Cash payments for income taxes, net of refunds, were $16.6 million , $24.8 million and $35.7 million in 2017 , 2016 and 2015 , respectively. |
Pension Plans
Pension Plans | 12 Months Ended |
Dec. 31, 2017 | |
Payment for Pension and Other Postretirement Benefits [Abstract] | |
Pension Plans | PENSION PLANS The Company has a non-contributory qualified defined benefit pension plan (the “Qualified Pension Plan”). On February 23, 2010, the Company’s Board of Directors approved an amendment to the Qualified Pension Plan that, among other things, closed the Qualified Pension Plan to all new hires on or after March 1, 2010, and stipulated that years of service would continue to be added for purposes of the benefit calculations only through December 31, 2015, with no further accrual of benefits for service thereafter. Given that effective December 31, 2015, the qualified pension plan was frozen with respect to future benefit accruals, under U.S. Government Cost Accounting Standard (“CAS”) 413 the Company must determine the USG’s share of any pension curtailment adjustment calculated in accordance with CAS. During the fourth quarter of 2016, the Company accrued a $0.3 million liability representing our estimate of the amount due to the USG based on our pension curtailment adjustment calculation, which was submitted to the USG for review in December 2016. The Company has maintained its accrual at $0.3 million as of December 31, 2017. There can be no assurance that the ultimate resolution of this matter will not have a material adverse effect on the Company's results of operations, financial position and cash flows. The Company also has a Supplemental Employees’ Retirement Plan (“SERP”), which is considered a non-qualified pension plan. The SERP provides certain key executives, whose compensation is in excess of the limitations imposed by federal law on the qualified defined benefit pension plan, with supplemental benefits based upon eligible earnings, years of service and age at retirement. During 2010, the Company's Board of Directors also approved an amendment to the SERP that made changes consistent with the pension plan amendment. The Board's Personnel & Compensation Committee and the Board have not approved any new participants to the SERP since February 28, 2010, and do not intend to do so at any time in the future. The measurement date for both these plans is December 31 . 13. PENSION PLANS (CONTINUED) Obligations and Funded Status The changes in the actuarial present value of the projected benefit obligation and fair value of plan assets are as follows: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Projected benefit obligation at beginning of year $ 728,601 $ 712,842 $ 10,059 $ 10,184 Service cost 4,794 4,596 — — Interest cost 24,358 24,488 241 254 Actuarial liability loss (a) 47,433 20,588 652 155 Benefit payments (34,870 ) (33,913 ) (3,056 ) (534 ) Projected benefit obligation at end of year $ 770,316 $ 728,601 $ 7,896 $ 10,059 Fair value of plan assets at beginning of year $ 572,174 $ 553,858 $ — $ — Actual return on plan assets 96,088 42,229 — — Employer contributions 10,000 10,000 3,056 534 Benefit payments (34,870 ) (33,913 ) (3,056 ) (534 ) Fair value of plan assets at end of year $ 643,392 $ 572,174 $ — $ — Funded status at end of year $ (126,924 ) $ (156,427 ) $ (7,896 ) $ (10,059 ) Accumulated benefit obligation $ 770,316 $ 728,601 $ 7,896 $ 10,059 (a) The actuarial liability loss amount for the qualified pension plan for 2017 and 2016 is principally due to the effect of changes in the discount rate. The Company has recorded liabilities related to our qualified pension plan and SERP as follows: At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Current liabilities (a) $ — $ — $ (942 ) $ (3,061 ) Noncurrent liabilities (126,924 ) (156,427 ) (6,954 ) (6,998 ) Total $ (126,924 ) $ (156,427 ) $ (7,896 ) $ (10,059 ) (a) The current liabilities are included in other accruals and payables on the Consolidated Balance Sheets. The following table presents amounts included in accumulated other comprehensive income on the Consolidated Balance Sheets that will be recognized as components of pension cost in future periods. At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Unrecognized loss $ 173,214 $ 193,764 $ 1,410 $ 1,209 Amount included in accumulated other comprehensive income $ 173,214 $ 193,764 $ 1,410 $ 1,209 The amount of unrecognized loss for the qualified pension plan and the SERP, respectively, that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year is estimated to be $11.1 million and $0.3 million . 13. PENSION PLANS (CONTINUED) Obligations and Funded Status - continued The pension plan net periodic benefit costs on the Consolidated Statements of Operations and other amounts recognized in other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income and Consolidated Statements of Shareholders’ Equity were computed using the projected unit credit actuarial cost method and included the following components: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2015 2017 2016 2015 In thousands Service cost for benefits earned during the year $ 4,794 $ 4,596 $ 14,131 $ — $ — $ 206 Interest cost on projected benefit obligation 24,358 24,488 27,514 241 254 318 Expected return on plan assets (42,049 ) (40,767 ) (44,130 ) — — — Amortization of prior service cost — — 57 — — — Recognized net loss 13,943 12,694 9,920 146 182 218 Additional amount recognized due to curtailment/settlement — — — 305 — — Net pension benefit cost $ 1,046 $ 1,011 $ 7,492 $ 692 $ 436 $ 742 Change in net gain or (loss) (6,607 ) 19,126 29,923 347 155 (155 ) Amortization of prior service cost — — (57 ) — — — Amortization of net loss (13,943 ) (12,694 ) (9,920 ) (146 ) (182 ) (218 ) Total recognized in other comprehensive income (loss) $ (20,550 ) $ 6,432 $ 19,946 $ 201 $ (27 ) $ (373 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (19,504 ) $ 7,443 $ 27,438 $ 893 $ 409 $ 369 The following tables show the amount of the contributions made to the Qualified Pension Plan and SERP during each period and the amount of contributions the Company expects to make during 2018 : Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Contributions $ 10,000 $ 10,000 $ 3,056 $ 534 Qualified Pension Plan (a) SERP In thousands Expected contributions during 2018 $ 10,000 $ 942 (a) The Company contributed $10.0 million to the qualified pension plan in January 2018. Currently, the Company does not intend to make any further contributions to the qualified pension plan in 2018 ; however, given Tax Reform the Company is evaluating its options. 13. PENSION PLANS (CONTINUED) Obligations and Funded Status - continued Expected future benefit payments, which reflect expected future service, are as follows: Qualified Pension Plan SERP In thousands 2018 $ 34,878 $ 942 2019 $ 37,000 $ 517 2020 $ 38,692 $ 503 2021 $ 39,960 $ 2,464 2022 $ 41,689 $ 469 2023-2027 $ 223,256 $ 2,018 Mortality is a key assumption in developing actuarial estimates, and therefore could significantly impact the valuation of the Company's obligations under the qualified pension plan and SERP. The Company reviewed the mortality data and based on the size and demographics of the plan's participant population, the Company determined the RP-2000 Scale AA Generational based mortality table was the most appropriate assumption. Since 2014, the Company has been using the Citigroup Above Median Double-A Curve, as it is deemed to be the most appropriate basis for generating the Company's discount rate assumption, as the future cash flows of the plan are most closely aligned to the Above Median Double-A Curve. The discount rates used in determining benefit obligations of the pension plans are as follows: At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 Discount rate 3.50 % 3.98 % 3.15 % 3.43 % The actuarial assumptions used in determining the net periodic benefit cost of the pension plans are as follows: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 Discount rate 3.98 % 4.17 % 3.43 % 3.47 % Expected return on plan assets 7.50 % 7.50 % N/A N/A Average rate of increase in compensation levels N/A N/A N/A N/A Other In 2016, the Company began utilizing a "spot rate approach" in the calculation of pension interest and service cost. The spot rate approach applies separate discount rates for each projected benefit payment in the calculation of pension interest and service cost. 13. PENSION PLANS (CONTINUED) Qualified Pension Plan Assets The expected return on plan assets rate was determined based upon historical returns adjusted for estimated future market fluctuations. For 2017 and 2016 , the expected rate of return on plan assets was 7.5% . During 2017 , the actual return on pension plan assets, net of expenses, was 17.0% . Plan assets are invested in a diversified portfolio consisting of equity and fixed income securities. The investment goals for pension plan assets are to improve and/or maintain the Plan’s funded status by generating long-term asset returns that exceed the rate of growth of the Plan’s liabilities. The Plan invests assets in a manner that seeks to (a) maximize return within reasonable and prudent levels of risk of loss of funded status; and (b) maintain sufficient liquidity to meet benefit payment obligations and other periodic cash flow requirements on a timely basis. The return generation/liability matching asset allocation ratio is currently 56.8%/43.2% . As the plan’s funded status changes, the pension plan’s Administrative Committee (the management committee that is responsible for plan administration) will act through an immediate or gradual process, as appropriate, to reallocate assets. Under the current investment policy, no Investment Manager may invest in investments deemed illiquid by the Investment Manager at the time of purchase, development programs, real estate, mortgages or private equities or securities of Kaman Corporation without prior written authorization from the Finance Committee of the Board of Directors. In addition, with the exception of USG securities, managers’ holdings in the securities of any one issuer, at the time of purchase, may not exceed 7.5% of the total market value of that manager’s account. The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Short-term Investments – This investment category consists of cash and cash equivalents and futures and options contracts. Cash and cash equivalents are comprised of investments with maturities of three months or less when purchased, including certain short-term fixed-income securities, and are classified as Level 1 investments. Futures contracts and options contracts requiring the investment managers to receive from or pay to the broker an amount of cash equal to daily fluctuations are included in short-term investments and are classified as Level 2 investments. Corporate Stock – This investment category consists primarily of domestic common stock issued by U.S. corporations. Common shares are traded actively on exchanges and price quotes for these shares are readily available. Holdings of corporate stock are classified as Level 1 investments. Mutual Funds –Mutual funds are traded actively on public exchanges. The share prices for these mutual funds are published at the close of each business day. Holdings of mutual funds are classified as Level 1 investments. Common Trust Funds – Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The values of the commingled funds are not publicly quoted and must trade through a broker. For equity and fixed-income commingled funds traded through a broker, the fund administrator values the fund using the net asset value (“NAV”) per fund share, derived from the value of the underlying assets. The underlying assets in these funds (equity securities, fixed income securities and commodity-related securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Holdings of common trust funds are not subject to leveling. Fixed Income Securities - For fixed income securities, multiple prices and price types are obtained from pricing vendors whenever possible, which enables cross-provider validations. A primary price source is identified based on asset type, class or issue for each security. The fair values of fixed income securities are based on evaluated prices that reflect observable market information, such as actual trade information of similar securities, adjusted for observable differences, and are categorized as Level 2. These securities are primarily investment grade securities. 13. PENSION PLANS (CONTINUED) Qualified Pension Plan Assets - continued The fair values of the Company’s qualified pension plan assets at December 31, 2017 and 2016 , are as follows: Total Carrying Value at December 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Not subject to leveling In thousands Short-term investments: Cash and cash equivalents $ 35,046 $ 35,046 $ — $ — $ — Futures contracts - assets 116 — 116 — — Futures contracts - liabilities (1,384 ) — (1,384 ) — — Fixed income securities 96,318 — 96,318 — — Mutual funds 126,955 126,955 — — — Common trust funds (1) 314,420 — — — 314,420 Corporate stock 70,879 70,879 — — — Subtotal $ 642,350 $ 232,880 $ 95,050 $ — $ 314,420 Accrued income/expense 1,042 120 873 — 49 Total $ 643,392 $ 233,000 $ 95,923 $ — $ 314,469 Total Carrying Value at December 31, 2016 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Not subject to leveling In thousands Short term investments: Cash and cash equivalents $ 21,537 $ 21,537 $ — $ — $ — Futures contracts - liabilities (1,346 ) — (1,346 ) — — Fixed income securities 127,857 — 127,857 — — Mutual funds 131,897 131,897 — — — Common trust funds (1) 216,354 — — — 216,354 Corporate stock 74,348 74,348 — — — Subtotal $ 570,647 $ 227,782 $ 126,511 $ — $ 216,354 Accrued income/expense 1,527 133 1,394 — — Total $ 572,174 $ 227,915 $ 127,905 $ — $ 216,354 (1) In accordance with ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension plan assets. Derivatives are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. Derivative instruments mainly consist of equity futures and interest rate futures. 13. PENSION PLANS (CONTINUED) Other Plans The Company also maintains a Defined Contribution Plan that has been adopted by most of its U.S. subsidiaries. Employees of the adopting employers who meet the eligibility requirements of the plan may participate. Employer matching contributions are made to the plan based on a percentage of each participant’s pre-tax contribution. For each dollar that a participant contributes, up to 5% of compensation, participating subsidiaries make employer contributions of one dollar. Employer contributions to the plan totaled $12.6 million , $11.9 million and $11.9 million in 2017 , 2016 and 2015 , respectively. One of the Company's foreign subsidiaries maintains a defined benefit plan of its own for its local employees. The net pension liability associated with this plan as of December 31, 2017 and 2016 , of $0.1 million is included in Other current liabilities on the Company's Consolidated Balance Sheets. |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | OTHER LONG-TERM LIABILITIES Other long-term liabilities consist of the following: At December 31, 2017 2016 In thousands Supplemental employees' retirement plan ("SERP") $ 6,954 $ 6,998 Deferred compensation 15,862 15,238 Long-term incentive plan 9,475 8,346 Noncurrent income taxes payable 3,363 2,903 Environmental remediation liability 2,602 3,763 Capital leases 4,985 2,588 Other 3,657 5,080 Total $ 46,898 $ 44,916 The Company maintains a non-qualified deferred compensation plan for certain of its employees as well as a non-qualified deferred compensation plan for its Board of Directors. Generally, participants in these plans have the ability to defer a certain amount of their compensation, as defined in the agreement. The deferred compensation liability will be paid out either upon retirement or as requested based upon certain terms in the agreements and in accordance with Internal Revenue Code Section 409A. Disclosures regarding the assumptions used in the determination of the SERP liabilities are included in Note 13, Pension Plans . Discussions of our environmental remediation liabilities are in Note 9, Environmental Costs , and Note 15, Commitments and Contingencies . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Asset Retirement Obligations The Company has unrecorded Asset Retirement Obligation’s (“AROs”) that are conditional upon certain events. These AROs generally include the removal and disposition of non-friable asbestos. The Company has not recorded a liability for these conditional AROs at December 31, 2017 , because the Company does not currently believe there is a reasonable basis for estimating a date or range of dates for major renovation or demolition of these facilities. In reaching this conclusion, the Company considered the historical performance of each facility and has taken into account factors such as planned maintenance, asset replacements and upgrades, which, if conducted as in the past, can extend the physical lives of the facilities indefinitely. The Company also considered the possibility of changes in technology and risk of obsolescence in arriving at its conclusion. 15. COMMITMENTS AND CONTINGENCIES (CONTINUED) Asset Retirement Obligations - continued The Company currently leases various properties under leases that give the lessor the right to make the determination as to whether the lessee must return the premises to their original condition, except for normal wear and tear. The Company does not normally make substantial modifications to leased property, and many of the Company's leases either require lessor approval of planned improvements or transfer ownership of such improvements to the lessor at the termination of the lease. Historically the Company has not incurred significant costs to return leased premises to their original condition. Operating Leases Rent commitments under various leases for office space, warehouses, land and buildings expire at varying dates from January 2018 to December 2026. The terms of most of these leases are in the range of 3 to 5 years. Some of the Company’s leases have rent escalations, rent holidays or contingent rent that are recognized on a straight-line basis over the entire lease term. Material leasehold improvements and other landlord incentives are amortized over the shorter of their economic lives or the lease term, including renewal periods, if reasonably assured. Certain annual rentals are subject to renegotiation, with certain leases renewable for varying periods. Lease periods for machinery and equipment range from 1 to 5 years. Substantially all real estate taxes, insurance and maintenance expenses associated with leased facilities are obligations of the Company. It is expected that in the normal course of business leases that expire will be renewed or replaced by leases on other similar property. The following minimum future rental payments are required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2017 : In thousands 2018 $ 25,773 2019 21,193 2020 16,273 2021 11,557 2022 7,691 Thereafter 15,300 Total $ 97,787 Lease expense for all operating leases, including leases with terms of less than one year, amounted to $28.0 million , $27.3 million and $26.4 million for 2017 , 2016 and 2015 , respectively. Capital Leases During 2014, the Company entered into a master leasing agreement with PNC for financing the purchases of equipment, with total capacity of $5.0 million . In May 2017, the Company amended the master leasing agreement with PNC to increase the total capacity to $10.0 million . Such leases are classified as capital for accounting purposes and are recorded at the present value of the future minimum lease payments at the inception of the lease. Amounts due under capital leases are recorded as liabilities, and assets acquired under capital leases are recorded as equipment. Amortization of assets recorded under capital leases is included in depreciation and amortization expense. 15. COMMITMENTS AND CONTINGENCIES (CONTINUED) Capital Leases - continued The following minimum payments are required under capital leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2017 : In thousands 2018 $ 1,155 2019 1,457 2020 1,249 2021 1,113 2022 863 Thereafter 307 Total $ 6,144 Interest expense related to capital leases was immaterial in 2017 and 2016 . There was no interest expense associated with capital leases in 2015 . See Note 7, Property, Plant and Equipment, Net , for additional information regarding our capital leases. Other Matters Pension Freeze Effective December 31, 2015, the Company's qualified pension plan was frozen with respect to future benefit accruals. Under CAS 413 the Company must determine the USG’s share of any pension curtailment adjustment calculated in accordance with CAS. Such adjustments can result in an amount due to the USG for pension plans that are in a surplus position or an amount due to the contractor for plans that are in a deficit position. During the fourth quarter of 2016, the Company accrued a $0.3 million liability representing our estimate of the amount due to the USG based on the Company's pension curtailment adjustment calculation, which was submitted to the USG for review in December 2016. The Company has maintained its accrual at $0.3 million as of December 31, 2017. There can be no assurance that the ultimate resolution of this matter will not have a material adverse effect on the Company's results of operations, financial position and cash flows. Aerospace Claim Matter On June 29, 2016, the Company received notification from a customer of their intent to file a claim for recovery of costs and expenses related to rework on certain aerostructures components previously delivered by the Company to the customer. The notification did not indicate the extent of the rework undertaken by the customer, the cost or expenses incurred by the customer or the time frame in which the customer anticipated filing its formal claim. On October 17, 2017, the Company received a letter from the customer seeking to recover $12.4 million associated with the rework of these components and related costs incurred by the customer. The Company does not believe the claim has merit and will continue to defend against the claim. The Company estimates the cost to rework the aerostructure components delivered to the customer over the time period in question is approximately $0.2 million . Based on this analysis, the Company has accrued $0.2 million , the estimated cost to rework the aerostructure components, as of December 31, 2017; however, there can be no assurance that the ultimate resolution of this matter will not have a material adverse effect on the Company's results of operations, financial position and cash flows. 15. COMMITMENTS AND CONTINGENCIES (CONTINUED) Other Matters - continued New Hartford In connection with sale of the Company’s Music segment in 2007, the Company assumed responsibility for meeting certain requirements of the Transfer Act that applied to our transfer of the New Hartford, Connecticut, facility leased by that segment for guitar manufacturing purposes (“Ovation”). Under the Transfer Act, those responsibilities essentially consist of assessing the site's environmental conditions and remediating environmental impairments, if any, caused by Ovation's operations prior to the sale. The site is a multi-tenant industrial park, in which Ovation and other unrelated entities lease space. The environmental assessment, which began in 2008, has been completed and site remediation is in process. The Company's estimate of its portion of the cost to assess the environmental conditions and remediate this site is $2.3 million , all of which has been accrued. The total amount paid to date in connection with these environmental remediation activities is $1.6 million . At December 31, 2017 , the Company had $0.7 million accrued for these environmental remediation activities. A portion ( $0.1 million ) of the accrual related to this property is included in other current liabilities and the balance is included in other long-term liabilities. The remaining balance of the accrual reflects the total anticipated cost of completing these environmental remediation activities. Although it is reasonably possible that additional costs will be paid in connection with the resolution of this matter, the Company is unable to estimate the amount of such additional costs, if any, at this time. Bloomfield In connection with the Company’s 2008 purchase of the portion of the Bloomfield campus that Kaman Aerospace Corporation had leased from NAVAIR, the Company assumed responsibility for environmental remediation at the facility as may be required under the Transfer Act and is currently remediating the property under the guidance of the Connecticut Department of Environmental Protection ("CTDEP"). The assumed environmental liability of $10.3 million was determined by taking the undiscounted estimated remediation liability of $20.8 million and discounting it at a rate of 8% . This remediation process will take many years to complete. The total amount paid to date in connection with these environmental remediation activities is $12.9 million . At December 31, 2017 , the Company had $2.6 million accrued for these environmental remediation activities. A portion ( $0.6 million ) of the accrual related to this property is included in other current liabilities, and the balance is included in other long-term liabilities. Although it is reasonably possible that additional costs will be paid in connection with the resolution of this matter, the Company is unable to estimate the amount of such additional costs, if any, at this time. Rimpar In connection with the Company's purchase of GRW, the Company assumed responsibility for the environmental remediation at the Rimpar, Germany facility. As part of the purchase price allocation, the Company initially accrued approximately $4.2 million during the year ended December 31, 2015. In 2016, the Company completed a Phase II assessment in order to better understand the extent of the environmental effort necessary to remediate the facility. Based on this assessment, the Company adjusted the accrual to $0.5 million , as results of the assessment indicate a lower level of remediation effort will be required. The total amount paid to date in connection with these environmental remediation activities is $0.2 million . The balance ( $0.3 million ) of the accrual related to this property is included in other current liabilities. Although it is reasonably possible that additional costs will be paid in connection with the resolution of this matter, the Company is unable to estimate the amount of such additional costs, if any, at this time. |
Computation of Earnings Per Sha
Computation of Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | COMPUTATION OF EARNINGS PER SHARE The computation of basic earnings per share is based on net earnings divided by the weighted average number of shares of common stock outstanding for each year. The computation of diluted earnings per share includes the common stock equivalency of dilutive options granted to employees under the Company's stock incentive plan and shares issuable on redemption of its Convertible Notes. For the Year Ended December 31, 2017 2016 2015 In thousands, except per share amounts Net earnings $ 49,826 $ 58,854 $ 60,438 Basic: Weighted average number of shares outstanding 27,611 27,107 27,177 Basic earnings per share $ 1.80 $ 2.17 $ 2.22 Diluted: Weighted average number of shares outstanding 27,611 27,107 27,177 Weighted average shares issuable on exercise of dilutive stock options 160 141 133 Weighted average shares issuable on exercise of convertible notes 466 773 558 Weighted average shares issuable on exercise of warrants related to 2017 Notes 181 51 — Total 28,418 28,072 27,868 Diluted earnings per share $ 1.75 $ 2.10 $ 2.17 Equity awards Excluded from the diluted earnings per share calculation for the years ended December 31, 2017 , 2016 and 2015 , respectively, are 245,361 , 472,328 and 487,071 shares associated with equity awards granted to employees that are anti-dilutive based on the average stock price. 2017 Convertible Notes For the years ended December 31, 2017 , 2016 and 2015 , shares issuable under the 2017 Notes that were dilutive during the period were included in the calculation of earnings per share as the conversion price for the Convertible Notes was less than the average share price of the Company's stock. 2024 Convertible Notes For the year ended December 31, 2017 , shares issuable under the 2024 Notes were excluded from the calculation of earnings per share as the conversion price for the Convertible Notes was greater than the average share price of the Company's stock. Warrants For the years ended December 31, 2017 and 2016, shares issuable under the warrants sold in connection with the Company’s 2017 Convertible Note offering were included in the calculation of diluted earnings per share as the strike price of the warrants was less than the average share price of the Company’s stock. Excluded from the diluted earnings per share calculation for the year ended December 31, 2015 , were 3,422,477 shares, associated with these warrants, as they were anti-dilutive. For further information on the Convertible Notes, see Note 10, Debt . |
Share-Based Arrangements
Share-Based Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Arrangements | SHARE-BASED ARRANGEMENTS General The Company accounts for stock options, restricted stock awards, restricted stock units and performance shares as equity awards and measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the statement of operations. The Company also has an employee stock purchase plan which is accounted for as a liability award. Compensation expense for stock options, restricted stock awards and restricted stock units is recognized on a straight-line basis over the vesting period of the awards. Share-based compensation expense recorded for the years ended December 31, 2017 , 2016 and 2015 was $6.0 million , $5.7 million and $6.4 million , respectively. Stock Incentive Plan On April 17, 2013, the shareholders of the Company approved the 2013 Management Incentive Plan (the "2013 Plan"), which replaced the 2003 Stock Incentive Plan. The 2013 Plan provides the Company with the ability to use equity-based awards of up to 2,250,000 authorized shares and is designed as a flexible share authorization plan, such that the Company's share authorization is based on the least costly type of award (stock options). Shares issued pursuant to “Full Value Awards” as defined in the 2013 Plan (awards other than stock options or stock appreciation rights which are settled by the issuance of shares, e.g., restricted stock, restricted stock units, performance shares, performance units if settled with stock, or other stock-based awards) count against the 2013 Plan's share authorization at a rate of 3 to 1 , while shares issued upon exercise of stock options or stock appreciation rights count against the share authorization at a rate of 1 to 1. This means that every time an option is granted, the authorized pool of shares is reduced by one (1) share and every time a Full Value Award is granted, the authorized pool of shares is reduced by 3 shares. In deriving the valuation ratio used in the 2013 Plan, the Company used the Black Scholes Fair Value model as the basis for determining the approximate value of an option as compared to a "full value share." As of December 31, 2017 , there were 525,310 shares available for grant under the plan. LTIP awards provide certain senior executives an opportunity to receive award payments in either stock or cash as determined by the Personnel and Compensation Committee of the Board of Directors in accordance with the Plan, at the end of each performance cycle. For the performance cycle, the Company’s financial results are compared to the Russell 2000 indices for the same periods based upon the following: (a) average return on total capital, (b) earnings per share growth and (c) total return to shareholders. No awards will be payable if the Company’s performance is in the bottom quartile of the designated indices. The maximum award is payable if performance reaches the 75 th percentile of the designated indices. Awards are paid out at 100% at the 50 th percentile. Awards for performance between the 25 th and 75 th percentiles are determined by straight-line interpolation between 0% and 200% . Generally, LTIP awards are paid in cash. Stock options are granted with an exercise price equal to the average market price of our stock at the date of grant. Stock options and Stock Appreciation Rights ("SARs") granted under the plan generally expire ten years from the date of grant and vest 20% each year over a 5 -year period on each of the first five anniversaries of the date of grant. Restricted Stock Awards ("RSAs") are generally granted with restrictions that lapse at the rate of 20% per year over a 5 -year period on each of the first five anniversaries of the date of grant. Generally, these awards are subject to forfeiture if a recipient separates from service with the Company. From time-to-time, the Company has issued additional stock awards with market and performance based conditions. Currently, there are three awards with these conditions that have not been settled. The number of shares earned under an award granted in 2014 has been determined at a 139.9% achievement level, representing 1,506 shares to be delivered in 2019. The remaining shares for the awards granted in 2015 and 2016 are 2,165 , assuming a 100% achievement level. The Company measures the cost of these awards based on their grant date fair value to the extent of the probable number of shares to be earned upon vesting. Amortization of this cost will be recorded on a straight-line basis over the requisite service period. Throughout the course of the requisite service period, the Company will monitor the level of achievement compared to the target and adjust the number of shares expected to be earned, and the related compensation expense recorded thereafter, to reflect the updated most probable outcome. Compensation expense for these awards for the years ended December 31, 2017 and 2016 was not material. 17. SHARE-BASED ARRANGEMENTS (CONTINUED) Stock Incentive Plan - continued Stock option activity is as follows: Options Weighted average- exercise price Options outstanding at December 31, 2016 958,679 $ 36.18 Granted 226,315 51.97 Exercised (201,767 ) 32.44 Forfeited or expired (57,842 ) 43.02 Options outstanding at December 31, 2017 925,385 $ 40.43 The following table presents information regarding options outstanding as of December 31, 2017 : Weighted-average remaining contractual term - options outstanding (years) 6.4 Aggregate intrinsic value - options outstanding (in thousands) $ 17,034 Weighted-average exercise price - options outstanding $ 40.43 Options exercisable 378,725 Weighted-average remaining contractual term - options exercisable (years) 4.4 Aggregate intrinsic value - options exercisable (in thousands) $ 9,571 Weighted-average exercise price - options exercisable $ 33.57 The intrinsic value represents the amount by which the market price of the stock on the measurement date exceeds the exercise price of the option. The intrinsic value of options exercised in 2017 , 2016 and 2015 was $3.9 million , $3.9 million and $1.0 million , respectively. The Company currently has an open stock repurchase plan, which would enable the Company to repurchase shares as needed. Since 2008 the Company has generally issued shares related to option exercises and RSAs from its authorized but unissued common stock. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The following table indicates the weighted-average assumptions used in estimating fair value: 2017 2016 2015 Expected option term (years) 5.0 5.2 5.1 Expected volatility 19.9 % 26.0 % 29.0 % Risk-free interest rate 1.9 % 1.2 % 1.6 % Expected dividend yield 1.6 % 1.8 % 1.6 % Per share fair value of options granted $ 8.61 $ 8.63 $ 9.28 The expected term of options granted represents the period of time option grants are expected to be outstanding based upon historical exercise patterns. Forfeitures of options are estimated based upon historical data and are adjusted based upon actual occurrences. The cumulative effect of stock award forfeitures was immaterial. The volatility assumption is based on the historical daily price data of the Company’s stock over a period equivalent to the weighted-average expected term of the options. Management evaluated whether there were factors during that period that were unusual and would distort the volatility figure if used to estimate future volatility and concluded that there were no such factors. The Company relies only on historical volatility since future volatility is expected to be consistent with historical volatility. The risk-free interest rate assumption is based upon the interpolation of various U.S. Treasury rates determined at the date of option grant. Expected dividends are based upon a historical analysis of our dividend yield over the past year. 17. SHARE-BASED ARRANGEMENTS (CONTINUED) Stock Incentive Plan - continued Restricted Stock Award and Restricted Stock Unit activity is as follows: Restricted Stock Awards Weighted- average grant date fair value Restricted Stock outstanding at December 31, 2016 167,674 $ 40.27 Granted 79,508 50.30 Vested (78,571 ) 41.70 Forfeited or expired (13,729 ) 42.46 Restricted Stock outstanding at December 31, 2017 154,882 $ 44.50 The grant date fair value for restricted stock is the average market price of the unrestricted shares on the date of grant. The total fair value of restricted stock awards vested during 2017 , 2016 and 2015 was $5.7 million , $4.3 million and $3.8 million , respectively. The Company records a tax benefit and associated deferred tax asset for compensation expense recognized on non-qualified stock options and restricted stock for which the Company is allowed a tax deduction. For 2017 , 2016 and 2015 , respectively, the Company recorded a tax benefit of $2.0 million , $2.0 million and $2.2 million for these two types of compensation expense. The windfall tax benefit is the tax benefit realized on the exercise of non-qualified stock options and disqualifying dispositions of stock acquired by exercise of incentive stock options and Employee Stock Purchase Plan stock purchases in excess of the deferred tax asset originally recorded. During the fourth quarter of 2016, the Company early adopted ASU 2016-09, "Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting". Prior to the adoption of this standard update, windfall tax benefits were recorded in equity. With the adoption of this standard update, all of the tax effects related to share-based payments at settlement or expiration now flow through the income statement. Accordingly, there was no windfall tax benefit recorded in equity in 2017 and 2016 . The total windfall tax benefit recorded in equity in 2015 was $0.3 million . As of December 31, 2017 , future compensation costs related to non-vested stock options and restricted stock grants is $6.9 million . The Company anticipates that this cost will be recognized over a weighted-average period of 3.0 years. Employees Stock Purchase Plan The Kaman Corporation Employees Stock Purchase Plan (“ESPP”) allows employees to purchase common stock of the Company, through payroll deductions, at 85% of the market value of shares at the time of purchase. The plan provides for the grant of rights to employees to purchase a maximum of 1,500,000 shares of common stock. During 2017 , 63,874 shares were issued to employees at prices ranging from $46.79 to $57.27 . During 2016 , 74,273 shares were issued to employees at prices ranging from $32.95 to $42.40 . During 2015 , 79,294 shares were issued to employees at prices ranging from $31.64 to $36.46 . At December 31, 2017 , there were 171,191 shares available for purchase under the plan. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION The Company is organized based upon the nature of its products and services, and is composed of two operating segments each overseen by a segment manager. These segments are reflective of how the Company’s Chief Executive Officer, who is its Chief Operating Decision Maker (“CODM”), reviews operating results for the purposes of allocating resources and assessing performance. The Company has not aggregated operating segments for purposes of identifying reportable segments. The Distribution segment is a leading power transmission, motion control, and fluid power industrial distributor with operations throughout the United States. The segment provides electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components, along with engineered integrated solutions to its customers' most challenging applications serving a broad spectrum of industrial markets, including both MRO and OEM customers. The Aerospace segment produces and markets proprietary aircraft bearings and components; super precision, miniature ball bearings for the medical, industrial and aerospace markets; complex metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; and safe and arming solutions for missile and bomb systems for the U.S. and allied militaries. The segment also markets the design and supply of aftermarket parts to businesses performing MRO in aerospace markets; performs helicopter subcontract work; restores, modifies and supports the Company's SH-2G Super Seasprite maritime helicopters; manufactures and supports the Company's K-MAX® manned and unmanned medium-to-heavy lift helicopters; and provides engineering design, analysis and certification services. Summarized financial information by business segment is as follows: For the year ended December 31, 2017 2016 2015 In thousands Net sales: Distribution $ 1,080,965 $ 1,106,322 $ 1,177,539 Aerospace (a) 724,944 702,054 597,586 Net sales $ 1,805,909 $ 1,808,376 $ 1,775,125 Operating income: Distribution $ 52,482 $ 41,859 $ 49,441 Aerospace 119,889 115,005 110,328 Net gain (loss) on sale of assets 256 (11 ) 328 Corporate expense (58,452 ) (50,930 ) (55,578 ) Operating income 114,175 105,923 104,519 Interest expense, net 20,581 15,747 13,144 Other (income) expense, net (784 ) 472 3,386 Earnings before income taxes 94,378 89,704 87,989 Income tax expense 44,552 30,850 27,551 Net earnings $ 49,826 $ 58,854 $ 60,438 (a) Net sales by the Aerospace segment under contracts with USG agencies (including sales to foreign governments through foreign military sales contracts with USG agencies) totaled $248.6 million , $244.4 million and $211.4 million in 2017 , 2016 and 2015 , respectively, and represent direct and indirect sales to the USG and related agencies. 18. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED) At December 31, In thousands 2017 2016 2015 Identifiable assets (a) : Distribution $ 537,911 $ 540,900 $ 558,630 Aerospace 810,278 720,823 738,426 Corporate (b) 107,263 164,563 142,555 Total assets $ 1,455,452 $ 1,426,286 $ 1,439,611 Capital expenditures: Distribution $ 9,621 $ 9,016 $ 10,685 Aerospace 17,208 17,935 13,378 Corporate 802 2,826 5,869 Total capital expenditures $ 27,631 $ 29,777 $ 29,932 Depreciation and amortization (c) : Distribution $ 15,083 $ 16,107 $ 16,368 Aerospace 23,717 23,584 16,275 Corporate 3,671 3,702 3,538 Total depreciation and amortization $ 42,471 $ 43,393 $ 36,181 (a) Identifiable assets are year-end assets at their respective net carrying values segregated as to segment and corporate use. (b) For the periods presented, the corporate identifiable assets are principally comprised of cash, short-term and long-term deferred income tax assets, cash surrender value of life insurance policies and fixed assets. (c) Depreciation and amortization amounts exclude amortization of debt issuance costs. The following table summarizes total sales of the Company, which are principally derived from the sale of products: For the year ended December 31, 2017 2016 2015 in thousands Bearings and Power Transmission (a) $ 536,143 $ 548,736 $ 594,511 Automation, Control and Energy 326,117 337,428 354,771 Fluid Power 218,705 220,158 228,257 Military and Defense, other than fuzes 201,760 205,812 242,112 Missile and Bomb Fuzes 184,640 164,187 120,755 Commercial Aerospace and Other 338,544 332,055 234,719 Total sales (b) $ 1,805,909 $ 1,808,376 $ 1,775,125 (a) Aerospace bearings are not included in this caption, as they are reported in either the "Military and Defense" or "Commercial Aerospace and Other" categories. (b) Service revenue was not material for the years ended December 31, 2017 , 2016 and 2015 . 18. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED) Sales are attributed to geographic regions based on the location to which the product is shipped. Geographic distribution of sales recorded is as follows: For the year ended December 31, 2017 2016 2015 In thousands North America $ 1,505,768 $ 1,514,595 $ 1,518,416 Europe 169,353 168,456 112,057 Middle East 81,343 61,409 65,740 Asia 35,521 46,805 33,020 Oceania 10,868 13,385 37,959 Other 3,056 3,726 7,933 Total $ 1,805,909 $ 1,808,376 $ 1,775,125 Geographic distribution of long-lived assets is as follows: At December 31, 2017 2016 In thousands United States $ 456,023 $ 465,906 Germany 169,782 151,336 United Kingdom 47,486 44,702 Czech Republic 5,448 4,766 Mexico 1,241 1,650 Total $ 679,980 $ 668,360 For the purpose of this disclosure the Company excluded deferred tax assets of $ 27.6 million and $ 59.4 million as of December 31, 2017 and 2016 , respectively. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company has evaluated subsequent events through the issuance date of these financial statements. No material subsequent events were identified that require disclosure. |
Schedule II (Notes)
Schedule II (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | KAMAN CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2017 , 2016 AND 2015 (Dollars in Thousands) Additions DESCRIPTION Balance Beginning of Period Charged to Costs and Expenses Others (A) Deductions (B) Balance End of Period 2017 Allowance for doubtful accounts $ 4,123 $ 1,164 $ — $ 1,153 $ 4,134 2016 Allowance for doubtful accounts $ 2,989 $ 2,635 $ 19 $ 1,520 $ 4,123 2015 Allowance for doubtful accounts $ 3,208 $ 1,694 $ 96 $ 2,009 $ 2,989 (A) Additions to allowance for doubtful accounts attributable to acquisitions. (B) Recoveries and write-off of bad debts. Additions (Reductions) DESCRIPTION Balance Beginning of Period Current Year Provision (Benefit) Others Balance End of Period 2017 Valuation allowance on deferred tax assets $ 4,143 $ 830 $ 325 $ 5,298 2016 Valuation allowance on deferred tax assets $ 11,122 $ 269 $ (7,248 ) $ 4,143 2015 Valuation allowance on deferred tax assets $ 4,694 $ 281 $ 6,147 $ 11,122 (a)(3) EXHIBITS. Page Number in Form 10-K An index to the exhibits filed or incorporated by reference immediately precedes such exhibits. 118 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the carrying amount of property, plant and equipment, goodwill and other intangible assets; valuation allowances for receivables, inventories and income taxes; valuation of share-based compensation; vendor incentives; assets and obligations related to employee benefits; estimates of environmental remediation costs; and accounting for long-term contracts including claims. Actual results could differ from those estimates. |
Foreign Currency Translations | Foreign Currency Translation The Company has certain operations outside the United States that prepare financial statements in currencies other than the U.S. dollar. For these operations, results of operations and cash flows are translated using the average exchange rate throughout the period. Assets and liabilities are generally translated at end of period rates. The gains and losses associated with these translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’ equity. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable. The carrying amounts of these items, as well as trade accounts payable and notes payable, approximate fair value due to the short-term maturity of these instruments. At December 31, 2017 , one customer accounted for more than 10% of consolidated accounts receivable. At December 31, 2016 , no individual customer accounted for more than 10% of consolidated accounts receivable. At December 31, 2017 and 2016 , no individual customer accounted for more than 10.0% of consolidated net sales. Foreign sales were approximately 18.8% , 18.1% and 15.6% of the Company’s net sales in 2017 , 2016 and 2015 , respectively, and are concentrated in the United Kingdom, Germany, Canada, New Zealand, the Middle East and Asia. |
Additional Cash Flow Information | Additional Cash Flow Information Non-cash investing activities in 2017 include an accrual of $3.6 million for purchases of property and equipment (including capital lease obligations). Non-cash financing activities in 2017 include 624,044 common shares issued for the partial unwind of warrant transactions during the second quarter of 2017 that had a value of approximately $30.3 million , the receipt of 136,369 shares with an approximate value of $7.5 million to unwind the remaining bond hedge transactions during the fourth quarter of 2017 and the issuance to bond holders of 136,347 shares with an approximate value of $7.5 million upon conversion of the remaining 2017 Notes. Other non-cash financing activities in 2017 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $12.7 million , net of tax of $7.7 million . Additionally, non-cash financing activities in 2017 include $5.6 million of dividends declared but not yet paid. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additional Cash Flow Information - continued Non-cash investing activities in 2016 include an accrual of $2.3 million for purchases of property and equipment (including capital lease obligations), $1.4 million in earn-out payments to the former owners of an aerospace acquisition and an adjustment of $0.2 million for a certain tax matter. Non-cash financing activities in 2016 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $4.0 million , net of tax of $2.5 million . Additionally, non-cash financing activities in 2016 include $4.9 million of dividends declared but not yet paid. Non-cash investing activities in 2015 include $5.4 million in earn-out payments to the former owners of an aerospace acquisition. Non-cash financing activities in 2015 include an adjustment to other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total net adjustment was $11.9 million , net of tax of $7.2 million . Additionally, non-cash financing activities in 2015 include $4.9 million of dividends declared but not yet paid. The Company describes its pension obligations in more detail in Note 13, Pension Plans . The Company describes the convertible notes transactions in more detail in Note 10, Debt. |
Revenue Recognition | Revenue Recognition Sales and estimated profits under long-term contracts are generally recognized using the percentage-of-completion method of accounting, using as a measurement basis either the ratio that costs incurred bear to estimated total costs (after giving effect to estimates of costs to complete based upon most recent information for each contract) or units-of-delivery. Reviews of contracts are made routinely throughout their lives and the impact of revisions in profit estimates are recorded in the accounting period in which the revisions are made. Anticipated contract losses are charged to operations when they are probable. In cases where the Company has multiple contracts with a single customer, each contract is generally treated as a separate profit center and accounted for as such. Except in the case of contracts accounted for using the cost-to-cost method of percentage-of-completion accounting, revenues are recognized when the product has been shipped or delivered, depending upon when title and risk of loss have passed. For certain U.S. Government ("USG") contracts delivery is deemed to have occurred when work is substantially complete and acceptance by the customer has occurred by execution of a Material Inspection and Receiving Report, DD Form 250 or Memorandum of Shipment. Sales contracts are initially reviewed to ascertain if they involve multiple element arrangements. If such an arrangement exists and there is no evidence of stand-alone value for each element of the undelivered items, recognition of sales for the arrangement is deferred until all elements of the arrangement are delivered and risk of loss and title have passed (except in the case of contracts accounted for using the percentage-of-completion method of accounting). For elements that do have stand-alone value or contracts that are not considered multiple element arrangements, sales and related costs of sales are recognized as services are performed or when the product has been shipped or delivered depending upon when title and risk of loss have passed. Pre-contract costs incurred for items such as materials or tooling for anticipated contracts are included in inventory if recovery of such costs is considered probable. Thereafter, if the Company determines it will not be awarded an anticipated contract and the associated pre-contract costs cannot be applied to another program the costs are expensed immediately. As of December 31, 2017 and 2016 , approximately $2.3 million and $2.0 million , respectively, of pre-contract costs were included in inventory, which, in both cases, represented less than 1% of total inventory. Learning or start-up costs incurred in connection with existing or anticipated follow-on contracts are charged to the existing contract unless the terms of the contract permit recovery of these costs over a specific contractual term and provide for reimbursement if the contract is canceled. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition - continued If it is probable that a claim with respect to change orders will result in additional contract revenue and the amount of such additional revenue can be reliably estimated, then the additional contract revenue is considered in our accounting for the program, but only if the contract provides a legal basis for the claim, the additional costs were unforeseen and not caused by deficiencies in our performance, the costs are identifiable and reasonable in view of the work performed and the evidence supporting the claim is objective and verifiable. If these requirements are met, the claim portion of the program is accounted for separately to ensure revenue from the claim is recorded only to the extent claim related costs have been incurred; accordingly, no profit with respect to such costs is recorded until the change order is formally approved. If these requirements are not met, the forecast of total contract cost at completion (which is used to calculate the gross margin rate) for the basic contract is generally increased to include all incurred and anticipated claim related costs. Recognition of sales not accounted for under the cost-to-cost method of percentage-of-completion accounting occurs when the sales price is fixed, collectability is reasonably assured and the product’s title and risk of loss has transferred to the customer. The Company includes freight costs charged to customers in net sales and the correlating expense as a cost of sales. Sales tax collected from customers is excluded from net sales in the accompanying Consolidated Statements of Operations. |
Cost of Sales and Selling, General and Administrative Expenses | Cost of Sales and Selling, General and Administrative Expenses Cost of sales includes costs of products and services sold (i.e., purchased product, raw material, direct labor, engineering labor, outbound freight charges, depreciation and amortization, indirect costs and overhead charges). Selling expenses primarily consist of advertising, promotion, bid and proposal, employee payroll and corresponding benefits and commissions paid to sales and marketing personnel. General and administrative expenses primarily consist of employee payroll including executive, administrative and financial personnel and corresponding benefits, incentive compensation, independent research and development, consulting expenses, warehousing costs, depreciation and amortization. Legal costs are expensed as incurred and are generally included in general and administrative expenses. The Aerospace segment includes general and administrative expenses as an element of program cost and inventory for certain government contracts. Certain inventory related costs, including purchasing costs, receiving costs and inspection costs, for the Distribution segment are not included in cost of sales. For the years ended December 31, 2017 , 2016 and 2015 , $3.5 million , $3.5 million and $3.2 million , respectively, of such costs are included in general and administrative expenses. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments. These investments are liquid in nature and have original maturities of three months or less. Bank overdraft positions, which occur when total outstanding issued checks exceed available cash balances at a single financial institution at the end of a reporting period, are reclassified to other current liabilities within the consolidated balance sheets. At December 31, 2017 and 2016 , the Company had bank overdrafts of $3.1 million and $4.3 million , respectively, included in other current liabilities. |
Accounts Receivable | Accounts Receivable The Company has three types of accounts receivable: (a) Trade receivables, which consist of amounts billed and currently due from customers; (b) USG contracts, which consist of (1) amounts billed, and (2) costs and accrued profit – not billed; and (c) Commercial and other government contracts, which consist of (1) amounts billed, and (2) costs and accrued profit – not billed. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade accounts receivable and billed contracts balance. Management determines the allowance based on known troubled accounts, historical experience and other currently available evidence. |
Inventories | Inventories Inventory of merchandise for resale is stated at cost (using the average costing method) or net realizable value, whichever is lower. Contracts and other work in process and finished goods are valued at production cost represented by raw material, labor and overhead. For certain government contracts, allowable general and administrative expenses are also included in inventory. Initial tooling and startup costs may be included, where applicable. Contracts and other work in process and finished goods are not reported at amounts in excess of net realizable values. The Company includes raw material amounts in the contracts in process and other work in process balances. Raw material includes certain general stock materials but primarily relates to purchases that were made in anticipation of specific programs for which production has not been started as of the balance sheet date. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is recorded at cost. Depreciation is computed primarily on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives for buildings range from 15 to 40 years and for leasehold improvements range from 1 to 20 years, whereas machinery, office furniture and equipment generally have useful lives ranging from 3 to 15 years. At the time of retirement or disposal, the acquisition cost of the asset and related accumulated depreciation are eliminated and any gain or loss is credited to or charged against income. Long-lived assets, such as property, plant and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Maintenance and repair items are charged against income as incurred, whereas renewals and betterments are capitalized and depreciated. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination and is reviewed for impairment at least annually. Accounting Standards Codification Topic 350, "Intangibles - Goodwill and Other," ("ASC 350") permits the assessment of qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-step goodwill impairment test required under ASC 350. The qualitative assessment management performs takes into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting units, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. In the first step of the two-step test, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). In Step 2, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using an income methodology based on management’s estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks associated with those cash flows. In addition, management uses a market-based valuation method involving analysis of market multiples of revenues and earnings before interest, taxes, depreciation and amortization ("EBITDA") for (i) a group of comparable public companies and (ii) recent transactions, if any, involving comparable companies. If the fair value of the reporting unit exceeds its carrying value, step two need not be performed. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Goodwill and Other Intangible Assets - continued Goodwill and intangible assets with indefinite lives are evaluated annually for impairment in the fourth quarter, based on annual forecast information. Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit. Goodwill and other intangible assets are reviewed for possible impairment whenever changes in conditions indicate that the fair value of a reporting unit is more likely than not below its carrying value. No such charges were recorded in 2017 , 2016 or 2015 . |
Vendor Incentives | Vendor Incentives The Company’s Distribution segment enters into agreements with certain vendors providing for inventory purchase incentives that are generally earned upon achieving specified volume-purchasing levels. The Company recognizes rebate income relative to specific rebate programs as a reduction of the cost of inventory based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions that results in progress toward earning the rebate, provided that the amounts are probable and reasonably estimable. As of December 31, 2017 and 2016 , total vendor incentive receivables, included in other current assets, were approximately $14.5 million and $13.3 million , respectively. |
Self-Insured Retentions | Self-Insured Retentions To limit exposure to losses related to group health, workers’ compensation, auto and product general liability claims, the Company obtains third-party insurance coverage. The Company has varying levels of deductibles for these claims. The total liability/deductible for group health is limited to $0.3 million per claim, workers’ compensation is limited to $0.4 million per claim and for product/general liability and auto liability the limit is $0.3 million per claim. The cost of such benefits is recognized as expense based on claims filed in each reporting period and an estimate of claims incurred but not reported (“IBNR”) during such period. The estimates for the IBNR are based upon historical trends and information provided to us by the claims administrators, and are periodically revised to reflect changes in loss trends. These amounts are included in other accruals and payables on the Consolidated Balance Sheets. Liabilities associated with these claims are estimated in part by considering historical claims experience, severity factors and other actuarial assumptions. Projections of future losses are inherently uncertain because of the random nature of insurance claim occurrences and the potential for differences between actual developments and actuarial assumptions. Such self-insurance accruals will likely include claims for which the ultimate losses will be settled over a period of years. |
Research and Development | Research and Development Customer funded research expenditures (which are included in cost of sales) were $1.1 million in 2017 , $0.9 million in 2016 and $0.4 million in 2015 . Research and development costs not specifically covered by contracts are recognized as expense as incurred and included in selling, general and administrative expenses. Such costs amounted to $8.2 million , $7.7 million and $6.7 million in 2017 , 2016 and 2015 , respectively. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The deferred income taxes were significantly impacted by the enactment of the Tax Cuts and Jobs Act of 2017 ("Tax Reform"), as further discussed in Note 12, Income Taxes . The Company records a benefit for uncertain tax positions in the financial statements only when it determines it is more likely than not that such a position will be sustained upon examination by taxing authorities based on the technical merits of the position. Unrecognized tax benefits represent the difference between the position taken in the tax return and the benefit reflected in the financial statements. |
Share-Based Payment Arrangements | Share-Based Payment Arrangements The Company records compensation expense for share-based awards based upon an assessment of the grant date fair value of the awards. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. A number of assumptions are used to determine the fair value of options granted. These include expected term, dividend yield, volatility of the options and the risk free interest rate. See Note 17, Share-Based Arrangements, for further information. |
Derivative Financial Instruments | Derivative Financial Instruments The Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are recognized on the Consolidated Balance Sheets as either assets or liabilities and are measured at fair value. Changes in the fair values of derivatives are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is effective as part of a hedged transaction. Gains and losses on derivative instruments reported in accumulated other comprehensive income are subsequently included in earnings in the periods in which earnings are affected by the hedged item. The Company does not use derivative instruments for speculative purposes. See Note 5, Derivative Financial Instruments , for further information. |
Pension Accounting | Pension Accounting The Company accounts for its defined benefit pension plan by recognizing the overfunded or underfunded status of the plan, calculated as the difference between the plan assets and the projected benefit obligation, as an asset or liability on the balance sheet, with changes in the funded status recognized in comprehensive income in the year in which they occur. Expenses and liabilities associated with the plan are determined based upon actuarial valuations. Integral to the actuarial valuations are a variety of assumptions including expected return on plan assets and discount rate. The Company regularly reviews the assumptions, which are updated at the measurement date, December 31 st . The impact of differences between actual results and the assumptions are accumulated and generally amortized over future periods, which will affect expense recognized in future periods. See Note 13, Pension Plans , for further information. |
Recent Accounting Standards | Recent Accounting Standards In February 2018, the FASB issued Accounting Standards Update ("ASU") 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The objective of this standard is to address the concern that tax effects of items within accumulated other comprehensive income do not appropriately reflect the tax rate because Tax Reform required the adjustment of deferred taxes be recorded to income. This ASU provides an entity the election to reclassify stranded tax effects resulting from Tax Reform to retained earnings from accumulated other comprehensive income. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the potential impact this standard update might have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities". The objective of this standard update is to improve the financial reporting of hedging relationships to better reflect the economic results of an entity's risk management activities in its financial statements. This ASU expands hedge accounting for both nonfinancial and financial risk components and refines the measurement of hedge results to better reflect an entity's hedging strategies. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting". The objective of this standard update is to address the diversity in practice and reduce the cost and complexity of applying guidance for a change to the terms or conditions of a share-based payment award. This ASU provides guidance on when an entity should apply modification accounting for stock compensation. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Standards - continued In March 2017, the FASB issued ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities”. Under this ASU, the amortization period for certain callable debt securities held at a premium is shortened to more closely align the amortization period with expectations incorporated in market pricing on the underlying securities. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The adoption of this standard will not have an impact on the Company's consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715) - Improving the Net Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The objective of this standard update is to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. This standard update requires employers to disaggregate the service cost component from the other components of net benefit cost. This ASU also provides guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. The other components of net benefit cost, which are expected to more than offset the service cost component, are required to be presented in the income statement separately from the service cost component and outside of operating profit. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. This ASU will be applied retrospectively for the presentation of the service cost component and the other components of net benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component and the other components of net benefit cost in assets. The standard update allows for a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company intends to apply this practical expedient for prior period presentation. The Company currently estimates that the service cost component to be included in operating profit will be approximately $4.9 million and the other components of net benefit cost will have a favorable impact to other (income) expense, net of approximately $11.5 million in 2018. In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)". The objective of this standard update is to clarify the scope of asset derecognition guidance and to provide new guidance for partial sales of nonfinancial assets. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted; however, an entity is required to apply the amendments in this ASU in the same period that it applies the amendments for ASU 2014-09. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The objective of this standard update is to simplify the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Under this ASU, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, assuming the loss recognized does not exceed the total amount of goodwill for the reporting unit. The standard update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The impact of the adoption of this standard update is dependent on the Company's goodwill impairment assessment. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash". The objective of this standard update is to address the diversity in classification and presentation of changes in restricted cash on the statement of cash flows. Under this ASU, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory". Under this ASU, income tax consequences of an intra-entity transfer of an asset other than inventory will be recognized when the transfer occurs. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Standards - continued In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments". This standard update was issued to address diversity in practice in how certain cash receipts and cash payments are presented and classified. The provisions of ASU 2016-15 will be effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323) - Simplifying the Transition to the Equity Method of Accounting”. This standard update eliminates the requirement to retroactively adopt the equity method of accounting when an investment qualifies for use of the equity method. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The adoption of this standard update did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815) - Contingent Put and Call Options in Debt Instruments”. The objective of this standard update is to eliminate inconsistent practices with regards to assessing embedded contingent put and call options in debt instruments. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The adoption of this standard update did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815) - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”. The objective of this standard update is to clarify whether a change in the counterparty to a derivative instrument results in a requirement to dedesignate that hedging relationship and discontinue the application of hedge accounting. The standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The adoption of this standard update did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Under this ASU as amended, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged under this ASU as amended. This standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company has developed a project plan that includes a three-phase approach to implementing this standard update. Phase one, the assessment phase, was completed in the third quarter of 2017. The Company began the second phase in the fourth quarter of 2017, which includes implementing new lease administration software, establishing policies and understanding the initial financial impact this standard update will have on the Company's consolidated financial statements. Phase three, which the Company anticipates beginning in the second half of 2018, will include integrating the standard update into financial reporting processes and systems and developing a more robust understanding of the financial impact of this standard update. The Company anticipates the ASU will have a material impact on its assets and liabilities due to the addition of right-of-use assets and lease liabilities to the balance sheet; however it does not expect the ASU to have a material impact on the Company's cash flows or results of operations. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities”. The objective of this standard update is to remove inconsistent practices with regards to the accounting for financial instruments between US GAAP and International Financial Reporting Standards (“IFRS”). The standard update intends to improve the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The provisions of this standard update are effective for interim and annual periods beginning after December 15, 2017. The Company does not expect these changes to have a material impact on its consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Standards - continued In July 2015, the FASB issued ASU 2015-11, " Inventory (Topic 330) - Simplifying the Measurement of Inventory". ASU 2015-11 requires an entity to measure inventory within the scope of the standard at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard update is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. The adoption of this standard update did not have a material impact on the Company’s consolidated financial statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". The objective of this standard update is to remove inconsistent practices with regard to revenue recognition between US GAAP and IFRS. The standard intends to improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The provisions of ASU No. 2014-09 will be effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016. The Company has developed a project plan that includes a three-phase approach to implementing this standard update. Phase one, the assessment phase, was completed in early 2016. The Company concluded the second phase of the project, which included conversion activities such as establishing policies, identifying system impacts and developing a basic understanding of the impact this standard update will have on the Company's consolidated financial statements, during the fourth quarter of 2016. Phase three, which began during the first quarter of 2017, includes the integration of the standard update into financial reporting processes and systems, and developing a more robust understanding of the financial impact of this standard update on the Company's consolidated financial statements. The Company will transition using the modified retrospective method upon adoption of this standard update. The Distribution segment currently recognizes the majority of its revenue at a point in time, which will continue under Topic 606, with only a small percentage of revenue streams moving to an over time revenue recognition model. The majority of our long-term contracts in the Aerospace segment are currently accounted for under the percentage-of-completion method using units-of-delivery as a measurement basis. For these programs, early-contract unit costs in excess of the average expected cost over the life of the contract are capitalized and amortized over the number of units in the contract. With the adoption of this standard update, certain deferred unit costs in excess of the contract average will be adjusted within the cumulative effect to retained earnings and will not be amortized into future earnings. The Company anticipates that many of these contracts will move to an over time revenue model under the percentage-of-completion method. For example, revenue for the Company's Joint Programmable Fuze ("JPF") program with the USG will move from percentage-of-completion using units-of-delivery as the measurement basis to the over time revenue recognition model using input costs as the basis for recognizing progress to completion. Conversely, revenue for the K-MAX® program will move from cost-to-cost revenue recognition to point in time, with revenue on these aircraft being recognized upon delivery to the end customer. The Company estimates that the adoption of Topic 606 will result in a net reduction to opening retained earnings of approximately $9.0 million to $11.0 million , net of tax, as of January 1, 2018. Subsequent to the issuance of ASU 2014-09, the FASB has issued the following updates: ASU 2015-14, "Revenue from Contracts with Customers (Topic 606) - "Deferral of the Effective Date"; ASU 2016-08, “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; ASU 2016-10, "Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing"; ASU 2016-12, "Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients"; and ASU 2016-20, "Technical Corrections and Improvements to Topic 606". The amendments in these updates affect the guidance contained within ASU 2014-09 and have been assessed as part of the Company's revenue recognition project plan. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs | The following table summarizes the accrual balances by cost type for the restructuring actions: Severance Other (1) Total In thousands Restructuring accrual balance at December 31, 2016 $ — $ — $ — Provision 1,369 178 1,547 Cash payments (202 ) — (202 ) Changes in foreign currency exchange rates 5 1 6 Restructuring accrual balance at December 31, 2017 $ 1,172 $ 179 $ 1,351 (1) Includes costs associated with consolidation of facilities. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, Net [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following: At December 31, 2017 2016 In thousands Trade receivables $ 152,078 $ 143,471 U.S. Government contracts: Billed 26,093 17,244 Costs and accrued profit – not billed 862 1,478 Commercial and other government contracts: Billed 107,962 50,560 Costs and accrued profit – not billed 30,590 22,234 Less allowance for doubtful accounts (4,134 ) (4,123 ) Total $ 313,451 $ 230,864 |
Accounts Receivable due to contract changes, negotiated settlements and claims for unanticipated cost | Accounts receivable, net includes amounts for matters such as contract changes, negotiated settlements and claims for unanticipated contract costs. These amounts are as follows: At December 31, 2017 2016 In thousands Contract changes, negotiated settlements and claims for unanticipated contract costs $ 900 $ 900 Total $ 900 $ 900 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Schedule of Financial Instruments not Carried at Fair Value | The following table provides the carrying value and fair value of financial instruments that are not carried at fair value at December 31, 2017 and 2016 : 2017 2016 In thousands Carrying Value Fair Value Carrying Value Fair Value Long-term debt: Level 1 $ — $ — $ 113,203 $ 170,935 Level 2 405,602 428,432 303,855 279,582 Total $ 405,602 $ 428,432 $ 417,058 $ 450,517 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following: At December 31, 2017 2016 In thousands Merchandise for resale $ 151,520 $ 158,618 Raw materials 18,871 20,592 Contracts in process: U.S. Government, net of progress payments of $10,810 and $28,824 in 2017 and 2016, respectively 75,448 85,779 Commercial and other government contracts 55,510 81,420 Other work in process (including certain general stock materials) 40,445 22,096 Finished goods 25,643 25,309 Total $ 367,437 $ 393,814 |
Property Plant and Equipment,35
Property Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, plant and equipment | Property, plant and equipment, net is summarized as follows: At December 31, 2017 2016 In thousands Land $ 15,163 $ 14,921 Buildings 104,763 97,265 Leasehold improvements 20,746 20,068 Machinery, office furniture and equipment 269,417 249,068 Construction in process 27,974 21,565 Total 438,063 402,887 Less accumulated depreciation (252,611 ) (226,366 ) Property, plant and equipment, net $ 185,452 $ 176,521 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company: 2017 2016 Distribution Aerospace Total Distribution Aerospace Total In thousands Gross balance at beginning of period $ 149,204 $ 204,942 $ 354,146 $ 149,204 $ 219,758 $ 368,962 Accumulated impairment — (16,252 ) (16,252 ) — (16,252 ) (16,252 ) Net balance at beginning of period 149,204 188,690 337,894 149,204 203,506 352,710 Additions — — — — 2,138 2,138 Impairments — — — — — — Foreign currency translation — 13,823 13,823 — (7,342 ) (7,342 ) Purchase price adjustment (1) — — — — (9,612 ) (9,612 ) Net balance at end of period $ 149,204 $ 202,513 $ 351,717 $ 149,204 $ 188,690 $ 337,894 Accumulated impairment at end of period $ — $ (16,252 ) $ (16,252 ) $ — $ (16,252 ) $ (16,252 ) |
Schedule of acquired finite-lived intangible assets by major class | Other intangible assets consisted of: At December 31, At December 31, 2017 2016 Amortization Period Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization In thousands Customer lists / relationships 6-26 years $ 159,592 $ (65,036 ) $ 154,745 $ (51,800 ) Developed technologies 10-20 years 20,148 (2,790 ) 19,049 (1,394 ) Trademarks / trade names 3-15 years 8,995 (3,905 ) 8,344 (3,250 ) Non-compete agreements and other 1-9 years 8,345 (8,319 ) 8,096 (7,444 ) Patents 17 years 523 (435 ) 523 (425 ) Total $ 197,603 $ (80,485 ) $ 190,757 $ (64,313 ) |
Schedule of finite-lived intangible assets, future amortization expense | Estimated amortization expense for the next five years associated with intangible assets existing as of December 31, 2017 , is as follows: In thousands 2018 $ 13,866 2019 $ 12,456 2020 $ 11,957 2021 $ 11,435 2022 $ 11,042 |
Environmental Costs (Tables)
Environmental Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of change in environmental remediation | The following table displays the activity and balances associated with accruals related to environmental costs included in other accruals and payables and other long-term liabilities: 2017 2016 In thousands Balance at January 1 $ 6,635 $ 11,609 Additions to accrual 442 314 Payments (1,062 ) (1,543 ) Other (1) — (3,779 ) Changes in foreign currency exchange rates 42 34 Balance at December 31 $ 6,057 $ 6,635 (1) In 2015, the Company recorded approximately $4.2 million related to environmental remediation at the newly acquired Rimpar, Germany facility. During 2016, the Company reduced this liability to approximately $0.5 million based on the results of the Phase II assessment. See Note 15, Commitments and Contingencies for further detail on this matter. |
Schedule of future payments for environmental remediation | The following represents estimated future payments for the undiscounted environmental remediation liability related to the Bloomfield campus as of December 31, 2017 : In thousands 2018 $ 403 2019 451 2020 171 2021 513 2022 151 Thereafter 4,524 Total $ 6,213 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instrument | |
Schedule of long-term debt instruments | The Company has long-term debt as follows: At December 31, 2017 2016 In thousands Revolving credit agreement $ 140,074 $ 212,605 Term loan 84,375 91,250 Convertible notes 181,153 113,203 Total 405,602 417,058 Less current portion 7,500 120,078 Total excluding current portion $ 398,102 $ 296,980 |
Schedule of maturities of long-term debt | The aggregate annual maturities of long-term debt for each of the next five years are approximately as follows: In thousands 2018 $ 7,500 2019 $ 9,375 2020 $ 207,574 2021 $ — 2022 $ — |
Schedule of line of credit facilities | The following table shows the amounts available for borrowing under the Company's revolving credit facility: At December 31, 2017 2016 In thousands Total facility $ 600,000 $ 600,000 Amounts outstanding, excluding letters of credit 140,074 212,605 Amounts available for borrowing, excluding letters of credit 459,926 387,395 Letters of credit under the credit facility 6,455 5,655 Amounts available for borrowing $ 453,471 $ 381,740 Amounts available for borrowing subject to EBITDA, as defined by the Credit Agreement $ 246,031 $ 209,467 |
Interest rate on credit facility | The interest rate for the outstanding amounts on both the revolving credit facility and term loan commitment are as follows: At December 31, 2017 2016 Interest rate 2.84 % 2.19 % |
2017 Notes | |
Debt Instrument | |
Schedule of equity and liability components in convertible debt | 2017 Notes 2017 Notes December 31, December 31, In thousands Principal amount of liability $ — $ 115,000 Unamortized discount — 1,797 Carrying value of liability $ — $ 113,203 |
Schedule of extinguishment of debt | See below for further details on the loss on extinguishment: In thousands Carrying value of 2017 Notes $ 113,943 Carrying value of Redeemed Debt $ 102,548 Fair value of consideration transferred allocated to debt component (1) 103,637 Loss on extinguishment of 2017 Notes (2) $ (1,089 ) Acceleration of the related portion of debt issuance cost (3) (297 ) Total loss on extinguishment of 2017 Notes (4) $ (1,386 ) ( 1 ) The fair value of consideration transferred was calculated using a discount rate of 3% , representing the Company's borrowing rate at the date of issuance for a similar debt instrument with a remaining expected life of six months (for the 2017 Notes). (2) The majority of this balance relates to the write-off of approximately $1.0 million , 90% of the unamortized debt discount. (3) The Company determined that in connection with the repurchase of the 2017 Notes, 90% of the unamortized debt issuance costs should be written off, representing the approximate outstanding portion of these costs related to the notes repurchased. (4) This loss is included in interest expense, net on the Company's Consolidated Statement of Operations. |
Interest expense associated with convertible notes | Interest expense associated with the 2017 Notes consisted of the following: For the year ended December 31, 2017 2016 2015 In thousands Contractual coupon rate of interest $ 3,270 $ 3,738 $ 3,738 Accretion of convertible notes discount 1,797 2,144 2,035 Interest expense - convertible notes $ 5,067 $ 5,882 $ 5,773 |
2024 Notes | |
Debt Instrument | |
Use of Proceeds | Use of proceeds from the issuance of the 2024 Notes was as follows: In thousands Proceeds: Gross proceeds $ 200,000 Commission fees and other expenses (1) (7,348 ) Net proceeds $ 192,652 Use of Proceeds: Cost to repurchase $103.5 million aggregate principal amount of 2017 Notes (2) $ (106,744 ) Cost for capped call transaction related to 2024 Notes (20,500 ) Payment made to reduce revolving credit facility (3 ) (65,408 ) Total use of proceeds $ (192,652 ) (1) Debt issuance fees paid to the counterparties and other expenses (i.e. legal and accounting fees) related to the issuance of the 2024 Notes were capitalized. (2) The total aggregate cost to repurchase 90% of the 2017 Notes was $165.3 million , of which $58.6 million was repaid using the proceeds received from the unwind of the bond hedge transactions. Included in this balance is $1.7 million of related accrued interest payments. (3) Additional payments to the revolving credit facility were made from proceeds received as part of the bond hedge settlement related to the repurchase of the 2017 Notes. See the 2017 Notes section below for further discussion. 10. DEBT (CONTINUED) |
Schedule of changes in conversion rate for convertible notes | The following table illustrates the conversion rate at the date of issuance of the 2024 Notes: 2024 Notes Conversion Rate per $1,000 principal amount (1) 15.3227 Conversion Price (2) $ 65.2626 Contingent Conversion Price (3) $ 84.84 Aggregate shares to be issued upon conversion (4) 3,064,540 (1) Represents the number of shares of Common Stock hypothetically issuable per each $1,000 principal amount of 2024 Notes, subject to adjustments upon the occurrence of certain specified events in accordance with the terms of the Indenture. (2) Represents $1,000 divided by the conversion rate as of such date. The conversion price reflects the strike price of the embedded option within the 2024 Notes. If the Company's share price exceeds the conversion price at conversion, the noteholders would be entitled to receive additional consideration either in cash, shares or a combination thereof, the form of which is at the sole discretion of the Company. (3) Prior to November 1, 2023, the notes are convertible only in the following circumstances: (1) during any fiscal quarter commencing after July 1, 2017, and only during any such fiscal quarter, if the last reported sale price of the Company's common stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter, (2) during the five consecutive business day period following any ten consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day or (3) upon the occurrence of specified corporate events. On or after November 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. If the Company undergoes a fundamental change (as defined in the Indenture), holders of the notes may require the Company to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount to be repurchased, plus any accrued and unpaid interest. As of December 31, 2017, none of the conditions permitting the holders of the 2024 Notes to convert had been met. Therefore, the 2024 Notes are classified as long-term debt. (4) This represents the number of shares hypothetically issuable upon conversion of 100% of the outstanding aggregate principal amount of the 2024 Notes at each date; however, the terms of the 2024 Notes state that the Company may pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. The Company currently intends to settle the aggregate principal amount in cash. Amounts due in excess of the principal, if any, also may be settled in cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. |
Schedule of equity and liability components in convertible debt | The carrying amount of the equity component and the principal amount of the liability component, the unamortized discount and the net carrying value of the liability are as follows: 2024 Notes December 31, 2017 December 31, 2016 In thousands Principal amount of liability $ 200,000 $ — Unamortized discount 18,847 — Carrying value of liability $ 181,153 $ — Equity component $ 20,459 $ — |
Interest expense associated with convertible notes | Interest expense associated with the 2024 Notes consisted of the following: For the year ended December 31, 2017 2016 2015 In thousands Contractual coupon rate of interest $ 4,207 $ — $ — Accretion of convertible notes discount 1,612 — — Interest expense - convertible notes $ 5,819 $ — $ — |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are shown below: 2017 2016 In thousands Foreign currency translation: Beginning balance $ (34,896 ) $ (22,625 ) Net gain (loss) on foreign currency translation 27,840 (12,271 ) Ending balance $ (7,056 ) $ (34,896 ) Pension and other post-retirement benefits (a) : Beginning balance $ (121,448 ) $ (117,455 ) Reclassification to net income Amortization of net loss, net of tax expense of $5,304 and $4,849, respectively 8,785 8,027 Change in net gain (loss), net of tax expense (benefit) of $2,357 and ($7,261), respectively 3,903 (12,020 ) Other comprehensive gain (loss), net of tax benefit 12,688 (3,993 ) Ending balance $ (108,760 ) $ (121,448 ) Derivative instruments (b) : Beginning balance $ (49 ) $ (58 ) Net gain (loss) on derivative instruments, net of tax expense (benefit) of $73 and ($354), respectively 121 (587 ) Reclassification to net income, net of tax (benefit) expense of ($42) and $360, respectively (70 ) 596 Other comprehensive income, net of tax 51 9 Ending balance $ 2 $ (49 ) Total accumulated other comprehensive income (loss) $ (115,814 ) $ (156,393 ) (a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 13, Pension Plans for additional information) (b) See Note 5, Derivative Financial Instruments , for additional information regarding the Company's derivative instruments. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) associated with earnings from continuing operations | The components of income tax expense (benefit) are as follows: For the year ended December 31, 2017 2016 2015 In thousands Current: Federal $ 16,979 $ 20,405 $ 25,170 State 1,301 2,312 349 Foreign 2,362 738 931 20,642 23,455 26,450 Deferred: Federal 23,498 10,133 5,474 State 251 (1,023 ) (2,682 ) Foreign 161 (1,715 ) (1,691 ) 23,910 7,395 1,101 Total $ 44,552 $ 30,850 $ 27,551 |
Tax effects of temporary differences that give rise to deferred tax assets and liabilities | The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below: At December 31, 2017 2016 In thousands Deferred tax assets: Deferred employee benefits $ 46,539 $ 82,836 Inventories 5,528 9,694 Tax loss and credit carryforwards 20,813 19,216 Accrued liabilities and other items 7,031 12,433 Total deferred tax assets 79,911 124,179 Deferred tax liabilities: Property, plant and equipment (10,756 ) (15,653 ) Intangibles (40,258 ) (48,785 ) Other items (4,020 ) (3,100 ) Total deferred tax liabilities (55,034 ) (67,538 ) Net deferred tax assets before valuation allowance 24,877 56,641 Valuation allowance (5,298 ) (4,143 ) Net deferred tax assets after valuation allowance $ 19,579 $ 52,498 |
Schedule of effective income tax rate reconciliation | The provision for income taxes differs from that computed at the federal statutory corporate tax rate as follows: For the year ended December 31, 2017 2016 2015 In thousands Federal tax at 35% statutory rate $ 33,032 $ 31,396 $ 30,796 State income taxes, net of federal benefit 917 999 (1,517 ) Tax effect of: Section 199 Manufacturing deduction (1,616 ) (2,153 ) (2,275 ) Impact of tax rate changes, including Tax Reform 10,032 613 (224 ) Other, net 2,187 (5 ) 771 Income tax expense $ 44,552 $ 30,850 $ 27,551 |
Change in the liability for uncertain tax positions | The change in the liability for 2017 , 2016 and 2015 is explained as follows: 2017 2016 2015 In thousands Balance at January 1 $ 2,832 $ 2,996 $ 2,441 Additions based on current year tax positions 381 211 117 Changes for tax positions of prior years 152 (96 ) (160 ) Settlements 58 (155 ) 19 Additions due to acquired business — — 954 Reductions due to lapses in statutes of limitation — (124 ) (375 ) Balance at December 31 $ 3,423 $ 2,832 $ 2,996 |
Pension Plans (Tables)
Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payment for Pension and Other Postretirement Benefits [Abstract] | |
Changes in the actuarial present value of the projected benefit obligation and fair value of plan assets | The changes in the actuarial present value of the projected benefit obligation and fair value of plan assets are as follows: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Projected benefit obligation at beginning of year $ 728,601 $ 712,842 $ 10,059 $ 10,184 Service cost 4,794 4,596 — — Interest cost 24,358 24,488 241 254 Actuarial liability loss (a) 47,433 20,588 652 155 Benefit payments (34,870 ) (33,913 ) (3,056 ) (534 ) Projected benefit obligation at end of year $ 770,316 $ 728,601 $ 7,896 $ 10,059 Fair value of plan assets at beginning of year $ 572,174 $ 553,858 $ — $ — Actual return on plan assets 96,088 42,229 — — Employer contributions 10,000 10,000 3,056 534 Benefit payments (34,870 ) (33,913 ) (3,056 ) (534 ) Fair value of plan assets at end of year $ 643,392 $ 572,174 $ — $ — Funded status at end of year $ (126,924 ) $ (156,427 ) $ (7,896 ) $ (10,059 ) Accumulated benefit obligation $ 770,316 $ 728,601 $ 7,896 $ 10,059 (a) The actuarial liability loss amount for the qualified pension plan for 2017 and 2016 is principally due to the effect of changes in the discount rate. |
Liabilities related to the qualified pension plan and SERP | The Company has recorded liabilities related to our qualified pension plan and SERP as follows: At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Current liabilities (a) $ — $ — $ (942 ) $ (3,061 ) Noncurrent liabilities (126,924 ) (156,427 ) (6,954 ) (6,998 ) Total $ (126,924 ) $ (156,427 ) $ (7,896 ) $ (10,059 ) (a) The current liabilities are included in other accruals and payables on the Consolidated Balance Sheets. |
Schedule of pension costs in future periods | The following table presents amounts included in accumulated other comprehensive income on the Consolidated Balance Sheets that will be recognized as components of pension cost in future periods. At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Unrecognized loss $ 173,214 $ 193,764 $ 1,410 $ 1,209 Amount included in accumulated other comprehensive income $ 173,214 $ 193,764 $ 1,410 $ 1,209 |
Pension plan net periodic benefit costs and other amounts recognized in other comprehensive loss | The pension plan net periodic benefit costs on the Consolidated Statements of Operations and other amounts recognized in other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income and Consolidated Statements of Shareholders’ Equity were computed using the projected unit credit actuarial cost method and included the following components: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2015 2017 2016 2015 In thousands Service cost for benefits earned during the year $ 4,794 $ 4,596 $ 14,131 $ — $ — $ 206 Interest cost on projected benefit obligation 24,358 24,488 27,514 241 254 318 Expected return on plan assets (42,049 ) (40,767 ) (44,130 ) — — — Amortization of prior service cost — — 57 — — — Recognized net loss 13,943 12,694 9,920 146 182 218 Additional amount recognized due to curtailment/settlement — — — 305 — — Net pension benefit cost $ 1,046 $ 1,011 $ 7,492 $ 692 $ 436 $ 742 Change in net gain or (loss) (6,607 ) 19,126 29,923 347 155 (155 ) Amortization of prior service cost — — (57 ) — — — Amortization of net loss (13,943 ) (12,694 ) (9,920 ) (146 ) (182 ) (218 ) Total recognized in other comprehensive income (loss) $ (20,550 ) $ 6,432 $ 19,946 $ 201 $ (27 ) $ (373 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (19,504 ) $ 7,443 $ 27,438 $ 893 $ 409 $ 369 |
Contributions made to the Qualified Pension Plan and SERP | The following tables show the amount of the contributions made to the Qualified Pension Plan and SERP during each period and the amount of contributions the Company expects to make during 2018 : Qualified Pension Plan SERP 2017 2016 2017 2016 In thousands Contributions $ 10,000 $ 10,000 $ 3,056 $ 534 Qualified Pension Plan (a) SERP In thousands Expected contributions during 2018 $ 10,000 $ 942 (a) The Company contributed $10.0 million to the qualified pension plan in January 2018. Currently, the Company does not intend to make any further contributions to the qualified pension plan in 2018 ; however, given Tax Reform the Company is evaluating its options. |
Actuarial assumptions used in determining benefit obligations and net periodic benefit of the pension plans | Expected future benefit payments, which reflect expected future service, are as follows: Qualified Pension Plan SERP In thousands 2018 $ 34,878 $ 942 2019 $ 37,000 $ 517 2020 $ 38,692 $ 503 2021 $ 39,960 $ 2,464 2022 $ 41,689 $ 469 2023-2027 $ 223,256 $ 2,018 |
Schedule of actuarial assumptions used in determining benefit obligations and net periodic benefit cost of the pension plans | The discount rates used in determining benefit obligations of the pension plans are as follows: At December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 Discount rate 3.50 % 3.98 % 3.15 % 3.43 % The actuarial assumptions used in determining the net periodic benefit cost of the pension plans are as follows: For the year ended December 31, Qualified Pension Plan SERP 2017 2016 2017 2016 Discount rate 3.98 % 4.17 % 3.43 % 3.47 % Expected return on plan assets 7.50 % 7.50 % N/A N/A Average rate of increase in compensation levels N/A N/A N/A N/A |
Fair value of the Company’s qualified pension plan assets | The fair values of the Company’s qualified pension plan assets at December 31, 2017 and 2016 , are as follows: Total Carrying Value at December 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Not subject to leveling In thousands Short-term investments: Cash and cash equivalents $ 35,046 $ 35,046 $ — $ — $ — Futures contracts - assets 116 — 116 — — Futures contracts - liabilities (1,384 ) — (1,384 ) — — Fixed income securities 96,318 — 96,318 — — Mutual funds 126,955 126,955 — — — Common trust funds (1) 314,420 — — — 314,420 Corporate stock 70,879 70,879 — — — Subtotal $ 642,350 $ 232,880 $ 95,050 $ — $ 314,420 Accrued income/expense 1,042 120 873 — 49 Total $ 643,392 $ 233,000 $ 95,923 $ — $ 314,469 Total Carrying Value at December 31, 2016 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Not subject to leveling In thousands Short term investments: Cash and cash equivalents $ 21,537 $ 21,537 $ — $ — $ — Futures contracts - liabilities (1,346 ) — (1,346 ) — — Fixed income securities 127,857 — 127,857 — — Mutual funds 131,897 131,897 — — — Common trust funds (1) 216,354 — — — 216,354 Corporate stock 74,348 74,348 — — — Subtotal $ 570,647 $ 227,782 $ 126,511 $ — $ 216,354 Accrued income/expense 1,527 133 1,394 — — Total $ 572,174 $ 227,915 $ 127,905 $ — $ 216,354 (1) In accordance with ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension plan assets. |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following: At December 31, 2017 2016 In thousands Supplemental employees' retirement plan ("SERP") $ 6,954 $ 6,998 Deferred compensation 15,862 15,238 Long-term incentive plan 9,475 8,346 Noncurrent income taxes payable 3,363 2,903 Environmental remediation liability 2,602 3,763 Capital leases 4,985 2,588 Other 3,657 5,080 Total $ 46,898 $ 44,916 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | The following minimum future rental payments are required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2017 : In thousands 2018 $ 25,773 2019 21,193 2020 16,273 2021 11,557 2022 7,691 Thereafter 15,300 Total $ 97,787 |
Schedule of future minimum lease payments for capital leases | The following minimum payments are required under capital leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2017 : In thousands 2018 $ 1,155 2019 1,457 2020 1,249 2021 1,113 2022 863 Thereafter 307 Total $ 6,144 |
Computation of Earnings Per S44
Computation of Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | For the Year Ended December 31, 2017 2016 2015 In thousands, except per share amounts Net earnings $ 49,826 $ 58,854 $ 60,438 Basic: Weighted average number of shares outstanding 27,611 27,107 27,177 Basic earnings per share $ 1.80 $ 2.17 $ 2.22 Diluted: Weighted average number of shares outstanding 27,611 27,107 27,177 Weighted average shares issuable on exercise of dilutive stock options 160 141 133 Weighted average shares issuable on exercise of convertible notes 466 773 558 Weighted average shares issuable on exercise of warrants related to 2017 Notes 181 51 — Total 28,418 28,072 27,868 Diluted earnings per share $ 1.75 $ 2.10 $ 2.17 |
Share-Based Arrangements (Table
Share-Based Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation, stock options, activity | Stock option activity is as follows: Options Weighted average- exercise price Options outstanding at December 31, 2016 958,679 $ 36.18 Granted 226,315 51.97 Exercised (201,767 ) 32.44 Forfeited or expired (57,842 ) 43.02 Options outstanding at December 31, 2017 925,385 $ 40.43 |
Schedule of share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding | The following table presents information regarding options outstanding as of December 31, 2017 : Weighted-average remaining contractual term - options outstanding (years) 6.4 Aggregate intrinsic value - options outstanding (in thousands) $ 17,034 Weighted-average exercise price - options outstanding $ 40.43 Options exercisable 378,725 Weighted-average remaining contractual term - options exercisable (years) 4.4 Aggregate intrinsic value - options exercisable (in thousands) $ 9,571 Weighted-average exercise price - options exercisable $ 33.57 |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The following table indicates the weighted-average assumptions used in estimating fair value: 2017 2016 2015 Expected option term (years) 5.0 5.2 5.1 Expected volatility 19.9 % 26.0 % 29.0 % Risk-free interest rate 1.9 % 1.2 % 1.6 % Expected dividend yield 1.6 % 1.8 % 1.6 % Per share fair value of options granted $ 8.61 $ 8.63 $ 9.28 |
Schedule of share-based compensation, restricted stock and restricted stock units activity | Restricted Stock Award and Restricted Stock Unit activity is as follows: Restricted Stock Awards Weighted- average grant date fair value Restricted Stock outstanding at December 31, 2016 167,674 $ 40.27 Granted 79,508 50.30 Vested (78,571 ) 41.70 Forfeited or expired (13,729 ) 42.46 Restricted Stock outstanding at December 31, 2017 154,882 $ 44.50 |
Segment and Geographic Inform46
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of revenue from segments to consolidated | Summarized financial information by business segment is as follows: For the year ended December 31, 2017 2016 2015 In thousands Net sales: Distribution $ 1,080,965 $ 1,106,322 $ 1,177,539 Aerospace (a) 724,944 702,054 597,586 Net sales $ 1,805,909 $ 1,808,376 $ 1,775,125 Operating income: Distribution $ 52,482 $ 41,859 $ 49,441 Aerospace 119,889 115,005 110,328 Net gain (loss) on sale of assets 256 (11 ) 328 Corporate expense (58,452 ) (50,930 ) (55,578 ) Operating income 114,175 105,923 104,519 Interest expense, net 20,581 15,747 13,144 Other (income) expense, net (784 ) 472 3,386 Earnings before income taxes 94,378 89,704 87,989 Income tax expense 44,552 30,850 27,551 Net earnings $ 49,826 $ 58,854 $ 60,438 (a) Net sales by the Aerospace segment under contracts with USG agencies (including sales to foreign governments through foreign military sales contracts with USG agencies) totaled $248.6 million , $244.4 million and $211.4 million in 2017 , 2016 and 2015 , respectively, and represent direct and indirect sales to the USG and related agencies. |
Reconciliation of assets from segment to consolidated | At December 31, In thousands 2017 2016 2015 Identifiable assets (a) : Distribution $ 537,911 $ 540,900 $ 558,630 Aerospace 810,278 720,823 738,426 Corporate (b) 107,263 164,563 142,555 Total assets $ 1,455,452 $ 1,426,286 $ 1,439,611 Capital expenditures: Distribution $ 9,621 $ 9,016 $ 10,685 Aerospace 17,208 17,935 13,378 Corporate 802 2,826 5,869 Total capital expenditures $ 27,631 $ 29,777 $ 29,932 Depreciation and amortization (c) : Distribution $ 15,083 $ 16,107 $ 16,368 Aerospace 23,717 23,584 16,275 Corporate 3,671 3,702 3,538 Total depreciation and amortization $ 42,471 $ 43,393 $ 36,181 (a) Identifiable assets are year-end assets at their respective net carrying values segregated as to segment and corporate use. (b) For the periods presented, the corporate identifiable assets are principally comprised of cash, short-term and long-term deferred income tax assets, cash surrender value of life insurance policies and fixed assets. (c) Depreciation and amortization amounts exclude amortization of debt issuance costs. |
Revenue from external customers by products and services | The following table summarizes total sales of the Company, which are principally derived from the sale of products: For the year ended December 31, 2017 2016 2015 in thousands Bearings and Power Transmission (a) $ 536,143 $ 548,736 $ 594,511 Automation, Control and Energy 326,117 337,428 354,771 Fluid Power 218,705 220,158 228,257 Military and Defense, other than fuzes 201,760 205,812 242,112 Missile and Bomb Fuzes 184,640 164,187 120,755 Commercial Aerospace and Other 338,544 332,055 234,719 Total sales (b) $ 1,805,909 $ 1,808,376 $ 1,775,125 (a) Aerospace bearings are not included in this caption, as they are reported in either the "Military and Defense" or "Commercial Aerospace and Other" categories. (b) Service revenue was not material for the years ended December 31, 2017 , 2016 and 2015 . |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Sales are attributed to geographic regions based on the location to which the product is shipped. Geographic distribution of sales recorded is as follows: For the year ended December 31, 2017 2016 2015 In thousands North America $ 1,505,768 $ 1,514,595 $ 1,518,416 Europe 169,353 168,456 112,057 Middle East 81,343 61,409 65,740 Asia 35,521 46,805 33,020 Oceania 10,868 13,385 37,959 Other 3,056 3,726 7,933 Total $ 1,805,909 $ 1,808,376 $ 1,775,125 Geographic distribution of long-lived assets is as follows: At December 31, 2017 2016 In thousands United States $ 456,023 $ 465,906 Germany 169,782 151,336 United Kingdom 47,486 44,702 Czech Republic 5,448 4,766 Mexico 1,241 1,650 Total $ 679,980 $ 668,360 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Segments) (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Accounting Policies [Abstract] | |
Primary business segments number | 2 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Concentration) (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Customers | Dec. 31, 2016USD ($)Customers | Dec. 31, 2015USD ($) | |
Concentration Risk [Line Items] | |||
Goodwill and Intangible Asset Impairment | $ | $ 0 | $ 0 | $ 0 |
Consolidated net sales | |||
Concentration Risk [Line Items] | |||
Concentration risk | 10.00% | 10.00% | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Number of customers that exceeded threshold | 0 | 0 | |
Accounts receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk | 10.00% | 10.00% | |
Number of customers that exceeded threshold | 1 | 0 | |
Foreign sales | Consolidated net sales | |||
Concentration Risk [Line Items] | |||
Concentration risk | 18.80% | 18.10% | 15.60% |
Summary of Significant Accoun49
Summary of Significant Accounting Policies (Additional Cash Flow) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Noncash or Part Noncash Acquisitions [Line Items] | |||
Accrual for purchases of property and equipment | $ 3.6 | $ 2.3 | |
Other noncash expense | (0.2) | ||
Total net adjustment | 12.7 | 4 | $ 11.9 |
Adjustments to other comprehensive income related to underfunding of pension and SERP plans and changes in fair value of derivative financial instruments, tax | 7.7 | 2.5 | 7.2 |
Dividends declared but not yet paid | $ 5.6 | 4.9 | 4.9 |
Aerospace | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Earnout payments to former owners | $ 1.4 | $ 5.4 | |
Warrant | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Options issued in debt conversion (in shares) | 624,044 | ||
Stock conversion amount | $ 30.3 | ||
Bond Hedge Transactions - 2017 Notes [Member] | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Shares received in noncash transaction (in shares) | 136,369 | ||
Value of shares received | $ 7.5 | ||
2017 Notes | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Stock conversion amount | $ 7.5 | ||
Debt Conversion, Converted Instrument, Shares Issued | 136,347 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies (Revenue Recognition) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Pre-contract costs included in inventory | $ 2.3 | $ 2 |
Percentage of pre-contract inventory (less than) | 1.00% | 1.00% |
Summary of Significant Accoun51
Summary of Significant Accounting Policies (Cost of Sales and Selling, General and Administrative Expenses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Distribution | General and administrative expenses | |||
Component of Operating Other Cost and Expense [Line Items] | |||
Inventory related costs, including purchasing costs, receiving costs and inspection costs | $ 3.5 | $ 3.5 | $ 3.2 |
Summary of Significant Accoun52
Summary of Significant Accounting Policies (Cash and Cash Equivalents and Accounts Receivable) (Details) $ in Millions | Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($) |
Accounting Policies [Abstract] | ||
Bank overdrafts | $ | $ 3.1 | $ 4.3 |
Number of types of accounts receivable | Integer | 3 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies (Property Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Minimum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 1 year |
Minimum | Machinery, office furniture and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 20 years |
Maximum | Machinery, office furniture and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Vendor Incentives) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other assets | Vendor incentive receivable | Distribution | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Vendor incentive receivables | $ 14.5 | $ 13.3 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies (Self-Insured Retentions) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Total Liability/Deductible for Group Health Insurance Per Claim | $ 0.3 |
Total Liability/Deductible for Workers Compensation Per Claim | 0.4 |
Total Liability/Deductible for Product/General and Auto Insurance Per Claim | $ 0.3 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Research and Development) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cost of sales | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Customer funded research expenditures | $ 1.1 | $ 0.9 | $ 0.4 |
Operating expenses | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Research and development costs | $ 8.2 | $ 7.7 | $ 6.7 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies (Recent Accounting Standards) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Standard Update 2017-07 [Member] | Other Nonoperating Income (Expense) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ (11.5) |
Accounting Standard Update 2017-07 [Member] | Operating Income (Loss) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 4.9 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings | Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 9 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings | Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 11 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring accrual balance at December 31, 2016 | $ 0 | ||
Provision | 1,547 | ||
Cash payments | (202) | ||
Changes in foreign currency exchange rates | 6 | ||
Restructuring accrual balance at December 31, 2017 | 1,351 | $ 0 | |
Restructuring costs | 2,661 | 1,032 | $ 1,496 |
Inventory Write-down | 1,000 | ||
Effect on Future Earnings, Amount | 4,000 | ||
Employee Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring accrual balance at December 31, 2016 | 0 | ||
Provision | 1,369 | ||
Cash payments | (202) | ||
Changes in foreign currency exchange rates | 5 | ||
Restructuring accrual balance at December 31, 2017 | 1,172 | 0 | |
Other Restructuring | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring accrual balance at December 31, 2016 | 0 | ||
Provision | 178 | ||
Cash payments | 0 | ||
Changes in foreign currency exchange rates | 1 | ||
Restructuring accrual balance at December 31, 2017 | 179 | 0 | |
Voluntary Retirement Program | |||
Restructuring Reserve [Roll Forward] | |||
Severance Costs | 300 | ||
Distribution | |||
Restructuring Reserve [Roll Forward] | |||
Severance Costs | 500 | 700 | |
Aerospace | |||
Restructuring Reserve [Roll Forward] | |||
Severance Costs | 400 | $ 2,500 | |
Corporate, Non-Segment | |||
Restructuring Reserve [Roll Forward] | |||
Severance Costs | 2,800 | ||
Minimum | |||
Restructuring Reserve [Roll Forward] | |||
Expected restructuring costs | 7,000 | ||
Maximum | |||
Restructuring Reserve [Roll Forward] | |||
Expected restructuring costs | $ 8,500 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less allowance for doubtful accounts | $ (4,134) | $ (4,123) |
Total | 313,451 | 230,864 |
Contract changes, negotiated settlements and claims for unanticipated contract costs | 900 | 900 |
Trade receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 152,078 | 143,471 |
U.S. Government contracts | Billed | Contract receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 26,093 | 17,244 |
U.S. Government contracts | Costs and accrued profit – not billed | Contract receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 862 | 1,478 |
Commercial and other government contracts | Billed | Contract receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 107,962 | 50,560 |
Commercial and other government contracts | Costs and accrued profit – not billed | Contract receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 30,590 | 22,234 |
K-MAX® program | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unbilled receivables and accrued profit, included in Other Assets | $ 3,700 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 405,602 | $ 417,058 |
Carrying Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 113,203 |
Carrying Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 405,602 | 303,855 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 428,432 | 450,517 |
Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 170,935 |
Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 428,432 | $ 279,582 |
Derivative Financial Instrume61
Derivative Financial Instruments (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)Integer | Dec. 31, 2017USD ($) | Dec. 31, 2015EUR (€)Integer | |
Derivative [Line Items] | ||||
Reclassified expense from other comprehensive income | $ 900,000 | |||
Expense related to cash flow hedges expected to be reclassified from other comprehensive income | $ 0 | |||
Interest rate swap | ||||
Derivative [Line Items] | ||||
Number of quarterly interest payments | Integer | 8 | 8 | ||
Variable rate revolving credit facility debt | $ 83,800,000 | |||
Forward exchange contract | ||||
Derivative [Line Items] | ||||
Amount of cash flow hedges | € | € 135,000,000 | |||
Other Nonoperating Income (Expense) | Forward exchange contract | ||||
Derivative [Line Items] | ||||
Derivative expense in other expenses | 2,200,000 | |||
Foreign currency contract expense | $ 800,000 |
Inventories (Details)
Inventories (Details) $ in Thousands | Dec. 31, 2017USD ($)shipset | Dec. 31, 2016USD ($) |
Schedule of Inventory [Line Items] | ||
Merchandise for resale | $ 151,520 | $ 158,618 |
Raw materials | 18,871 | 20,592 |
Progress payments | 10,810 | 28,824 |
Other work in process (including certain general stock materials) | 40,445 | 22,096 |
Finished goods | 25,643 | 25,309 |
Total | 367,437 | 393,814 |
Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for unanticipated contract costs | 4,400 | 3,600 |
Segment work in progress | 40,445 | 22,096 |
Aerospace | ||
Schedule of Inventory [Line Items] | ||
General and administrative costs in inventory, incurred | 14,700 | 13,000 |
General and administrative costs in inventory, remaining | 10,600 | 11,000 |
Distribution | ||
Schedule of Inventory [Line Items] | ||
Consignment inventory | 5,200 | 6,400 |
K-MAX® program | ||
Schedule of Inventory [Line Items] | ||
Inventory, Noncurrent | 15,700 | |
Total program inventory | 25,500 | 32,000 |
SH-2G(I) | ||
Schedule of Inventory [Line Items] | ||
Other work in process (including certain general stock materials) | 6,200 | 7,200 |
Segment work in progress | 6,200 | 7,200 |
Inventory, Noncurrent | 3,300 | |
A-10 program | ||
Schedule of Inventory [Line Items] | ||
Backlog | $ 1,200 | |
Remaining A-10 shipsets | 3 | |
Total program inventory | $ 8,700 | |
Inventory associated with nonrecurring costs | 7,000 | |
Other Inventory, Noncurrent | $ 500 | |
Number of shipsets delivered | shipset | 170 | |
Shipsets under program of record | shipset | 242 | |
U.S. Government contracts | ||
Schedule of Inventory [Line Items] | ||
U.S. Government, net of progress payments of $10,810 and $28,824 in 2017 and 2016, respectively | $ 75,448 | 85,779 |
Commercial and other government contracts | ||
Schedule of Inventory [Line Items] | ||
Commercial and other government contracts | $ 55,510 | $ 81,420 |
Property Plant and Equipment,63
Property Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 438,063 | $ 402,887 | |
Less accumulated depreciation | (252,611) | (226,366) | |
Property, plant and equipment, net | 185,452 | 176,521 | |
Depreciation expense | 27,700 | 27,500 | $ 24,100 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 15,163 | 14,921 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 104,763 | 97,265 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 20,746 | 20,068 | |
Machinery, office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 269,417 | 249,068 | |
Construction in process | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 27,974 | 21,565 | |
ERP systems | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 3,300 | 3,900 | 3,800 |
Total expenses incurred | 1,200 | 2,000 | 1,200 |
Total capital expenditures | 3,600 | 4,100 | 6,400 |
Capital expenditures total to date | 48,200 | ||
Assets held under capital lases | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 400 | 300 | $ 100 |
Capital leased assets | 7,200 | 3,600 | |
Capital leases accumulated depreciation | $ 800 | $ 400 |
Goodwill and Other Intangible64
Goodwill and Other Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||
Gross balance at beginning of period | $ 354,146 | $ 368,962 | |
Accumulated impairment | $ (16,252) | (16,252) | (16,252) |
Net balance at beginning of period | 337,894 | 352,710 | |
Additions | 0 | 2,138 | |
Impairments | 0 | 0 | |
Foreign currency translation | 13,823 | (7,342) | |
Purchase price adjustment (1) | 0 | (9,612) | |
Net balance at end of period | $ 351,717 | $ 337,894 | |
Fair value inputs, long-term revenue growth Rate | 1.00% | 1.00% | |
Fair value inputs, discount rate | 1.00% | 1.00% | |
Percent carrying amount in excess of fair value | 5.00% | ||
Minimum | |||
Goodwill [Roll Forward] | |||
Reporting unit, percentage of fair value in excess of carrying amount | 25.00% | ||
Aerospace | |||
Goodwill [Roll Forward] | |||
Gross balance at beginning of period | $ 204,942 | 219,758 | |
Accumulated impairment | $ (16,252) | (16,252) | (16,252) |
Net balance at beginning of period | 188,690 | 203,506 | |
Additions | 0 | 2,138 | |
Impairments | 0 | 0 | |
Foreign currency translation | 13,823 | (7,342) | |
Purchase price adjustment (1) | 0 | (9,612) | |
Net balance at end of period | 202,513 | 188,690 | |
Distribution | |||
Goodwill [Roll Forward] | |||
Gross balance at beginning of period | 149,204 | 149,204 | |
Accumulated impairment | 0 | 0 | $ 0 |
Net balance at beginning of period | 149,204 | 149,204 | |
Additions | 0 | 0 | |
Impairments | 0 | 0 | |
Foreign currency translation | 0 | 0 | |
Purchase price adjustment (1) | 0 | 0 | |
Net balance at end of period | $ 149,204 | $ 149,204 | |
Distribution | Minimum | |||
Goodwill [Roll Forward] | |||
Reporting unit, percentage of fair value in excess of carrying amount | 68.00% | ||
Aerosystems | Minimum | |||
Goodwill [Roll Forward] | |||
Reporting unit, percentage of fair value in excess of carrying amount | 25.00% | 4.00% |
Goodwill and Other Intangible65
Goodwill and Other Intangible Assets, Net (Other Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 197,603 | $ 190,757 | |
Accumulated Amortization | (80,485) | (64,313) | |
Intangible assets amortization expense | 14,600 | 15,600 | $ 11,800 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |||
2,018 | 13,866 | ||
2,019 | 12,456 | ||
2,020 | 11,957 | ||
2,021 | 11,435 | ||
2,022 | 11,042 | ||
Customer lists / relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 159,592 | 154,745 | |
Accumulated Amortization | $ (65,036) | (51,800) | |
Customer lists / relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 6 years | ||
Customer lists / relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 26 years | ||
Developed technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 20,148 | 19,049 | |
Accumulated Amortization | $ (2,790) | (1,394) | |
Developed technologies | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 10 years | ||
Developed technologies | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 20 years | ||
Trademarks / trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 8,995 | 8,344 | |
Accumulated Amortization | $ (3,905) | (3,250) | |
Trademarks / trade names | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 3 years | ||
Trademarks / trade names | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 15 years | ||
Noncompete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 8,345 | 8,096 | |
Accumulated Amortization | $ (8,319) | (7,444) | |
Noncompete agreements | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 1 year | ||
Noncompete agreements | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 9 years | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 17 years | ||
Gross Amount | $ 523 | 523 | |
Accumulated Amortization | (435) | $ (425) | |
U.K. Composites | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets net | 11,300 | ||
Engineering Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets net | $ 1,200 |
Environmental Costs (Schedule o
Environmental Costs (Schedule of Change in Environmental Remediation) (Details) - Accruals and Payable and Other Long Term Liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Balance at January 1 | $ 6,635 | $ 11,609 |
Additions to accrual | 442 | 314 |
Payments | (1,062) | (1,543) |
Other1 | 0 | (3,779) |
Changes in foreign currency exchange rates | 42 | 34 |
Balance at December 31 | $ 6,057 | $ 6,635 |
Environmental Costs (Details)
Environmental Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2008 | |
Accruals and Payable and Other Long Term Liabilities | |||||
Site Contingency [Line Items] | |||||
Accrual for environmental loss contingencies | $ 6,057 | $ 6,635 | $ 11,609 | ||
Moosup | |||||
Site Contingency [Line Items] | |||||
Escrow deposit | $ 1,600 | $ 4,000 | |||
Environmental escrow contribution period | 4 years | ||||
Moosup | Liabilities, Other Accruals and Payables | |||||
Site Contingency [Line Items] | |||||
Accrual for environmental loss contingencies | $ 2,400 | ||||
Bloomfield | |||||
Site Contingency [Line Items] | |||||
Undiscounted estimated remediation liability | 6,213 | $ 20,800 | |||
Discount rate | 8.00% | ||||
Accrual for environmental loss contingencies | $ 10,300 | ||||
Bloomfield | Liabilities, Other Accruals and Payables | |||||
Site Contingency [Line Items] | |||||
Accrual for environmental loss contingencies | $ 600 |
Environmental Costs (Schedule68
Environmental Costs (Schedule of Future Payments for Environmental Remediation) (Details) - Bloomfield - USD ($) $ in Thousands | Dec. 31, 2017 | Aug. 31, 2008 |
Site Contingency [Line Items] | ||
2,018 | $ 403 | |
2,019 | 451 | |
2,020 | 171 | |
2,021 | 513 | |
2,022 | 151 | |
Thereafter | 4,524 | |
Total | $ 6,213 | $ 20,800 |
Debt (Schedule of Long-term Deb
Debt (Schedule of Long-term Debt and Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument | ||
Long-term debt, gross | $ 405,602 | $ 417,058 |
Less current portion | 7,500 | 120,078 |
Total excluding current portion | 398,102 | 296,980 |
Debt issuance costs | $ 6,500 | $ 900 |
Long-term debt, weighted average interest rate | 3.02% | 2.48% |
2,018 | $ 7,500 | |
2,019 | 9,375 | |
2,020 | 207,574 | |
2,021 | 0 | |
2,022 | 0 | |
Revolving Credit Facility | ||
Debt Instrument | ||
Long-term debt, gross | 140,074 | $ 212,605 |
Term Loan | ||
Debt Instrument | ||
Long-term debt, gross | 84,375 | 91,250 |
Convertible Notes | ||
Debt Instrument | ||
Long-term debt, gross | 181,153 | 113,203 |
Capital Lease Obligations | ||
Debt Instrument | ||
Other long-term liabilities | $ 5,000 | $ 2,600 |
Debt (Revolving Credit and Term
Debt (Revolving Credit and Term Loan Agreements) (Details) $ in Thousands | Jun. 30, 2017USD ($) | Jun. 30, 2015USD ($) | May 06, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($) | May 06, 2015USD ($) |
Debt Instrument | |||||||
Outstanding balance under revolving credit agreement | $ 405,602 | $ 417,058 | |||||
Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Outstanding balance under revolving credit agreement | 140,074 | 212,605 | |||||
Term Loan | |||||||
Debt Instrument | |||||||
Outstanding balance under revolving credit agreement | $ 84,375 | $ 91,250 | |||||
Credit Agreement 2015 | |||||||
Debt Instrument | |||||||
Interest rate at period end | 2.84% | 2.19% | |||||
Consolidated senior secured indebtedness to consolidated EBITDA, ratio | 3.50 | ||||||
Debt instrument, basis points | 1 | ||||||
Number of consecutive quarters | Integer | 4 | ||||||
Consolidated total indebtedness to consolidated EBITDA, ratio | 4 | ||||||
Consolidated total leverage ratio | 4.25 | ||||||
Consideration for permitted acquisition under credit agreement | $ 125,000 | ||||||
Covenant terms, number of full fiscal quarters prior to | Integer | 2 | ||||||
Portion of rent expense under capital leases That is Treated as Interest Expense, ratio | 4 | ||||||
Minimum liquidity debt covenant under credit agreement | 50.00% | ||||||
Credit Agreement 2015 | Term Loan | |||||||
Debt Instrument | |||||||
Quarterly principal payment amounts | $ 1,875 | $ 1,250 | |||||
Consolidated senior secured indebtedness to consolidated EBITDA, ratio | 3.75 | ||||||
Credit Agreement 2015 | JPMorgan Chase Bank NA as Administrative Agent Bank of America NA and RBS Citizens NA as Co-Syndication Agents | |||||||
Debt Instrument | |||||||
Line of credit, credit agreement | $ 700,000 | ||||||
Credit Agreement 2015 | JPMorgan Chase Bank NA as Administrative Agent Bank of America NA and RBS Citizens NA as Co-Syndication Agents | Term Loan | |||||||
Debt Instrument | |||||||
Line of credit increase in maximum borrowing capacity due to accordion feature | $ 900,000 | ||||||
Credit Agreement 2015 | Co-lead Arrangers Bank of America Securities LLC, JP Morgan Securities LLC, and RBS Citizens N.A. and a Syndicate of Lenders | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Line of credit, amount outstanding | 140,074 | $ 212,605 | |||||
Remaining borrowing capacity excluding letters of credit | 459,926 | 387,395 | |||||
Line of credit, credit agreement | 600,000 | 600,000 | 600,000 | ||||
Available borrowing capacity | 453,471 | 381,740 | |||||
Remaining borrowing capacity subject to EBITDA limitations | $ 246,031 | 209,467 | |||||
Credit Agreement 2015 | Co-lead Arrangers Bank of America Securities LLC, JP Morgan Securities LLC, and RBS Citizens N.A. and a Syndicate of Lenders | Term Loan | |||||||
Debt Instrument | |||||||
Line of credit, credit agreement | $ 100,000 | ||||||
Credit Agreement 2015 | Collateral Member One | Line of Credit | |||||||
Debt Instrument | |||||||
Equity interest In certain foreign subsidiaries | 66.00% | ||||||
Credit Agreement 2015 | Collateral Member Two | Line of Credit | |||||||
Debt Instrument | |||||||
Equity interest in domestic subsidiaries | 100.00% | ||||||
Credit Agreement 2015 | Minimum | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Commitment fee percentage | 0.175% | ||||||
Credit Agreement 2015 | Minimum | Letter of Credit | |||||||
Debt Instrument | |||||||
Commitment fee percentage | 1.25% | ||||||
Credit Agreement 2015 | Maximum | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Commitment fee percentage | 0.30% | ||||||
Credit Agreement 2015 | Maximum | Letter of Credit | |||||||
Debt Instrument | |||||||
Commitment fee percentage | 2.00% | ||||||
Credit Agreement 2015 | Forecast | Term Loan | |||||||
Debt Instrument | |||||||
Quarterly principal payment amounts | $ 2,500 | ||||||
Final quarterly principal payment | $ 65,000 | ||||||
Letter of Credit | Co-lead Arrangers Bank of America Securities LLC, JP Morgan Securities LLC, and RBS Citizens N.A. and a Syndicate of Lenders | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Letters of credit outstanding amount | $ 6,455 | $ 5,655 |
Debt (Convertible Debt) (Detail
Debt (Convertible Debt) (Details) $ / shares in Units, $ in Thousands | Nov. 13, 2017USD ($) | May 12, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)Integershares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | May 24, 2017USD ($) | Nov. 30, 2010USD ($) |
Debt Instrument | |||||||
Proceeds from convertible debt | $ 200,000 | $ 0 | $ 0 | ||||
Purchase of call options related to convertible notes | $ 20,500 | ||||||
Repayments of lines of credit | (65,408) | ||||||
Use of proceeds from debt issuance total | (192,652) | ||||||
Accrued interest payments | $ 1,700 | ||||||
Convertible Debt [Abstract] | |||||||
Capped call transaction cap price (in dollars per share) | $ / shares | $ 88.7570 | ||||||
Effective interest rate | 5.00% | ||||||
Amortization of debt issuance costs | 2,014 | 1,536 | 1,548 | ||||
Interest Expense, Debt [Abstract] | |||||||
Accretion of convertible notes discount | 3,410 | 2,144 | 2,035 | ||||
Proceeds from bond hedge settlement convertible notes | 58,564 | 0 | 0 | ||||
Gain (Loss) on Extinguishment of Debt | (137) | 0 | 0 | ||||
2024 Notes | |||||||
Debt Instrument | |||||||
Convertible notes face amount | 200,000 | 0 | $ 200,000 | ||||
Amount before overallotment | $ 175,000 | ||||||
Debt Instrument face amount overallotment | 25,000 | ||||||
Annual principal interest rate | 3.25% | ||||||
Deferred finance costs, gross | (7,400) | (7,348) | |||||
Proceeds from convertible debt | $ 192,652 | ||||||
Convertible Debt [Abstract] | |||||||
Conversion rate | 15.3227 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 65.2626 | ||||||
Contingent conversion price (in dollars per shares) | $ / shares | $ 84.84 | ||||||
Aggregate shares to be issued upon conversion, convertible (in shares) | shares | 3,064,540 | ||||||
Convertible debt stock price threshold trigger percent | 130.00% | ||||||
Convertible debt trading days threshold | Integer | 20 | ||||||
Convertible, threshold consecutive trading days | Integer | 30 | ||||||
Percentage of average of closing price of common stock | 98.00% | ||||||
Carrying value of liability | $ 181,153 | 0 | 179,500 | ||||
Equity component | 20,459 | 0 | 20,500 | ||||
Debt issuance costs, recorded to APIC | 700 | ||||||
Debt issuance costs, recorded as contra-debt | $ 6,700 | ||||||
Amortization of debt issuance costs | 500 | ||||||
Unamortized discount | 18,847 | 0 | |||||
Interest Expense, Debt [Abstract] | |||||||
Contractual coupon rate of interest | 4,207 | 0 | 0 | ||||
Accretion of convertible notes discount | 1,612 | 0 | 0 | ||||
Interest expense | 5,819 | 0 | 0 | ||||
2017 Notes | |||||||
Debt Instrument | |||||||
Convertible notes face amount | 0 | 115,000 | $ 115,000 | ||||
Debt Instrument, Repurchased Face Amount | $ 11,500 | $ 103,500 | |||||
Repurchase face amount | $ (106,744) | ||||||
Options issued in debt conversion (in shares) | shares | 624,044 | ||||||
Annual principal interest rate | 3.25% | ||||||
Convertible Debt [Abstract] | |||||||
Carrying value of liability | $ 113,943 | 0 | 113,203 | ||||
Effective interest rate | 3.00% | ||||||
Unamortized discount | 0 | 1,797 | |||||
Interest Expense, Debt [Abstract] | |||||||
Contractual coupon rate of interest | 3,270 | 3,738 | 3,738 | ||||
Accretion of convertible notes discount | $ 1,000 | 1,797 | 2,144 | 2,035 | |||
Interest expense | 5,067 | 5,882 | 5,773 | ||||
Repurchase of debt fair value equity component | 60,000 | ||||||
Convertible debt repurchased carrying value | 102,548 | ||||||
Repurchase of debt fair value debt component | 103,637 | ||||||
Gain loss) on extinguishment of debt, before write off of debt issuance cost | (1,089) | ||||||
Proceeds from bond hedge settlement convertible notes | $ 58,600 | ||||||
Percent of repurchase principal | 10.00% | 90.00% | |||||
Debt Instrument, Repurchase Amount | $ 165,300 | ||||||
Write off of Deferred Debt Issuance Cost | (297) | ||||||
Gain (Loss) on Extinguishment of Debt | (1,386) | ||||||
Credit Agreement 2015 | Revolving Credit Facility | |||||||
Convertible Debt [Abstract] | |||||||
Amortization of debt issuance costs | $ 1,000 | $ 1,000 | $ 1,000 | ||||
Year 1 | 2017 Notes | |||||||
Debt Instrument | |||||||
Options issued in debt conversion (in shares) | shares | 90,000 |
Debt (Debt Issuance Costs) (Det
Debt (Debt Issuance Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument | |||
Amortization of debt issuance costs | $ 2,014 | $ 1,536 | $ 1,548 |
Interest paid | 17,900 | 14,300 | 11,400 |
Credit Agreement 2015 | Revolving Credit Facility | |||
Debt Instrument | |||
Debt issuance cost | 2,300 | ||
Amortization of debt issuance costs | $ 1,000 | $ 1,000 | $ 1,000 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ (156,393) | |||
Other comprehensive income (loss) | 40,579 | $ (16,255) | $ (13,877) | |
Ending balance | (115,814) | (156,393) | ||
Foreign currency translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (34,896) | (22,625) | ||
Other comprehensive income (loss), before reclassifications | 27,840 | (12,271) | ||
Ending balance | (7,056) | (34,896) | (22,625) | |
Pension and other post-retirement benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | [1] | (121,448) | (117,455) | |
Other comprehensive income (loss) | [1] | 12,688 | (3,993) | |
Ending balance | [1] | (108,760) | (121,448) | (117,455) |
Amortization of net loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification to net income | [1] | 8,785 | 8,027 | |
Reclassification from AOCI, tax | (5,304) | (4,849) | ||
Change in net gain | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification to net income | [1] | 3,903 | (12,020) | |
Reclassification from AOCI, tax | (2,357) | 7,261 | ||
Derivative instruments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | [2] | (49) | (58) | |
Other comprehensive income (loss), before reclassifications | [2] | 121 | (587) | |
Reclassification to net income | [2] | (70) | 596 | |
Other comprehensive income (loss) | [2] | 51 | 9 | |
Ending balance | [2] | 2 | (49) | $ (58) |
OCI before reclassifications to net income, tax | (73) | 354 | ||
Reclassification from AOCI, tax | $ 42 | $ (360) | ||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 13, Pension Plans for additional information) | |||
[2] | See Note 5, Derivative Financial Instruments, for additional information regarding the Company's derivative instruments. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current: | ||||
Federal | $ 16,979 | $ 20,405 | $ 25,170 | |
State | 1,301 | 2,312 | 349 | |
Foreign | 2,362 | 738 | 931 | |
Total, Current | 20,642 | 23,455 | 26,450 | |
Deferred: | ||||
Federal | 23,498 | 10,133 | 5,474 | |
State | 251 | (1,023) | (2,682) | |
Foreign | 161 | (1,715) | (1,691) | |
Total, Deferred | 23,910 | 7,395 | 1,101 | |
Income tax expense | $ 44,552 | $ 30,850 | $ 27,551 | |
Federal statutory rate | 21.00% | 35.00% | 35.00% | 35.00% |
Excess tax benefit share based compensation | $ 800 | $ 500 | ||
Tax adjustments, settlements, and unusual provisions | $ 9,700 |
Income Taxes (Deferred Income T
Income Taxes (Deferred Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets: | |||
Deferred employee benefits | $ 46,539 | $ 82,836 | |
Inventories | 5,528 | 9,694 | |
Tax loss and credit carryforwards | 20,813 | 19,216 | |
Accrued liabilities and other items | 7,031 | 12,433 | |
Total deferred tax assets | 79,911 | 124,179 | |
Deferred tax liabilities: | |||
Property, plant and equipment | (10,756) | (15,653) | |
Intangibles | (40,258) | (48,785) | |
Other items | (4,020) | (3,100) | |
Total deferred tax liabilities | (55,034) | (67,538) | |
Net deferred tax assets before valuation allowance | 24,877 | 56,641 | |
Valuation allowance | (5,298) | (4,143) | |
Net deferred tax assets after valuation allowance | 19,579 | 52,498 | |
Change in valuation allowance | 1,200 | ||
Pre-tax income (loss) from foreign operations | 700 | $ (5,000) | $ (4,300) |
Undistributed earnings from foreign subsidiaries | 23,200 | ||
Delamac | |||
Deferred tax liabilities: | |||
Net deferred tax assets | $ 1,600 |
Income Taxes (Tax Rate Reconcil
Income Taxes (Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||||
Excess tax benefit share based compensation | $ 800 | $ 500 | ||
Federal statutory rate | 21.00% | 35.00% | 35.00% | 35.00% |
Federal tax at 35% statutory rate | $ 33,032 | $ 31,396 | $ 30,796 | |
State income taxes, net of federal benefit | 917 | 999 | (1,517) | |
Section 199 Manufacturing deduction | (1,616) | (2,153) | (2,275) | |
Impact of tax rate changes, including Tax Reform | 10,032 | 613 | (224) | |
Other, net | 2,187 | (5) | 771 | |
Income tax expense | $ 44,552 | $ 30,850 | $ 27,551 |
Income Taxes (Uncertain Tax Pos
Income Taxes (Uncertain Tax Positions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits, income tax penalties and interest accrued | $ 400 | $ 200 | $ 500 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1 | 2,832 | 2,996 | 2,441 |
Additions based on current year tax positions | 381 | 211 | 117 |
Changes for tax positions of prior years | (152) | ||
Changes for tax positions of prior years | 96 | 160 | |
Settlements | 58 | 19 | |
Settlements | (155) | ||
Additions due to acquired business | 0 | 0 | 954 |
Reductions due to lapses in statutes of limitation | 0 | (124) | (375) |
Balance at December 31 | 3,423 | 2,832 | 2,996 |
Unrecognized tax benefits that would impact effective tax rate | 3,000 | ||
Unrecognized tax benefits, income tax penalties and interest expense ($0.1 million or less) | 100 | 100 | 100 |
Income taxes paid, net | $ 16,600 | $ 24,800 | $ 35,700 |
Pension Plans (Obligations and
Pension Plans (Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Fair value of plan assets at beginning of year | $ 572,174 | ||||
Fair value of plan assets at end of year | 643,392 | $ 572,174 | |||
Noncurrent liabilities | (126,924) | (156,427) | |||
Qualified Pension Plan | |||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Projected benefit obligation at beginning of year | 728,601 | 712,842 | |||
Service cost | 4,794 | 4,596 | $ 14,131 | ||
Interest cost | 24,358 | 24,488 | 27,514 | ||
Actuarial liability loss (a) | [1] | 47,433 | 20,588 | ||
Benefit payments | 34,870 | 33,913 | |||
Projected benefit obligation at end of year | 770,316 | 728,601 | 712,842 | ||
Fair value of plan assets at beginning of year | 572,174 | 553,858 | |||
Actual return on plan assets | 96,088 | 42,229 | |||
Employer contributions | 10,000 | 10,000 | |||
Fair value of plan assets at end of year | 643,392 | 572,174 | 553,858 | ||
Funded status at end of year | (126,924) | (156,427) | |||
Accumulated benefit obligation | 770,316 | 728,601 | |||
Current liabilities | 0 | [2] | 0 | ||
Noncurrent liabilities | (126,924) | (156,427) | |||
Total | (126,924) | (156,427) | |||
Unrecognized loss | 173,214 | 193,764 | |||
Amount included in accumulated other comprehensive income | 173,214 | 193,764 | |||
Expected amortization defined benefit plan | 11,100 | ||||
SERP | |||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Projected benefit obligation at beginning of year | 10,059 | 10,184 | |||
Service cost | 0 | 0 | 206 | ||
Interest cost | 241 | 254 | 318 | ||
Actuarial liability loss (a) | [1] | 652 | 155 | ||
Benefit payments | 3,056 | 534 | |||
Projected benefit obligation at end of year | 7,896 | 10,059 | 10,184 | ||
Fair value of plan assets at beginning of year | 0 | 0 | |||
Actual return on plan assets | 0 | 0 | |||
Employer contributions | 3,056 | 534 | |||
Fair value of plan assets at end of year | 0 | 0 | $ 0 | ||
Funded status at end of year | (7,896) | (10,059) | |||
Accumulated benefit obligation | 7,896 | 10,059 | |||
Current liabilities | (942) | (3,061) | |||
Noncurrent liabilities | (6,954) | (6,998) | |||
Total | (7,896) | (10,059) | |||
Unrecognized loss | 1,410 | 1,209 | |||
Amount included in accumulated other comprehensive income | 1,410 | $ 1,209 | |||
Expected amortization defined benefit plan | $ 300 | ||||
[1] | The actuarial liability loss amount for the qualified pension plan for 2017 and 2016 is principally due to the effect of changes in the discount rate. | ||||
[2] | (a) The current liabilities are included in other accruals and payables on the Consolidated Balance Sheets |
Pension Plans (Pension Plan Net
Pension Plans (Pension Plan Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Qualified Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost for benefits earned during the year | $ 4,794 | $ 4,596 | $ 14,131 |
Interest cost on projected benefit obligation | (24,358) | (24,488) | (27,514) |
Expected return on plan assets | (42,049) | (40,767) | (44,130) |
Amortization of prior service cost | 0 | 0 | 57 |
Recognized net loss | 13,943 | 12,694 | 9,920 |
Additional amount recognized due to curtailment/settlement | 0 | 0 | 0 |
Net pension benefit cost | 1,046 | 1,011 | 7,492 |
Change in net gain or (loss) | (6,607) | 19,126 | 29,923 |
Amortization of prior service cost | 0 | 0 | (57) |
Amortization of net loss | (13,943) | (12,694) | (9,920) |
Total recognized in other comprehensive income (loss) | (20,550) | 6,432 | 19,946 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | (19,504) | 7,443 | 27,438 |
SERP | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost for benefits earned during the year | 0 | 0 | 206 |
Interest cost on projected benefit obligation | (241) | (254) | (318) |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 0 | 0 |
Recognized net loss | 146 | 182 | 218 |
Additional amount recognized due to curtailment/settlement | 305 | 0 | 0 |
Net pension benefit cost | 692 | 436 | 742 |
Change in net gain or (loss) | 347 | 155 | (155) |
Amortization of prior service cost | 0 | 0 | 0 |
Amortization of net loss | (146) | (182) | (218) |
Total recognized in other comprehensive income (loss) | 201 | (27) | (373) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ 893 | $ 409 | $ 369 |
Pension Plans (Contributions) (
Pension Plans (Contributions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Qualified Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | |||
Expected amortization defined benefit plan | $ 11,100 | ||
Contributions | 10,000 | $ 10,000 | |
Expected contributions during 2018 | [1] | 10,000 | |
SERP | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | |||
Expected amortization defined benefit plan | 300 | ||
Contributions | 3,056 | $ 534 | |
Expected contributions during 2018 | $ 942 | ||
[1] | The Company contributed $10.0 million to the qualified pension plan in January 2018. Currently, the Company does not intend to make any further contributions to the qualified pension plan in 2018; however, given Tax Reform the Company is evaluating its options. |
Pension Plans (Expected Future
Pension Plans (Expected Future Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Qualified Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
2,018 | $ 34,878 | |
2,019 | 37,000 | |
2,020 | 38,692 | |
2,021 | 39,960 | |
2,022 | 41,689 | |
2023-2027 | $ 223,256 | |
Discount rate | 3.50% | 3.98% |
Discount rate for calculating net periodic benefit cost | 3.98% | 4.17% |
Expected return on plan assets | 7.50% | 7.50% |
SERP | ||
Defined Benefit Plan Disclosure [Line Items] | ||
2,018 | $ 942 | |
2,019 | 517 | |
2,020 | 503 | |
2,021 | 2,464 | |
2,022 | 469 | |
2023-2027 | $ 2,018 | |
Discount rate | 3.15% | 3.43% |
Discount rate for calculating net periodic benefit cost | 3.43% | 3.47% |
Pension Plans (Plan Assets for
Pension Plans (Plan Assets for Qualified Pension Plan) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | $ (643,392) | $ (572,174) | |
Not subject to leveling | (314,469) | (216,354) | |
Defined benefit plan, fair value plan assets before accrued income | 642,350 | 570,647 | |
Alternative Investment before Accrued Interest, Fair Value Disclosure | 314,420 | ||
Defined benefit plan, fair value of plan assets, accrued income | 1,042 | 1,527 | |
Alternative Investment, Accrued Interest | 49 | ||
Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (233,000) | (227,915) | |
Defined benefit plan, fair value plan assets before accrued income | 232,880 | 227,782 | |
Defined benefit plan, fair value of plan assets, accrued income | 120 | 133 | |
Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (95,923) | (127,905) | |
Defined benefit plan, fair value plan assets before accrued income | 95,050 | 126,511 | |
Defined benefit plan, fair value of plan assets, accrued income | 873 | 1,394 | |
Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Defined benefit plan, fair value plan assets before accrued income | 0 | 0 | |
Defined benefit plan, fair value of plan assets, accrued income | 0 | 0 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (35,046) | (21,537) | |
Not subject to leveling | 0 | 0 | |
Cash and cash equivalents | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (35,046) | (21,537) | |
Cash and cash equivalents | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Cash and cash equivalents | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (96,318) | (127,857) | |
Not subject to leveling | 0 | 0 | |
Fixed income securities | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Fixed income securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (96,318) | (127,857) | |
Fixed income securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Mutual funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (126,955) | (131,897) | |
Not subject to leveling | 0 | 0 | |
Mutual funds | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (126,955) | (131,897) | |
Mutual funds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Mutual funds | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Common trust funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | [1] | (314,420) | (216,354) |
Not subject to leveling | [1] | (314,420) | (216,354) |
Common trust funds | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Common trust funds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Common trust funds | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Corporate stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (70,879) | (74,348) | |
Not subject to leveling | 0 | 0 | |
Corporate stock | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (70,879) | (74,348) | |
Corporate stock | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Corporate stock | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Assets | Futures contracts - liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (116) | ||
Not subject to leveling | 0 | ||
Assets | Futures contracts - liabilities | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Assets | Futures contracts - liabilities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (116) | ||
Assets | Futures contracts - liabilities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | ||
Liability | Futures contracts - liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (1,384) | (1,346) | |
Not subject to leveling | 0 | 0 | |
Liability | Futures contracts - liabilities | Quoted prices in active markets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | 0 | 0 | |
Liability | Futures contracts - liabilities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | (1,384) | (1,346) | |
Liability | Futures contracts - liabilities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total carrying value | $ 0 | $ 0 | |
[1] | 1) In accordance with ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension plan assets. |
Pension Plans (Other Plans) (De
Pension Plans (Other Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Actual return on pension plan assets | 17.00% | ||
Maximize return | 56.80% | ||
Liquidity | 43.20% | ||
Defined contribution, maximum contribution limit | 5.00% | ||
Defined contribution plan, employer contributions | $ 12.6 | $ 11.9 | $ 11.9 |
Qualified Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected return on plan assets | 7.50% | 7.50% | |
Managers’ securities holdings percentage maximum limit of total market value | 7.50% | ||
Other Accruals and Payables | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net pension liability amounts recognized in balance sheet | $ 0.1 | $ 0.1 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Long-Term Liabilities [Line Items] | ||
Supplemental employees' retirement plan (SERP) | $ 126,924 | $ 156,427 |
Total | 46,898 | 44,916 |
Other Liabilities | ||
Other Long-Term Liabilities [Line Items] | ||
Supplemental employees' retirement plan (SERP) | 6,954 | 6,998 |
Deferred compensation | 15,862 | 15,238 |
Long-term incentive plan | 9,475 | 8,346 |
Noncurrent income taxes payable | 3,363 | 2,903 |
Environmental remediation liability | 2,602 | 3,763 |
Capital leases | 4,985 | 2,588 |
Other | $ 3,657 | $ 5,080 |
Commitments and Contingencies85
Commitments and Contingencies (Schedule of Operating Lease Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 25,773 | ||
2,019 | 21,193 | ||
2,020 | 16,273 | ||
2,021 | 11,557 | ||
2,022 | 7,691 | ||
Thereafter | 15,300 | ||
Total | 97,787 | ||
Lease expense | $ 28,000 | $ 27,300 | $ 26,400 |
Office Space, Warehouses, Land and Buildings | Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years | ||
Office Space, Warehouses, Land and Buildings | Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 5 years | ||
Machinery and Equipment | Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 1 year | ||
Machinery and Equipment | Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 5 years |
Commitments and Contingencies86
Commitments and Contingencies (Capital Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Total capacity under master lease agreement | $ 10,000 | $ 5,000 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,018 | 1,155 | |
2,019 | 1,457 | |
2,020 | 1,249 | |
2,021 | 1,113 | |
2,022 | 863 | |
Thereafter | 307 | |
Total | $ 6,144 |
Commitments and Contingencies87
Commitments and Contingencies (Textuals) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 28, 2016 | Aug. 31, 2008 | |
Accruals and Payable and Other Long Term Liabilities | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | $ 6,057 | $ 6,635 | $ 11,609 | ||
Accrual for environmental loss contingencies, payments | 1,062 | 1,543 | |||
Additions to accrual | 442 | $ 314 | |||
New Hartford | |||||
Loss Contingencies [Line Items] | |||||
Accrual for payments due to customer under agreement | 700 | ||||
Accrual for environmental loss contingencies | 2,300 | ||||
Accrual for environmental loss contingencies, payments | 1,600 | ||||
New Hartford | Liabilities, Other Accruals and Payables | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | 100 | ||||
Bloomfield | |||||
Loss Contingencies [Line Items] | |||||
Accrual for payments due to customer under agreement | 2,600 | ||||
Accrual for environmental loss contingencies | $ 10,300 | ||||
Accrual for environmental loss contingencies, payments | 12,900 | ||||
Environmental liability, discounted amount | 10,300 | ||||
Undiscounted estimated remediation liability | 6,213 | $ 20,800 | |||
Discount rate | 8.00% | ||||
Bloomfield | Liabilities, Other Accruals and Payables | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | 600 | ||||
Rimpar | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies, payments | 200 | ||||
Rimpar | Liabilities, Other Accruals and Payables | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | 300 | ||||
Rimpar | Accruals and Payable and Other Long Term Liabilities | GWR Bearing GmbH (GRW) | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | $ 500 | ||||
Additions to accrual | $ 4,200 | ||||
Pension Costs | |||||
Loss Contingencies [Line Items] | |||||
Accrual for payments due to customer under agreement | 300 | ||||
Unasserted Claim | |||||
Loss Contingencies [Line Items] | |||||
Accrual for payments due to customer under agreement | 200 | ||||
Unasserted claim | $ 12,400 |
Computation of Earnings Per S88
Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net earnings | $ 49,826 | $ 58,854 | $ 60,438 |
Basic: | |||
Weighted average number of shares outstanding (in shares) | 27,611,000 | 27,107,000 | 27,177,000 |
Earnings Per Share, Basic (in dollars per share) | $ 1.80 | $ 2.17 | $ 2.22 |
Diluted: | |||
Weighted average number of shares outstanding (in shares) | 27,611,000 | 27,107,000 | 27,177,000 |
Weighted average shares issuable on exercise of dilutive stock options (in shares) | 160,000 | 141,000 | 133,000 |
Weighted average shares issuable on exercise of convertible notes (in shares) | 466,000 | 773,000 | 558,000 |
Weighted average shares issuable on exercise of warrants related to 2017 Notes (in shares) | 181,000 | 51,000 | 0 |
Weighted average number of shares outstanding, diluted (in shares) | 28,418,000 | 28,072,000 | 27,868,000 |
Diluted earnings per share (in dollars per share) | $ 1.75 | $ 2.10 | $ 2.17 |
Equity awards granted to employees | |||
Diluted: | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 245,361 | 472,328 | 487,071 |
Warrant | |||
Diluted: | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,422,477 |
Share-Based Arrangements (Compe
Share-Based Arrangements (Compensation Arrangements by Share-based Payment Award) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Share-based compensation expense | $ 5,956 | $ 5,686 | $ 6,388 |
Share-Based Arrangements (Stock
Share-Based Arrangements (Stock Incentive Plan) (Details) | 3 Months Ended | 12 Months Ended | |||
Apr. 03, 2015 | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 17, 2013shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Number of shares authorized under the plan for each award issued, fair value awards | 3 | ||||
Employee Stock Options and ESPP Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Windfall tax benefit realized | $ | $ 0 | $ 0 | $ 300,000 | ||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Award vesting rate | 0.20 | ||||
Share-based payment award, vesting period | 5 years | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Award vesting rate | 0.20 | ||||
Share-based payment award, vesting period | 5 years | ||||
2013 Management Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Number of shares authorized (in shares) | 2,250,000 | ||||
Number of shares available for grant (in shares) | 525,310 | ||||
2013 Management Incentive Plan | LTIP Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting percentage | 100.00% | ||||
2013 Management Incentive Plan | Performance- and Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting percentage | 100.00% | ||||
Granted (in shares) | 2,165 | ||||
Minimum | 2013 Management Incentive Plan | LTIP Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting percentage | 0.00% | ||||
Maximum | 2013 Management Incentive Plan | LTIP Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting percentage | 200.00% | ||||
2014 Grant [Member] | 2013 Management Incentive Plan | Performance- and Market-based Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting percentage | 139.90% | ||||
Granted (in shares) | 1,506 |
Share-Based Arrangements (Sto91
Share-Based Arrangements (Stock Options Activity) (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Options, Outstanding [Roll Forward] | ||||
Outstanding at beginning of period (in shares) | 958,679 | |||
Granted (in shares) | 226,315 | |||
Exercised (in shares) | (201,767) | |||
Forfeited or expired (in shares) | (57,842) | |||
Outstanding at end of period (in shares) | 925,385 | 958,679 | ||
Options, Weighted Average Exercise Price [Roll Forward] | ||||
Outstanding at beginning of period (in dollars per share) | $ 36.18 | |||
Granted (in dollars per share) | 51.97 | |||
Exercised (in dollars per share) | 32.44 | |||
Forfeited or expired (in dollars per share) | 43.02 | |||
Outstanding at end of period (in dollars per share) | $ 40.43 | $ 36.18 | ||
Options, Additional Disclosures [Abstract] | ||||
Weighted-average remaining contractual term - options outstanding | 6 years 5 months | |||
Aggregate intrinsic value - options outstanding | $ 17,034 | |||
Weighted-average exercise price - options outstanding (in dollars per share) | $ 36.18 | $ 36.18 | $ 40.43 | |
Options exercisable (in shares) | 378,725 | |||
Weighted-average remaining contractual term - options exercisable | 4 years 5 months | |||
Aggregate intrinsic value - options exercisable | $ 9,571 | |||
Weighted-average exercise price - options exercisable (in dollars per share) | $ 33.57 | |||
Intrinsic value of options exercised | $ 3,900 | $ 3,900 | $ 1,000 | |
Options, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected option term | 5 years | 5 years 2 months | 5 years 1 month | |
Expected volatility | 19.90% | 26.00% | 29.00% | |
Risk-free interest rate | 1.90% | 1.20% | 1.60% | |
Expected dividend yield | 1.60% | 1.80% | 1.60% | |
Per share fair value of options granted | $ 8.61 | $ 8.63 | $ 9.28 |
Share-Based Arrangements (Restr
Share-Based Arrangements (Restricted Stock Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Nonqualified Stock Options and Restricted Stock | |||
Restricted Stock, Weighted-Average Grant Date Fair Value [Roll Forward] | |||
Tax benefit from compensation expense | $ 2,000,000 | $ 2,000,000 | $ 2,200,000 |
Compensation cost not yet recognized | $ 6,900,000 | ||
Compensation cost recognized, period | 3 years | ||
Employee Stock Options and ESPP Stock | |||
Restricted Stock, Weighted-Average Grant Date Fair Value [Roll Forward] | |||
Windfall tax benefit realized | $ 0 | $ 0 | 300,000 |
Restricted Stock | |||
Restricted Stock, Outstanding [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 167,674 | ||
Granted (in shares) | 79,508 | ||
Vested (in shares) | (78,571) | ||
Forfeited or expired (in shares) | (13,729) | ||
Outstanding at end of period (in shares) | 154,882 | 167,674 | |
Restricted Stock, Weighted-Average Grant Date Fair Value [Roll Forward] | |||
Outstanding at beginning of period (in dollars per share) | $ 40.27 | ||
Granted (in dollars per share) | 50.30 | ||
Vested (in dollars per share) | 41.70 | ||
Forfeited or expired (in dollars per share) | 42.46 | ||
Outstanding at end of period (in dollars per share) | $ 44.50 | $ 40.27 | |
Total fair value of restricted stock awards vested | $ 5,700,000 | $ 4,300,000 | $ 3,800,000 |
Share-Based Arrangements (Emplo
Share-Based Arrangements (Employee Stock Purchase Plan) (Details) - ESPP Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Market price after discount, purchase date | 85.00% | ||
Number of shares authorized (in shares) | 1,500,000 | ||
Employee stock issued (in shares) | 63,874 | 74,273 | 79,294 |
Number of shares available for purchase (in shares) | 171,191 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Employee stock issued (in dollars per share) | $ 46.79 | $ 32.95 | $ 31.64 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Employee stock issued (in dollars per share) | $ 57.27 | $ 42.40 | $ 36.46 |
Segment and Geographic Inform94
Segment and Geographic Information (Reconciliation of Income From Segments to Consolidation) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Net sales | [1] | $ 1,805,909 | $ 1,808,376 | $ 1,775,125 |
Operating income | 114,175 | 105,923 | 104,519 | |
Net gain (loss) on sale of assets | 256 | (11) | 328 | |
Interest expense, net | 20,581 | 15,747 | 13,144 | |
Other (income) expense, net | (784) | 472 | 3,386 | |
Earnings before income taxes | 94,378 | 89,704 | 87,989 | |
Income tax expense | 44,552 | 30,850 | 27,551 | |
Net earnings | 49,826 | 58,854 | 60,438 | |
Segment Reconciliation [Abstract] | ||||
Total assets | 1,455,452 | 1,426,286 | 1,439,611 | |
Capital expenditures | 27,631 | 29,777 | 29,932 | |
Depreciation and amortization | 42,471 | 43,393 | 36,181 | |
U.S. Government contracts | Aerospace | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | 248,600 | 244,400 | 211,400 | |
Operating Segments | Distribution | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | 1,080,965 | 1,106,322 | 1,177,539 | |
Operating income | 52,482 | 41,859 | 49,441 | |
Segment Reconciliation [Abstract] | ||||
Total assets | [2] | 537,911 | 540,900 | 558,630 |
Capital expenditures | 9,621 | 9,016 | 10,685 | |
Depreciation and amortization | 15,083 | 16,107 | 16,368 | |
Operating Segments | Aerospace | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | [3] | 724,944 | 702,054 | 597,586 |
Operating income | 119,889 | 115,005 | 110,328 | |
Segment Reconciliation [Abstract] | ||||
Total assets | [2] | 810,278 | 720,823 | 738,426 |
Capital expenditures | 17,208 | 17,935 | 13,378 | |
Depreciation and amortization | 23,717 | 23,584 | 16,275 | |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net gain (loss) on sale of assets | 256 | (11) | 328 | |
Corporate, Non-Segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Corporate expense | (58,452) | (50,930) | (55,578) | |
Segment Reconciliation [Abstract] | ||||
Total assets | [2],[4] | 107,263 | 164,563 | 142,555 |
Capital expenditures | 802 | 2,826 | 5,869 | |
Depreciation and amortization | $ 3,671 | $ 3,702 | $ 3,538 | |
[1] | Service revenue was not material for the years ended December 31, 2017, 2016 and 2015. | |||
[2] | Identifiable assets are year-end assets at their respective net carrying values segregated as to segment and corporate use. | |||
[3] | Net sales by the Aerospace segment under contracts with USG agencies (including sales to foreign governments through foreign military sales contracts with USG agencies) totaled $248.6 million, $244.4 million and $211.4 million in 2017, 2016 and 2015, respectively, and represent direct and indirect sales to the USG and related agencies. | |||
[4] | For the periods presented, the corporate identifiable assets are principally comprised of cash, short-term and long-term deferred income tax assets, cash surrender value of life insurance policies and fixed assets. |
Segment and Geographic Inform95
Segment and Geographic Information (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | ||||
Net sales | [1] | $ 1,805,909 | $ 1,808,376 | $ 1,775,125 |
Long-lived assets | 679,980 | 668,360 | ||
Deferred income taxes | 27,603 | 59,373 | ||
North America | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,505,768 | 1,514,595 | 1,518,416 | |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | 456,023 | 465,906 | ||
Mexico | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | 1,241 | 1,650 | ||
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 169,353 | 168,456 | 112,057 | |
Germany | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | 169,782 | 151,336 | ||
United Kingdom | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | 47,486 | 44,702 | ||
Czech Republic | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | 5,448 | 4,766 | ||
Middle East | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 81,343 | 61,409 | 65,740 | |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 35,521 | 46,805 | 33,020 | |
Oceania | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 10,868 | 13,385 | 37,959 | |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,056 | 3,726 | 7,933 | |
Distribution | Bearings and Power Transmission | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | [2] | 536,143 | 548,736 | 594,511 |
Distribution | Automation, Control and Energy | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 326,117 | 337,428 | 354,771 | |
Distribution | Fluid Power | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 218,705 | 220,158 | 228,257 | |
Aerospace | Military and Defense, other than fuzes | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 201,760 | 205,812 | 242,112 | |
Aerospace | Missile and Bomb Fuzes | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 184,640 | 164,187 | 120,755 | |
Aerospace | Commercial Aerospace and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 338,544 | $ 332,055 | $ 234,719 | |
[1] | Service revenue was not material for the years ended December 31, 2017, 2016 and 2015. | |||
[2] | Aerospace bearings are not included in this caption, as they are reported in either the "Military and Defense" or "Commercial Aerospace and Other" categories. |
Schedule II (Details)
Schedule II (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation Allowance of Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance Beginning of Period | $ 4,143 | $ 11,122 | $ 4,694 |
Additions Charged to Costs and Expenses / Provision Benefit | 830 | 269 | 281 |
Additions Other | 325 | 6,147 | |
Deductions | (7,248) | ||
Balance End of Period | 5,298 | 4,143 | 11,122 |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance Beginning of Period | 4,123 | 2,989 | 3,208 |
Additions Charged to Costs and Expenses / Provision Benefit | 1,164 | 2,635 | 1,694 |
Additions Other | 0 | 19 | 96 |
Deductions | 1,153 | 1,520 | 2,009 |
Balance End of Period | $ 4,134 | $ 4,123 | $ 2,989 |