Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 1-10596 | |
Entity Registrant Name | ESCO TECHNOLOGIES INC. | |
Entity Incorporation, State or Country Code | MO | |
Entity Tax Identification Number | 43-1554045 | |
Entity Address, Address Line One | 9900A Clayton Road | |
Entity Address, City or Town | St. Louis | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63124-1186 | |
City Area Code | (314) | |
Local Phone Number | 213-7200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Entity Common Stock, Shares Outstanding | 25,981,313 | |
Entity Central Index Key | 0000866706 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Trading Symbol | ESE | |
Security Exchange Name | NYSE |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 199,766 | $ 192,223 | $ 576,312 | $ 540,496 |
Costs and expenses: | ||||
Cost of sales | 122,172 | 122,805 | 363,026 | 346,911 |
Selling, general and administrative expenses | 43,400 | 39,910 | 126,066 | 122,813 |
Amortization of intangible assets | 4,693 | 4,605 | 13,965 | 13,615 |
Interest expense, net | 1,973 | 2,243 | 5,788 | 6,464 |
Other expenses (income), net | 2,636 | (656) | (2,037) | 992 |
Total costs and expenses | 174,874 | 168,907 | 506,808 | 490,795 |
Earnings before income tax | 24,892 | 23,316 | 69,504 | 49,701 |
Income tax expense (benefit) | 4,825 | 4,297 | 13,323 | (13,983) |
Net earnings | $ 20,067 | $ 19,019 | $ 56,181 | $ 63,684 |
Earnings per share: | ||||
Basic - Net earnings | $ 0.77 | $ 0.73 | $ 2.17 | $ 2.46 |
Diluted - Net earnings | $ 0.77 | $ 0.73 | $ 2.15 | $ 2.45 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net earnings | $ 20,067 | $ 19,019 | $ 56,181 | $ 63,684 |
Other comprehensive income net of tax: | ||||
Foreign currency translation adjustments | 1,839 | (6,865) | (2,013) | (2,740) |
Net unrealized (loss) gain on derivative instruments | (7) | (62) | 94 | 93 |
Total other comprehensive income (loss), net of tax | 1,832 | (6,927) | (1,919) | (2,647) |
Comprehensive income | $ 21,899 | $ 12,092 | $ 54,262 | $ 61,037 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 38,956 | $ 30,477 |
Accounts receivable, net | 168,675 | 163,740 |
Contract assets | 99,499 | 53,034 |
Inventories, net | 126,816 | 135,416 |
Other current assets | 16,260 | 13,356 |
Total current assets | 450,206 | 396,023 |
Property, plant and equipment, net of accumulated depreciation of $125,747 and $115,728, respectively | 151,545 | 134,954 |
Intangible assets, net of accumulated amortization of $106,239 and $92,274, respectively | 336,625 | 345,353 |
Goodwill | 381,683 | 381,652 |
Other assets | 6,036 | 7,140 |
Total assets | 1,326,095 | 1,265,122 |
Current liabilities: | ||
Short-term borrowings and current maturities of long-term debt | 20,921 | 20,000 |
Accounts payable | 59,329 | 63,033 |
Contract liabilities | 53,758 | 49,035 |
Accrued salaries | 29,914 | 29,379 |
Accrued other expenses | 35,814 | 39,083 |
Total current liabilities | 199,736 | 200,530 |
Pension obligations | 14,610 | 16,286 |
Deferred tax liabilities | 66,286 | 64,794 |
Other liabilities | 36,656 | 24,102 |
Long-term debt | 197,000 | 200,000 |
Total liabilities | 514,288 | 505,712 |
Shareholders' equity: | ||
Preferred stock, par value $.01 per share, authorized 10,000,000 shares | ||
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,596,940 and 30,534,786 shares, respectively | 306 | 305 |
Additional paid-in capital | 291,204 | 291,190 |
Retained earnings | 661,003 | 606,837 |
Accumulated other comprehensive loss, net of tax | (33,447) | (31,528) |
Total stockholders' equity before treasury stock | 919,066 | 866,804 |
Less treasury stock, at cost: 4,615,627 and 4,623,958 common shares, respectively | (107,259) | (107,394) |
Total shareholders' equity | 811,807 | 759,410 |
Total Liabilities and Shareholders' Equity | $ 1,326,095 | $ 1,265,122 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Sep. 30, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Accumulated depreciation | $ 125,747 | $ 115,728 |
Accumulated amortization | $ 106,239 | $ 92,274 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 30,596,940 | 30,534,786 |
Treasury stock, shares | 4,615,627 | 4,623,958 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 56,181 | $ 63,684 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 28,763 | 28,350 |
Stock compensation expense | 3,878 | 3,864 |
Changes in assets and liabilities | (41,851) | (9,454) |
Change in property, plant and equipment due to gain on sale of building | (8,922) | |
Effect of deferred taxes | 1,492 | (23,086) |
Pension contributions | (2,500) | (9,414) |
Net cash provided by operating activities | 37,041 | 53,944 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | (937) | (11,445) |
Additions to capitalized software | (6,207) | (7,118) |
Capital expenditures | (26,457) | (15,539) |
Proceeds from sale of building and land | 17,201 | |
Net cash used by investing activities | (16,400) | (34,102) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 32,921 | 53,000 |
Principal payments on long-term debt | (35,000) | (66,000) |
Dividends paid | (6,223) | (6,205) |
Other | (3,234) | (2,886) |
Net cash used by financing activities | (11,536) | (22,091) |
Effect of exchange rate changes on cash and cash equivalents | (626) | (8) |
Net increase (decrease) in cash and cash equivalents | 8,479 | (2,257) |
Cash and cash equivalents, beginning of period | 30,477 | 45,516 |
Cash and cash equivalents, end of period | 38,956 | 43,259 |
Supplemental cash flow information: | ||
Interest paid | 5,556 | 6,333 |
Income taxes paid (including state and foreign) | $ 18,513 | $ 4,343 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2019 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures required for annual financial statements by accounting principles generally accepted in the United States of America (GAAP). For further information, refer to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018. The Company’s results for the three and nine-month periods ended June 30, 2019 are not necessarily indicative of the results for the entire 2019 fiscal year. References to the third quarters of 2019 and 2018 represent the fiscal quarters ended June 30, 2019 and 2018, respectively. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE | 9 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE Our significant accounting policies are included in Note 1 of our Annual Report on Form 10-K for the year ended September 30, 2018. On October 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606) Revenue Recognition Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Filtration: Approximately 52% of the segment’s revenues (approximately 19% of consolidated revenues) are accounted for over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract. Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Test: Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. USG : Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Technical Packaging: Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 9 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE (EPS) | |
EARNINGS PER SHARE (EPS) | 3. EARNINGS PER SHARE (EPS) Basic EPS is calculated using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive common share options and vesting of performance-accelerated restricted shares (restricted shares) by using the treasury stock method. The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands): Three Months Nine Months Ended June 30, Ended June 30, 2019 2018 2019 2018 Weighted Average Shares Outstanding - Basic 25,971 25,900 25,935 25,862 Dilutive Options and Restricted Shares 138 150 155 180 Adjusted Shares - Diluted 26,109 26,050 26,090 26,042 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2019 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 4. SHARE-BASED COMPENSATION The Company provides compensation benefits to certain key employees under several share-based plans providing for performance-accelerated restricted shares (restricted shares), and to non-employee directors under a non-employee directors compensation plan. Performance-Accelerated Restricted Share Awards Compensation expense related to the restricted share awards was $1.0 million and $3.1 million for the three and nine-month periods ended June 30, 2019, respectively, and $0.9 million and $3.1 million for the corresponding periods of 2018. There were 280,504 non-vested shares outstanding as of June 30, 2019. Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $0.3 million and $0.8 million for the three and nine-month periods ended June 30, 2019, respectively, and $0.3 million and $0.8 million for the corresponding periods of 2018. The total share-based compensation cost that has been recognized in the results of operations and included within selling, general and administrative expenses (SG&A) was $1.3 million and $3.9 million for the three and nine-month periods ended June 30, 2019, respectively, and $1.2 million and $3.9 million for the three and nine-month periods ended June 30, 2018. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.2 million and $0.8 million for the three and nine-month periods ended June 30, 2019, respectively, and $0.2 million and $0.9 million for the three and nine-month periods ended June 30, 2018, respectively. As of June 30, 2019, there was $10.7 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted-average period of 2.1 years. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jun. 30, 2019 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES Inventories consist of the following: June 30, September 30, (In thousands) 2019 2018 Finished goods $ 18,583 26,678 Work in process 42,678 47,765 Raw materials 65,555 60,973 Total inventories $ 126,816 135,416 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Included on the Company’s Consolidated Balance Sheets at June 30, 2019 and September 30, 2018 are the following intangible assets gross carrying amounts and accumulated amortization: June 30, September 30, (Dollars in thousands) 2019 2018 Goodwill $ 381,683 381,652 Intangible assets with determinable lives: Patents Gross carrying amount $ 1,880 1,833 Less: accumulated amortization 873 791 Net $ 1,007 1,042 Capitalized software Gross carrying amount $ 77,502 71,294 Less: accumulated amortization 47,206 41,624 Net $ 30,296 29,670 Customer relationships Gross carrying amount $ 185,135 185,333 Less: accumulated amortization 55,641 47,802 Net $ 129,494 137,531 Other Gross carrying amount $ 5,382 5,468 Less: accumulated amortization 2,518 2,056 Net $ 2,864 3,412 Intangible assets with indefinite lives: Trade names $ 172,964 173,698 The changes in the carrying amount of goodwill attributable to each business segment for the nine months ended June 30, 2019 is as follows: (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2018 254.1 34.1 73.7 19.8 381.7 Foreign currency translation 0.2 — — (0.2) — Balance as of June 30, 2019 $ 254.3 34.1 73.7 19.6 381.7 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Jun. 30, 2019 | |
BUSINESS SEGMENT INFORMATION | |
BUSINESS SEGMENT INFORMATION | 7. BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers, and classifies its business operations in four reportable segments for financial reporting purposes: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The Filtration segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), and Mayday Manufacturing Co. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday). The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements used in commercial aerospace applications, unique filter mechanisms used in micro-propulsion devices for satellites and custom designed filters for manned and unmanned aircraft; manufacture elastomeric-based signature reduction solutions for the U.S. Navy; and manufacture landing gear components for the aerospace and defense industry. The Test segment’s operations consist primarily of ETS-Lindgren Inc. (ETS-Lindgren). ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. The USG segment’s operations consist primarily of Doble Engineering Company (Doble), Morgan Schaffer Inc. (Morgan Schaffer), and NRG Systems, Inc. (NRG). Doble provides high-end, intelligent diagnostic test solutions for the electric power delivery industry and is a leading supplier of partial discharge testing instruments used to assess the integrity of high voltage power delivery equipment. Morgan Schaffer provides an integrated offering of dissolved gas analysis, oil testing, and data management solutions for the electric power industry. NRG designs and manufactures decision support tools for the renewable energy industry, primarily wind. The Technical Packaging segment’s operations consist of Thermoform Engineered Quality LLC (TEQ) and Plastique Limited and Plastique Sp. z o.o. (together, Plastique). The companies within this segment provide innovative solutions to the medical and commercial markets for thermoformed packages and specialty products using a wide variety of thin gauge plastics and pulp. Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes. Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2019 2018 2019 2018 NET SALES Filtration $ 83,067 69,721 228,769 195,531 Test 42,298 45,034 126,459 123,368 USG 52,894 55,489 157,639 157,942 Technical Packaging 21,507 21,979 63,445 63,655 Consolidated totals $ 199,766 192,223 576,312 540,496 EBIT Filtration $ 19,039 14,292 47,092 35,056 Test 5,927 5,902 14,791 13,797 USG 10,148 11,528 40,461 27,805 Technical Packaging 1,625 2,505 3,333 5,355 Corporate (loss) (9,874) (8,668) (30,385) (25,848) Consolidated EBIT 26,865 25,559 75,292 56,165 Less: Interest expense (1,973) (2,243) (5,788) (6,464) Earnings before income taxes $ 24,892 23,316 69,504 49,701 Non-GAAP Financial Measures The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT. The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP. |
DEBT
DEBT | 9 Months Ended |
Jun. 30, 2019 | |
DEBT | |
DEBT | 8. DEBT The Company’s debt is summarized as follows: June 30, September 30, (In thousands) 2019 2018 Total borrowings $ 217,921 220,000 Short-term borrowings and current portion of long-term debt (20,921) (20,000) Total long-term debt, less current portion $ 197,000 200,000 The Company’s existing credit facility (“the Credit Facility”) matures December 21, 2020. The Credit Facility includes a $450 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of nine banks led by JPMorgan Chase Bank, N.A., as Administrative Agent. At June 30, 2019, the Company had approximately $225 million available to borrow under the Credit Facility, and a $250 million increase option, in addition to $39.0 million cash on hand. At June 30, 2019, the Company had $217.0 million of outstanding borrowings under the Credit Facility, and $0.9 million of short-term borrowing in addition to outstanding letters of credit of $7.2 million. The Company classified $20.9 million as the current portion of long-term debt as of June 30, 2019, as the Company intends to repay this amount within the next twelve month period; however, the Company has no contractual obligation to repay such amount during the next twelve month period. The Credit Facility requires, as determined by certain financial ratios, a facility fee ranging from 12.5 to 27.5 basis points per year on the unused portion. The terms of the facility provide that interest on borrowings may be calculated at a spread over the London Interbank Offered Rate (LIBOR) or based on the prime rate, at the Company’s election. The facility is secured by the unlimited guaranty of the Company’s material domestic subsidiaries and a 65% pledge of the material foreign subsidiaries’ share equity. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. The weighted average interest rates were 3.21% and 3.22% for the three and nine-month periods ending June 30, 2019, respectively, and 3.17% and 2.97% for the corresponding periods of 2018. At June 30, 2019, the Company was in compliance with all debt covenants. |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 9 Months Ended |
Jun. 30, 2019 | |
INCOME TAX EXPENSE | |
INCOME TAX EXPENSE | 9. INCOME TAX EXPENSE The third quarter 2019 effective income tax rate was 19.4% compared to 18.4% in the third quarter of 2018. The income tax expense for the first nine months of 2019 was $13.3 million compared to income tax benefit of $14.0 million for the first nine months of 2018. The effective income tax rate for the first nine months of 2019 was 19.2% compared to (28.1)% for the first nine months of 2018. The income tax expense in the third quarter and first nine months of 2019 was favorably impacted by tax planning strategies to increase foreign tax credits claimed retrospectively. The Company reduced the valuation allowance for excess foreign tax credits by $2.4 million ($2.3 million in the second quarter of 2019 and $0.1 million in third quarter of 2019) and recorded an amended return benefit of $0.3 million ($0.2 million in the second quarter of 2019 and $0.1 million in the third quarter of 2019) which favorably impacted the third quarter and year-to-date effective tax rate by 1.0% and 4.1%, respectively. Income tax expense in the third quarter of 2019 and first nine months of 2019 was also favorably impacted by additional tax benefits on share-based compensation that vested during the quarter decreasing the effective tax rate by 1.8% and 0.7%, respectively. A non-automatic accounting method change filed with the 2018 tax return was approved by the Internal Revenue Service during the third quarter of 2019 and favorably impacted the third quarter and year-to-date effective tax rate by 1.0% and 0.4%, respectively. H.R. 1, Tax Cuts and Jobs Act In the first quarter of 2018, the Company recorded a $2.3 million provisional estimate of the income tax effects of the future repatriation of the cumulative earnings of its foreign subsidiaries which unfavorably impacted the year-to-date effective tax rate by 4.7%. An additional $7.5 million pension contribution for the 2017 plan year was approved during the second quarter of 2018 increasing the value of the deferred tax liability by $1.0 million. This favorable adjustment, net of the $0.3 million unfavorable impact to the 2017 Domestic Production Deduction, favorably impacted the year-to-date effective tax rate by 1.6%. An accounting method change was filed with the 2017 tax return which resulted in an additional deferred tax liability to be adjusted as a result of the TCJA. A favorable adjustment, net of the $0.3 million unfavorable impact to the 2018 Domestic Production deduction, favorably impacted the third quarter and year-to-date effective tax rate by 2.9% and 1.4%, respectively. The income tax expense in the third quarter and first nine months of 2018 was favorably impacted by return to provision true-ups decreasing the third quarter and year-to-date effective tax rate by 1.4% and 0.7%, respectively. Income tax expense in the third quarter and first nine months of 2018 was also favorably impacted by additional tax benefits on share-based compensation that vested during the quarter decreasing the effective tax rate by 1.9% and 0.9%, respectively. Provisions under the TCJA that became effective for the Company in the current fiscal year include a further reduction in the U.S. statutory rate to 21%, a new minimum tax on global intangible low-taxed income (“GILTI”), the benefit of the deduction for foreign-derived intangible income (“FDII”), and changes to IRC Section 162(m) related to the deductibility of executive compensation. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Jun. 30, 2019 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 10. SHAREHOLDERS’ EQUITY The change in shareholders’ equity for the first nine months of 2019 and 2018 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2018 2019 2018 2019 Common stock Beginning balance 305 305 305 305 Stock plans — 1 — 1 Ending balance 305 306 305 306 Additional paid-in-capital Beginning balance 292,404 293,612 289,785 291,190 Stock plans (2,298) (2,408) 321 14 Ending balance 290,106 291,204 290,106 291,204 Retained earnings Beginning balance 557,249 643,018 516,718 606,836 Net earnings common stockholders 19,019 20,067 63,684 56,181 Dividends paid (2,076) (2,082) (6,210) (6,227) Adoption of accounting standards updates — — — 4,213 Ending balance 574,192 661,003 574,192 661,003 Accumulated other comprehensive income (loss) Beginning balance (23,028) (35,280) (27,308) (31,528) Foreign currency translation (6,865) 1,840 (2,801) (2,013) Pension — — 61 — Forward exchange contracts (62) (7) 93 94 Ending balance (29,955) (33,447) (29,955) (33,447) Treasury stock Beginning balance (107,394) (107,259) (107,582) (107,394) Issued under stock plans — — 188 135 Ending balance (107,394) (107,259) (107,394) (107,259) Total equity 727,254 811,807 727,254 811,807 |
RETIREMENT PLANS
RETIREMENT PLANS | 9 Months Ended |
Jun. 30, 2019 | |
RETIREMENT PLANS | |
RETIREMENT PLANS | 11. RETIREMENT PLANS A summary of net periodic benefit expense for the Company’s defined benefit plans for the three and nine-month periods ended June 30, 2019 and 2018 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2019 2018 2019 2018 Defined benefit plans Interest cost $ 875 821 2,626 2,461 Expected return on assets (1,086) (975) (3,259) (2,924) Amortization of: Prior service cost — — — — Actuarial loss 487 548 1,461 1,644 Net periodic benefit cost $ 276 394 828 1,181 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Jun. 30, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 12. DERIVATIVE FINANCIAL INSTRUMENTS Market risks relating to the Company’s operations result primarily from changes in interest rates and changes in foreign currency exchange rates. The Company is exposed to market risk related to changes in interest rates and selectively uses derivative financial instruments, including forward contracts and swaps, to manage these risks. In 2018, the Company entered into three interest rate swaps with a notional amount of $150 million to hedge some of its exposure to variability in future LIBOR-based interest payments on variable rate debt. In addition, the Company’s Canadian subsidiary Morgan Schaffer enters into foreign exchange contracts to manage foreign currency risk as a portion of their revenue is denominated in U.S. dollars. The Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. All derivative instruments are reported in either accrued expenses or other receivables on the balance sheet at fair value. For derivative instruments designated as cash flow hedges, the gain or loss on the derivative is deferred in accumulated other comprehensive income until recognized in earnings with the underlying hedged item. The interest rate swaps entered into during 2018 were not designated as cash flow hedges and, therefore, the gain or loss on the derivative is reflected in earnings each period. The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of June 30, 2019: Fair Notional Value Float Fix (In thousands) amount (US$) Rate Rate Forward contracts 6,000 USD (4) Interest rate swap 150,000 USD 6 2.38 % 2.09 % Interest rate swap * 150,000 USD (1,041) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Financial Assets and Liabilities The Company has estimated the fair value of its financial instruments as of June 30, 2019 and September 30, 2018 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, debt and other current assets and liabilities approximate fair value because of the short maturity of those instruments. Fair Value of Financial Instruments The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of June 30, 2019: (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): Forward contracts $ — (1,039) $ — (1,039) Valuation was based on third party evidence of similarly priced derivative instruments. Nonfinancial Assets and Liabilities The Company’s nonfinancial assets such as property, plant and equipment, and other intangible assets are not measured at fair value on a recurring basis; however they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during the three and nine-month periods ended June 30, 2019. |
REVENUES
REVENUES | 9 Months Ended |
Jun. 30, 2019 | |
REVENUES | |
REVENUES | 14. REVENUES Disaggregation of Revenues Our revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2019 are presented in the table below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The table below also includes a reconciliation of the disaggregated revenue within our reportable segments. Three Months Ended June 30, 2019 Technical (In thousands) Filtration Test USG Packaging Total Customer type: Commercial $ 47,482 $ 37,980 $ 52,065 $ 21,507 $ 159,034 Government 35,585 4,318 829 — 40,732 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Geographic location: United States $ 69,872 $ 26,923 $ 38,414 $ 11,559 $ 146,268 International 13,195 15,375 14,480 9,948 53,498 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Revenue recognition method: Point in time $ 41,633 $ 6,485 $ 40,968 $ — $ 89,092 Over time 41,434 35,813 11,926 21,507 110,674 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Nine Months Ended June 30, 2019 Technical (In thousands) Filtration Test USG Packaging Total Customer type: Commercial $ 131,112 $ 111,577 $ 154,240 $ 63,251 $ 460,180 Government 97,657 14,882 3,399 194 116,132 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 Geographic location: United States $ 190,701 $ 82,072 $ 112,289 $ 32,865 $ 417,927 International 38,068 44,387 45,350 30,580 158,385 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 Revenue recognition method: Point in time $ 115,852 $ 29,092 $ 122,075 $ - $ 267,021 Over time 112,917 97,367 35,564 63,445 309,291 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 Remaining Performance Obligations Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At June 30, 2019, we had $432.5 million in remaining performance obligations of which we expect to recognize revenues of 83% in the next twelve months. Contract assets and liabilities Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At June 30, 2019, contract assets and liabilities totaled $99.5 million and $53.8 million, respectively. Upon adoption of ASC 606 on October 1, 2018, contract assets and liabilities related to our contracts with customers were $87 million and $51 million, respectively. During the first nine months of 2019, we recognized approximately $35 million in revenues that were included in the contract liabilities balance at the adoption date. Reconciliation of ASC 606 to Prior Accounting Standards The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below: June 30, 2019 Effect of the adoption of Under Prior (In thousands) As Reported ASC 606 Accounting Consolidated Balance Sheets Contract assets (1) $ 99,499 $ (43,576) $ 55,923 Inventories 126,816 36,089 162,905 Total current assets 450,206 (7,487) 442,719 Total assets 1,326,095 (7,487) 1,318,608 Contract liabilities (2) 53,758 4,549 58,307 Total current liabilities 199,736 4,549 204,285 Deferred tax liabilities 66,286 (1,678) 64,608 Total liabilities 514,288 2,871 517,159 Retained earnings 661,003 (10,358) 650,645 Total shareholders’ equity 811,807 (10,358) 801,449 Total liabilities and shareholders’ equity $ 1,326,095 (7,487) 1,318,608 (1) Previously “cost and estimated earnings on long-term contracts” (2) Previously “advance payments on long-term contracts” and “current portion of deferred revenue” Three Months Ended June 30, 2019 Effect of the adoption of Under Prior (In thousands, except per share amounts) As Reported ASC 606 Accounting Consolidated Statements of Operations Net sales $ 199,766 $ (4,008) $ 195,758 Cost of sales 122,172 (1,380) 120,792 Total costs and expenses 174,874 (1,380) 173,494 Earnings before income tax 24,892 (2,628) 22,264 Income tax expense (benefit) 4,825 (399) 4,426 Net earnings 20,067 (2,229) 17,838 Earnings per share: Basic: Net earnings $ 0.77 $ (0.08) $ 0.69 Diluted: Net earnings $ 0.77 $ (0.08) $ 0.69 Consolidated Statements of Comprehensive Income Net earnings $ 20,067 $ (2,229) $ 17,838 Comprehensive income 21,899 (2,229) 19,670 Nine Months Ended June 30, 2019 Effect of the adoption of Under Prior (In thousands, except per share amounts) As Reported ASC 606 Accounting Consolidated Statements of Operations Net sales $ 576,312 $ (9,787) $ 566,525 Cost of sales 363,026 (8,360) 354,666 Total costs and expenses 506,808 (8,360) 498,448 Earnings before income tax 69,504 (1,427) 68,077 Income tax expense (benefit) 13,323 (171) 13,152 Net earnings 56,181 (1,256) 54,925 Earnings per share: Basic: Net earnings $ 2.17 $ (0.05) $ 2.12 Diluted: Net earnings $ 2.15 $ (0.04) $ 2.11 Consolidated Statements of Comprehensive Income Net earnings $ 56,181 $ (1,256) $ 54,925 Comprehensive income 54,262 (1,256) 53,006 Consolidated Statements of Cash flows Net earnings $ 56,181 $ (1,256) $ 54,925 Adjustments to reconcile net earnings to net cash provided by operating activities: Change in assets and liabilities $ (41,851) 1,256 $ (40,595) Net cash provided by operating activities 37,041 — 37,041 |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 9 Months Ended |
Jun. 30, 2019 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 15. NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU No. 2016-062, “Leases” (ASU 2016-02) which supersedes ASC 840, “Leases” and creates a new topic, ASC 842 “Leases.” Subsequent to the issuance of ASU 2016-02, ASC 842 was amended by various updates that amend and clarify the impact and implementation of the aforementioned update. These updates require lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. Upon initial application, the provisions of these updates are required to be applied using the modified retrospective method which requires retrospective adoption to each prior reporting period presented with the cumulative effect of adoption recorded to the earliest reporting period presented. An optional transition method can be utilized which requires retrospective adoption beginning on the date of adoption with the cumulative effect of initially applying these updates recognized at the date of initial adoption. These updates also expand the required quantitative and qualitative disclosures surrounding leases. These updates are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier application permitted. We expect to adopt these updates on October 1, 2019 using the optional transition method. We continue to evaluate the impact these updates will have on our consolidated financial statements. Based upon the analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of assets and liabilities of less than $30 million to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. We believe the updates will also have an impact on our accounting policies, internal controls and disclosures related to leases. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Jun. 30, 2019 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 16. SUBSEQUENT EVENT On July 2, 2019, the Company acquired Globe Composite Solutions, LLC (Globe), a supplier of mission-critical composite-based products and solutions for navy, defense, and industrial customers. Globe’s operating results from date of acquisition will be included in the Company’s Filtration segment. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE (Policies) | 9 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE | |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Filtration: Approximately 52% of the segment’s revenues (approximately 19% of consolidated revenues) are accounted for over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract. Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Test: Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. USG : Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Technical Packaging: Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. |
Contract Assets and Liabilities | Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet. |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE (EPS) | |
Schedule of weighted average number of shares used in the calculation of earnings per share | Three Months Nine Months Ended June 30, Ended June 30, 2019 2018 2019 2018 Weighted Average Shares Outstanding - Basic 25,971 25,900 25,935 25,862 Dilutive Options and Restricted Shares 138 150 155 180 Adjusted Shares - Diluted 26,109 26,050 26,090 26,042 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
INVENTORIES | |
Schedule of inventories | Inventories consist of the following: June 30, September 30, (In thousands) 2019 2018 Finished goods $ 18,583 26,678 Work in process 42,678 47,765 Raw materials 65,555 60,973 Total inventories $ 126,816 135,416 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill and intangible assets | June 30, September 30, (Dollars in thousands) 2019 2018 Goodwill $ 381,683 381,652 Intangible assets with determinable lives: Patents Gross carrying amount $ 1,880 1,833 Less: accumulated amortization 873 791 Net $ 1,007 1,042 Capitalized software Gross carrying amount $ 77,502 71,294 Less: accumulated amortization 47,206 41,624 Net $ 30,296 29,670 Customer relationships Gross carrying amount $ 185,135 185,333 Less: accumulated amortization 55,641 47,802 Net $ 129,494 137,531 Other Gross carrying amount $ 5,382 5,468 Less: accumulated amortization 2,518 2,056 Net $ 2,864 3,412 Intangible assets with indefinite lives: Trade names $ 172,964 173,698 |
Schedule of carrying amount of goodwill attributable to each business segment | (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2018 254.1 34.1 73.7 19.8 381.7 Foreign currency translation 0.2 — — (0.2) — Balance as of June 30, 2019 $ 254.3 34.1 73.7 19.6 381.7 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
BUSINESS SEGMENT INFORMATION | |
Schedule of Net Sales and Earnings Before Income Tax | Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2019 2018 2019 2018 NET SALES Filtration $ 83,067 69,721 228,769 195,531 Test 42,298 45,034 126,459 123,368 USG 52,894 55,489 157,639 157,942 Technical Packaging 21,507 21,979 63,445 63,655 Consolidated totals $ 199,766 192,223 576,312 540,496 EBIT Filtration $ 19,039 14,292 47,092 35,056 Test 5,927 5,902 14,791 13,797 USG 10,148 11,528 40,461 27,805 Technical Packaging 1,625 2,505 3,333 5,355 Corporate (loss) (9,874) (8,668) (30,385) (25,848) Consolidated EBIT 26,865 25,559 75,292 56,165 Less: Interest expense (1,973) (2,243) (5,788) (6,464) Earnings before income taxes $ 24,892 23,316 69,504 49,701 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
DEBT | |
Schedule of debt | The Company’s debt is summarized as follows: June 30, September 30, (In thousands) 2019 2018 Total borrowings $ 217,921 220,000 Short-term borrowings and current portion of long-term debt (20,921) (20,000) Total long-term debt, less current portion $ 197,000 200,000 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
SHAREHOLDERS' EQUITY | |
Schedule of change in shareholders' equity | The change in shareholders’ equity for the first nine months of 2019 and 2018 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2018 2019 2018 2019 Common stock Beginning balance 305 305 305 305 Stock plans — 1 — 1 Ending balance 305 306 305 306 Additional paid-in-capital Beginning balance 292,404 293,612 289,785 291,190 Stock plans (2,298) (2,408) 321 14 Ending balance 290,106 291,204 290,106 291,204 Retained earnings Beginning balance 557,249 643,018 516,718 606,836 Net earnings common stockholders 19,019 20,067 63,684 56,181 Dividends paid (2,076) (2,082) (6,210) (6,227) Adoption of accounting standards updates — — — 4,213 Ending balance 574,192 661,003 574,192 661,003 Accumulated other comprehensive income (loss) Beginning balance (23,028) (35,280) (27,308) (31,528) Foreign currency translation (6,865) 1,840 (2,801) (2,013) Pension — — 61 — Forward exchange contracts (62) (7) 93 94 Ending balance (29,955) (33,447) (29,955) (33,447) Treasury stock Beginning balance (107,394) (107,259) (107,582) (107,394) Issued under stock plans — — 188 135 Ending balance (107,394) (107,259) (107,394) (107,259) Total equity 727,254 811,807 727,254 811,807 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
RETIREMENT PLANS | |
Schedule of components of net periodic benefit cost | A summary of net periodic benefit expense for the Company’s defined benefit plans for the three and nine-month periods ended June 30, 2019 and 2018 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2019 2018 2019 2018 Defined benefit plans Interest cost $ 875 821 2,626 2,461 Expected return on assets (1,086) (975) (3,259) (2,924) Amortization of: Prior service cost — — — — Actuarial loss 487 548 1,461 1,644 Net periodic benefit cost $ 276 394 828 1,181 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of outstanding derivative financial instruments | Fair Notional Value Float Fix (In thousands) amount (US$) Rate Rate Forward contracts 6,000 USD (4) Interest rate swap 150,000 USD 6 2.38 % 2.09 % Interest rate swap * 150,000 USD (1,041) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value of financial instruments | The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of June 30, 2019: (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): Forward contracts $ — (1,039) $ — (1,039) |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
REVENUES | |
Schedule of disaggregation of revenue by reportable segment | Three Months Ended June 30, 2019 Technical (In thousands) Filtration Test USG Packaging Total Customer type: Commercial $ 47,482 $ 37,980 $ 52,065 $ 21,507 $ 159,034 Government 35,585 4,318 829 — 40,732 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Geographic location: United States $ 69,872 $ 26,923 $ 38,414 $ 11,559 $ 146,268 International 13,195 15,375 14,480 9,948 53,498 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Revenue recognition method: Point in time $ 41,633 $ 6,485 $ 40,968 $ — $ 89,092 Over time 41,434 35,813 11,926 21,507 110,674 Total revenues $ 83,067 $ 42,298 $ 52,894 $ 21,507 $ 199,766 Nine Months Ended June 30, 2019 Technical (In thousands) Filtration Test USG Packaging Total Customer type: Commercial $ 131,112 $ 111,577 $ 154,240 $ 63,251 $ 460,180 Government 97,657 14,882 3,399 194 116,132 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 Geographic location: United States $ 190,701 $ 82,072 $ 112,289 $ 32,865 $ 417,927 International 38,068 44,387 45,350 30,580 158,385 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 Revenue recognition method: Point in time $ 115,852 $ 29,092 $ 122,075 $ - $ 267,021 Over time 112,917 97,367 35,564 63,445 309,291 Total revenues $ 228,769 $ 126,459 $ 157,639 $ 63,445 $ 576,312 |
Schedule of reconciliation of ASC 606 to prior accounting standards | The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below: June 30, 2019 Effect of the adoption of Under Prior (In thousands) As Reported ASC 606 Accounting Consolidated Balance Sheets Contract assets (1) $ 99,499 $ (43,576) $ 55,923 Inventories 126,816 36,089 162,905 Total current assets 450,206 (7,487) 442,719 Total assets 1,326,095 (7,487) 1,318,608 Contract liabilities (2) 53,758 4,549 58,307 Total current liabilities 199,736 4,549 204,285 Deferred tax liabilities 66,286 (1,678) 64,608 Total liabilities 514,288 2,871 517,159 Retained earnings 661,003 (10,358) 650,645 Total shareholders’ equity 811,807 (10,358) 801,449 Total liabilities and shareholders’ equity $ 1,326,095 (7,487) 1,318,608 (1) Previously “cost and estimated earnings on long-term contracts” (2) Previously “advance payments on long-term contracts” and “current portion of deferred revenue” Three Months Ended June 30, 2019 Effect of the adoption of Under Prior (In thousands, except per share amounts) As Reported ASC 606 Accounting Consolidated Statements of Operations Net sales $ 199,766 $ (4,008) $ 195,758 Cost of sales 122,172 (1,380) 120,792 Total costs and expenses 174,874 (1,380) 173,494 Earnings before income tax 24,892 (2,628) 22,264 Income tax expense (benefit) 4,825 (399) 4,426 Net earnings 20,067 (2,229) 17,838 Earnings per share: Basic: Net earnings $ 0.77 $ (0.08) $ 0.69 Diluted: Net earnings $ 0.77 $ (0.08) $ 0.69 Consolidated Statements of Comprehensive Income Net earnings $ 20,067 $ (2,229) $ 17,838 Comprehensive income 21,899 (2,229) 19,670 Nine Months Ended June 30, 2019 Effect of the adoption of Under Prior (In thousands, except per share amounts) As Reported ASC 606 Accounting Consolidated Statements of Operations Net sales $ 576,312 $ (9,787) $ 566,525 Cost of sales 363,026 (8,360) 354,666 Total costs and expenses 506,808 (8,360) 498,448 Earnings before income tax 69,504 (1,427) 68,077 Income tax expense (benefit) 13,323 (171) 13,152 Net earnings 56,181 (1,256) 54,925 Earnings per share: Basic: Net earnings $ 2.17 $ (0.05) $ 2.12 Diluted: Net earnings $ 2.15 $ (0.04) $ 2.11 Consolidated Statements of Comprehensive Income Net earnings $ 56,181 $ (1,256) $ 54,925 Comprehensive income 54,262 (1,256) 53,006 Consolidated Statements of Cash flows Net earnings $ 56,181 $ (1,256) $ 54,925 Adjustments to reconcile net earnings to net cash provided by operating activities: Change in assets and liabilities $ (41,851) 1,256 $ (40,595) Net cash provided by operating activities 37,041 — 37,041 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE - ASC 606 Adoption (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 |
Impact due to new accounting pronouncements | |||
Retained earnings | $ 661,003 | $ 606,837 | |
Effect of the Effect of ASU 606 | ASU 2014-09 | |||
Impact due to new accounting pronouncements | |||
Retained earnings | $ 4,200 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE- Revenue Recognition (Details) | 9 Months Ended |
Jun. 30, 2019 | |
Filtration | |
Percentage of segment revenues recognized when services are performed or when products are delivered | 48.00% |
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 18.00% |
Percentage of segment revenues recorded over time | 52.00% |
Percentage of consolidate revenues recorded over time | 19.00% |
Test | |
Percentage of segment revenues recognized when services are performed or when products are delivered | 25.00% |
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 6.00% |
Percentage of segment revenues recorded over time | 75.00% |
Percentage of consolidate revenues recorded over time | 17.00% |
USG | |
Percentage of segment revenues recognized when services are performed or when products are delivered | 80.00% |
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 24.00% |
Percentage of segment revenues recorded over time | 20.00% |
Percentage of consolidate revenues recorded over time | 6.00% |
Percentage of segment revenues based on software contracts | 8.00% |
Percentage of consolidate revenues based on software contracts | 2.00% |
Technical Packaging | |
Percentage of segment revenues recorded over time | 100.00% |
Percentage of consolidate revenues recorded over time | 10.00% |
EARNINGS PER SHARE (EPS) (Detai
EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
EARNINGS PER SHARE (EPS) | ||||
Weighted Average Shares Outstanding - Basic | 25,971 | 25,900 | 25,935 | 25,862 |
Dilutive Options and Restricted Shares | 138 | 150 | 155 | 180 |
Adjusted Shares - Diluted | 26,109 | 26,050 | 26,090 | 26,042 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Selling, general and administrative expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation cost | $ 1.3 | $ 1.2 | $ 3.9 | $ 3.9 |
Performance-Accelerated Restricted Share Awards | ||||
SHARE-BASED COMPENSATION | ||||
Pretax compensation expense | $ 1 | 0.9 | $ 3.1 | 3.1 |
Non-vested shares | 280,504 | 280,504 | ||
Non-Employee Directors Plan | ||||
SHARE-BASED COMPENSATION | ||||
Pretax compensation expense | $ 0.3 | 0.3 | $ 0.8 | 0.8 |
Total income tax benefit recognized | 0.2 | $ 0.2 | 0.8 | $ 0.9 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 10.7 | $ 10.7 | ||
Remaining weighted-average period for recognition of total unrecognized compensation cost | 2 years 1 month 6 days |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Sep. 30, 2018 |
INVENTORIES | ||
Finished goods | $ 18,583 | $ 26,678 |
Work in process | 42,678 | 47,765 |
Raw materials | 65,555 | 60,973 |
Total inventories | $ 126,816 | $ 135,416 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Sep. 30, 2018 |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill | $ 381,683 | $ 381,652 |
Less: accumulated amortization | 106,239 | 92,274 |
Patents | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 1,880 | 1,833 |
Less: accumulated amortization | 873 | 791 |
Net | 1,007 | 1,042 |
Capitalized software | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 77,502 | 71,294 |
Less: accumulated amortization | 47,206 | 41,624 |
Net | 30,296 | 29,670 |
Customer relationships | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 185,135 | 185,333 |
Less: accumulated amortization | 55,641 | 47,802 |
Net | 129,494 | 137,531 |
Other | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 5,382 | 5,468 |
Less: accumulated amortization | 2,518 | 2,056 |
Net | 2,864 | 3,412 |
Trade names | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Trade names | $ 172,964 | $ 173,698 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2019USD ($) | |
Changes in goodwill | |
Goodwill, Beginning Balance | $ 381,652 |
Goodwill, Ending Balance | 381,683 |
USG | |
Changes in goodwill | |
Goodwill, Beginning Balance | 254,100 |
Foreign currency translation | 200 |
Goodwill, Ending Balance | 254,300 |
Test | |
Changes in goodwill | |
Goodwill, Beginning Balance | 34,100 |
Goodwill, Ending Balance | 34,100 |
Filtration | |
Changes in goodwill | |
Goodwill, Beginning Balance | 73,700 |
Goodwill, Ending Balance | 73,700 |
Technical Packaging | |
Changes in goodwill | |
Goodwill, Beginning Balance | 19,800 |
Foreign currency translation | (200) |
Goodwill, Ending Balance | $ 19,600 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | $ 199,766 | $ 192,223 | $ 576,312 | $ 540,496 |
Consolidated EBIT | 26,865 | 25,559 | 75,292 | 56,165 |
Less: interest expense | (1,973) | (2,243) | (5,788) | (6,464) |
Earnings before income taxes | 24,892 | 23,316 | 69,504 | 49,701 |
Filtration | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 83,067 | 69,721 | 228,769 | 195,531 |
Consolidated EBIT | 19,039 | 14,292 | 47,092 | 35,056 |
Test | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 42,298 | 45,034 | 126,459 | 123,368 |
Consolidated EBIT | 5,927 | 5,902 | 14,791 | 13,797 |
USG | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 52,894 | 55,489 | 157,639 | 157,942 |
Consolidated EBIT | 10,148 | 11,528 | 40,461 | 27,805 |
Technical Packaging | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 21,507 | 21,979 | 63,445 | 63,655 |
Consolidated EBIT | 1,625 | 2,505 | 3,333 | 5,355 |
Corporate (loss) | ||||
BUSINESS SEGMENT INFORMATION | ||||
Consolidated EBIT | $ (9,874) | $ (8,668) | $ (30,385) | $ (25,848) |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Sep. 30, 2018 |
DEBT | ||
Total borrowings | $ 217,921 | $ 220,000 |
Short-term borrowings and current portion of long-term debt | (20,921) | (20,000) |
Total long-term debt, less current portion | $ 197,000 | $ 200,000 |
DEBT - Additional information (
DEBT - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
DEBT | |||||
Available to borrow under the credit facility | $ 225,000 | $ 225,000 | |||
Cash on hand | 38,956 | 38,956 | $ 30,477 | ||
Outstanding borrowings | 217,921 | 217,921 | $ 220,000 | ||
Short term borrowings | 900 | 900 | |||
Letters of Credit Outstanding, Amount | $ 7,200 | $ 7,200 | |||
Facility Secured By Pledge Of Material Foreign Subsidiaries Share Equity | 65.00% | ||||
Weighted average interest rates | 3.21% | 3.17% | 3.22% | 2.97% | |
Long-term Debt, Current Maturities | $ 20,900 | $ 20,900 | |||
Revolving Credit Facility | |||||
DEBT | |||||
Outstanding borrowings | 217,000 | 217,000 | |||
Line of Credit Facility, Amount Outstanding | 450,000 | $ 450,000 | |||
Line of Credit Facility, Commitment Fee Amount | 250,000 | ||||
Minimum | |||||
DEBT | |||||
Credit facility fees | 12.50% | ||||
Maximum | |||||
DEBT | |||||
Incremental term loan | $ 250,000 | $ 250,000 | |||
Credit facility fees | 27.50% |
INCOME TAX EXPENSE (Details)
INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
INCOME TAX EXPENSE | ||||||||||
Effective Income Tax Rate Reconciliation, Percent | 18.40% | 19.40% | 19.20% | (28.10%) | ||||||
Income Tax Expense (Benefit) | $ 4,825 | $ 4,297 | $ 13,323 | $ (13,983) | ||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | 100 | $ 2,300 | 2,400 | |||||||
Amended return benefit | $ 100 | $ 200 | $ 300 | |||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent | 1.00% | 4.10% | ||||||||
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Percent | 1.80% | 1.90% | 0.70% | 0.90% | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 21.00% | 24.50% | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 400 | $ 1,000 | $ (30,300) | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 1.50% | 61.70% | ||||||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Amount | $ 4,100 | $ 500 | $ 700 | 2,900 | ||||||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | $ 2,300 | |||||||||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent | 2.10% | 8.20% | 4.70% | |||||||
Effective Income Tax Rate Reconciliation, Deduction, Amount | $ 300 | $ 300 | ||||||||
Effective Income Tax Rate Reconciliation, Deduction, Percent | 1.00% | 2.90% | 0.40% | 1.40% | 1.60% | |||||
Additional Pension Contribution to be Made | $ 7,500 | |||||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 1.40% | 0.70% | ||||||||
Tax Cuts And Jobs Act [Member] | ||||||||||
INCOME TAX EXPENSE | ||||||||||
Income Tax Expense (Benefit) | $ 100 | $ 24,300 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in shareholder's equity | ||||
Beginning Balance | $ 759,410 | |||
Net earnings | $ 20,067 | $ 19,019 | 56,181 | $ 63,684 |
Other comprehensive income (loss) | 1,832 | (6,927) | (1,919) | (2,647) |
Ending Balance | 811,807 | 727,254 | 811,807 | 727,254 |
Common Stock [Member] | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 305 | 305 | 305 | 305 |
Stock plans | 1 | 1 | ||
Ending Balance | 306 | 305 | 306 | 305 |
Common Stock Including Additional Paid in Capital [Member] | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 293,612 | 292,404 | 291,190 | 289,785 |
Stock compensation plans | (2,408) | (2,298) | 14 | 321 |
Ending Balance | 291,204 | 290,106 | 291,204 | 290,106 |
Retained Earnings [Member] | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 643,018 | 557,249 | 606,836 | 516,718 |
Net earnings | 20,067 | 19,019 | 56,181 | 63,684 |
Cash dividends | (2,082) | (2,076) | (6,227) | (6,210) |
Adoption of accounting standards updates | 4,213 | |||
Ending Balance | 661,003 | 574,192 | 661,003 | 574,192 |
AOCI Attributable to Parent [Member] | ||||
Changes in shareholder's equity | ||||
Beginning Balance | (35,280) | (23,028) | (31,528) | (27,308) |
Foreign currency translation | 1,840 | (6,865) | (2,013) | (2,801) |
Pension | 61 | |||
Forward exchange contracts | (7) | (62) | 94 | 93 |
Ending Balance | (33,447) | (29,955) | (33,447) | (29,955) |
Treasury Stock [Member] | ||||
Changes in shareholder's equity | ||||
Beginning Balance | (107,259) | (107,394) | (107,394) | (107,582) |
Issued under stock plans | 135 | 188 | ||
Ending Balance | $ (107,259) | $ (107,394) | $ (107,259) | $ (107,394) |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
RETIREMENT PLANS | ||||
Interest cost | $ 875 | $ 821 | $ 2,626 | $ 2,461 |
Expected return on plan assets | (1,086) | (975) | (3,259) | (2,924) |
Actuarial loss | (487) | (548) | (1,461) | (1,644) |
Net periodic benefit cost | $ 276 | $ 394 | $ 828 | $ 1,181 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Interest rate swap | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Notional amount | $ 150,000 | $ 150,000 |
Fair Value | $ 6 | |
Float Rate | 2.38% | |
Fix Rate | 2.09% | |
Interest rate swap one | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Notional amount | $ 150,000 | |
Fair Value | $ (1,041) | |
Fix Rate | 2.24% | |
Forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Notional amount | $ 6,000 | |
Fair Value | $ (4) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Forward contracts $ in Thousands | Jun. 30, 2019USD ($) |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Fair Value of Financial Instruments | $ (1,039) |
Level 2 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Fair Value of Financial Instruments | $ (1,039) |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of revenues | ||||
Total revenues | $ 199,766 | $ 192,223 | $ 576,312 | $ 540,496 |
Point in time | ||||
Disaggregation of revenues | ||||
Total revenues | 89,092 | 267,021 | ||
Over time | ||||
Disaggregation of revenues | ||||
Total revenues | 110,674 | 309,291 | ||
United States | ||||
Disaggregation of revenues | ||||
Total revenues | 146,268 | 417,927 | ||
International | ||||
Disaggregation of revenues | ||||
Total revenues | 53,498 | 158,385 | ||
Commercial | ||||
Disaggregation of revenues | ||||
Total revenues | 159,034 | 460,180 | ||
Government | ||||
Disaggregation of revenues | ||||
Total revenues | 40,732 | 116,132 | ||
Filtration | ||||
Disaggregation of revenues | ||||
Total revenues | 83,067 | 69,721 | 228,769 | 195,531 |
Filtration | Point in time | ||||
Disaggregation of revenues | ||||
Total revenues | 41,633 | 115,852 | ||
Filtration | Over time | ||||
Disaggregation of revenues | ||||
Total revenues | 41,434 | 112,917 | ||
Filtration | United States | ||||
Disaggregation of revenues | ||||
Total revenues | 69,872 | 190,701 | ||
Filtration | International | ||||
Disaggregation of revenues | ||||
Total revenues | 13,195 | 38,068 | ||
Filtration | Commercial | ||||
Disaggregation of revenues | ||||
Total revenues | 47,482 | 131,112 | ||
Filtration | Government | ||||
Disaggregation of revenues | ||||
Total revenues | 35,585 | 97,657 | ||
Test | ||||
Disaggregation of revenues | ||||
Total revenues | 42,298 | 45,034 | 126,459 | 123,368 |
Test | Point in time | ||||
Disaggregation of revenues | ||||
Total revenues | 6,485 | 29,092 | ||
Test | Over time | ||||
Disaggregation of revenues | ||||
Total revenues | 35,813 | 97,367 | ||
Test | United States | ||||
Disaggregation of revenues | ||||
Total revenues | 26,923 | 82,072 | ||
Test | International | ||||
Disaggregation of revenues | ||||
Total revenues | 15,375 | 44,387 | ||
Test | Commercial | ||||
Disaggregation of revenues | ||||
Total revenues | 37,980 | 111,577 | ||
Test | Government | ||||
Disaggregation of revenues | ||||
Total revenues | 4,318 | 14,882 | ||
USG | ||||
Disaggregation of revenues | ||||
Total revenues | 52,894 | 55,489 | 157,639 | 157,942 |
USG | Point in time | ||||
Disaggregation of revenues | ||||
Total revenues | 40,968 | 122,075 | ||
USG | Over time | ||||
Disaggregation of revenues | ||||
Total revenues | 11,926 | 35,564 | ||
USG | United States | ||||
Disaggregation of revenues | ||||
Total revenues | 38,414 | 112,289 | ||
USG | International | ||||
Disaggregation of revenues | ||||
Total revenues | 14,480 | 45,350 | ||
USG | Commercial | ||||
Disaggregation of revenues | ||||
Total revenues | 52,065 | 154,240 | ||
USG | Government | ||||
Disaggregation of revenues | ||||
Total revenues | 829 | 3,399 | ||
Technical Packaging | ||||
Disaggregation of revenues | ||||
Total revenues | 21,507 | $ 21,979 | 63,445 | $ 63,655 |
Technical Packaging | Over time | ||||
Disaggregation of revenues | ||||
Total revenues | 21,507 | 63,445 | ||
Technical Packaging | United States | ||||
Disaggregation of revenues | ||||
Total revenues | 11,559 | 32,865 | ||
Technical Packaging | International | ||||
Disaggregation of revenues | ||||
Total revenues | 9,948 | 30,580 | ||
Technical Packaging | Commercial | ||||
Disaggregation of revenues | ||||
Total revenues | $ 21,507 | 63,251 | ||
Technical Packaging | Government | ||||
Disaggregation of revenues | ||||
Total revenues | $ 194 |
REVENUES - Remaining Performanc
REVENUES - Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2019USD ($) |
Remaining Performance Obligations | |
Revenue, Remaining Performance Obligation, Amount | $ 432.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Remaining Performance Obligations | |
Percentage of remaining performance obligation expected to be recognized as of June 30, 2019 | 83.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
REVENUES - Contract assets and
REVENUES - Contract assets and liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2019 | Oct. 01, 2018 | |
REVENUES | ||
Contract with Customer, Asset, Net | $ 99.5 | $ 87 |
Contract with Customer, Liability | 53.8 | $ 51 |
Contract with Customer, Liability, Revenue Recognized | $ 35 |
REVENUES - Reconciliation of AS
REVENUES - Reconciliation of ASC 606 to Prior Standards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Consolidated Balance Sheets | |||||
Contract assets | $ 99,499 | $ 99,499 | $ 53,034 | ||
Inventories | 126,816 | 126,816 | 135,416 | ||
Total current assets | 450,206 | 450,206 | 396,023 | ||
Total assets | 1,326,095 | 1,326,095 | 1,265,122 | ||
Contract liabilities | 53,758 | 53,758 | 49,035 | ||
Total current liabilities | 199,736 | 199,736 | 200,530 | ||
Deferred tax liabilities | 66,286 | 66,286 | |||
Total liabilities | 514,288 | 514,288 | 505,712 | ||
Retained earnings | 661,003 | 661,003 | 606,837 | ||
Total shareholders' equity | 811,807 | $ 727,254 | 811,807 | $ 727,254 | 759,410 |
Total liabilities and shareholders' equity | 1,326,095 | 1,326,095 | $ 1,265,122 | ||
Consolidated Statements of Operations | |||||
Net sales | 199,766 | 192,223 | 576,312 | 540,496 | |
Cost of sales | 122,172 | 122,805 | 363,026 | 346,911 | |
Total costs and expenses | 174,874 | 168,907 | 506,808 | 490,795 | |
Earnings before income tax | 24,892 | 23,316 | 69,504 | 49,701 | |
Income tax expense (benefit) | 4,825 | 4,297 | 13,323 | (13,983) | |
Net earnings | $ 20,067 | $ 19,019 | $ 56,181 | $ 63,684 | |
Basic: | |||||
Net earnings | $ 0.77 | $ 0.73 | $ 2.17 | $ 2.46 | |
Diluted: | |||||
Net earnings | $ 0.77 | $ 0.73 | $ 2.15 | $ 2.45 | |
Consolidated Statements of Comprehensive Income | |||||
Net earnings | $ 20,067 | $ 19,019 | $ 56,181 | $ 63,684 | |
Comprehensive income | 21,899 | 12,092 | 54,262 | 61,037 | |
Consolidated Statements of Cash flows | |||||
Net earnings | 20,067 | $ 19,019 | 56,181 | 63,684 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||
Change in assets and liabilities | (41,851) | (9,454) | |||
Net cash provided by operating activities | 37,041 | $ 53,944 | |||
Effect of the Effect of ASU 606 | |||||
Consolidated Balance Sheets | |||||
Contract assets | (43,576) | (43,576) | |||
Inventories | 36,089 | 36,089 | |||
Total current assets | (7,487) | (7,487) | |||
Total assets | (7,487) | (7,487) | |||
Contract liabilities | 4,549 | 4,549 | |||
Total current liabilities | 4,549 | 4,549 | |||
Deferred tax liabilities | (1,678) | (1,678) | |||
Total liabilities | 2,871 | 2,871 | |||
Retained earnings | (10,358) | (10,358) | |||
Total shareholders' equity | (10,358) | (10,358) | |||
Total liabilities and shareholders' equity | (7,487) | (7,487) | |||
Consolidated Statements of Operations | |||||
Net sales | (4,008) | (9,787) | |||
Cost of sales | (1,380) | (8,360) | |||
Total costs and expenses | (1,380) | (8,360) | |||
Earnings before income tax | (2,628) | (1,427) | |||
Income tax expense (benefit) | (399) | (171) | |||
Net earnings | $ (2,229) | $ (1,256) | |||
Basic: | |||||
Net earnings | $ (0.08) | $ (0.05) | |||
Diluted: | |||||
Net earnings | $ (0.08) | $ (0.04) | |||
Consolidated Statements of Comprehensive Income | |||||
Net earnings | $ (2,229) | $ (1,256) | |||
Comprehensive income | (2,229) | (1,256) | |||
Consolidated Statements of Cash flows | |||||
Net earnings | (2,229) | (1,256) | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||
Change in assets and liabilities | 1,256 | ||||
Under Prior Accounting | |||||
Consolidated Balance Sheets | |||||
Contract assets | 55,923 | 55,923 | |||
Inventories | 162,905 | 162,905 | |||
Total current assets | 442,719 | 442,719 | |||
Total assets | 1,318,608 | 1,318,608 | |||
Contract liabilities | 58,307 | 58,307 | |||
Total current liabilities | 204,285 | 204,285 | |||
Deferred tax liabilities | 64,608 | 64,608 | |||
Total liabilities | 517,159 | 517,159 | |||
Retained earnings | 650,645 | 650,645 | |||
Total shareholders' equity | 801,449 | 801,449 | |||
Total liabilities and shareholders' equity | 1,318,608 | 1,318,608 | |||
Consolidated Statements of Operations | |||||
Net sales | 195,758 | 566,525 | |||
Cost of sales | 120,792 | 354,666 | |||
Total costs and expenses | 173,494 | 498,448 | |||
Earnings before income tax | 22,264 | 68,077 | |||
Income tax expense (benefit) | 4,426 | 13,152 | |||
Net earnings | $ 17,838 | $ 54,925 | |||
Basic: | |||||
Net earnings | $ 0.69 | $ 2.12 | |||
Diluted: | |||||
Net earnings | $ 0.69 | $ 2.11 | |||
Consolidated Statements of Comprehensive Income | |||||
Net earnings | $ 17,838 | $ 54,925 | |||
Comprehensive income | 19,670 | 53,006 | |||
Consolidated Statements of Cash flows | |||||
Net earnings | $ 17,838 | 54,925 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||
Change in assets and liabilities | (40,595) | ||||
Net cash provided by operating activities | $ 37,041 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - ASU 2016-02 - Restatement adjustment - Maximum $ in Millions | Oct. 01, 2019USD ($) |
Leases | |
Right-of-use assets | $ 30 |
Operating lease liabilities | $ 30 |