FORM10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
2023
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
Delaware | 62-1096725 | |||||||
| (State or other jurisdiction of
| (I.R.S. Employer
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207 Mockingbird Lane
Johnson City, Tennessee 37604
(423)434-8300
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
| Common Stock, par value $0.01 | NNBR | The Nasdaq Stock Market LLC | ||||||||||||
| Large accelerated filer | ☐ | Accelerated filer | ☒ | |||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||||||||||||||||
| Emerging growth company | ☐ | |||||||||||||||||||
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Assets Current assets: Cash and cash equivalents Accounts receivable, net Inventories Income tax receivable Current assets of discontinued operations Other current assets Total current assets Property, plant and equipment, net Goodwill, net Intangible assets, net Investment in joint venture Non-current assets of discontinued operations Othernon-current assets Total assets Liabilities and Stockholders’ Equity Current liabilities: Accounts payable Accrued salaries, wages and benefits Income taxes payable Current maturities of long-term debt Current liabilities of discontinued operations Other current liabilities Total current liabilities Deferred tax liabilities Long-term debt, net of current portion Non-current liabilities of discontinued operations Othernon-current liabilities Total liabilities Total stockholders’ equity Total liabilities and stockholders’ equity Balance, December 31, 2016(1) Net income Dividends paid Share-based compensation expense Shares issued for option exercises Sale of PBC business (Note 2) Restricted shares forgiven for taxes Foreign currency translation gain (loss) Adoption of new accounting standard (Note 1) Balance, September 30, 2017 Statements of Changes in Stockholders’ Equity Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income to net cash provided by (used by) operating activities: Depreciation and amortization Depreciation and amortization of discontinued operations Amortization of debt issuance costs Write-off of debt issuance costs Gain on disposal of discontinued operations, net of tax and cost to sell Compensation expense from issuance of share-based awards Other Changes in operating assets and liabilities: Accounts receivable Inventories Accounts payable Income taxes payable Other Net cash provided by operating activities Cash flows from investing activities: Acquisition of property, plant and equipment Proceeds from measurement period adjustments to previous acquisition Proceeds from disposals of property, plant and equipment Short term investment Proceeds from sale of business, net of cash sold Net cash provided by (used by) investing activities Cash flows from financing activities: Debt issue costs paid Dividends paid Proceeds from long-term debt Repayment of long-term debt Proceeds from (repayment of) short-term debt, net Proceeds from issuance of stock and exercise of stock options Shares withheld to satisfy income tax withholding Principal payments on capital leases Net cash used by financing activities Effect of exchange rate changes on cash flows Net change in cash and cash equivalents Cash and cash equivalents at beginning of period(1) Cash and cash equivalents at end of period Contents 2023Item 1. Financial StatementsNN, Inc.Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)(Unaudited)Amounts in thousands Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands, except per share data) 2023 2022 2023 2022 Net sales $ 124,443 $ 127,297 $ 376,737 $ 380,726 Cost of sales (exclusive of depreciation and amortization shown separately below) 104,543 108,033 320,648 316,500 Selling, general, and administrative expense 11,693 10,205 35,833 38,453 Depreciation and amortization 11,577 11,193 34,643 33,962 Other operating expense (income), net (631) (17) (526) 1,862 Loss from operations (2,739) (2,117) (13,861) (10,051) Interest expense 5,739 3,746 15,484 10,673 Other expense (income), net (1,463) (1,156) 1,970 (4,219) Loss before benefit (provision) for income taxes and share of net income from joint venture (7,015) (4,707) (31,315) (16,505) Benefit (provision) for income taxes 245 1,068 (1,381) (1,514) Share of net income from joint venture 1,713 1,424 3,087 3,935 Net loss $ (5,057) $ (2,215) $ (29,609) $ (14,084) Other comprehensive loss: Foreign currency translation loss $ (3,072) $ (7,653) $ (3,606) $ (13,543) Interest rate swap: Change in fair value, net of tax — 904 (230) 2,464 Reclassification adjustments included in net loss, net of tax (449) (116) (1,366) (51) Other comprehensive loss $ (3,521) $ (6,865) $ (5,202) $ (11,130) Comprehensive loss $ (8,578) $ (9,080) $ (34,811) $ (25,214) Basic and diluted net loss per share $ (0.18) $ (0.11) $ (0.84) $ (0.49) Shares used to calculate basic and diluted net loss per share 47,539 44,711 46,410 44,670 See notes to condensed consolidated financial statements (unaudited).3NN, Inc.Condensed Consolidated Balance Sheets(Unaudited)Amounts in thousands(in thousands, except per share data) September 30,
2023December 31,
2022Assets Current assets: Cash and cash equivalents $ 21,790 $ 12,808 Accounts receivable, net of allowances of $1,210 and $1,469 at September 30, 2023 and December 31, 2022 73,229 74,129 Inventories 70,917 80,682 Income tax receivable 12,182 12,164 Prepaid assets 3,800 2,794 Other current assets 11,339 9,123 Total current assets 193,257 191,700 Property, plant and equipment, net of accumulated depreciation of $243,638 and $225,046 at September 30, 2023 and December 31, 2022 185,707 197,637 Operating lease right-of-use assets 43,549 46,713 Intangible assets, net 62,202 72,891 Investment in joint venture 29,131 31,802 Deferred tax assets 164 102 Other non-current assets 6,688 5,282 Total assets $ 520,698 $ 546,127 Liabilities, Preferred Stock, and Stockholders’ Equity Current liabilities: Accounts payable $ 49,347 $ 45,871 Accrued salaries, wages and benefits 13,243 11,671 Income tax payable 340 926 Short-term debt and current maturities of long-term debt 6,699 3,321 Current portion of operating lease liabilities 5,407 5,294 Other current liabilities 13,483 11,723 Total current liabilities 88,519 78,806 Deferred tax liabilities 4,137 5,596 Long-term debt, net of current portion 145,892 149,389 Operating lease liabilities, net of current portion 47,841 51,411 Other non-current liabilities 16,288 9,960 Total liabilities 302,677 295,162 Commitments and contingencies (Note 9) Series D perpetual preferred stock - $0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022 74,295 64,701 Stockholders’ equity: Common stock - $0.01 par value per share, 90,000 shares authorized, 47,311 and 43,856 shares issued and outstanding at September 30, 2023 and December 31, 2022 473 439 Additional paid-in capital 460,382 468,143 Accumulated deficit (274,807) (245,198) Accumulated other comprehensive loss (42,322) (37,120) Total stockholders’ equity 143,726 186,264 Total liabilities, preferred stock, and stockholders’ equity $ 520,698 $ 546,127 See notes to condensed consolidated financial statements (unaudited).4Table of dollars, except share data September 30,
2017 December 31,
2016(1) $ 347,380 $ 6,271 108,220 93,433 76,641 67,137 — 872 — 106,717 20,194 6,997 552,435 281,427 238,809 230,580 443,496 441,402 236,752 254,263 37,739 36,008 — 103,290 8,279 9,602 $ 1,517,510 $ 1,356,572 $ 48,330 $ 44,705 17,362 15,762 65,989 — 21,090 12,751 — 45,421 22,233 20,849 175,004 139,488 96,316 96,069 793,999 785,713 — 11,960 10,887 12,829 1,076,206 1,046,059 441,304 310,513 $ 1,517,510 $ 1,356,572 (1)Includes the effects of discontinued operations (Note 2) and prior periods’ revisions (Note 1 and Note 15)The accompanying notes are an integral part of the ContentsNN, Inc.Condensed Consolidated Financial Statements.NN, Inc.Condensed Consolidated StatementStatements of Changes in Stockholders’ EquityThree Months Ended September 30, 2023 and 2022(Unaudited)Amounts in thousandsCommon Stock Additional
paid-in
capitalAccumulated deficit Accumulated other comprehensive loss Total (in thousands) Number of shares Par
valueBalance as of June 30, 2023 47,019 $ 470 $ 462,525 $ (269,750) $ (38,801) $ 154,444 Net loss — — — (5,057) — (5,057) Dividends accrued for preferred stock — — (3,347) — — (3,347) Shares issued under stock incentive plans, net of forfeitures 292 3 (3) — — — Share-based compensation expense — — 1,207 — — 1,207 Other comprehensive loss — — — — (3,521) (3,521) Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ (274,807) $ (42,322) $ 143,726 Common Stock Additional
paid-in
capitalAccumulated deficit Accumulated other comprehensive loss Total (in thousands) Number of shares Par
valueBalance as of June 30, 2022 43,884 $ 439 $ 473,019 $ (230,969) $ (36,167) $ 206,322 Net loss — — — (2,215) — (2,215) Dividends accrued for preferred stock — — (2,783) — — (2,783) Shares forfeited under stock incentive plans (2) — — — — — Share-based compensation expense — — 307 — — 307 Other comprehensive loss — — — — (6,865) (6,865) Balance as of September 30, 2022 43,882 $ 439 $ 470,543 $ (233,184) $ (43,032) $ 194,766 See notes to condensed consolidated financial statements (unaudited).5Table of dollars and shares Common Stock Accumulated Number Additional other Non- of Par paid in Retained comprehensive controlling shares value capital earnings income (loss) interest Total 27,249 $ 272 $ 284,508 $ 55,509 $ (29,808 ) $ 32 $ 310,513 — — — 118,561 — — 118,561 — — — (5,913 ) — — (5,913 ) 86 1 3,985 — — — 3,986 250 2 2,943 — — — 2,945 — — — — (9,243 ) (32 ) (9,275 )
and forfeited (24 ) — (580 ) — — — (580 ) — — — — 20,327 — 20,327 — — — 740 — — 740 27,561 $ 275 $ 290,856 168,897 $ (18,724 ) $ — $ 441,304 (1)Includes the effects of prior periods’ revisions (Note 1 and Note 15)The accompanying notes are an integral part of the ContentsNN, Inc.Condensed Consolidated Financial Statements.Nine Months Ended September 30, 2023 and 2022(Unaudited)Common Stock Additional
paid-in
capitalAccumulated deficit Accumulated other comprehensive loss Total (in thousands) Number of shares Par
valueBalance as of December 31, 2022 43,856 $ 439 $ 468,143 $ (245,198) $ (37,120) $ 186,264 Net loss — — (29,609) — (29,609) Dividends accrued for preferred stock — — (9,594) — — (9,594) Shares issued under stock incentive plans, net of forfeitures 3,598 36 (57) — — (21) Share-based compensation expense — — 2,058 — — 2,058 Restricted shares forgiven for taxes (143) (2) (168) — — (170) Other comprehensive loss — — — — (5,202) (5,202) Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ (274,807) $ (42,322) $ 143,726 Common Stock Additional
paid-in
capitalAccumulated deficit Accumulated other comprehensive loss Total (in thousands) Number of shares Par
valueBalance as of December 31, 2021 43,027 $ 430 $ 474,757 $ (219,100) $ (31,902) $ 224,185 Net loss — — — (14,084) — (14,084) Dividends accrued for preferred stock — — (7,979) — — (7,979) Shares issued under stock incentive plans, net of forfeitures 886 9 (9) — — — Share-based compensation expense — — 3,862 — — 3,862 Restricted shares forgiven for taxes (31) — (88) — — (88) Other comprehensive loss (11,130) (11,130) Balance as of September 30, 2022 43,882 $ 439 $ 470,543 $ (233,184) $ (43,032) $ 194,766 See notes to condensed consolidated financial statements (unaudited).6NN, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited)Amounts in thousandsNine Months Ended
September 30,(in thousands) 2023 2022 Cash flows from operating activities Net loss $ (29,609) $ (14,084) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 34,643 33,962 Amortization of debt issuance costs and discount 1,409 1,021 Paid-in-kind interest 1,491 — Total derivative loss (gain), net of cash settlements 3,139 (4,858) Share of net income from joint venture, net of cash dividends received 851 2,310 Share-based compensation expense 2,058 3,862 Deferred income taxes (1,531) (1,831) Other (776) (3,096) Changes in operating assets and liabilities: Accounts receivable 335 (15,667) Inventories 9,692 (11,314) Accounts payable 5,240 9,827 Income taxes receivable and payable, net (576) (403) Other (2,476) (2,400) Net cash provided by (used in) operating activities 23,890 (2,671) Cash flows from investing activities Acquisition of property, plant and equipment (16,292) (14,011) Proceeds from sale of property, plant, and equipment 2,876 460 Net cash used in investing activities (13,416) (13,551) Cash flows from financing activities Proceeds from long-term debt 52,000 32,000 Repayments of long-term debt (55,522) (28,158) Cash paid for debt issuance costs (55) (136) Proceeds from short-term debt 3,648 — Other (1,276) (2,265) Net cash provided by (used in) financing activities (1,205) 1,441 Effect of exchange rate changes on cash flows (287) (1,324) Net change in cash and cash equivalents 8,982 (16,105) Cash and cash equivalents at beginning of period 12,808 28,656 Cash and cash equivalents at end of period $ 21,790 $ 12,551 See notes to condensed consolidated financial statements (unaudited).7Table of dollars Nine Months Ended September 30, 2017 2016 $ 118,561 $ 5,215 38,432 38,411 7,723 8,766 3,237 3,048 8,054 2,589 (129,353 ) — 3,220 3,051 439 421 (15,094 ) (24,422 ) (10,764 ) 1,663 (3,317 ) 629 (19,178 ) (2,153 ) (1,674 ) 9,073 286 46,291 (31,674 ) (32,166 ) — 1,635 639 366 (8,000 ) — 371,436 — 332,401 (30,165 ) (6,545 ) (3,692 ) (5,764 ) (5,677 ) 317,000 39,000 (301,313 ) (39,562 ) (3,968 ) (4,101 ) 2,945 2,553 (580 ) (159 ) (2,855 ) (3,465 ) (1,080 ) (15,103 ) 1,368 (1,322 ) 332,975 (299 ) 14,405 15,087 347,380 $ 14,788 (1)Beginning balance for the nine-month period ended September 30, 2017, includes $8.1 million of cash that was included in current assets of discontinued operations.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.NN, Inc.Notes to Condensed Consolidated Financial StatementsSeptember 30, 2017(Unaudited)Amounts in thousands of dollars and shares, except per share data
Asia.
Certain prior period amounts have been reclassified to conform to the current year’s presentation.
Prior Periods’ Financial Statement Revision
In connection with
We previously corrected asout-of-period adjustments certain immaterial misstatements and reflected them in the prior period financial statements, where applicable. These immaterial previously recordedout-of-period adjustments were primarily due to misstatements related to the initial recording of deferred tax assets and liabilities and corresponding adjustments to goodwill as part of the purchase price allocations of the Autocam and PEP acquisitions in 2014 and 2015, the accounting for the goodwill balances from those acquisitions for multi-currency reporting through other comprehensive income, and themark-to-market adjustments on our interest rate hedge,Other expense (income), net of tax, through other comprehensive income.
We assessed the materiality of the misstatements on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M,Materiality, codified in ASC Topic 250,Accounting Changes and Error Corrections, (“ASC 250”) and concluded that the misstatements were not material to any prior annual or interim periods. In accordance with ASC 250 (SAB Topic 1.N,Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have corrected these misstatements for all prior periods presented by revising the condensed consolidated financial statements and other consolidated financial information included herein. We have revised, and will revise for annual and interim periods in future filings, certain amounts in the consolidated financial statements to correct these misstatements. See Note 15 for additional information on the revision.
Newly Adopted Accounting Standards
In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)2016-09, Improvements to Employee Share-Based Payment Accounting.The new standard changes how companies account for certain aspects of share-based payments to employees. Entities must recognize the income tax effects of awards in the statement of operations when the awards vest or are settled (i.e., additionalpaid-in capital pools were eliminated). The guidance changed regarding employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures. The guidance was effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. As of January 1, 2017, we adopted ASU2016-09, and the effects of the standard are reflected in the three-month and nine-month periods ended September 30, 2017, balances. Upon adoption, we reclassified $0.7 million in historical tax benefits from deferred taxes to retained earnings. We will recognize prospective tax benefits in income tax expense. Tax payments in respect of shares withheld for taxes are now classified in the financing section of the statement of cash flows. The calculation of diluted earnings per share now excludes tax benefits that would have generated more dilutive shares. The effects of the adoption were not material to the financial statements.
Issuance of New Accounting Standards
Revenue Recognition. In May 2014, the FASB issued a new standard that provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most of the existing revenue recognition requirements. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The standard also requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Factors that will affectpre-and post-implementation include, but are not limited to, identifying all the contracts that exist and whether incidental obligations or marketing incentives included in some of those contracts are performance obligations. Additionally, we are evaluating the transfer of control of certain consignment contracts which may impact the timing of revenue recognition under the new standard.
The standard will be effective for us beginning January 1, 2018. We intend to adopt the standard utilizing the modified retrospective transition method. Under this transition method, we will recognize the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings as of January 1, 2018, and will apply the new standard beginning with the most current period presented to contracts that are not completed at the date of initial application. We continue to evaluate the adoption method throughout each phase of implementation.
While our ability to adopt the standard using the modified retrospective method depends on system readiness and completing our analysis of information necessary to present required footnote disclosures in the consolidated financial statements, the implementation project remains on schedule. We have completed a diagnostic accounting assessment, including an analysis of a representative sample of contracts, to identify areas that will be most significantly impacted by implementation of the new standard. We have also completed initial training to educate contract managers of the technical aspects of the new standard. We are in the process of concluding on and documenting our assessments related to the standard as well as potential system and procedural changes. We are evaluating the impact the new standard will have on our financial condition, results of operations and cash flows. We expect to complete our final evaluation of the impact of adopting the new standard during 2017.
Leases. In February 2016, the FASB issued ASU2016-02,Leases. ASU2016-02 creates Topic 842,Leases, in the ASC and supersedes ASC 840,Leases. Entities that hold numerous equipment and real estate leases, in particular those with numerous operating leases, will be most affected by the new guidance. The lease accounting standard is effective for NN beginning January 1, 2019, with modified retrospective adoption required and early adoption permitted. The amendments in ASU2016-02 are expected to impact balance sheets at many companies by adding lease-related assets and liabilities. This may affect compliance with contractual agreements and loan covenants. We have performed inquiries within segment locations and compiled information on operating and capital leases. We are currently evaluating the impacts of the lease accounting standard on our financial position, results of operations, and related disclosures.
Statement of Cash Flows. In August 2016, the FASB issued ASU2016-15,Classification of Certain Cash Receipts and Cash Payments. This standard provides clarification on how certain cash receipts and cash payments are presented and classified on the statement of cash flows. The standard is effective for NN beginning January 1, 2018, and is required to be adopted using a retrospective approach if practicable, with early adoption permitted. We are in the process of assessing the effects of the standard on prior periods. We expect to complete our final evaluation of the impact of adopting the new standard during 2017. Although our analysis of the effects on prior periods is not yet complete, we have identified $31.6 million of cash paid for debt prepayment in April 2017 that is currently classified as an operating cash outflow. Under the new guidance, this $31.6 million will be classified as a financing cash outflow.
Goodwill. In January 2017, the FASB issued ASU2017-04,Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, that eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the current Step 1 test). The standard is effective for NN beginning with impairment tests performed on or after January 1, 2020, with early adoption permitted. We are currently evaluating the impact this new guidance is expected to have on our financial position or results of operations and related disclosures.
Note 2. Discontinued Operations
On August 17, 2017, we completed the sale of our PBC business to Tsubaki Nakashima, Co, Ltd. for a base purchase price of $375.0 million in cash, subject to certain adjustments. We expect to finalize purchase price adjustments in accordance with the purchase agreement. The PBC business included all our facilities that were engaged in the production of precision steel balls, steel rollers, and metal retainers and automotive specialty products used primarily in the bearing industry. The sale of the PBC business furthers management’s long-term strategy to build a diversified industrial business with a comprehensive geographic footprint in attractive high-growth market segments. The PBC business represented all of the PBC reportable segment disclosed in our historical financial statements. Under the terms of a transition services agreement, we will provide certain support services for twelve months from the closing date of the sale.
We received cash proceeds of $387.6 million and recorded an estimatedafter-tax gain on sale of $129.4 million, which is included in the “Income from discontinued operations, net of tax” line on the Condensed Consolidated Statements of Operations and Comprehensive Income for the three-month and nine-month periods ended September 30, 2017. The net amount of cash proceeds and gain are subject to change due to the finalization of working capital adjustments. The gain includes the effects of $9.3 million in cumulative foreign currency translation gain andnon-controlling interest attributable to the PBC business as of August 17, 2017.
In accordance with ASC205-20,Presentation of Financial Statements – Discontinued Operations,the operating results of PBC are classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain on the disposition of the business, net of tax, as one line item on the Condensed Consolidated Statements of Operations and Comprehensive Income. AllIncome (Loss).
The following table summarizes the major line items included in the results of operations of the discontinued operations.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
Net sales | $ | 31,600 | $ | 58,247 | $ | 168,287 | $ | 188,149 | ||||||||
Cost of products sold (exclusive of depreciation and amortization shown separately below) | 26,070 | 45,353 | 130,554 | 145,426 | ||||||||||||
Selling, general and administrative expense | 2,466 | 4,146 | 11,589 | 13,211 | ||||||||||||
Depreciation and amortization | 1,611 | 2,956 | 7,723 | 8,766 | ||||||||||||
Restructuring and integration expense | — | 50 | 427 | 2,390 | ||||||||||||
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Income from operations | 1,453 | 5,742 | 17,994 | 18,356 | ||||||||||||
Gain on disposal of discontinued operations | 215,280 | — | 215,280 | — | ||||||||||||
Other income (expense) | (59 | ) | (98 | ) | (265 | ) | (325 | ) | ||||||||
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Income (loss) from discontinued operations before provision (benefit) for income taxes | 216,674 | 5,644 | 233,009 | 18,031 | ||||||||||||
Provision for income taxes | (80,849 | ) | (1,981 | ) | (86,430 | ) | (5,467 | ) | ||||||||
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Income (loss) from discontinued operations, net of tax | 135,825 | 3,663 | 146,579 | 12,564 | ||||||||||||
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The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented.
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
Cash | $ | — | $ | 8,134 | ||||
Accounts receivable, net | — | 46,114 | ||||||
Inventories | — | 47,714 | ||||||
Other current assets | — | 4,755 | ||||||
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Total current assets of discontinued operations | — | 106,717 | ||||||
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Property, plant and equipment, net | — | 92,373 | ||||||
Goodwill, net | — | 8,909 | ||||||
Intangible assets, net | — | 1,718 | ||||||
Othernon-current assets | — | 290 | ||||||
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Totalnon-current assets of discontinued operations | — | 103,290 | ||||||
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Total assets of discontinued operations | $ | — | $ | 210,007 | ||||
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Accounts payable | $ | — | $ | 31,014 | ||||
Accrued salaries, wages and benefits | — | 9,234 | ||||||
Income taxes payable | — | 2,997 | ||||||
Other current liabilities | — | 2,176 | ||||||
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Total current liabilities of discontinued operations | — | 45,421 | ||||||
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Deferred tax liabilities | — | 3,522 | ||||||
Accrued post-employment benefits | — | 4,707 | ||||||
Othernon-current liabilities | — | 3,731 | ||||||
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Totalnon-current liabilities of discontinued operations | — | 11,960 | ||||||
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Total liabilities of discontinued operations | $ | — | $ | 57,381 | ||||
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The following table presents the significant noncash items and cash paid for capital expenditures of discontinued operations for each period presented.
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
Depreciation and amortization | $ | 7,723 | $ | 8,766 | ||||
Acquisition of property, plant and equipment | $ | 10,024 | $ | 14,015 | ||||
Note 3. Inventories
Inventories are comprised of the following amounts:
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
Raw materials | $ | 35,253 | $ | 36,081 | ||||
Work in process | 24,535 | 22,644 | ||||||
Finished goods | 16,853 | 8,412 | ||||||
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Inventories | $ | 76,641 | $ | 67,137 | ||||
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Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. The inventory valuations above were developed using normalized production capacities for each manufacturing location. Any costs from abnormal excess capacity or underutilization of fixed production overheads are expensed in the period incurred and are not included as a component of inventory valuation.
Note 4. Net Income (Loss) Per Share
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
Income (loss) from continuing operations | $ | (2,930 | ) | $ | 792 | $ | (28,018 | ) | $ | (7,349 | ) | |||||
Income from discontinued operations, net of tax | 135,825 | 3,663 | 146,579 | 12,564 | ||||||||||||
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Net income | $ | 132,895 | $ | 4,455 | $ | 118,561 | $ | 5,215 | ||||||||
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Weighted average shares outstanding | 27,544 | 27,159 | 27,403 | 26,973 | ||||||||||||
Effect of dilutive stock options | — | 163 | — | — | ||||||||||||
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Diluted shares outstanding | 27,544 | 27,322 | 27,403 | 26,973 | ||||||||||||
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Basic income (loss) from continuing operations per share | $ | (0.11 | ) | $ | 0.03 | $ | (1.02 | ) | $ | (0.27 | ) | |||||
Basic income from discontinued operations per share | 4.93 | 0.13 | 5.35 | 0.47 | ||||||||||||
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Basic net income per share | $ | 4.82 | $ | 0.16 | $ | 4.33 | $ | 0.19 | ||||||||
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Diluted income (loss) from continuing operations per share | $ | (0.11 | ) | $ | 0.03 | $ | (1.02 | ) | $ | (0.27 | ) | |||||
Diluted income from discontinued operations per share | 4.93 | 0.13 | 5.35 | 0.47 | ||||||||||||
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Diluted net income per share | $ | 4.82 | $ | 0.16 | $ | 4.33 | $ | 0.19 | ||||||||
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The calculations of diluted income from continuing operations per share for the three-month periods ended September 30, 2017 and 2016, exclude 0.8 million and 0.6 million potentially dilutive stock options, which had the effect of being anti-dilutive. The calculations of diluted income from continuing operations per share for the nine-month periods ended September 30, 2017 and 2016, exclude 0.8 million and 0.8 million potentially dilutive stock options, which had the effect of being anti-dilutive. Given the loss from continuing operations for the three-month and nine-month periods ended September 30, 2017, and for the nine-month period ended September 30, 2016, all options are considered anti-dilutive and were excluded from the calculation of diluted loss from continuing operations per share.
The segment information and
Within our APC segment, we manufacture highly engineered,difficult-to-manufacture precision metal components andsub-assemblies for theelectrical, general industrial, automotive, and industrialmedical end markets.
Within
assessing performance.
| Autocam Precision Components Group | Precision Engineered Products Group | Corporate and Consolidations | Total Continuing Operations | |||||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||
Revenues from external customers | $ | 81,664 | $ | 66,492 | $ | — | $ | 148,156 | ||||||||
Income (loss) from operations | $ | 6,799 | $ | 7,922 | $ | (8,425 | ) | $ | 6,296 | |||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||
Revenues from external customers | $ | 254,768 | $ | 208,890 | $ | — | $ | 463,658 | ||||||||
Income (loss) from operations | $ | 28,088 | $ | 29,436 | $ | (25,230 | ) | $ | 32,294 | |||||||
Three Months Ended September 30, 2016 | ||||||||||||||||
Revenues from external customers | $ | 80,492 | $ | 66,222 | $ | — | $ | 146,714 | ||||||||
Income (loss) from operations | $ | 8,464 | $ | 9,913 | $ | (5,392 | ) | $ | 12,985 | |||||||
Nine Months Ended September 30, 2016 | ||||||||||||||||
Revenues from external customers | $ | 247,473 | $ | 195,837 | $ | — | $ | 443,310 | ||||||||
Income (loss) from operations | $ | 22,761 | $ | 26,116 | $ | (19,420 | ) | $ | 29,457 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Mobile Solutions | $ | 78,961 | $ | 76,122 | $ | 234,132 | $ | 225,542 | |||||||||||||||
| Power Solutions | 45,484 | 51,124 | 142,618 | 155,184 | |||||||||||||||||||
| Intersegment sales eliminations | (2) | 51 | (13) | — | |||||||||||||||||||
| Total | $ | 124,443 | $ | 127,297 | $ | 376,737 | $ | 380,726 | |||||||||||||||
| Income (loss) from operations: | |||||||||||||||||||||||
| Mobile Solutions | $ | (1,283) | $ | (474) | $ | (6,063) | $ | 3,224 | |||||||||||||||
| Power Solutions | 3,936 | 2,582 | 8,266 | 4,376 | |||||||||||||||||||
| Corporate | (5,392) | (4,225) | (16,064) | (17,651) | |||||||||||||||||||
| Total | $ | (2,739) | $ | (2,117) | $ | (13,861) | $ | (10,051) | |||||||||||||||
The following table presents debt balances as of September 30, 2017, and December 31, 2016.
| September 30, 2017 | December 31, 2016 | |||||||
$545.0 million Senior Secured Term Loan B (“Senior Secured Term Loan”) bearing interest at the greater of 0.75% orone-month LIBOR (1.23% at September 30, 2017), plus an applicable margin of 4.25% at September 30, 2017, expiring October 19, 2022 | $ | 539,250 | $ | 543,563 | ||||
$300.0 million Incremental Term Loan (“Incremental Term Loan”) bearing interest at the greater of 0.75% orone-month LIBOR (1.23% at September 30, 2017), plus an applicable margin of 3.75% at September 30, 2017, expiring April 3, 2021 | 294,000 | — | ||||||
$143.0 million Senior Secured Revolver (“Senior Secured Revolver”) bearing interest atone-month LIBOR (1.23% at September 30, 2017) plus an applicable margin of 3.5% at September 30, 2017, expiring October 19, 2020 | — | 27,977 | ||||||
$250.0 million Senior Notes (“Senior Notes”) bearing interest at 10.25% | — | 250,000 | ||||||
French Safeguard Obligations | 401 | 358 | ||||||
Brazilian lines of credit and equipment notes | 327 | 573 | ||||||
Chinese line of credit, bearing interest | 3,014 | 2,619 | ||||||
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Total | 836,992 | 825,090 | ||||||
Less current maturities of long-term debt | 21,090 | 12,751 | ||||||
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| |||||
Principal, net of current portion | 815,902 | 812,339 | ||||||
Less unamortized debt issuance costs | 21,903 | 26,626 | ||||||
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Long-term debt, net of current portion | $ | 793,999 | $ | 785,713 | ||||
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On April 3, 2017, we redeemed the Senior Notes for $281.6 million resulting in a loss on debt extinguishment of $36.3 million, including $31.6 million cash paid for the call premium and a $4.7 millionnon-cashwrite-off of unamortized debt issuance costs. The Senior Notes were redeemed and the call premium was paid with the proceeds of a new $300.0 million Incremental Term Loan that was added by amendment to the existing credit facility. The Incremental Term Loan bears interest at the lower of 0.75% or theone-month London Interbank Offered Rate (“LIBOR”), plus 3.75%, and matures on April 3, 2021, with payments of $3.0 million due quarterly. The amendment also reduced the Senior Secured Revolver from $143.0 million to $100.0 million until such time as a leverage ratio covenant threshold has been met for four consecutive fiscal quarters. Upon satisfaction3. Inventories
We used cash generated from operations and a portion of the cash proceeds from the sale of the PBC business to pay down the Senior Secured Revolver on August 17, 2017, which had a $33.2 million outstanding balance at that time. We continue to utilize the Senior Secured Revolver for daily working capital needs.
We assumed certain foreign credit facilities as part of the Autocam acquisition. These facilities relate to local borrowings in France, Brazil, and China. These facilities are with financial institutions in the countries in which foreign plants operate and are used to fund working capital and equipment purchases in those countries. Our 2016 Annual Report includes descriptions of these foreign credit facilities.
following amounts:
| September 30, 2023 | December 31, 2022 | ||||||||||
| Raw materials | $ | 26,780 | $ | 32,146 | |||||||
| Work in process | 23,317 | 24,610 | |||||||||
| Finished goods | 20,820 | 23,926 | |||||||||
| Total inventories | $ | 70,917 | $ | 80,682 | |||||||
The following table shows changes in the carrying amount of goodwill, net, for the nine months ended September 30, 2017.
| Autocam Precision Components Group | Precision Engineered Products Group | Total | ||||||||||
Balance as of December 31, 2016 | $ | 70,717 | $ | 370,685 | $ | 441,402 | ||||||
Currency impacts | 736 | 1,358 | 2,094 | |||||||||
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Balance as of September 30, 2017 | $ | 71,453 | $ | 372,043 | $ | 443,496 | ||||||
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Goodwill is tested for impairment on an annual basis during the fourth quarter and more often if a triggering event occurs. As of September 30, 2017, there were no indications of impairment at the reporting units with goodwill balances.
Note 8.4. Intangible Assets Net
| Autocam Precision Components Group | Precision Engineered Products Group | Total | ||||||||||
Balance as of December 31, 2016 | $ | 42,928 | $ | 211,335 | $ | 254,263 | ||||||
Amortization | (2,616 | ) | (14,900 | ) | (17,516 | ) | ||||||
Currency impacts | 5 | — | 5 | |||||||||
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Balance as of September 30, 2017 | $ | 40,317 | $ | 196,435 | $ | 236,752 | ||||||
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by reportable segment.
| Mobile Solutions | Power Solutions | Total | |||||||||||||||
| Balance as of December 31, 2022 | $ | 22,356 | $ | 50,535 | $ | 72,891 | |||||||||||
| Amortization | (2,515) | (8,174) | (10,689) | ||||||||||||||
| Balance as of September 30, 2023 | $ | 19,841 | $ | 42,361 | $ | 62,202 | |||||||||||
Note 9. Shared-Based Compensation
The following table lists the components of share-based compensation expense for the three-month and nine-month periods ended September 30, 20172023.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
Stock options | $ | 527 | $ | 185 | $ | 1,102 | $ | 679 | ||||||||
Restricted stock | 773 | 425 | 1,628 | 2,120 | ||||||||||||
Performance share units | 467 | 294 | 1,255 | 760 | ||||||||||||
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Share-based compensation | $ | 1,767 | $ | 904 | $ | 3,985 | $ | 3,559 | ||||||||
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Prior tomanaged, and we account for it under the sale of the PBC business, our board of directors approved the acceleration of vesting of share-based awards to 19 members of PBC executive management in recognition of their service to the Company. The vesting date was accelerated to August 17, 2017, and the term was changed to two years for 58,094 option awards. The vesting date for 25,564 restricted stock awards was accelerated to August 17, 2017. We accounted for the acceleration of vesting as a modification of share-based awards. Accordingly, we recognized in discontinued operations approximately $0.8 million of incremental share-based compensation expense.
Stock Options
During the nine months ended September 30, 2017, we granted 125,700 option awards to officers and certain other key employees. The weighted average grant date fair value of options granted during the nine months ended September 30, 2017, was $11.84 per share. The fair value of these options cannot be determined by market value because the options are not traded in an open market. Accordingly, we utilized the Black Scholes financial pricing model to estimate the fair value. equity method.
| Balance as of December 31, 2022 | $ | ||||||
| 3,087 | ||||||
| (3,938) | ||||||
| (1,820) | ||||||
| $ | 29,131 | |||||
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The following table provides a reconciliation of option activity
| Weighted- | Weighted- | |||||||||||||||
| Average | Average | |||||||||||||||
| Exercise | Remaining | Aggregate | ||||||||||||||
| Price | Contractual | Intrinsic | ||||||||||||||
Options | Shares (000) | (per share) | Term (years) | Value | ||||||||||||
Outstanding at January 1, 2017 | 897 | $ | 12.22 | |||||||||||||
Granted | 126 | 24.20 | ||||||||||||||
Exercised | (250 | ) | 11.79 | |||||||||||||
Forfeited or expired | (6 | ) | 7.72 | |||||||||||||
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Outstanding at September 30, 2017 | 767 | $ | 14.32 | 6.5 | $ | 11,246 | (1) | |||||||||
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Exercisable at September 30, 2017 | 583 | $ | 12.71 | 5.7 | $ | 9,500 | (1) | |||||||||
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Restricted Stock
During2023, respectively, and 22.7% and (9.2)% for the three and nine months ended September 30, 2017, we granted 85,393 restricted stock awards tonon-executive directors, officers2022, respectively. The effective tax rates for the three and certain other key employees. The shares of restricted stock granted during the nine months ended September 30, 2017, vestpro-rata over three years for officers2023 and certain other key employees and over one year fornon-executive directors. We determined the fair value of the shares issued by using the closing price of our common stock as of the date of grant. The weighted average grant date value of restricted stock granted in the nine months ended September 30, 2017, was $24.29 per share.
Performance Share Units
During the nine months ended September 30, 2017, we granted 98,618 performance share units to officers and certain other key employees. The performance share units granted will be satisfied in the form of shares of common stock during 2020 if certain performance and/or market conditions are met. We recognize the compensation expense over the three-year period in which the performance and market conditions are measured. We determined the fair value per share of the performance share units issued by using the grant date closing price of our common stock for the units with a performance condition, or $24.20, and a Monte Carlo valuation model for the units that have a market condition, or $29.84.
Note 10. Income Taxes
Our effective tax rate from continuing operations was 26% and 31% for the three-month and nine-month periods ended September 30, 2017, respectively, and 93% and 51% for the three-month and nine-month periods ended September 30, 2016, respectively. The loss on extinguishment of Senior Notes impacted the 2017 tax rate and was treated as a discrete item during the second quarter of 2017. The 2016 effective rate was impacted by changes in forecasted income and loss and driven by the application of the three- and nine-month results against the permanent book to tax differences. The effective tax rates for 2017 and 20162022 differ from the U.S. federal statutory tax rate of 35%21% primarily due primarily to the accrual of tax on non-permanently reinvested unremitted earnings outside the United States that are indefinitely reinvestedof foreign subsidiaries and taxed at rates lower than the U.S. federal statutory rate.
Management believes that it is reasonably possible thatby limitation on the amount of unrecognized income tax benefitsbenefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized. In addition, the effective tax rate for the three and nine months ended September 30,
| September 30, 2023 | December 31, 2022 | ||||||||||
| Term Loan Facility | $ | 147,741 | $ | 147,375 | |||||||
| ABL Facility | — | 1,000 | |||||||||
| International loans | 10,704 | 8,729 | |||||||||
| Total principal | 158,445 | 157,104 | |||||||||
| Less: short-term debt and current maturities of long-term debt | 6,699 | 3,321 | |||||||||
| Principal of long-term debt, net of current portion | 151,746 | 153,783 | |||||||||
| Less: unamortized debt issuance costs and discount (1) | 5,854 | 4,394 | |||||||||
| Long-term debt, net of current portion | $ | 145,892 | $ | 149,389 | |||||||
Duringis available in the third quarterform of 2017,letters of credit and $5.0 million is available for the Internal Revenue Service commencedissuance of short-term swingline loans. The availability of credit under the ABL Facility is limited by a borrowing base calculation derived from accounts receivable and inventory held in the United States. Outstanding borrowings under the ABL Facility bear interest on a variable rate structure plus an examinationinterest rate spread that is based on the average amount of aggregate revolving commitment available. Effective March 3, 2023, the variable borrowing rate is either 1) Adjusted SOFR plus an applicable margin of 1.75% or 2.00%, depending on availability, or 2) the greater of the federal tax returnfunds rate or prime, plus an applicable margin of 0.75% or 1.00%, depending on availability. We may elect whether to use one-month, three-month, or six-month Adjusted SOFR. At September 30, 2023, using one-month Adjusted SOFR plus a 2.00% margin, the interest rate on outstanding borrowings under the ABL Facility was 7.429%. We pay a commitment fee of 0.375% for unused capacity under thepre-acquisition period ABL Facility and a 2.125% fee on the amount of January 1, 2015 through October 19, 2015letters of credit outstanding. The final maturity date of the ABL Facility is March 22, 2026.
| Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows used in finance leases | $ | 258 | $ | 262 | |||||||
| Operating cash flows used in operating leases | 10,533 | 10,865 | |||||||||
| Financing cash flows used in finance leases | 1,084 | 2,177 | |||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | 1,619 | 908 | |||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 477 | 3,835 | |||||||||
interest, penalties, and currency impacts and therefore is dependent on the timing of the decision. For the remaining open lawsuits, we currently believe the cumulative potential liability in the event of unfavorable decisions on all matters will be less than $5.0 million, inclusive of interest and penalties.
All Accordingly, we do not expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of September 30, 2023.
We owncash at a 49% investmentredemption price equal to the liquidation preference then in effect. Series D Preferred Stock shares earn cash dividends at a joint venture locatedrate of 10.0% per year, payable quarterly in Wuxi, China,arrears, accruing whether or not earned or declared. If no cash dividend is paid, then the liquidation preference per share effective on the dividend date increases by 12.0% per year. Beginning March 22, 2026, the cash dividend rate and in-kind dividend rate increase by 2.5% per year. Cash dividends are required beginning on September 30, 2027.
accounting for these features.
Balance as of December 31, 2016 | $ | 36,008 | ||
Our share of cumulative earnings | 4,481 | |||
Dividends declared and paid by joint venture | (4,156 | ) | ||
Accretion of basis difference from purchase accounting | (342 | ) | ||
Foreign currency translation gain | 1,748 | |||
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Balance as of September 30, 2017 | $ | 37,739 | ||
|
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2023.
| Balance as of December 31, 2022 | $ | 64,701 | |||
| Accrual of in-kind dividends | 7,451 | ||||
| Amortization | 2,143 | ||||
| Balance as of September 30, 2023 | $ | 74,295 | |||
| Three Months Ended September 30, 2023 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| United States and Puerto Rico | $ | 37,048 | $ | 36,433 | $ | (2) | $ | 73,479 | |||||||||||||||
| China | 12,414 | 1,671 | — | 14,085 | |||||||||||||||||||
| Brazil | 13,936 | 215 | — | 14,151 | |||||||||||||||||||
| Mexico | 3,221 | 3,204 | — | 6,425 | |||||||||||||||||||
| Germany | 2,139 | 98 | — | 2,237 | |||||||||||||||||||
| Poland | 1,397 | 2 | — | 1,399 | |||||||||||||||||||
| Other | 8,806 | 3,861 | — | 12,667 | |||||||||||||||||||
| Total net sales | $ | 78,961 | $ | 45,484 | $ | (2) | $ | 124,443 | |||||||||||||||
| Three Months Ended September 30, 2022 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| United States and Puerto Rico | $ | 35,419 | $ | 39,579 | $ | 51 | $ | 75,049 | |||||||||||||||
| China | 12,839 | 1,378 | — | 14,217 | |||||||||||||||||||
| Brazil | 14,109 | 137 | — | 14,246 | |||||||||||||||||||
| Mexico | 5,185 | 4,769 | — | 9,954 | |||||||||||||||||||
| Germany | 1,432 | 84 | — | 1,516 | |||||||||||||||||||
| Poland | 1,100 | 2 | — | 1,102 | |||||||||||||||||||
| Other | 6,038 | 5,175 | — | 11,213 | |||||||||||||||||||
| Total net sales | $ | 76,122 | $ | 51,124 | $ | 51 | $ | 127,297 | |||||||||||||||
| Nine Months Ended September 30, 2023 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| United States and Puerto Rico | $ | 112,850 | $ | 115,571 | $ | (13) | $ | 228,408 | |||||||||||||||
| China | 37,714 | 4,480 | — | 42,194 | |||||||||||||||||||
| Brazil | 37,372 | 479 | — | 37,851 | |||||||||||||||||||
| Mexico | 11,106 | 9,892 | — | 20,998 | |||||||||||||||||||
| Germany | 5,617 | 329 | — | 5,946 | |||||||||||||||||||
| Poland | 5,025 | 11 | — | 5,036 | |||||||||||||||||||
| Other | 24,448 | 11,856 | — | 36,304 | |||||||||||||||||||
| Total net sales | $ | 234,132 | $ | 142,618 | $ | (13) | $ | 376,737 | |||||||||||||||
| Nine Months Ended September 30, 2022 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| United States and Puerto Rico | $ | 109,183 | $ | 120,442 | $ | — | $ | 229,625 | |||||||||||||||
| China | 34,155 | 3,855 | — | 38,010 | |||||||||||||||||||
| Brazil | 36,122 | 794 | — | 36,916 | |||||||||||||||||||
| Mexico | 18,336 | 13,868 | — | 32,204 | |||||||||||||||||||
| Germany | 3,836 | 219 | — | 4,055 | |||||||||||||||||||
| Poland | 3,598 | 7 | — | 3,605 | |||||||||||||||||||
| Other | 20,312 | 15,999 | — | 36,311 | |||||||||||||||||||
| Total net sales | $ | 225,542 | $ | 155,184 | $ | — | $ | 380,726 | |||||||||||||||
| September 30, 2017 | December 31, 2016 | |||||||
Current assets | $ | 41,367 | $ | 31,295 | ||||
Non-current assets | 29,176 | 22,522 | ||||||
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Total assets | $ | 70,543 | $ | 53,817 | ||||
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Current liabilities | $ | 26,746 | $ | 13,549 | ||||
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Total liabilities | $ | 26,746 | $ | 13,549 | ||||
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Weindustries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, specification plating, and surface finishing.
| Three Months Ended September 30, 2023 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| Automotive | $ | 55,933 | $ | 8,641 | $ | — | $ | 64,574 | |||||||||||||||
| General Industrial | 17,284 | 12,351 | — | 29,635 | |||||||||||||||||||
| Residential/Commercial Electrical | — | 17,802 | — | 17,802 | |||||||||||||||||||
| Other | 5,744 | 6,690 | (2) | 12,432 | |||||||||||||||||||
| Total net sales | $ | 78,961 | $ | 45,484 | $ | (2) | $ | 124,443 | |||||||||||||||
| Three Months Ended September 30, 2022 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| Automotive | $ | 51,388 | $ | 10,822 | $ | — | $ | 62,210 | |||||||||||||||
| General Industrial | 19,546 | 14,751 | — | 34,297 | |||||||||||||||||||
| Residential/Commercial Electrical | — | 17,025 | — | 17,025 | |||||||||||||||||||
| Other | 5,188 | 8,526 | 51 | 13,765 | |||||||||||||||||||
| Total net sales | $ | 76,122 | $ | 51,124 | $ | 51 | $ | 127,297 | |||||||||||||||
| Nine Months Ended September 30, 2023 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| Automotive | $ | 164,698 | $ | 26,559 | $ | — | $ | 191,257 | |||||||||||||||
| General Industrial | 56,725 | 40,466 | — | 97,191 | |||||||||||||||||||
| Residential/Commercial Electrical | — | 49,995 | — | 49,995 | |||||||||||||||||||
| Other | 12,709 | 25,598 | (13) | 38,294 | |||||||||||||||||||
| Total net sales | $ | 234,132 | $ | 142,618 | $ | (13) | $ | 376,737 | |||||||||||||||
| Nine Months Ended September 30, 2022 | Mobile Solutions | Power Solutions | Intersegment Sales Eliminations | Total | |||||||||||||||||||
| Automotive | $ | 150,834 | $ | 30,628 | $ | — | $ | 181,462 | |||||||||||||||
| General Industrial | 61,883 | 47,726 | — | 109,609 | |||||||||||||||||||
| Residential/Commercial Electrical | — | 52,981 | — | 52,981 | |||||||||||||||||||
| Other | 12,825 | 23,849 | — | 36,674 | |||||||||||||||||||
| Total net sales | $ | 225,542 | $ | 155,184 | $ | — | $ | 380,726 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Restricted stock | $ | 1,001 | 471 | 1,780 | 3,233 | ||||||||||||||||||
| Performance share units | 206 | (201) | 264 | 505 | |||||||||||||||||||
| Stock options | — | $ | 37 | $ | 14 | $ | 124 | ||||||||||||||||
| Share-based compensation expense | $ | 1,207 | $ | 307 | $ | 2,058 | $ | 3,862 | |||||||||||||||
| Nonvested Restricted Shares | Weighted Average Grant-Date Fair Value | ||||||||||
| Unvested at January 1, 2023 | 1,038 | $ | 4.03 | ||||||||
| Granted | 3,711 | 1.37 | |||||||||
| Vested | (1,130) | 3.65 | |||||||||
| Forfeited | (160) | 1.51 | |||||||||
| Unvested at September 30, 2023 | 3,459 | $ | 1.41 | ||||||||
| Nonvested PSU Awards | Weighted Average Grant-Date Fair Value | ||||||||||||||||||||||||||||||||||
| Nonvested at January 1, 2023 | 1,031 | $ | 3.80 | ||||||||||||||||||||||||||||||||
| Granted | 3,621 | 1.14 | |||||||||||||||||||||||||||||||||
| Vested | (67) | 4.63 | |||||||||||||||||||||||||||||||||
| Forfeited | (634) | 2.47 | |||||||||||||||||||||||||||||||||
| Nonvested at September 30, 2023 | 3,951 | $ | 1.56 | ||||||||||||||||||||||||||||||||
| Foreign Currency Translation | Interest rate swap | Income taxes (1) | Total | ||||||||||||||||||||
| Balance as of June 30, 2023 | $ | (40,706) | $ | 1,905 | $ | — | $ | (38,801) | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | (3,072) | — | — | (3,072) | |||||||||||||||||||
| Amounts reclassified from AOCI to interest expense (2) | — | (449) | — | (449) | |||||||||||||||||||
| Net other comprehensive income (loss) | (3,072) | (449) | — | (3,521) | |||||||||||||||||||
| Balance as of September 30, 2023 | $ | (43,778) | $ | 1,456 | $ | — | $ | (42,322) | |||||||||||||||
| Balance as of June 30, 2022 | $ | (37,906) | $ | 2,207 | $ | (468) | $ | (36,167) | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | (7,653) | 1,145 | (241) | (6,749) | |||||||||||||||||||
| Amounts reclassified from AOCI to interest expense (2) | — | (146) | 30 | (116) | |||||||||||||||||||
| Net other comprehensive income (loss) | (7,653) | 999 | (211) | (6,865) | |||||||||||||||||||
| Balance as of September 30, 2022 | $ | (45,559) | $ | 3,206 | $ | (679) | $ | (43,032) | |||||||||||||||
| Foreign Currency Translation | Interest rate swap | Income taxes (1) | Total | ||||||||||||||||||||
| Balance as of December 31, 2022 | $ | (40,172) | $ | 3,149 | $ | (97) | $ | (37,120) | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | (3,606) | (327) | 97 | (3,836) | |||||||||||||||||||
| Amounts reclassified from AOCI to interest expense (2) | — | (1,366) | — | (1,366) | |||||||||||||||||||
| Net other comprehensive income (loss) | (3,606) | (1,693) | 97 | (5,202) | |||||||||||||||||||
| Balance as of September 30, 2023 | $ | (43,778) | $ | 1,456 | $ | — | $ | (42,322) | |||||||||||||||
| Balance as of December 31, 2021 | $ | (32,016) | $ | 151 | $ | (37) | (31,902) | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (13,543) | 3,119 | (655) | (11,079) | |||||||||||||||||||
| Amounts reclassified from AOCI to interest expense (2) | — | (64) | 13 | (51) | |||||||||||||||||||
| Net other comprehensive income (loss) | (13,543) | 3,055 | (642) | (11,130) | |||||||||||||||||||
| Balance as of September 30, 2022 | $ | (45,559) | $ | 3,206 | $ | (679) | $ | (43,032) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss | $ | (5,057) | $ | (2,215) | $ | (29,609) | $ | (14,084) | |||||||||||||||
| Adjustment for preferred stock cumulative dividends and deemed dividends | (3,347) | (2,783) | (9,594) | (7,979) | |||||||||||||||||||
| Numerator for basic and diluted net loss per common share | $ | (8,404) | $ | (4,998) | $ | (39,203) | $ | (22,063) | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares outstanding | 47,186 | 43,884 | 45,793 | 43,695 | |||||||||||||||||||
| Adjustment for participating securities | (3,496) | (1,065) | (2,365) | (918) | |||||||||||||||||||
| Adjustment for warrants outstanding (1) | 3,849 | 1,892 | 2,982 | 1,893 | |||||||||||||||||||
| Shares used to calculate basic and diluted net loss per share | 47,539 | 44,711 | 46,410 | 44,670 | |||||||||||||||||||
| Basic and diluted net loss per common share | $ | (0.18) | $ | (0.11) | $ | (0.84) | $ | (0.49) | |||||||||||||||
| Cash dividends declared per common share | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
shares outstanding for calculation of basic earnings per share (see Note 13.15).
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Stock Options | 315 | 542 | 407 | 563 | |||||||||||||||||||
| 2019 Warrants | 1,500 | 1,500 | 1,500 | 1,500 | |||||||||||||||||||
| 1,815 | 2,042 | 1,907 | 2,063 | ||||||||||||||||||||
Our financial instruments
| Balance as of December 31, 2022 | $ | 2,959 | |||
| Issuances | 2,712 | ||||
| Change in fair value (1) | 1,642 | ||||
| Balance as of September 30, 2023 | $ | 7,313 | |||
| September 30, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Derivative liability - other non-current liabilities | $ | 7,150 | $ | — | $ | 163 | |||||||||||
| December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Derivative liability - other non-current liabilities | $ | 2,831 | $ | — | $ | 128 | |||||||||||
Faira share of our common stock, less the $0.01 per share exercise price.
of the 2021 Swap. Since the 2021 Swap was an effective cash flow hedge and the forecasted interest payments remaining probable of occurring, the gain will be recognized as a reduction to interest expense through the original maturity date of July 31, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Interest expense (benefit) (1) | $ | (449) | $ | (146) | $ | (1,366) | $ | (64) | |||||||||||||||
| Fair Value Measurements at September 30, 2017 | ||||||||||||||||
Description | September 30, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Derivative asset - current | $ | 10 | — | $ | 10 | — | ||||||||||
Derivative asset - noncurrent | — | — | — | — | ||||||||||||
Derivative liability - current | (1,479 | ) | — | (1,479 | ) | — | ||||||||||
Derivative liability - noncurrent | — | — | — | — | ||||||||||||
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| $ | (1,469 | ) | — | $ | (1,469 | ) | — | |||||||||
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Description Derivative asset - current Derivative asset - noncurrent Derivative liability - current Derivative liability - noncurrent Fair Value Measurements at December 31, 2016 December 31,
2016 Quoted Prices in
Active Markets
for Identical
Assets (Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs (Level 3) $ 69 $ — $ 69 $ — 6 — 6 — (1,903 ) — (1,903 ) — (1,028 ) — (1,028 ) — $ (2,856 ) $ — $ (2,856 ) $ —
Our policy is to manage
The inputs for determining fair value of the interest rate swap are classified as Level 2 inputs. Level 2within the fair value hierarchy.
| December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Derivative asset - other current assets | $ | — | $ | 2,130 | $ | — | |||||||||||
| Derivative asset - other non-current assets | — | 1,023 | — | ||||||||||||||
| Total | $ | — | $ | 3,153 | $ | — | |||||||||||
We have elected
Asflows to its present value using prevailing market interest rates for debt with similar creditworthiness, terms and maturities and is considered a Level 3 fair value measurement.
by these cautionary statements.
and this Quarterly Report.
Discontinued Operations
On August 17, 2017,operations or that may influence operations in the future.
The salethe automotive end market are suppliers to the Detroit Three Automakers. While the duration and scope of the PBCinitial and any future UAW strikes against the Detroit Three Automakers, as well as the corresponding impact on the business furthers management’s long-term strategyof suppliers to buildthe Detroit Three Automakers and the impact on our own business, financial position, results of operations and cash flow, are impossible to predict at this time, the prolonged idling of our customers’ production facilities in response to the strikes could have a diversified industrial business with a comprehensive geographicmaterial adverse impact on us.
We received cash proceedsstrategic growth initiatives in markets where we believe we will be able to maximize profitability. During the first half of $387.6 million2023, we closed our Taunton and recorded an estimatedafter-tax gain on sale of $129.4 million, which is included in the “Income from discontinued operations, net of tax” line on the Condensed Consolidated Statements of Operations and Comprehensive Income for the three-month and nine-month periods ended September 30, 2017. The net amount of cash proceeds and gain are subject to change due to the finalization of working capital adjustments.
In accordance with ASC205-20,Presentation of Financial Statements – Discontinued Operations,the operating results of PBC are classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain on the disposition of the business, net of tax, as one line item on the Condensed Consolidated Statements of Operations and Comprehensive Income. All Condensed Consolidated Statements of Operations and Comprehensive Income presented have been revised to reflect this presentation. Accordingly, results of the PBC business have been excluded from continuing operations and segment results for all periods presented in the condensed consolidated financial statements and the accompanying notes unless otherwise stated. Refer to Note 2 in the Notes to Condensed Consolidated Financial Statements for more information.
Debt Refinancing
On April 3, 2017, we redeemed the Senior Notes for $281.6 million resulting in a loss on debt extinguishment of $36.3 million, including $31.6 million cash paid for the call premium and a $4.7 millionnon-cashwrite-off of unamortized debt issuance costs. The Senior Notes were redeemed and the call premium was paid with the proceeds of a new $300.0 million Incremental Term Loan that was added by amendment to the existing credit facility. The Incremental Term Loan bears interest at the lower of 0.75% orone-month LIBOR, plus 3.75%, and matures on April 3, 2021, with payments of $3.0 million due quarterly. The amendment also reduced the Senior Secured Revolver from $143.0 million to $100.0 million until such time as a leverage ratio covenant threshold has been met for four consecutive fiscal quarters. Upon satisfaction of the ratio threshold, the Senior Secured Revolver may be restored to $143.0 million. In connection with the amendment, we paid $6.5 million in debt issuance costs of which we recorded $4.0 million as a direct reduction to the carrying amount of the associated debt and $2.5 million as a loss on modification of the Senior Secured Term Loan. Debt issuance costs related to the amendment were paid with proceedsIrvine sites from the Incremental Term Loan. AlsoPower Solutions group and three underutilized Mobile Solutions sites to reduce operating costs. Additionally, we continue to evaluate our global footprint, which may result in connection with the amendment, we wrote off $0.8 million of unamortized debt issuance costs relatedfurther consolidation or expansion actions to the modification of the Senior Secured Revolver.
Prior Periods’ Financial Statement Revision
Certain prior period amounts have been revised to reflect the impact of adjustments made tofurther improve our joint venture investment and to correct the timing of previously recordedout-of-period adjustments. Refer to Note 1 and Note 15 in the Notes to Condensed Consolidated Financial Statements for more information.
Subsequent Events
DRT Medical Acquisition. On October 2, 2017, we acquired 100% of the membership interests of DRT Medical, LLC, (“DRT Medical”) for $38.6 million in cash, subject to certain post-closing adjustments. DRT Medical is a supplier of precision manufactured medical instruments and orthopedic implants with locations in Ohio and Pennsylvania. Operating results of DRT Medical will be reported prospectively in our PEP segment. The effects of this acquisition are not reflected in the condensed consolidated financial statements presented in this Quarterly Report on Form10-Q because the acquisition occurred subsequent to September 30, 2017. We are in the process of analyzing the opening balance sheet and purchase price allocation. We incurred approximately $0.6 million in acquisition related costs, primarily with respect to DRT Medical, during the three-month and nine-month periods ended September 30, 2017.
Interest Rate Swap.Effective October 27, 2017, we terminated our interest rate swap with a cash payment of $1.3 million.
overall cost structure.
Overall 2022
| Three Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 148,156 | $ | 146,714 | $ | 1,442 | ||||||||||
Volume | $ | 314 | ||||||||||||||
Foreign exchange effects | 745 | |||||||||||||||
Price/material inflation pass-through/mix | 383 | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization shown separately below) | 110,836 | 107,185 | 3,651 | |||||||||||||
Volume | �� | 480 | ||||||||||||||
Foreign exchange effects | 604 | |||||||||||||||
Mix | 2,309 | |||||||||||||||
Inflation | 522 | |||||||||||||||
Cost reduction projects/other | (264 | ) | ||||||||||||||
Selling, general and administrative expense | 16,985 | 14,201 | 2,784 | |||||||||||||
Acquisition related costs excluded from selling, general and administrative expense | 619 | — | 619 | |||||||||||||
Depreciation and amortization | 13,075 | 11,737 | 1,338 | |||||||||||||
Restructuring and integration expense | 345 | 606 | (261 | ) | ||||||||||||
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Income from operations | 6,296 | 12,985 | (6,689 | ) | ||||||||||||
Interest expense | 12,739 | 15,801 | (3,062 | ) | ||||||||||||
Loss on extinguishment of debt andwrite-off of unamortized debt issuance costs | — | 2,589 | (2,589 | ) | ||||||||||||
Derivative payments (receipts) on interest rate swap | — | 609 | (609 | ) | ||||||||||||
Derivative loss (gain) on change in interest rate swap fair value | (27 | ) | 3,130 | (3,157 | ) | |||||||||||
Other (income) expense, net | (848 | ) | (263 | ) | (585 | ) | ||||||||||
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Loss from continuing operations before benefit for income taxes and share of net income from joint venture | (5,568 | ) | (8,881 | ) | 3,313 | |||||||||||
Benefit for income taxes | 1,436 | 8,246 | (6,810 | ) | ||||||||||||
Share of net income from joint venture | 1,202 | 1,427 | (225 | ) | ||||||||||||
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Income (loss) from continuing operations | (2,930 | ) | 792 | (3,722 | ) | |||||||||||
Income from discontinued operations, net of tax | 135,825 | 3,663 | 132,162 | |||||||||||||
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Net income | $ | 132,895 | $ | 4,455 | $ | 128,440 | ||||||||||
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| Three Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 124,443 | $ | 127,297 | $ | (2,854) | |||||||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 104,543 | 108,033 | $ | (3,490) | |||||||||||||
| Selling, general, and administrative expense | 11,693 | 10,205 | 1,488 | ||||||||||||||
| Depreciation and amortization | 11,577 | 11,193 | 384 | ||||||||||||||
| Other operating income, net | (631) | (17) | (614) | ||||||||||||||
| Loss from operations | (2,739) | (2,117) | (622) | ||||||||||||||
| Interest expense | 5,739 | 3,746 | 1,993 | ||||||||||||||
| Other income, net | (1,463) | (1,156) | (307) | ||||||||||||||
| Loss before benefit for income taxes and share of net income from joint venture | (7,015) | (4,707) | (2,308) | ||||||||||||||
| Benefit for income taxes | 245 | 1,068 | (823) | ||||||||||||||
| Share of net income from joint venture | 1,713 | 1,424 | 289 | ||||||||||||||
| Net loss | $ | (5,057) | $ | (2,215) | $ | (2,842) | |||||||||||
Cost of Products Sold.The increase in cost of products sold wasthree months ended September 30, 2022, primarily due to a shiftlower sales volume and lower costs associated with facility
higher material and labor costs and unfavorable foreign exchange effects.
Acquisition Related Costs Excluded from Selling, General and Administrative Expense. Acquisition related costs arethe three months ended September 30, 2022, primarily third party legal, accounting, valuation consulting and investment banking advisory fees incurreddue to sublease income related to the DRT Medical acquisition.
Interest Expense. Interest expense decreased by $3.1 million primarily due to the redemption of the Senior Notes at the beginning offacilities that closed during the second quarter of 20172023.
Interest on debt Interest rate swaps settlements Amortization of debt issuance costs Capital lease interest Capitalized interest (1) Total interest expense Debt issuance costs write-off Three Months Ended
September 30, 2017 2016 $ 11,591 $ 14,477 — 466 1,084 1,062 286 213 (222 ) (417 ) $ 12,739 $ 15,801 — 2,589
Loss on Extinguishment of Debt andWrite-off of Unamortized Debt Issuance Costs.InAmendment.
| Three Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Interest on debt | $ | 5,779 | $ | 3,639 | |||||||
| Gain recognized on interest rate swap | (449) | (146) | |||||||||
| Amortization of debt issuance costs and discount | 529 | 359 | |||||||||
| Capitalized interest | (350) | (272) | |||||||||
| Other | 230 | 166 | |||||||||
| Total interest expense | $ | 5,739 | $ | 3,746 | |||||||
Derivative Loss (Gain) on Change in Interest Rate Swap Fair Value.Duringthree months ended September 30, 2022, due to higher noncash derivative mark-to-market gains recognized during the thirdcurrent quarter of 2016, we chose to discontinue hedge accounting. As a result, all amounts of accumulated other comprehensive income were reclassified to earnings.
Benefit for Income Taxes. Our effective tax rate from continuing operations was 26% in the third quarter of 2017 compared to 93% in the third quarter of 2016. Note 10 in the Notes to Condensed Consolidated Financial Statements describes effective tax rates for each period presented.
Income (Loss) from Continuing Operations. The $6.7 million decrease in income from operations was the primary reason for the $3.7 million decrease in income from continuing operations in the third quarter of 2017. In addition, the increase in net sales was offset by increases in cost of products sold and selling, general and administrative expense as described above. Also, acquisition related costs, primarily with respect to DRT Medical, accounted for $0.6 million of the decrease in income from operations compared to the third quarter of 2016. This decrease2022.
Income from Discontinued Operations, Net of Tax. The largest component of income from discontinued operationsexpense in the third quartercurrent quarter. The JV, in which we own a 49% investment, recognized net sales of 2017 was$30.3 million and $27.0 million for the $129.4 million gain on sale of our PBC business, net of tax. Note 2 in the Notes to Condensed Consolidated Financial Statements provides details of the results of discontinued operations.
three months ended September 30, 2023 and 2022, respectively.
AUTOCAM PRECISION COMPONENTS GROUP
Within our APC segment, we manufacture highly engineered,difficult-to-manufacture precision metal components andsub-assemblies for the automotive, and industrial end markets.
| Three Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 81,664 | $ | 80,492 | $ | 1,172 | ||||||||||
Volume | $ | 1,049 | ||||||||||||||
Foreign exchange effects | 652 | |||||||||||||||
Price/material inflation pass-through/mix | (529 | ) | ||||||||||||||
Income from operations | $ | 6,799 | $ | 8,464 | $ | (1,665 | ) | |||||||||
| Three Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 78,961 | $ | 76,122 | $ | 2,839 | |||||||||||
| Loss from operations | $ | (1,283) | $ | (474) | $ | (809) | |||||||||||
Income from operations decreased due to various factors including an increase in cost of products sold of $1.2 million, consistent with the increase in sales and due to a shift in product mix toward products using higher cost raw materials. We incurredstart-up costs related to new product launches during the third quarter of 2017.
PRECISION ENGINEERED PRODUCTS GROUP
Within our PEP segment, we combine materials science expertise with advanced engineering and production capabilities to design and manufacture a broad range of high-precision metal and plastic components, assemblies, and finished devices for the medical, electrical, automotive and aerospace end markets.
| Three Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 66,492 | $ | 66,222 | $ | 270 | ||||||||||
Volume | $ | (735 | ) | |||||||||||||
Foreign exchange effects | 93 | |||||||||||||||
Price/material inflation pass-through/mix | 912 | |||||||||||||||
Income from operations | $ | 7,922 | $ | 9,913 | $ | (1,991 | ) | |||||||||
Net sales increased during the third quarter of 2017 from the third quarter of 2016three months ended September 30, 2022, primarily due to higher customer pricing, a customer settlement in the overall improvementquarter, and favorable foreign exchange effects of $0.9 million, partially offset by lower volume.
| Three Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 45,484 | $ | 51,124 | $ | (5,640) | |||||||||||
| Income from operations | $ | 3,936 | $ | 2,582 | $ | 1,354 | |||||||||||
decreased by $5.6 million, or 11.0%, during the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The decrease in income from operationssales was primarily due to a shiftlower volume, partially offset by higher pricing. The closure of the Taunton and Irvine sites contributed to the lower sales volume during the three months ended September 30, 2023.
closed facilities, partially offset by the impact of lower sales volume.
Overall 2022
| Nine Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 463,658 | $ | 443,310 | $ | 20,348 | ||||||||||
Volume | $ | 20,520 | ||||||||||||||
Foreign exchange effects | 425 | |||||||||||||||
Price/material inflation pass-through/mix | (597 | ) | ||||||||||||||
Cost of products sold (exclusive of depreciation and amortization | 339,345 | 323,660 | 15,685 | |||||||||||||
Volume | 13,145 | |||||||||||||||
Foreign exchange effects | 639 | |||||||||||||||
Mix | 4,987 | |||||||||||||||
Inflation | 2,009 | |||||||||||||||
Cost reduction projects/other | (5,095 | ) | ||||||||||||||
Selling, general and administrative expense | 52,606 | 46,931 | 5,675 | |||||||||||||
Acquisition related costs excluded from selling, general and | 619 | — | 619 | |||||||||||||
Depreciation and amortization | 38,432 | 38,411 | 21 | |||||||||||||
Restructuring and integration expense | 362 | 4,851 | (4,489 | ) | ||||||||||||
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Income from operations | 32,294 | 29,457 | 2,837 | |||||||||||||
Interest expense | 39,916 | 48,708 | (8,792 | ) | ||||||||||||
Loss on extinguishment of debt andwrite-off of unamortized | 39,639 | 2,589 | 37,050 | |||||||||||||
Derivative payments (receipts) on interest rate swap | — | 609 | (609 | ) | ||||||||||||
Derivative loss (gain) on change in interest rate swap fair value | (14 | ) | 3,130 | (3,144 | ) | |||||||||||
Other (income) expense, net | (945 | ) | (2,297 | ) | 1,352 | |||||||||||
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Loss from continuing operations before benefit for income | (46,302 | ) | (23,282 | ) | (23,020 | ) | ||||||||||
Benefit for income taxes | 14,145 | 11,763 | 2,382 | |||||||||||||
Share of net income from joint venture | 4,139 | 4,170 | (31 | ) | ||||||||||||
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Loss from continuing operations | (28,018 | ) | (7,349 | ) | (20,669 | ) | ||||||||||
Income from discontinued operations, net of tax | 146,579 | 12,564 | 134,015 | |||||||||||||
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Net income | $ | 118,561 | $ | 5,215 | $ | 113,346 | ||||||||||
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| Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 376,737 | $ | 380,726 | $ | (3,989) | |||||||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 320,648 | 316,500 | $ | 4,148 | |||||||||||||
| Selling, general, and administrative expense | 35,833 | 38,453 | (2,620) | ||||||||||||||
| Depreciation and amortization | 34,643 | 33,962 | 681 | ||||||||||||||
| Other operating expense (income), net | (526) | 1,862 | (2,388) | ||||||||||||||
| Loss from operations | (13,861) | (10,051) | (3,810) | ||||||||||||||
| Interest expense | 15,484 | 10,673 | 4,811 | ||||||||||||||
| Other expense (income), net | 1,970 | (4,219) | 6,189 | ||||||||||||||
| Loss before provision for income taxes and share of net income from joint venture | (31,315) | (16,505) | (14,810) | ||||||||||||||
| Provision for income taxes | (1,381) | (1,514) | 133 | ||||||||||||||
| Share of net income from joint venture | 3,087 | 3,935 | (848) | ||||||||||||||
| Net loss | $ | (29,609) | $ | (14,084) | $ | (15,525) | |||||||||||
CostIrvine facilities, lower customer settlements and unfavorable foreign exchange effects of Products Sold.The increase in cost of products sold was primarily due to the increase in demand and production volumes as well as changes in product mix andstart-up costs for certain new products. Increases$1.5 million. These decreases were partially offset by cost savings from production process improvement projects.
higher customer pricing and premium pricing on a certain customer project.
Acquisition Related Costs Excluded from Selling, General and Administrative Expense. Acquisition related costs are primarily third party legal accounting, valuation consulting and investment banking advisory fees incurred related to the DRT Medical acquisition.
Depreciation and Amortization. The slight increase in depreciation and amortization during the first nine months of 2017 from the first nine months of 2016 was consistent with additions to property, plant and equipment. The expected increase was partially offset by the absence in 2017 of $2.5 million of amortization of backlog and unfavorable leasehold intangibles which became fully amortizedsettlement reached during the first quarter of 2016.
Restructuring2022 and Integrationsublease income earned on closed facilities during the nine months ended September 30, 2023.
Interest Expense. Interest expense decreased by $8.8 million due to the redemption of the Senior Notes at the beginning of the second quarter of 2017connection with the proceeds of the Incremental Term Loan which bears a lower interest rate based on LIBOR. Further interest savings resulted from the refinancing of the Senior Secured Term Loan and Senior Secured Revolver in the third quarter of 2016.
| Nine Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
Interest on debt | $ | 36,689 | $ | 44,824 | ||||
Interest rate swaps settlements | — | 1,393 | ||||||
Amortization of debt issuance costs | 3,237 | 3,048 | ||||||
Capital lease interest | 856 | 628 | ||||||
Capitalized interest (1) | (866 | ) | (1,185 | ) | ||||
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Total interest expense | $ | 39,916 | $ | 48,708 | ||||
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Loss on Extinguishment of Debt andWrite-off of Unamortized Debt Issuance Costs. We wrote off $39.6 million in 2017 as a result of the extinguishment of the Senior Notes and modification of the credit facility.
Derivative Loss (Gain) on Change in Interest Rate Swap Fair Value.During the third quarter of 2016, we chose to discontinue hedge accounting. As a result, all amounts of accumulated other comprehensive income were reclassified to earnings.
Benefit for Income Taxes. Our effective tax rate from continuing operations was 31% for the nine-month period ended September 30, 2017, compared to 51% for the nine-month period ended September 30, 2016. Note 10 in the Notes to Condensed Consolidated Financial Statements describes effective tax rates for each period presented.
Loss from Continuing Operations. Income from operations of $32.3 million for the first nine months of 2017 was more than offset by the loss on extinguishment of debt andwrite-off of unamortized debt issuance cost and interest expense. In addition, the increase in net sales was offset byAmendment. These increases in cost of products sold and selling, general and administrative expense as described above. Also, acquisition related costs accounted for a $0.6 million reduction in income from operations compared to 2016. The loss was partially offset by an $8.8 million reduction in interest expense. Significant components of the changes in income from operations and interest expense were presented in the preceding paragraphs.
Income from Discontinued Operations, Net of Tax. The largest component of income from discontinued operations in the first nine months of 2017 was the $129.4 million gain on sale of our PBC business, net of tax. Note 2 in the Notes to Condensed Consolidated Financial Statements provides details of the results of discontinued operations.
Results by Segment
AUTOCAM PRECISION COMPONENTS GROUP
| Nine Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 254,768 | $ | 247,473 | $ | 7,295 | ||||||||||
Volume | $ | 7,727 | ||||||||||||||
Foreign exchange effects | 1,066 | |||||||||||||||
Price/material inflation pass-through/mix | (1,498 | ) | ||||||||||||||
Income from operations | $ | 28,088 | $ | 22,761 | $ | 5,327 | ||||||||||
Net sales increased during the first nine months of 2017 from the first nine months of 2016 due to industrial market demand improvements in the US and China and new automotive program launches in the US, China and Brazil. We are realizing the indirect benefits of our customers taking an increasing portion of market share. Also, as the Brazilian economy rebounds, demand for automotive products is increasing.
The increase in net sales contributed to the increase in income from operations. Cost reduction projects resulted in savings in cost of products sold of approximately $1.2 million over the first nine months of 2017 compared to the same period in 2016. Overall, cost of products sold increased by $3.2 million. Restructuring costs decreased by $3.6 million compared to the first nine months of 2016, primarily related to the closure of the Wheeling Plant in the prior year. These factors that increased income from operations were slightly offset bystart-up costs for new products and a $1.7 million increase in depreciation and amortization consistent with recent capital expenditure activity.
PRECISION ENGINEERED PRODUCTS GROUP
| Nine Months Ended September 30, | ||||||||||||||||
| 2017 | 2016 | $ Change | ||||||||||||||
Net sales | $ | 208,890 | $ | 195,837 | $ | 13,053 | ||||||||||
Volume | $ | 12,793 | ||||||||||||||
Foreign exchange effects | (641 | ) | ||||||||||||||
Price/material inflation pass-through/mix | 901 | |||||||||||||||
Income from operations | $ | 29,436 | $ | 26,116 | $ | 3,320 | ||||||||||
Net sales increased during the first nine months of 2017 from the first nine months of 2016 primarily due to the overall improvement in demand across the medical end market and sales to new customers within the aerospace market. In addition to overall medical market improvement, we have achieved increases in market share for certain medical devices. We have also benefited from the introduction of new products for the aerospace end market.
The increase in net sales contributed to the increase in income from operations. Cost of products sold increased at a rate consistent with net sales. We also experienced a shift in product mix toward higher cost raw materials and incurred new program setup costs for certain products sold into the aerospace end market. Additionally, during the first quarter of 2016 we recognized $2.5 million of amortization expense related to backlog and unfavorable leasehold intangibles which was fully amortized in 2016 and therefore did not impact 2017. Likewise, $0.9 million of restructuring cost was incurred in 2016 related to restructuring after the 2015 acquisition of PEP.
Changes in Financial Condition from December 31, 2016 to September 30, 2017
From December 31, 2016 to September 30, 2017, total assets increased by $160.9 million. Cash proceeds of $387.6 million from the sale of the PBC business was the primary contributor to the increase in assets. We also experienced increases in accounts receivable at APC and PEP as sales grew. Days inventory outstanding increased slightly by approximately four days due to normal seasonal inventory building activity as we prepare for fourth quarter sales. The increases in cash, accounts receivable, and inventory were partially offset by the carrying valuerecognition of current assetsgains from the interest rate swap and a higher amount of discontinued operations and noncurrent assets of discontinued operations as of December 31, 2016, which were soldinterest expense that was capitalized in the salecurrent quarter compared with the third
| Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Interest on debt | $ | 16,007 | $ | 9,819 | |||||||
| Gain recognized on interest rate swap | (1,366) | (64) | |||||||||
| Amortization of debt issuance costs and discount | 1,409 | 1,021 | |||||||||
| Capitalized interest | (1,060) | (572) | |||||||||
| Other | 494 | 469 | |||||||||
| Total interest expense | $ | 15,484 | $ | 10,673 | |||||||
From December 31, 2016 to(9.2)% for the nine months ended September 30, 2017, total liabilities increased2022. The rate for the nine months ended September 30, 2023 and September 30, 2022 was unfavorably impacted by $30.1 million. Total debt increasedthe accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by $16.6 million as a resultthe limitation on the amount of the redemption of our Senior Notes with the proceeds of a new $300.0 million Incremental Term Loantax benefit recorded for loss carryforwards in April 2017, net of the effect of paying down the Senior Secured Revolver using cash generated from operations andcertain jurisdictions where we believe it is more likely than not that a portion of the cash proceedsfuture tax benefit may not be realized. In addition, the effective rate for the nine months ended September 30, 2023, was favorably impacted by a net valuation allowance release based on management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized.
Working capital, which consists principally of cash, accounts receivable, inventories and other current assets offset by accounts payable, accrued payroll costs, income taxes payable current maturities of long-term debt and other current liabilities, was $377.4 million as of September 30, 2017, compared to $141.9 million as of December 31, 2016. The increase in working capital was due primarily to $387.6 million of cash proceeds from the sale of the PBC business and increases in accounts receivable and inventories, as discussed above, slightly offset by increases in accounts payable and taxes payable, also discussed above. The repayment of approximately $33.2 million of principal outstanding on our Senior Secured Revolver in August 2017 resulted in a reduction of working capital. Current assets of discontinued operations of $106.7 as of December 31, 2016, have the effect of decreasing working capital at September 30, 2017, compared to December 31, 2016, because they were sold in the sale of the PBC business and are no longer a component of our current assets. Current liabilities of discontinued operations of $45.4 as of December 30, 2016, have the effect of increasing working capital at September 30, 2017, compared to December 31, 2016, because they were assumed by the acquirer in the sale of the PBC business and are no longer a component of our current liabilities.
Cash provided by operations was $0.3$76.4 million for the nine months ended September 30, 2017,2023 and 2022, respectively.
| Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 234,132 | $ | 225,542 | $ | 8,590 | |||||||||||
| Income (loss) from operations | $ | (6,063) | $ | 3,224 | $ | (9,287) | |||||||||||
| Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | $ Change | |||||||||||||||
| Net sales | $ | 142,618 | $ | 155,184 | $ | (12,566) | |||||||||||
| Income from operations | $ | 8,266 | $ | 4,376 | $ | 3,890 | |||||||||||
Cash provided by investing activities was $332.4$2.7 million for the nine months ended September 30, 2017,2022. The difference was primarily due to decreases in accounts receivable and inventory during the nine months ended 2023 compared with cashto increases in these balance during the corresponding period of 2022.
Cash used2023, compared with cash provided by financing activities was $1.1of $1.4 million for the nine months ended September 30, 2017, compared with cash used by financing activities of $15.1 million for2022. The difference was primarily due to lower borrowings on the ABL Facility during the nine months ended September 30, 2016. The difference2023 compared to the prior year. This was primarily due to netpartially offset by proceeds of debt to fund the Senior Notes call premium in 2017.
from new international loans for working capital needs during 2023.
Aggregate
ABL Facility.
The Incremental Term Loan requires quarterly principal paymentsgreater of $3.0 million through March 31, 2021, with the remaining principal amount due on the maturity date. Ifone-month LIBOR is less than 0.75%, then we pay 4.50% per annum in interest. Ifone-month LIBOR exceeds 0.75%, then we pay the variableone-month LIBOR ratevarious benchmark rates plus an applicable margin of 3.75%5.875%. Beginning with the second quarter of 2023, interest is increased on a paid-in-kind basis at a rate between 1.00% and 2.00%, dependent on the Company’s leverage ratio. Based on the outstanding balanceinterest rate in effect at September 30, 2017,2023, annual cash interest payments would have been $14.6be approximately $18.2 million.
2023, which is in the process of IRS review and approval. The Senior Notes bore interest at 10.25% payable semi-annually in arrears on May 1 and November 1 of each year. Upon redemptiontiming of the Senior Notes, we paid interest of $10.8 million for the period November 1, 2016 through April 3, 2017.
We believe that funds generated from our consolidated continuing operations and existing cash will provide sufficient cash flow to service the required debt and interest payments under these facilities. The absence of cash flows from discontinued operations is not expected to significantly affect our ability to service our debt.
Our arrangements with customers typically provide that payments are due within 30 to 60 days following the date of shipment. We invoice and receive payment from many of our customers in euros as well as other currencies. Additionally, we are party to various third party and intercompany loans, payables and receivables denominated in currencies other than the U.S. dollar. As a result of these sales, loans, payables and receivables, our foreign exchange transaction and translation risk has increased. Various strategies to manage this risk are available to management, including producing and selling in local currencies and hedging programs. As of September 30, 2017, no currency hedges were in place. In addition, a strengtheningreceipt of the U.S. dollar and/or euro against foreign currencies could impair our ability to compete with international competitors for foreign as well as domestic sales.
For the next twelve months, we expect capital expenditures to remain relatively consistent, the majority of which relate to new or expanded business or continuous improvement programs. We believe that funds generated from continuing operations and borrowings from the credit facilities will be sufficient to finance capital expenditures and working capital needs through this period. The absence of cash flows from discontinued operations is not expected to significantly affect our ability to finance capital expenditures or working capital needs. We base these assertions on current availability for borrowing of up to $89.7 million, existing cash of $347.4 million and forecasted positive cash flow from continuing operations for the next twelve months.
refund remains uncertain.
Off-Balance Sheet Arrangements
We are not a party to anyoff-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Estimates
Recent Accounting Pronouncements
See Note 1 in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form10-Q.
At September 30, 2017, we had $539.3 million of principal outstanding under the variable rate Senior Secured Term Loan, without regard to debt issuance costs. At September 30, 2017, aone-percent increase in the interest rate charged on outstanding variable rate borrowings under the Senior Secured Term Loan would result in interest expense increasing annually by approximately $5.4 million.
At September 30, 2017, we had $294.0 million of principal outstanding under the Incremental Term Loan, without regard to debt issuance costs. At September 30, 2017, aone-percent increase in the interest rate charged on outstanding variable rate borrowings under the Incremental Term Loan would result in interest expense increasing annually by approximately $2.9 million.
At September 30, 2017, we did not have any debt outstanding under the Senior Secured Revolver.
Previously Identified Material Weaknesses in Internal Control Over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements would not be prevented or detected on a timely basis.
We previously disclosed in the 2016 Annual Report the following material weaknesses, which still existed as of September 30, 2017. We did not maintain an effective control environment due to a lack of a sufficient complement of personnel with an appropriate level of knowledge, experience and training commensurate with our financial reporting requirements. This material weakness in the control environment contributed to the following material weaknesses: we did not design and maintain effective internal control over: (i) the accounting for business combinations, which specifically included not designing and maintaining controls over the (a) accuracy, valuation and presentation and disclosure for allocating goodwill to our international businesses and (b) completeness, accuracy and valuation of deferred income taxes recorded in connection with business combinations; and (ii) the accounting for income taxes, which specifically included not designing and maintaining controls over the completeness, accuracy, valuation and presentation and disclosure of deferred income tax accounts, income tax provision and related disclosures.
These material weaknesses resulted in immaterial errors to property, plant and equipment, net; goodwill, net; investment in joint venture; accrued salaries, wages and benefits; other liabilities; deferred tax assets and liabilities; provision for income taxes; and other comprehensive income in our consolidated financial statements for the years ended December 31, 2016, 2015 and 2014. These immaterial errors resulted in a revision to previously issued financial statements as discussed in Note 1 and Note 15 in the Notes to Condensed Consolidated Financial Statements presented in this Quarterly Report. Management has determined that the revision was an additional effect of the material weaknesses described above. Additionally, these control deficiencies could result in a misstatement of substantially all account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Notwithstanding such material weaknesses, our Chief Executive Officer and Chief Financial Officer have concluded that our condensed consolidated financial statements in this Quarterly Report on Form10-Q present fairly, and in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.
Remediation Plan for Material Weaknesses
Building on our efforts during 2016, with the oversight of the Audit Committee of our board of directors, we have continued throughout 2017 to dedicate significant resources and efforts to improve our control environment and to take steps to remediate the material weaknesses identified above. Our internal audit organization, which reports directly to our audit committee, has played an integral role in providing direction to achieve a stronger control environment. While certain remedial actions have been completed, we continue to actively plan for and implement additional control procedures.
Actions Taken During the Current Quarter
The following remediation efforts were completed in the current quarter.
Ongoing Remediation Efforts
The remediation efforts outlined in the following list address the identified material weaknesses and enhance our overall financial control environment.
Status of Remediation Efforts
We believe the measures described above will remediate the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify, or in appropriate circumstances not complete, certain of the remediation measures described above. These material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control Over Financial Reporting
As described above
Brazil ICMS Tax Matter
Prior to the Autocam acquisition, Autocam’s Brazilian subsidiary received notification from the Brazilian tax authorities regarding ICMS (state value added tax or VAT) tax credits claimed on intermediary materials (tooling and perishable items) used
We believe that we have substantial legal and factual defenses, and we plan to defend our interestsCondensed Consolidated Financial Statements included in this matter vigorously. WhileQuarterly Report, we believe a loss is not probable, we estimateare engaged in certain legal proceedings, and the range of possible losses related to this assessment is from $0 to $6.0 million. No amount was accrued at September 30, 2017 for this matter. There was no material change in the status of this matter from December 31, 2016 to September 30, 2017.
We are entitled to indemnification from the former shareholders of Autocam, subject to the limitations and proceduresdisclosure set forth in the agreement and plan of mergerNote 9 relating to the Autocam acquisition. Management believes the indemnification would include amounts owed for the tax, interest and penalties related to this matter.
All Other Legal Matters
All other legal proceedings are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations or cash flows. In making that determination, we analyze the facts and circumstances of each case at least quarterly in consultation with our attorneys and determine a range of reasonably possible outcomes.
There
12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. A statement by the Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts. Although we do not have any funds deposited with SVB or Signature Bank, we currently have our cash and cash equivalents held in deposit in accounts at certain FDIC-insured financial institutions, some of which include amounts in excess of the insurance coverage offered by the FDIC. In the future, we may maintain our cash and cash equivalents at financial institutions in the United States in amounts that may be in excess of the FDIC insurance limit of $250,000. In the event of a failure of any of these financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations.
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Programs(1) | ||||||||||||
July 2017 | — | $ | — | — | — | |||||||||||
August 2017 | 6,388 | $ | 25.85 | — | — | |||||||||||
September 2017 | 63 | $ | 25.60 | — | — | |||||||||||
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Total | 6,451 | $ | 25.83 | — | — | |||||||||||
| Exhibit Number | Description of Exhibit | |||||||
| ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 10.4 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NN, Inc. | ||||||||||
| (Registrant) | ||||||||||
| Date: November | /s/ | |||||||||
| President, Chief Executive Officer and Director | ||||||||||
(Principal Executive Officer) | ||||||||||
| (Duly Authorized Officer) | ||||||||||
| Date: November | /s/ | |||||||||
| Senior Vice | ||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||
| (Duly Authorized Officer) | ||||||||||
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