Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Aug. 19, 2015 | Dec. 26, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TWIN DISC INC | ||
Entity Central Index Key | 100,378 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 171,061,739 | ||
Entity Common Stock, Shares Outstanding | 11,323,394 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Current assets: | ||
Cash | $ 22,936 | $ 24,757 |
Trade accounts receivable, net | 43,883 | 40,219 |
Inventories | 80,241 | 97,579 |
Deferred income taxes | 4,863 | 4,779 |
Other | 17,907 | 12,763 |
Total current assets | 169,830 | 180,097 |
Property, plant and equipment, net | 56,427 | 60,267 |
Goodwill, net | 12,789 | 13,463 |
Deferred income taxes | 4,878 | 2,556 |
Intangible assets, net | 2,186 | 2,797 |
Other assets | 3,752 | 7,805 |
Total assets | 249,862 | 266,985 |
Current liabilities: | ||
Short-term borrowings and current maturities of long-term debt | 3,571 | 3,604 |
Accounts payable | 20,729 | 22,111 |
Accrued liabilities | 32,754 | 31,265 |
Total current liabilities | 57,054 | 56,980 |
Long-term debt | 10,231 | 14,800 |
Accrued retirement benefits | 38,362 | 37,006 |
Deferred income taxes | 1,093 | 1,778 |
Other long-term liabilities | 2,955 | 4,110 |
Total liabilities | 109,695 | 114,674 |
Twin Disc shareholders' equity: | ||
Preferred shares authorized: 200,000; issued: none; no par value | 0 | 0 |
Common shares authorized: 30,000,000; issued: 13,099,468; no par value | 12,259 | 11,973 |
Retained earnings | 190,807 | 183,695 |
Accumulated other comprehensive loss | (35,481) | (15,943) |
Shareholders' equity before treasury stock | 167,585 | 179,725 |
Less treasury stock, at cost (1,832,121 and 1,837,595 shares, respectively) | 28,057 | 28,141 |
Total Twin Disc shareholders' equity | 139,528 | 151,584 |
Noncontrolling interest | 639 | 727 |
Total equity | 140,167 | 152,311 |
Total liabilities and equity | $ 249,862 | $ 266,985 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2015 | Jun. 30, 2014 |
Twin Disc shareholders' equity: | ||
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 13,099,468 | 13,099,468 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Treasury stock, shares (in shares) | 1,832,121 | 1,837,595 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME [Abstract] | |||
Net sales | $ 265,790 | $ 263,909 | $ 285,282 |
Cost of goods sold | 182,758 | 186,655 | 205,257 |
Gross profit | 83,032 | 77,254 | 80,025 |
Marketing, engineering and administrative expenses | 64,264 | 67,406 | 67,899 |
Restructuring of operations | 3,282 | 961 | 708 |
Impairment charge | 0 | 0 | 1,405 |
Earnings from operations | 15,486 | 8,887 | 10,013 |
Other income (expense): | |||
Interest income | 124 | 121 | 102 |
Interest expense | (606) | (936) | (1,435) |
Other, net | 896 | 24 | 557 |
Other income (expense) total | 414 | (791) | (776) |
Earnings before income taxes and noncontrolling interest | 15,900 | 8,096 | 9,237 |
Income taxes | 4,515 | 4,226 | 4,986 |
Net earnings | 11,385 | 3,870 | 4,251 |
Less: Net earnings attributable to noncontrolling interest | (212) | (226) | (369) |
Net earnings attributable to Twin Disc | $ 11,173 | $ 3,644 | $ 3,882 |
Earnings per share data: | |||
Basic earnings per share attributable to Twin Disc common shareholders (in dollars per share) | $ 0.99 | $ 0.32 | $ 0.34 |
Diluted earnings per share attributable to Twin Disc common shareholders (in dollars per share) | $ 0.99 | $ 0.32 | $ 0.34 |
Weighted average shares outstanding data: | |||
Basic shares outstanding (in shares) | 11,273 | 11,258 | 11,304 |
Dilutive stock awards (in shares) | 4 | 6 | 73 |
Diluted shares outstanding (in shares) | 11,277 | 11,264 | 11,377 |
Comprehensive (loss) income: | |||
Net earnings | $ 11,385 | $ 3,870 | $ 4,251 |
Foreign currency translation adjustment | (14,119) | 3,760 | 447 |
Benefit plan adjustments, net of income taxes of $(2,974), $3,806 and $4,163, respectively | (5,499) | 6,126 | 8,322 |
Comprehensive (loss) income | (8,233) | 13,756 | 13,020 |
Comprehensive income attributable to noncontrolling interest | (132) | (156) | (240) |
Comprehensive (loss) income attributable to Twin Disc | $ (8,365) | $ 13,600 | $ 12,780 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Comprehensive (loss) income: | |||
Benefit plan adjustments, tax | $ (2,974) | $ 3,806 | $ 4,163 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | |||
Net earnings | $ 11,385 | $ 3,870 | $ 4,251 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 10,161 | 10,657 | 10,838 |
Loss on sale of plant assets | 215 | 26 | 287 |
Impairment charge | 0 | 0 | 1,405 |
Stock compensation expense | 696 | 1,184 | 2,681 |
Restructuring of operations | 3,282 | 961 | 708 |
Provision for deferred income taxes | (442) | 634 | 687 |
Changes in operating assets and liabilities: | |||
Trade accounts receivable | (7,248) | 7,076 | 17,636 |
Inventories | 8,860 | 6,972 | 176 |
Other assets | (4,090) | 2,198 | (3,136) |
Accounts payable | 914 | 1,364 | (2,457) |
Accrued liabilities | 380 | (8,531) | (4,969) |
Accrued/prepaid retirement benefits | (7,053) | (662) | (3,631) |
Net cash provided by operating activities | 17,060 | 25,749 | 24,476 |
Cash flows from investing activities: | |||
Proceeds from sale of plant assets | 279 | 103 | 315 |
Capital expenditures | (9,049) | (7,245) | (6,582) |
Other, net | 1,934 | 34 | (231) |
Net cash used by investing activities | (6,836) | (7,108) | (6,498) |
Cash flows from financing activities: | |||
Proceeds from senior notes | 0 | 0 | 32 |
Payments of senior notes | (3,600) | (3,651) | (96) |
Borrowings under revolving loan agreement | 83,681 | 70,443 | 83,450 |
Repayments under revolving loan agreement | (84,674) | (75,544) | (88,382) |
Proceeds from exercise of stock options | 15 | 0 | 189 |
Acquisition of treasury stock | 0 | 0 | (3,069) |
Dividends paid to shareholders | (4,061) | (4,059) | (4,078) |
Dividends paid to noncontrolling interest | (220) | (487) | (204) |
Excess tax benefits from stock compensation | (26) | 524 | 1,451 |
Payments of withholding taxes on stock compensation | (313) | (2,169) | (1,700) |
Net cash used by financing activities | (9,198) | (14,943) | (12,407) |
Effect of exchange rate changes on cash | (2,847) | 335 | (548) |
Net change in cash | (1,821) | 4,033 | 5,023 |
Cash: | |||
Beginning of year | 24,757 | 20,724 | 15,701 |
End of year | 22,936 | 24,757 | 20,724 |
Cash paid during the year for: | |||
Interest | 569 | 989 | 1,536 |
Income taxes | $ 5,061 | $ 3,691 | $ 2,545 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Non-Controlling Interest [Member] | Total |
Balance, beginning of period at Jun. 30, 2012 | $ 12,759 | $ 184,306 | $ (34,797) | $ (26,781) | $ 1,022 | $ 136,509 |
Net earnings | 3,882 | 369 | 4,251 | |||
Translation adjustments | 576 | (129) | 447 | |||
Benefit plan adjustments, net of tax | 8,322 | 8,322 | ||||
Cash dividends | (4,078) | (204) | (4,282) | |||
Compensation expense and windfall tax benefits | 2,894 | 2,894 | ||||
Shares (acquired) issued, net | (2,470) | (2,109) | (4,579) | |||
Balance, end of period at Jun. 30, 2013 | 13,183 | 184,110 | (25,899) | (28,890) | 1,058 | 143,562 |
Net earnings | 3,644 | 226 | 3,870 | |||
Translation adjustments | 3,830 | (70) | 3,760 | |||
Benefit plan adjustments, net of tax | 6,126 | 6,126 | ||||
Cash dividends | (4,059) | (487) | (4,546) | |||
Compensation expense and windfall tax benefits | 1,708 | 1,708 | ||||
Shares (acquired) issued, net | (2,918) | 749 | (2,169) | |||
Balance, end of period at Jun. 30, 2014 | 11,973 | 183,695 | (15,943) | (28,141) | 727 | 152,311 |
Net earnings | 11,173 | 212 | 11,385 | |||
Translation adjustments | (14,039) | (80) | (14,119) | |||
Benefit plan adjustments, net of tax | (5,499) | (5,499) | ||||
Cash dividends | (4,061) | (220) | (4,281) | |||
Compensation expense and windfall tax benefits | 668 | 668 | ||||
Shares (acquired) issued, net | (382) | 84 | (298) | |||
Balance, end of period at Jun. 30, 2015 | $ 12,259 | $ 190,807 | $ (35,481) | $ (28,057) | $ 639 | $ 140,167 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | A. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies followed in the preparation of these financial statements: Consolidation Principles Translation of Foreign Currencies Cash Receivables Fair Value of Financial Instruments . Derivative Financial Instruments Periodically, the Company enters into forward exchange contracts to reduce the earnings and cash flow impact of non-functional currency denominated receivables and payables. These contracts are highly effective in hedging the cash flows attributable to changes in currency exchange rates. Gains and losses resulting from these contracts offset the foreign exchange gains or losses on the underlying assets and liabilities being hedged. The maturities of the forward exchange contracts generally coincide with the settlement dates of the related transactions. Gains and losses on these contracts are recorded in other income (expense) as the changes in the fair value of the contracts are recognized and generally offset the gains and losses on the hedged items in the same period. The primary currency to which the Company was exposed in fiscal 2015 and 2014 was the euro. At June 30, 2015 and 2014, the Company had no outstanding forward exchange contracts. Inventories Property, Plant and Equipment and Depreciation Impairment of Long-lived Assets Revenue Recognition Goodwill and Other Intangibles A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Company’s consolidated financial statements. Impairment of goodwill is measured according to a two step approach. In the first step, the fair value of a reporting unit, as defined, is compared to the carrying value of the reporting unit, including goodwill. The fair value is primarily determined using discounted cash flow analyses; however, other methods may be used to determine the fair value, including third party valuations. For purposes of the June 30, 2015 impairment analysis, the Company has utilized discounted cash flow analyses. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step, the implied value of the goodwill is estimated as the fair value of the reporting unit less the fair value of all other tangible and identifiable intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. Based upon the goodwill impairment review completed in conjunction with the preparation of the annual financial statements at the end of fiscal 2015, which incorporates management’s best estimates of economic and market conditions over the projected period and a weighted-average cost of capital that reflects current market conditions, it was determined that the fair value of goodwill for each of the reporting units exceeded the carrying value and therefore goodwill was not impaired. The fair value of the Company’s other intangible assets with indefinite lives, primarily tradenames, is estimated using the relief-from-royalty method, which requires assumptions related to projected revenues; assumed royalty rates that could be payable if the Company did not own the asset; and a discount rate. The Company completed the impairment testing of indefinite-lived intangibles as of June 30, 2015 and concluded there were no impairments. Changes in circumstances, existing at the measurement date or at other times in the future, or in the numerous estimates associated with management’s judgments, assumptions and estimates made in assessing the fair value of goodwill and other indefinite-lived intangibles, could result in an impairment charge in the future. The Company will continue to monitor all significant estimates and impairment indicators, and will perform interim impairment reviews as necessary. Any cost incurred to extend or renew the term of an indefinite lived intangible asset are expensed as incurred. Deferred Taxes Management Estimates Shipping and Handling Fees and Costs Out-of-Period Adjustments · The Company had over accrued for certain payroll related items totaling $337,000 as of June 30, 2013, resulting in an increase to earnings from operations. · The Company had overstated its warranty accrual by $217,000 as of June 30, 2013, resulting in an increase to earnings from operations. · The Company determined that work-in-process inventory had been overstated by $117,000 as of June 30, 2013. As a result, additional cost of goods sold was recorded in the first quarter of fiscal 2014, resulting in a decrease to earnings from operations. · The Company’s deferred tax liabilities were understated by $285,000 as of June 30, 2013, resulting in additional tax expense. The Company does not believe these errors were material to its financial statements for any prior period, nor that the correction of these errors was material to the year ended June 30, 2014. During the third quarter of fiscal 2015, the Company recorded an out-of-period adjustment for the correction of an error related to tax expense. More specifically, the Company understated tax expense by $175,000 for the year ended June 30, 2014. The impact of the correction of this error was to decrease net earnings by $175,000 for the fiscal year ended June 30, 2015. The Company does not believe this error is material to its financial statements for any prior period, nor that the correction of these errors was material to the year ended June 30, 2015, or any of the quarters therein. During the fourth quarter of 2015, the Company recorded an out-of-period adjustment to correct an error related to an understatement of its accrued retirement benefits for certain of its international benefit plans that contain minimum guarantees of approximately $470,000. The impact of this correction was to increase comprehensive loss by $470,000. The Company does not believe this error is material to its financial statements for any prior period, nor that the correction of this error is material to the year ended June 30, 2015. Recently Issued Accounting Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance intended to amend current presentation guidance by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (the Company’s fiscal 2017). The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In August 2014, the FASB issued updated guidance intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern. The amendments in this guidance are effective for fiscal years ending after December 15, 2016 (the Company’s fiscal 2017), and interim periods within fiscal years beginning after December 15, 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial disclosures. In June 2014, the FASB issued stock compensation guidance requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (the Company’s fiscal 2017). The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In May 2014, the FASB issued updated guidance on revenue from contracts with customers. This revenue recognition guidance supersedes existing U.S. GAAP guidance, including most industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies steps to apply in achieving this principle. This updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 (the Company’s fiscal 2019). The Company is currently evaluating the potential impact of this guidance on the Company’s financial statements and disclosures. In April 2014, the FASB issued updated guidance on the reporting for discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires expanded financial disclosures about discontinued operations. The amendments in this updated guidance are effective for the first quarter of the Company’s fiscal 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In July 2013, the FASB issued guidance stating that, except in certain defined circumstances, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013 (the Company’s fiscal 2015). The adoption of this guidance did not have a material impact on the Company’s financial statements and disclosures. In March 2013, the FASB issued guidance on the parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. This guidance clarifies the circumstances under which the related cumulative translation adjustment should be released into net income. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013 (the Company’s fiscal 2015). The adoption of this guidance did not have a material impact on the Company’s financial statements. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2015 | |
INVENTORIES [Abstract] | |
INVENTORIES | B. INVENTORIES The major classes of inventories at June 30 were as follows (in thousands): 2015 2014 Finished parts $ 56,982 $ 66,418 Work-in-process 8,292 12,419 Raw materials 14,967 18,742 $ 80,241 $ 97,579 Inventories stated on a LIFO basis represent approximately 28% of total inventories at June 30, 2015 and 2014. The approximate current cost of the LIFO inventories exceeded the LIFO cost by $26,816,000 and $27,180,000 at June 30, 2015 and 2014, respectively. The Company had reserves for inventory obsolescence of $8,167,000 and $7,591,000 at June 30, 2015 and 2014, respectively. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2015 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | C. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at June 30 were as follows (in thousands): 2015 2014 Land $ 6,646 $ 5,310 Buildings 44,110 44,540 Machinery and equipment 133,432 141,665 184,188 191,515 Less: accumulated depreciation 127,761 131,248 $ 56,427 $ 60,267 Depreciation expense for the years ended June 30, 2015, 2014 and 2013 was $9,922,000, $10,180,000 and $10,120,000, respectively. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | D. GOODWILL AND OTHER INTANGIBLES The changes in the carrying amount of goodwill, substantially all of which is allocated to the manufacturing segment, for the years ended June 30, 2015 and 2014 were as follows (in thousands): Gross Carrying Amount Accumulated Impairment Net Book Value Balance at June 30, 2013 $ 16,902 ($ 3,670) $ 13,232 Translation adjustment 231 - 231 Balance at June 30, 2014 17,133 ( 3,670) 13,463 Translation adjustment (674) - (674) Balance at June 30, 2015 $ 16,459 ($ 3,670) $ 12,789 The Company conducted its annual assessment for goodwill impairment during the fourth fiscal quarter of 2015 and concluded these assets are not impaired. At June 30, the following acquired intangible assets have definite useful lives and are subject to amortization (in thousands): 2015 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Licensing agreements $ 3,015 ($ 2,505) $ - $ 510 Non-compete agreements 2,128 ( 2,045) ( 83) - Trade name 1,653 ( 194) - 1,459 Other 6,476 ( 5,278) ( 1,194) 4 $13,272 ($10,022) ($ 1,277) $ 1,973 2014 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Licensing agreements $ 3,015 ($ 2,445) $ - $ 570 Non-compete agreements 2,128 ( 2,045) ( 83) - Trade name 2,009 ( 100) - 1,909 Other 6,482 ( 5,193) ( 1,194) 95 $13,634 ($ 9,783) ($ 1,277) $ 2,574 Other intangibles consist of certain amortizable acquisition costs, proprietary technology, computer software, certain customer relationships and debt issuance costs on the 6.05% notes. During the fourth quarter of fiscal 2013, the Company committed to a plan and entered negotiations to exit the distribution agreement and sell the inventory of its Italian distributor back to the parent supplier. This decision triggered an impairment review of the long lived assets at this entity, resulting in an impairment charge of $1,405,000, representing a complete impairment of the remaining intangibles ($1,277,000) and fixed assets ($128,000) for this entity. The impairment charge was determined by deriving the fair value of the asset group utilizing a discounted cash flow model. Significant inputs to this model include the discount rate, sales projections and profitability estimates. These inputs would be considered Level 3 in the fair value hierarchy. The weighted average remaining useful life of the intangible assets included in the table above is approximately 16 years. Intangible amortization expense for the years ended June 30, 2015, 2014 and 2013 was $239,000, $477,000 and $718,000, respectively. Estimated intangible amortization expense for each of the next five fiscal years is as follows (in thousands): Fiscal Year 2016 $ 146 2017 141 2018 141 2019 141 2020 141 Thereafter 1,263 $1,973 The gross carrying amount of the Company’s intangible assets that have indefinite lives and are not subject to amortization as of June 30, 2015 and 2014 are $213,000 and $223,000, respectively. These assets are comprised of acquired tradenames. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Jun. 30, 2015 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | E. ACCRUED LIABILITIES Accrued liabilities at June 30 were as follows (in thousands): 2015 2014 Salaries and wages $ 8,568 $ 6,648 Retirement benefits 3,773 4,909 Warranty 3,310 3,917 Customer advances/deferred revenue 2,602 3,082 Restructuring 3,776 785 Distributor rebate 2,989 3,242 Other 7,736 8,682 $32,754 $31,265 |
WARRANTY
WARRANTY | 12 Months Ended |
Jun. 30, 2015 | |
WARRANTY [Abstract] | |
WARRANTY | F. WARRANTY The Company warrants all assembled products, parts (except component products or parts on which written warranties are issued by the respective manufacturers thereof and are furnished to the original customer, as to which the Company makes no warranty and assumes no liability) and service against defective materials or workmanship. Such warranty generally extends from periods ranging from 12 months to 24 months. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers. However, its warranty obligation is affected by product failure rates, the number of units affected by the failure and the expense involved in satisfactorily addressing the situation. The warranty reserve is established based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. When evaluating the adequacy of the reserve for warranty costs, management takes into consideration the term of the warranty coverage, historical claim rates and costs of repair, knowledge of the type and volume of new products and economic trends. While we believe the warranty reserve is adequate and that the judgment applied is appropriate, such amounts estimated to be due and payable in the future could differ materially from what actually transpires. The following is a listing of the activity in the warranty reserve during the years ended June 30 (in thousands): 2015 2014 Reserve balance, July 1 $5,968 $5,701 Current period expense 1,989 2,214 Payments or credits to customers (2,332) (2,055) Translation adjustment (380) 108 Reserve balance, June 30 $5,245 $5,968 The current portion of the warranty accrual ($3,310,000 and $3,917,000 for fiscal 2015 and 2014, respectively) is reflected in accrued liabilities, while the long-term portion ($1,935,000 and $2,051,000 for fiscal 2015 and 2014, respectively) is included in other long-term liabilities on the Consolidated Balance Sheets. |
DEBT
DEBT | 12 Months Ended |
Jun. 30, 2015 | |
DEBT [Abstract] | |
DEBT | G. DEBT Notes Payable Notes payable consists of amounts borrowed under unsecured line of credit agreements. These lines of credit may be withdrawn at the option of the banks. The following is aggregate borrowing information at June 30 (in thousands): 2015 2014 Available credit lines $ 1,689 $ 3,372 Unused credit lines 1,689 3,372 Total notes payable $ - $ - Weighted-average interest rates on credit lines 5.8% 2.9% Long-term Debt Long-term debt consisted of the following at June 30 (in thousands): 2015 2014 Revolving loan agreement $10,208 $11,200 10-year unsecured senior notes 3,571 7,143 Capital lease obligations - 29 Other long-term debt 23 32 Subtotal 13,802 18,404 Less: current maturities (3,571 (3,604 Total long-term debt $10,231 $14,800 On June 30, 2014, the Company entered into a revolving loan agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association. Pursuant to the Credit Agreement, the Company may, from time to time, enter into revolving credit loans in amounts not to exceed, in the aggregate, Wells Fargo’s revolving credit commitment of $60,000,000. The revolving credit commitment may be increased under the agreement by an additional $10,000,000 in the event that the conditions for “Incremental Loans” (as defined in the agreement) are satisfied. In general, outstanding revolving credit loans will bear interest at LIBOR plus 1.00%. On June 30, 2014, the Company entered into an Amended and Restated Note Purchase and Private Shelf Agreement (the “Prudential Agreement”). Among other things, the Prudential Agreement: (a) amends and restates the “Note Agreement” between the Company and Purchasers dated as of April 10, 2006, as it has been amended from time to time (the “2006 Agreement”); and (b) sets forth the terms of the potential sale and purchase of up to $50,000,000 in “Shelf Notes” as defined in the Prudential Agreement (the “Shelf Notes”) by the Company to Prudential. The notes sold by the Company to the Existing Holders under the 2006 Agreement (the “2006 Notes”) are deemed outstanding under, and are governed by, the terms of the Prudential Agreement. The 2006 Notes bear interest on the outstanding principal balance at a fixed rate of 6.05% per annum and mature on April 10, 2016. The 2006 Notes mature and become due and payable in full on April 10, 2016 (the “Payment Date”). Prior to the Payment Date, the Company was obligated to make quarterly payments of interest during the term of the 2006 Notes, plus prepayments of principal of $3,571,429 on April 10 of each year from 2010 to 2015, inclusive. The outstanding balance was $3,571,429 and $7,142,857 at June 30, 2015 and June 30, 2014, respectively. Of the outstanding balance, $3,571,429 was classified as a current maturity of long-term debt at June 30, 2015 and June 30, 2014, respectively. The remaining $3,571,429 on June 30, 2014 was classified as long-term debt. In addition to the interest payments and any mandatory principal payments required under the terms of the Shelf Note, the Company will pay an issuance fee of 0.10% of the aggregate principal balance of each of the Shelf Notes sold to, and purchased by, Prudential. The Company may prepay the Shelf Notes or the 2006 Notes, subject to certain limitations. At no time during the term of the Prudential Agreement may the aggregate outstanding principal amount of the 2006 Notes and the Shelf Notes exceed $35,000,000. The Prudential Agreement includes financial covenants regarding minimum net worth, minimum EBITDA for the most recent four (4) fiscal quarters of $11,000,000 and a maximum total funded debt to EBITDA ratio of 3.0. On August 3, 2015, the Prudential Agreement was amended to revise the definition of EBITDA for the four consecutive fiscal quarters ending on and including June 30, 2015 to and including March 25, 2016 to add $3,300,000, reflective of the restructuring charge taken by the Company in the fourth quarter of the fiscal year ending June 30, 2015. As of June 30, 2015, the Company was in compliance with these financial covenants. In addition, the Company will be required to make an offer to purchase the 2006 Notes and Shelf Notes upon a Change of Control, and any such offer must include the payment of a Yield-Maintenance Amount. The Prudential Agreement also includes certain covenants that limit, among other things, certain indebtedness, acquisitions and investments. The Prudential Agreement also has a most favored lender provision whereby the Prudential Agreement shall be automatically modified to include any additional covenant or event of default that is included in any agreement evidencing, securing, guarantying or otherwise related to other indebtedness in excess of $1,000,000. The aggregate scheduled maturities of outstanding long-term debt obligations in subsequent years are as follows (in thousands): Fiscal Year 2016 $ 3,571 2017 - 2018 10,208 2019 - 2020 - Thereafter 23 $13,802 |
LEASE COMMITMENTS
LEASE COMMITMENTS | 12 Months Ended |
Jun. 30, 2015 | |
LEASE COMMITMENTS [Abstract] | |
LEASE COMMITMENTS | H. LEASE COMMITMENTS Approximate future minimum rental commitments under noncancellable operating leases are as follows (in thousands): Fiscal Year 2016 $ 2,955 2017 2,568 2018 1,910 2019 406 2020 232 Thereafter 11 $ 8,082 Total rent expense for operating leases approximated $3,550,000, $3,920,000 and $3,863,000 in fiscal 2015, 2014 and 2013, respectively. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2015 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | I. SHAREHOLDERS' EQUITY The total number of shares of common stock outstanding at June 30, 2015, 2014 and 2013 was 11,267,347, 11,261,873 and 11,212,952, respectively. At June 30, 2015, 2014 and 2013, treasury stock consisted of 1,832,121, 1,837,595 and 1,886,516 shares of common stock, respectively. The Company issued 49,314, 51,921 and 123,997 shares of treasury stock in fiscal 2015, 2014 and 2013, respectively, to fulfill its obligations under the stock option plans and restricted stock grants. The Company also recorded forfeitures of 46,240 and 3,000 shares of previously issued restricted stock in fiscal 2015 and 2014, respectively. The difference between the cost of treasury shares and the option price is recorded in common stock. On February 1, 2008, the Board of Directors authorized the purchase of 500,000 shares of common stock at market values. In fiscal 2009, the Company purchased 250,000 shares of its outstanding common stock at an average price of $7.25 per share for a total cost of $1,812,500. In fiscal 2012, the Company purchased 125,000 shares of its outstanding common stock at an average price of $19.40 per share for a total cost of $2,425,000. On July 27, 2012, the Board of Directors authorized the purchase of an additional 375,000 shares of common stock at market values. This authorization has no expiration. In fiscal 2013, the Company purchased 185,000 shares of its outstanding common stock at an average price of $16.59 per share for a total cost of $3,068,652. Cash dividends per share were $0.36, $0.36 and $0.36 in fiscal 2015, 2014 and 2013, respectively. Effective June 30, 2008, the Company’s Board of Directors established a Shareholder Rights Plan and distributed to shareholders one preferred stock purchase right (a “Right’) for each outstanding share of common stock. This Shareholder Rights Plan was amended on May 1, 2012. Under certain circumstances, a Right can be exercised to purchase one four-hundredth of a share of Series A Junior Preferred Stock at an exercise price of $125, subject to certain anti-dilution adjustments. The Rights will become exercisable on the earlier of: (i) ten business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired, or obtained the right to acquire from shareholders, beneficial ownership of 20% or more of the outstanding Company’s common stock (or 30% or more in the case of any person or group which currently owns 20% or more of the shares or who shall become the beneficial owner of 20% or more of the shares as a result of any transfer by reason of the death of or by gift from any other person who is an affiliate or an associate of such existing holder or by succeeding such a person as trustee of a trust existing on the Record Date ("Existing Holder")) or (ii) ten business days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 20% or more of such outstanding Common Stock (or 30% or more for an Existing Holder), as such periods may be extended pursuant to the Rights Agreement. In the event that any person or group becomes an Acquiring Person, each holder of a Right shall thereafter have the right to receive, upon exercise, in lieu of Preferred Stock, common stock of the Company having a value equal to two times the exercise price of the Right. However, Rights are not exercisable as described in this paragraph until such time as the Rights are no longer redeemable by the Company as set forth below. Notwithstanding any of the foregoing, if any person becomes an Acquiring Person all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by an Acquiring Person will become null and void. The Rights will expire at the close of business on June 30, 2018, unless earlier redeemed or exchanged by the Company. At any time before a person becomes an Acquiring Person, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 redemption price. The Company is authorized to issue 200,000 shares of preferred stock, none of which have been issued. The Company has designated 150,000 shares of the preferred stock for the purpose of the Shareholder Rights Plan. The components of accumulated other comprehensive loss included in equity as of June 30, 2015 and 2014 are as follows (in thousands): 2015 2014 Translation adjustments $ 6,740 $ 20,779 Benefit plan adjustments, net of income taxes of $24,411 and $21,436, respectively (42,221 (36,722 Accumulated other comprehensive loss $(35,481 $(15,943 A reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component for the years ended June 30, 2014 and June 30, 2015 is as follows: Translation Adjustment Benefit Plan Adjustment Balance at June 30, 2013 $ 16,949 ($42,848) Other comprehensive loss before reclassifications 3,830 3,950 Amounts reclassified from accumulated other comprehensive income - 2,176 Net current period other comprehensive income 3,830 6,126 Balance at June 30, 2014 $ 20,779 ($36,722) Translation Adjustment Benefit Plan Adjustment Balance at June 30, 2014 $ 20,779 ($36,722) Other comprehensive loss before reclassifications (14,039) (7,518) Amounts reclassified from accumulated other comprehensive income - 2,019 Net current period other comprehensive income (14,039) (5,499) Balance at June 30, 2015 $ 6,740 ($42,221) A reconciliation for the reclassifications out of accumulated other comprehensive income (loss), net of tax for the year ended June 30, 2014 is as follows: Amount Reclassified Amortization of benefit plan items Actuarial losses ($3,496) Transition asset and prior service benefit (31 Total before tax benefit (3,527) Tax benefit 1,351 Total reclassification net of tax ($2,176) A reconciliation for the reclassifications out of accumulated other comprehensive income (loss), net of tax for the year ended June 30, 2015 is as follows: Amount Reclassified Amortization of benefit plan items Actuarial losses ($3,074) Transition asset and prior service benefit (36 Total before tax benefit (3,110) Tax benefit 1,091 Total reclassification net of tax ($2,019) |
BUSINESS SEGMENTS AND FOREIGN O
BUSINESS SEGMENTS AND FOREIGN OPERATIONS | 12 Months Ended |
Jun. 30, 2015 | |
BUSINESS SEGMENTS AND FOREIGN OPERATIONS [Abstract] | |
BUSINESS SEGMENTS AND FOREIGN OPERATIONS | J. BUSINESS SEGMENTS AND FOREIGN OPERATIONS The Company and its subsidiaries are engaged in the manufacture and sale of marine and heavy duty off-highway power transmission equipment. Principal products include marine transmissions, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and controls systems. The Company sells to both domestic and foreign customers in a variety of market areas, principally pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. Net sales by product group is summarized as follows (in thousands): 2015 2014 2013 Industrial $ 42,078 $ 41,188 $ 48,110 Land based transmissions 76,450 67,055 68,535 Marine and propulsion systems 141,137 149,432 162,823 Other 6,125 6,234 5,814 Total $265,790 $263,909 $285,282 Industrial products include clutches, power take-offs and pump drives sold to the agriculture, recycling, construction and oil and gas markets. The land based transmission products include applications for oilfield and natural gas, military and airport rescue and fire fighting. The marine and propulsion systems include marine transmission, controls, surface drives, propellers and boat management systems for the global commercial, pleasure craft and patrol boat markets. Other products includes non-Twin Disc manufactured product sold through our Company-owned distribution entities. The Company has two reportable segments: manufacturing and distribution. These segments are managed separately because each provides different services and requires different technology and marketing strategies. The accounting practices of the segments are the same as those described in the summary of significant accounting policies. Transfers among segments are at established inter-company selling prices. Management evaluates the performance of its segments based on net earnings. Information about the Company's segments is summarized as follows (in thousands): Manufacturing Distribution Total 2015 Net sales $240,085 $100,708 $340,793 Intra-segment sales 19,901 6,961 26,862 Inter-segment sales 44,864 3,277 48,141 Interest income 171 33 204 Interest expense 946 - 946 Income taxes 7,312 1,459 8,771 Depreciation and amortization 8,106 482 8,588 Net earnings attributable to Twin Disc 14,409 5,013 19,422 Assets 254,749 53,759 308,508 Expenditures for segment assets 7,335 1,271 8,606 2014 Net sales $227,590 $121,389 $348,979 Intra-segment sales 18,416 9,926 28,342 Inter-segment sales 53,960 2,768 56,728 Interest income 311 22 333 Interest expense 2,565 45 2,610 Income taxes 6,233 1,432 7,665 Depreciation and amortization 8,566 549 9,115 Net earnings attributable to Twin Disc 7,029 6,285 13,314 Assets 254,652 57,233 311,885 Expenditures for segment assets 6,429 315 6,744 2013 Net sales $245,592 $130,360 $375,952 Intra-segment sales 16,140 15,127 31,267 Inter-segment sales 55,746 3,657 59,403 Interest income 479 19 498 Interest expense 3,248 62 3,310 Income taxes 5,112 1,630 6,742 Depreciation and amortization 8,817 497 9,314 Net earnings attributable to Twin Disc 10,141 5,840 15,981 Assets 258,617 56,965 315,582 Expenditures for segment assets 5,705 349 6,054 The following is a reconciliation of reportable segment net sales, net earnings and assets to the Company’s consolidated totals (in thousands): 2015 2014 2013 Net sales Total net sales from reportable segments $340,793 $348,979 $375,952 Elimination of inter-company sales (75,003 (85,070 (90,670 Total consolidated net sales $265,790 $263,909 $285,282 Net earnings attributable to Twin Disc: Total net earnings from reportable segments $ 19,422 $ 13,314 $ 15,981 Other corporate expenses (8,249) (9,670) (12,099) Total consolidated net earnings attributable to Twin Disc $ 11,173 $ 3,644 $ 3,882 Assets Total assets for reportable segments $308,508 $311,885 Corporate assets and eliminations (58,646 (44,900 Total consolidated assets $249,862 $266,985 Other significant items (in thousands): Segment Consolidated Totals Adjustments Totals 2015 Interest income $ 204 $ (80) $ 124 Interest expense 946 (340) 606 Income taxes 8,771 (4,256) 4,515 Depreciation and amortization 8,588 1,573 10,161 Expenditures for segment assets 8,606 443 9,049 2014 Interest income $ 333 $ (212) $ 121 Interest expense 2,610 (1,674) 936 Income taxes 7,665 (3,439) 4,226 Depreciation and amortization 9,115 1,542 10,657 Expenditures for segment assets 6,744 501 7,245 2013 Interest income $ 498 $ (396) $ 102 Interest expense 3,310 (1,875) 1,435 Income taxes 6,742 (1,756) 4,986 Depreciation and amortization 9,314 1,524 10,838 Expenditures for segment assets 6,054 528 6,582 All adjustments represent inter-company eliminations and corporate amounts. Geographic information about the Company is summarized as follows (in thousands): 2015 2014 2013 Net sales United States $131,198 $108,380 $127,844 China 19,712 33,830 29,119 Italy 14,457 17,396 19,140 Singapore 13,856 12,703 14,214 Canada 13,661 9,277 10,846 Other countries 72,906 82,323 84,119 Total $265,790 $263,909 $285,282 Net sales by geographic region are based on product shipment destination. 2015 2014 Long-lived assets United States $ 40,822 $ 46,821 Switzerland 7,686 8,196 Belgium 6,709 7,450 Italy 2,376 3,531 Other countries 2,586 2,074 Total $ 60,179 $ 68,072 One customer, Sewart Supply, Inc. (a distributor of Twin Disc), accounted for approximately 11%, 11% and 11% of consolidated net sales in fiscal 2015, 2014 and 2013, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | K. STOCK-BASED COMPENSATION During fiscal 2011, the Company adopted the Twin Disc, Incorporated 2010 Stock Incentive Plan for Non-Employee Directors (the “Directors’ Plan”), a plan to grant non-employee directors equity based awards up to 250,000 shares of common stock, and the Twin Disc, Incorporated 2010 Long-Term Incentive Compensation Plan (the “Incentive Plan”), a plan under which officers and key employees may be granted equity based awards up to 650,000 shares of common stock. The Directors’ Plan may grant options to purchase shares of common stock, at the discretion of the board, to non-employee directors who are elected or reelected to the board, or who continue to serve on the board. Such options carry an exercise price equal to the fair market value of the Company’s common stock as of the date of grant, vest immediately, and expire ten years after the date of grant. Options granted under the Incentive Plan are determined to be non-qualified or incentive stock options as of the date of grant, and may carry a vesting schedule. For options under the Incentive Plan that are intended to qualify as incentive stock options, if the optionee owns more than 10% of the total combined voting power of the Company’s stock, the price will not be less than 110% of the grant date fair market value and the options expire five years after the date of grant. There were no incentive options granted to a greater than 10% shareholder during the years presented. There were no options outstanding under the Directors’ Plan and the Incentive Plan as of June 30, 2015 and 2014. The Company has 19,200 non-qualified stock options outstanding as of June 30, 2015 under the Twin Disc, Incorporated Plan for Non-Employee Directors and Twin Disc, Incorporated 2004 Stock Incentive Plans. The 2004 plans were terminated during 2011, except options then outstanding will remain so until exercised or until they expire. Shares available for future options as of June 30 were as follows: 2015 2014 2010 Long-Term Incentive Compensation Plan 447,730 466,589 2010 Stock Incentive Plan for Non-employee Directors 171,986 193,858 Stock option transactions under the plans during 2015 were as follows: Weighted Weighted Average Aggregate Average Remaining Contractual Intrinsic 2015 Price Life (years) Value Non-qualified stock options: Options outstanding at beginning of year 21,600 $ 14.88 Granted - - Canceled/expired - - Exercised (2,400) 6.23 Options outstanding at June 30 19,200 $ 15.96 3.31 $81,492 Options price range ($10.01 - $27.55) Number of shares 19,200 Weighted average price $ 15.96 Weighted average remaining life 3.31 years The Company accounts for stock based compensation in accordance with ASC Topic 718-10, “Compensation – Stock Compensation.” In addition, the Company computes its windfall tax pool using the shortcut method. ASC Topic 718-10 requires the Company to expense the cost of employee services received in exchange for an award of equity instruments using the fair-value-based method. All options were 100% vested at the adoption of this statement. During fiscal 2015, 2014 and 2013 the Company granted no non-qualified stock options and all non-qualified stock options from prior periods have fully vested. As a result, no compensation cost has been recognized in the Consolidated Statements of Operations and Comprehensive Income for fiscal 2015, 2014 and 2013, respectively. The total intrinsic value of options exercised during the years ended June 30, 2015, 2014 and 2013 was approximately $55,000, $0 and $539,000, respectively. In fiscal 2015, 2014 and 2013, the Company granted a target number of 15,861, 43,154 and 28,255 performance stock unit awards, respectively, to various employees of the Company, including executive officers. The performance stock unit awards granted in fiscal 2015 will vest if the Company achieves a specified target objective relating to consolidated economic profit (as defined in the Performance Stock Unit Award Grant Agreement) in the cumulative three fiscal year period ending June 30, 2017. The performance stock unit awards granted in fiscal 2015 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance stock units that can be awarded if the target objective is exceeded is 13,621. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock unit awards granted in fiscal 2015. The performance stock unit awards granted in fiscal 2014 will vest if the Company achieves a specified target objective relating to consolidated economic profit (as defined in the Performance Stock Unit Award Grant Agreement) in the cumulative three fiscal year period ending June 30, 2016. The performance stock unit awards granted in fiscal 2014 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance stock units that can be awarded if the target objective is exceeded is 22,205. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock unit awards granted in fiscal 2014. The performance stock unit awards granted in fiscal 2013 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance stock units that can be awarded if the target objective is exceeded is 22,487. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock unit awards granted in fiscal 2013 and has reversed previously recognized expenses related to these awards during the second quarter of fiscal 2013. There were 29,855, 41,160 and 42,962 unvested performance stock unit awards outstanding at June 30, 2015, 2014 and 2013, respectively. The weighted average grant date fair value of the unvested awards at June 30, 2015 was $27.24. The performance stock unit awards are remeasured at fair-value based upon the Company’s stock price at the end of each reporting period. The fair-value of the stock unit awards are expensed over the performance period for the shares that are expected to ultimately vest. The compensation expense (income) for the year ended June 30, 2015, 2014 and 2013 related to the performance stock unit award grants, approximated $0, $0 and $1,238,000, respectively. At June 30, 2015, the Company had $537,000 of unrecognized compensation expense related to the unvested shares that would vest if the specified target objective was achieved for the fiscal 2015 and 2014 awards. The total fair value of performance stock unit awards vested in fiscal 2015, 2014 and 2013 was $0, $0 and $2,787,000, respectively. The performance stock unit awards are cash based, and are thus recorded as a liability on the Company’s Consolidated Balance Sheets. As of June 30, 2015, there were no awards included in “Liabilities” due to actual results to date and the low probability of achieving any of the threshold performance levels. In fiscal 2015, 2014 and 2013, the Company granted a target number of 16,261, 17,312 and 28,535 performance stock awards, respectively, to various employees of the Company, including executive officers. The performance stock awards granted in fiscal 2015 will vest if the Company achieves a specified target objective relating to consolidated economic profit (as defined in the Performance Stock Award Grant Agreement) in the cumulative three fiscal year period ending June 30, 2017. The performance stock awards granted in fiscal 2015 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 14,101. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock awards granted in fiscal 2015. The performance stock awards granted in fiscal 2014 will vest if the Company achieves a specified target objective relating to consolidated economic profit (as defined in the Performance Stock Award Grant Agreement) in the cumulative three fiscal year period ending June 30, 2016. The performance stock awards granted in fiscal 2014 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 17,038. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock awards granted in fiscal 2014. The performance stock awards granted in fiscal 2013 are subject to adjustment if the Company’s economic profit for the period falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 30,635. Based upon actual results to date and the low probability of achieving the threshold performance levels, the Company is not accruing the performance stock awards granted in fiscal 2013 and has reversed previously recognized expenses related to these awards during the second quarter of fiscal 2013. There were 25,949, 44,712 and 42,141 unvested performance stock awards outstanding at June 30, 2015, 2014 and 2013, respectively. The fair value of the stock awards (on the date of grant) is expensed over the performance period for the shares that are expected to ultimately vest. The compensation expense for the year ended June 30, 2015, 2014 and 2013, related to performance stock awards, approximated $0, $0 and $209,000, respectively. The weighted average grant date fair value of the unvested awards at June 30, 2015 was $27.36. At June 30, 2015, the Company had $710,000 of unrecognized compensation expense related to the unvested shares that would vest if the specified target objective was achieved for the fiscal 2015 and 2014 awards. The total fair value of performance stock awards vested in fiscal 2015, 2014 and 2013 was $0, $0 and $2,055,000, respectively. In addition to the performance shares mentioned above, the Company has unvested restricted stock outstanding that will vest if certain service conditions are fulfilled. The fair value of the restricted stock grants is recorded as compensation over the vesting period, which is generally 1 to 3 years. During fiscal 2015, 2014 and 2013, the Company granted 59,494, 51,004 and 83,729 service based restricted shares, respectively, to employees and non-employee directors in each year. A total of 46,240, 3,000 and 30,532 shares of restricted stock were forfeited during fiscal 2015, 2014 and 2013, respectively. There were 94,183, 116,297 and 186,469 unvested shares outstanding at June 30, 2015, 2014 and 2013, respectively. Compensation expense of $696,000, $1,184,000 and $1,234,000 was recognized during the year ended June 30, 2015, 2014 and 2013, respectively, related to these service-based awards. The total fair value of restricted stock grants vested in fiscal 2015, 2014 and 2013 was $993,000, $3,053,000 and $2,177,000, respectively. As of June 30, 2015, the Company had $923,000 of unrecognized compensation expense related to restricted stock which will be recognized over the next three years. |
ENGINEERING AND DEVELOPMENT COS
ENGINEERING AND DEVELOPMENT COSTS | 12 Months Ended |
Jun. 30, 2015 | |
ENGINEERING AND DEVELOPMENT COSTS [Abstract] | |
ENGINEERING AND DEVELOPMENT COSTS | L. ENGINEERING AND DEVELOPMENT COSTS Engineering and development costs include research and development expenses for new products, development and major improvements to existing products, and other costs for ongoing efforts to refine existing products. Research and development costs charged to operations totaled $2,288,000, $3,028,000 and $3,058,000 in fiscal 2015, 2014 and 2013, respectively. Total engineering and development costs were $11,091,000, $10,900,000 and $10,242,000 in fiscal 2015, 2014 and 2013, respectively. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 12 Months Ended |
Jun. 30, 2015 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | M. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Company has non-contributory, qualified defined benefit pension plans covering substantially all domestic employees hired prior to October 1, 2003, and certain foreign employees. Domestic plan benefits are based on years of service, and, for salaried employees, on average compensation for benefits earned prior to January 1, 1997, and on a cash balance plan for benefits earned after January 1, 1997. The Company's funding policy for the plans covering domestic employees is to contribute an actuarially determined amount which falls between the minimum and maximum amount that can be deducted for federal income tax purposes. On June 3, 2009, the Company announced it would freeze future accruals under the domestic defined benefit pension plans effective August 1, 2009. In addition, the Company has unfunded, non-qualified retirement plans for certain management employees and Directors. In the case of management employees, benefits are based either on final average compensation or on an annual credit to a bookkeeping account, intended to restore the benefits that would have been earned under the qualified plans, but for the earnings limitations under the Internal Revenue Code. In the case of Directors, benefits are based on years of service on the Board. All benefits vest upon retirement from the Company. In addition to providing pension benefits, the Company provides other postretirement benefits, including healthcare and life insurance benefits for certain domestic retirees. All employees retiring after December 31, 1992, and electing to continue healthcare coverage through the Company's group plan, are required to pay 100% of the premium cost. The measurement date for the Company’s pension and postretirement benefit plans in fiscal 2015 and 2014 was June 30. Obligations and Funded Status The following table sets forth the Company's defined benefit pension plans’ and other postretirement benefit plans’ funded status and the amounts recognized in the Company's balance sheets and statement of operations and comprehensive income as of June 30 (in thousands): Other Pension Postretirement Benefits Benefits 2015 2014 2015 2014 Change in benefit obligation: Benefit obligation, beginning of year $123,832 $125,846 $16,584 $17,739 Service cost 465 536 30 37 Interest cost 4,862 5,425 579 659 Actuarial loss (gain) 8,384 1,221 882 (60) Contributions by plan participants 154 174 547 581 Settlements - (121) - - Benefits paid (9,964 (9,249 (2,250 (2,372 Benefit obligation, end of year $127,733 $123,832 $ 16,372 $ 16,584 Change in plan assets: Fair value of assets, beginning of year $102,495 $ 94,723 $ - $ - Actual return on plan assets 5,828 14,031 - - Employer contribution 6,168 2,816 1,703 1,791 Contributions by plan participants 154 174 547 581 Benefits paid (9,964 (9,249 (2,250 (2,372 Fair value of assets, end of year $104,681 $102,495 $ - $ - Funded status $(23,052 $(21,337 $ (16,372 $(16,584 Amounts recognized in the balance sheet consist of: Other assets - noncurrent $ 638 $ 680 $ - $ - Accrued liabilities - current (764) (1,189) (2,040) (2,418) Accrued retirement benefits - noncurrent (22,926) (20,828) (14,332 (14,166 Net amount recognized $(23,052) $(21,337) $(16,372 $(16,584 Amounts recognized in accumulated other comprehensive loss consist of (net of tax): Net transition obligation $ 296 $ 340 $ - $ - Actuarial net loss 38,613 33,220 3,312 3,163 Net amount recognized $ 38,909 $ 33,560 $ 3,312 $ 3,163 The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during the next fiscal year for the qualified domestic defined benefit and other postretirement benefit plans are as follows (in thousands): Other Pension Postretirement Benefits Benefits Net transition obligation $ 35 $ - Actuarial net loss 3,646 728 Net amount to be recognized $3,681 $ 728 The accumulated benefit obligation for all defined benefit pension plans was approximately $127,733,000 and $123,832,000 at June 30, 2015 and 2014, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets (in thousands) : June 30 2015 2014 Projected and accumulated benefit obligation $126,242 $122,045 Fair value of plan assets 102,552 100,028 Components of Net Periodic Benefit Cost (in thousands): Pension Benefits 2015 2014 2013 Service cost $ 465 $ 536 $ 367 Interest cost 4,862 5,425 5,399 Expected return on plan assets (7,272) (6,591) (6,382) Settlement loss - - 5 Amortization of transition obligation 36 32 35 Amortization of actuarial net loss 2,436 2,894 3,357 Net periodic benefit cost $ 527 $ 2,296 $ 2,781 Other Postretirement Benefits 2015 2014 2013 Service cost $ 30 $ 37 $ 34 Interest cost 579 659 766 Amortization of actuarial net loss 638 602 792 Net periodic benefit cost $1,247 $1,298 $1,592 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for Fiscal 2015 (Pre-tax, in thousands): Pension Other Postretirement Benefits Net loss $ 9,406 $ 882 Amortization of transition asset (36) - Amortization of net (loss) gain (2,436 (638) Total recognized in other comprehensive income 6,934 244 Net periodic benefit cost 527 1,247 Total recognized in net periodic benefit cost and other comprehensive income $ 7,461 $ 1,491 Additional Information Assumptions (as of June 30, 2015 and 2014) Other Pension Benefits Postretirement Benefits Weighted average assumptions used to determine benefit obligations at June 30 2015 2014 2015 2014 Discount rate 4.05% 4.06% 3.93% 3.76% Expected return on plan assets 7.11% 7.39% Weighted average assumptions used to determine net periodic benefit cost for years ended June 30 Other Pension Benefits Postretirement Benefits 2015 2014 2013 2015 2014 2013 Discount rate 4.06% 4.35% 4.20% 3.76% 3.99% 4.20% Expected return on plan assets 7.39% 7.41% 7.50% The assumed weighted-average healthcare cost trend rate was 7.8% in 2015, grading down to 5% in 2022. A 1% increase in the assumed health care cost trend would increase the accumulated postretirement benefit obligation by approximately $336,000 and the service and interest cost by approximately $13,000. A 1% decrease in the assumed health care cost trend would decrease the accumulated postretirement benefit obligation by approximately $322,000 and the service and interest cost by approximately $12,000. Plan Assets The Company’s Pension Committee (“Committee”) oversees investment matters related to the Company’s funded benefit plans. The Committee works with external actuaries and investment consultants on an ongoing basis to establish and monitor investment strategies and target asset allocations. The overall objective of the Committee’s investment strategy is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and address other cash requirements of the pension plans. The Committee has established an Investment Policy Statement which provides written documentation of the Company’s expectations regarding its investment programs for the pension plans, establishes objectives and guidelines for the investment of the plan assets consistent with the Company’s financial and benefit-related goals, and outlines criteria and procedures for the ongoing evaluation of the investment program. The Company employs a total return on investment approach whereby a mix of investments among several asset classes are used to maximize long-term return of plan assets while avoiding excessive risk. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, and annual liability measurements. The Company’s pension plan weighted-average asset allocations at June 30, 2015 and 2014 by asset category are as follows: Target June 30 Asset Category Allocation 2015 2014 Equity securities 65% 62% 65% Debt securities 25% 25% 23% Real estate 10% 13% 12% 100% 100% 100% Due to market conditions and other factors, actual asset allocation may vary from the target allocation outlined above. The U.S. pension plans held 98,211 shares of Company stock with a fair market value of $1,830,653 (1.8 percent of total plan assets) at June 30, 2015 and 98,211 shares with a fair market value of $3,245,874 (3.2 percent of total plan assets) at June 30, 2014. The plans have a long-term return assumption of 7.25%. This rate was derived based upon historical experience and forward-looking return expectations for major asset class categories. Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are classified into the following hierarchy: Level I Unadjusted quoted prices in active markets for identical instruments Level II Unadjusted quoted prices in active markets for similar instruments, or Unadjusted quoted prices for identical or similar instruments in markets that are not active, or Other inputs that are observable in the market or can be corroborated by observable market data Level III Use of one or more significant unobservable inputs The following table presents plan assets using the fair value hierarchy as of June 30, 2015 (in thousands): Total Level I Level II Level III Cash and cash equivalents $ 1,034 $ 1,034 $ - $ - Equity securities: U.S. (a) 28,035 28,035 - - International (b) 14,819 10,649 4,170 - Fixed income (c) 22,615 8,993 13,622 - Annuity contracts (d) 9,508 - - 9,508 Real estate (e) 12,770 - 12,770 - Other (f) 15,900 - - 15,900 Total $104,681 $48,711 $30,562 $25,408 The following table presents plan assets using the fair value hierarchy as of June 30, 2014 (in thousands): Total Level I Level II Level III Cash and cash equivalents $ 965 $ 965 $ - $ - Equity securities: U.S. (a) 30,727 30,727 - - International (b) 16,676 10,785 5,891 - Fixed income (c) 21,892 7,603 14,289 - Annuity contracts (d) 6,340 - - 6,340 Real estate (e) 11,206 - 11,206 - Other (f) 14,689 - - 14,689 Total $102,495 $50,080 $31,386 $21,029 (a) U.S. equity securities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks. These securities are valued at the closing price reported on the active market on which the individual securities are traded. (b) International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country, capitalization and equity style (i.e., growth and value strategies). Certain assets are invested in international commingled equity funds. The vast majority of the investments are made in companies in developed markets with a smaller percentage in emerging markets. Securities traded on exchanges are valued at the closing price reported on the active market on which the individual securities are traded. International commingled funds are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. (c) Fixed income consists of corporate bonds with investment grade BBB or better from diversified industries, as well as government debt securities. Corporate and government debt investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and inactive markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. (d) Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows. (e) Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell its holding in the funds. (f) Other consists of hedged equity mutual funds. These investments are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. The following tables present a reconciliation of the fair value measurements using significant unobservable inputs (Level III) as of June 30, 2015 and 2014 (in thousands): Annuity Contracts Other Balance – June 30, 2014 $ 6,340 $14,689 Actual return on plan assets: Relating to assets still held at reporting date 2,978 1,211 Relating to assets sold during the period - - Purchases, sales and settlements, net 190 - Transfers in and/or out of Level III - - Balance – June 30, 2015 $ 9,508 $ 15,900 Annuity Contracts Real Estate Other Balance – June 30, 2013 $ 5,819 $ 3,012 $13,153 Actual return on plan assets: Relating to assets still held at reporting date 433 - 1,536 Relating to assets sold during the period - 257 - Purchases, sales and settlements, net 88 (3,269) - Transfers in and/or out of Level III - - - Balance – June 30, 2014 $ 6,340 $ - $ 14,689 Cash Flows Contributions The Company expects to contribute $2,240,000 to its defined benefit pension plans in fiscal 2016. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): Other Postretirement Benefits Pension Gross Part D Net Benefit Benefits Benefits Reimbursement Payments 2016 $10,446 $2,379 $ - $2,379 2017 9,927 2,349 - 2,349 2018 10,913 1,844 - 1,844 2019 9,756 1,734 - 1,734 2020 9,231 1,584 - 1,584 Years 2021- 2025 40,355 6,157 - 6,157 The Company sponsors defined contribution plans covering substantially all domestic employees and certain foreign employees. These plans provide for employer contributions based primarily on employee participation. The total expense under the plans was $2,526,000, $2,218,000 and $2,074,000 in fiscal 2015, 2014 and 2013, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | N. INCOME TAXES United States and foreign earnings before income taxes and minority interest were as follows (in thousands): 2015 2014 2013 United States $ 5,614 $1,107 $3,935 Foreign 10,286 6,989 5,302 $15,900 $8,096 $9,237 The provision (benefit) for income taxes is comprised of the following (in thousands): 2015 2014 2013 Currently payable: Federal $1,607 $ 651 $1,745 State 518 104 (234) Foreign 2,832 2,837 2,788 4,957 3,592 4,299 Deferred: Federal 408 1,309 1,122 State 5 (95) 439 Foreign ( 855) (580) (874) (442) 634 687 $4,515 $4,226 $4,986 The components of the net deferred tax asset as of June 30 are summarized in the table below (in thousands). 2015 2014 Deferred tax assets: Retirement plans and employee benefits $15,157 $13,692 Foreign tax credit carryforwards - 706 Federal tax credits - 160 State net operating loss and other state credit carryforwards 369 348 Inventory 1,789 1,672 Reserves 2,587 2,578 Foreign NOL carryforwards 3,539 6,090 Accruals 584 681 Other assets 568 (54) 24,593 25,873 Deferred tax liabilities: Property, plant and equipment 7,221 8,650 Intangibles 4,778 5,528 Other liabilities 451 711 12,450 14,889 Valuation Allowance (3,577) (5,593) Total net deferred tax assets $ 8,566 $ 5,391 Note: $82,000 and $166,000 of this net deferred tax position is included in Accrued Liabilities at June 30, 2015 and 2014, respectively. The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. During fiscal 2015, the Company reported operating income in certain foreign jurisdictions where the loss carryforward period is unlimited. The Company has evaluated the likelihood of whether the net deferred tax assets related to these jurisdictions would be realized and concluded that based primarily upon the uncertainty to achieve levels of sustained improvement and uncertain exchange rates in these jurisdictions, (a) it is more likely than not that $3,577,000 of deferred tax assets would not be realized; and that (b) a full valuation allowance on the balance of deferred tax assets relating to these jurisdictions continues to be necessary. The company recorded a net decrease in valuation allowance of $2,016,000 in fiscal 2015 due to lower cumulative operating losses in these jurisdictions. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income and foreign source income to realize the remaining deferred tax assets. Following is a reconciliation of the applicable U.S. federal income taxes to the actual income taxes reflected in the statements of operations (in thousands): 2015 2014 2013 U.S. federal income tax at 35% $5,491 $2,754 $3,104 Increases (reductions) in tax resulting from: Foreign tax items 362 (291) 88 State taxes 32 228 296 Valuation allowance (1,121) 1,551 1,216 Change in prior year estimate 157 139 309 Research and development tax credits (337) (267) (526) Section 199 deduction (96) (109) (84) Unrecognized tax benefits 5 183 539 Other, net 22 38 44 $4,515 $4,226 $4,986 The Company has not provided additional U.S. income taxes on cumulative earnings of consolidated foreign subsidiaries that are considered to be reinvested indefinitely. The Company reaffirms its position that these earnings remain permanently invested, and has no plans to repatriate funds to the U.S. for the foreseeable future. These earnings relate to ongoing operations and were approximately $3,045,000 at June 30, 2015. Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation. It is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings. The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be tax effective through the utilization of foreign tax credits. Annually, we file income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination are 2011 through 2015 for our major operations in Italy, Belgium and Japan. The tax years open to examination in the U.S. are for years subsequent to fiscal 2012. The Company has approximately $810,000 of unrecognized tax benefits as of June 30, 2015, which, if recognized would impact the effective tax rate. During the fiscal year the amount of unrecognized tax benefits decreased primarily due to settlements with various taxing authorities. During the next twelve months, the Company does not anticipate any significant changes in unrecognized tax benefits. The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits in income tax expense. Below is a reconciliation of beginning and ending amount of unrecognized tax benefits (in thousands): June 30, 2015 June 30, 2014 Unrecognized tax benefits, beginning of year $ 1,603 $ 1,556 Additions based on tax positions related to the prior year - 7 Additions based on tax positions related to the current year 184 173 Reductions based on tax positions related to the prior year (3) - Subtractions due to statutes closing (60) (1) Settlements with Taxing Authorities (914) (132) Unrecognized tax benefits, end of year $ 810 $1,603 Substantially all of the Company’s unrecognized tax benefits as of June 30, 3015, if recognized, would affect the effective tax rate. As of June 30, 2015 and 2014, the amounts accrued for interest and penalties totaled $62,000 and $309,000, respectively, and are not included in the reconciliation above. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Jun. 30, 2015 | |
CONTINGENCIES [Abstract] | |
CONTINGENCIES | O. CONTINGENCIES The Company is involved in litigation of which the ultimate outcome and liability to the Company, if any, are not presently determinable. Management believes that final disposition of such litigation will not have a material impact on the Company’s results of operations, financial position or cash flows, either individually or in the aggregate. |
RESTRUCTURING OF OPERATIONS
RESTRUCTURING OF OPERATIONS | 12 Months Ended |
Jun. 30, 2015 | |
RESTRUCTURING OF OPERATIONS [Abstract] | |
RESTRUCTURING OF OPERATIONS | P. RESTRUCTURING OF OPERATIONS During the fourth quarter of fiscal 2015, the Company committed to a restructuring plan to reduce costs and improve efficiencies at its North American manufacturing operations. The restructuring was meant to be a proactive measure to offset the impact low oil and gas prices had on the demand from its customers. During fiscal 2014, the Company recorded a pre-tax restructuring charge of $961,000 representing the incremental cost above the minimum legal indemnity for a targeted workforce reduction at its Belgian operation, following finalization of negotiations with the local labor unions. The minimum legal indemnity of $548,000 was recorded in the fourth quarter of fiscal 2013, upon announcement of the intended restructuring action. During fiscal 2014, the Company made cash payments of $857,000, resulting in an accrual balance at June 30, 2014 of $785,000. The Company made additional payments of $156,000 during fiscal 2015, resulting in a June 30, 2015 balance of $494,000 after a foreign exchange impact of $135,000. This remaining obligation relates to increased pension benefits agreed to as part of the restructuring and is expected to be paid out over the next several years. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Jun. 30, 2015 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | TWIN DISC, INCORPORATED AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS for the years ended June 30, 2015, 2014 and 2013 (in thousands) -----------Additions---------- Balance at Charged to Balance at Beginning Costs and Net End of Description of Period Expenses Acquired Deductions (1) Period 2015: Allowance for losses on accounts receivable $3,637 $ 304 $ - $1,758 $2,183 Deferred tax valuation allowance $5,593 $ 805 $ - $2,821 $3,577 2014: Allowance for losses on accounts receivable $2,884 $1,169 $ - $ 416 $3,637 Deferred tax valuation allowance $3,724 $2,140 $ - $271 $5,593 2013: Allowance for losses on accounts receivable $2,194 $1,385 $ - $ 695 $2,884 Deferred tax valuation allowance $3,811 $1,112 $ - $1,199 (2) $3,724 (1) Activity primarily represents amounts written-off during the year, along with other adjustments (primarily foreign currency translation adjustments). (2) Represents adjustments resulting from foreign tax audits. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Consolidation Principles | Consolidation Principles |
Translation of Foreign Currencies | Translation of Foreign Currencies |
Cash | Cash |
Receivables | Receivables |
Fair Value of Financial Instruments | Fair Value of Financial Instruments . |
Derivative Financial Instruments | Derivative Financial Instruments Periodically, the Company enters into forward exchange contracts to reduce the earnings and cash flow impact of non-functional currency denominated receivables and payables. These contracts are highly effective in hedging the cash flows attributable to changes in currency exchange rates. Gains and losses resulting from these contracts offset the foreign exchange gains or losses on the underlying assets and liabilities being hedged. The maturities of the forward exchange contracts generally coincide with the settlement dates of the related transactions. Gains and losses on these contracts are recorded in other income (expense) as the changes in the fair value of the contracts are recognized and generally offset the gains and losses on the hedged items in the same period. The primary currency to which the Company was exposed in fiscal 2015 and 2014 was the euro. At June 30, 2015 and 2014, the Company had no outstanding forward exchange contracts. |
Inventories | Inventories |
Property, Plant and Equipment and Depreciation | Property, Plant and Equipment and Depreciation |
Impairment of Long-lived Assets | Impairment of Long-lived Assets |
Revenue Recognition | Revenue Recognition |
Goodwill and Other Intangibles | Goodwill and Other Intangibles A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Company’s consolidated financial statements. Impairment of goodwill is measured according to a two step approach. In the first step, the fair value of a reporting unit, as defined, is compared to the carrying value of the reporting unit, including goodwill. The fair value is primarily determined using discounted cash flow analyses; however, other methods may be used to determine the fair value, including third party valuations. For purposes of the June 30, 2015 impairment analysis, the Company has utilized discounted cash flow analyses. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step, the implied value of the goodwill is estimated as the fair value of the reporting unit less the fair value of all other tangible and identifiable intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. Based upon the goodwill impairment review completed in conjunction with the preparation of the annual financial statements at the end of fiscal 2015, which incorporates management’s best estimates of economic and market conditions over the projected period and a weighted-average cost of capital that reflects current market conditions, it was determined that the fair value of goodwill for each of the reporting units exceeded the carrying value and therefore goodwill was not impaired. The fair value of the Company’s other intangible assets with indefinite lives, primarily tradenames, is estimated using the relief-from-royalty method, which requires assumptions related to projected revenues; assumed royalty rates that could be payable if the Company did not own the asset; and a discount rate. The Company completed the impairment testing of indefinite-lived intangibles as of June 30, 2015 and concluded there were no impairments. Changes in circumstances, existing at the measurement date or at other times in the future, or in the numerous estimates associated with management’s judgments, assumptions and estimates made in assessing the fair value of goodwill and other indefinite-lived intangibles, could result in an impairment charge in the future. The Company will continue to monitor all significant estimates and impairment indicators, and will perform interim impairment reviews as necessary. Any cost incurred to extend or renew the term of an indefinite lived intangible asset are expensed as incurred. |
Deferred Taxes | Deferred Taxes |
Management Estimates | Management Estimates |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs |
Out-of-Period Adjustments | Out-of-Period Adjustments · The Company had over accrued for certain payroll related items totaling $337,000 as of June 30, 2013, resulting in an increase to earnings from operations. · The Company had overstated its warranty accrual by $217,000 as of June 30, 2013, resulting in an increase to earnings from operations. · The Company determined that work-in-process inventory had been overstated by $117,000 as of June 30, 2013. As a result, additional cost of goods sold was recorded in the first quarter of fiscal 2014, resulting in a decrease to earnings from operations. · The Company’s deferred tax liabilities were understated by $285,000 as of June 30, 2013, resulting in additional tax expense. The Company does not believe these errors were material to its financial statements for any prior period, nor that the correction of these errors was material to the year ended June 30, 2014. During the third quarter of fiscal 2015, the Company recorded an out-of-period adjustment for the correction of an error related to tax expense. More specifically, the Company understated tax expense by $175,000 for the year ended June 30, 2014. The impact of the correction of this error was to decrease net earnings by $175,000 for the fiscal year ended June 30, 2015. The Company does not believe this error is material to its financial statements for any prior period, nor that the correction of these errors was material to the year ended June 30, 2015, or any of the quarters therein. During the fourth quarter of 2015, the Company recorded an out-of-period adjustment to correct an error related to an understatement of its accrued retirement benefits for certain of its international benefit plans that contain minimum guarantees of approximately $470,000. The impact of this correction was to increase comprehensive loss by $470,000. The Company does not believe this error is material to its financial statements for any prior period, nor that the correction of this error is material to the year ended June 30, 2015. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance intended to amend current presentation guidance by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (the Company’s fiscal 2017). The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In August 2014, the FASB issued updated guidance intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern. The amendments in this guidance are effective for fiscal years ending after December 15, 2016 (the Company’s fiscal 2017), and interim periods within fiscal years beginning after December 15, 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial disclosures. In June 2014, the FASB issued stock compensation guidance requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (the Company’s fiscal 2017). The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In May 2014, the FASB issued updated guidance on revenue from contracts with customers. This revenue recognition guidance supersedes existing U.S. GAAP guidance, including most industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies steps to apply in achieving this principle. This updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 (the Company’s fiscal 2019). The Company is currently evaluating the potential impact of this guidance on the Company’s financial statements and disclosures. In April 2014, the FASB issued updated guidance on the reporting for discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires expanded financial disclosures about discontinued operations. The amendments in this updated guidance are effective for the first quarter of the Company’s fiscal 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements and disclosures. In July 2013, the FASB issued guidance stating that, except in certain defined circumstances, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013 (the Company’s fiscal 2015). The adoption of this guidance did not have a material impact on the Company’s financial statements and disclosures. In March 2013, the FASB issued guidance on the parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. This guidance clarifies the circumstances under which the related cumulative translation adjustment should be released into net income. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013 (the Company’s fiscal 2015). The adoption of this guidance did not have a material impact on the Company’s financial statements. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
INVENTORIES [Abstract] | |
Major Classes of Inventories | The major classes of inventories at June 30 were as follows (in thousands): 2015 2014 Finished parts $ 56,982 $ 66,418 Work-in-process 8,292 12,419 Raw materials 14,967 18,742 $ 80,241 $ 97,579 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment at June 30 were as follows (in thousands): 2015 2014 Land $ 6,646 $ 5,310 Buildings 44,110 44,540 Machinery and equipment 133,432 141,665 184,188 191,515 Less: accumulated depreciation 127,761 131,248 $ 56,427 $ 60,267 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill, substantially all of which is allocated to the manufacturing segment, for the years ended June 30, 2015 and 2014 were as follows (in thousands): Gross Carrying Amount Accumulated Impairment Net Book Value Balance at June 30, 2013 $ 16,902 ($ 3,670) $ 13,232 Translation adjustment 231 - 231 Balance at June 30, 2014 17,133 ( 3,670) 13,463 Translation adjustment (674) - (674) Balance at June 30, 2015 $ 16,459 ($ 3,670) $ 12,789 |
Acquired Intangible Assets with Finite Lives | At June 30, the following acquired intangible assets have definite useful lives and are subject to amortization (in thousands): 2015 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Licensing agreements $ 3,015 ($ 2,505) $ - $ 510 Non-compete agreements 2,128 ( 2,045) ( 83) - Trade name 1,653 ( 194) - 1,459 Other 6,476 ( 5,278) ( 1,194) 4 $13,272 ($10,022) ($ 1,277) $ 1,973 2014 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Licensing agreements $ 3,015 ($ 2,445) $ - $ 570 Non-compete agreements 2,128 ( 2,045) ( 83) - Trade name 2,009 ( 100) - 1,909 Other 6,482 ( 5,193) ( 1,194) 95 $13,634 ($ 9,783) ($ 1,277) $ 2,574 |
Estimated Intangible Amortization Expense | Estimated intangible amortization expense for each of the next five fiscal years is as follows (in thousands): Fiscal Year 2016 $ 146 2017 141 2018 141 2019 141 2020 141 Thereafter 1,263 $1,973 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | Accrued liabilities at June 30 were as follows (in thousands): 2015 2014 Salaries and wages $ 8,568 $ 6,648 Retirement benefits 3,773 4,909 Warranty 3,310 3,917 Customer advances/deferred revenue 2,602 3,082 Restructuring 3,776 785 Distributor rebate 2,989 3,242 Other 7,736 8,682 $32,754 $31,265 |
WARRANTY (Tables)
WARRANTY (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
WARRANTY [Abstract] | |
Warranty Reserve | The following is a listing of the activity in the warranty reserve during the years ended June 30 (in thousands): 2015 2014 Reserve balance, July 1 $5,968 $5,701 Current period expense 1,989 2,214 Payments or credits to customers (2,332) (2,055) Translation adjustment (380) 108 Reserve balance, June 30 $5,245 $5,968 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
DEBT [Abstract] | |
Notes Payable Under Unsecured Line of Credit Agreements | The following is aggregate borrowing information at June 30 (in thousands): 2015 2014 Available credit lines $ 1,689 $ 3,372 Unused credit lines 1,689 3,372 Total notes payable $ - $ - Weighted-average interest rates on credit lines 5.8% 2.9% |
Long-term Debt | Long-term debt consisted of the following at June 30 (in thousands): 2015 2014 Revolving loan agreement $10,208 $11,200 10-year unsecured senior notes 3,571 7,143 Capital lease obligations - 29 Other long-term debt 23 32 Subtotal 13,802 18,404 Less: current maturities (3,571 (3,604 Total long-term debt $10,231 $14,800 |
Schedule of Maturities of Long-term Debt | The aggregate scheduled maturities of outstanding long-term debt obligations in subsequent years are as follows (in thousands): Fiscal Year 2016 $ 3,571 2017 - 2018 10,208 2019 - 2020 - Thereafter 23 $13,802 |
LEASE COMMITMENTS (Tables)
LEASE COMMITMENTS (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
LEASE COMMITMENTS [Abstract] | |
Future Minimum Rental Commitments Under Noncancellable Operating Leases | Approximate future minimum rental commitments under noncancellable operating leases are as follows (in thousands): Fiscal Year 2016 $ 2,955 2017 2,568 2018 1,910 2019 406 2020 232 Thereafter 11 $ 8,082 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss included in equity as of June 30, 2015 and 2014 are as follows (in thousands): 2015 2014 Translation adjustments $ 6,740 $ 20,779 Benefit plan adjustments, net of income taxes of $24,411 and $21,436, respectively (42,221 (36,722 Accumulated other comprehensive loss $(35,481 $(15,943 |
Reconciliation for the Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax, by Component | A reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component for the years ended June 30, 2014 and June 30, 2015 is as follows: Translation Adjustment Benefit Plan Adjustment Balance at June 30, 2013 $ 16,949 ($42,848) Other comprehensive loss before reclassifications 3,830 3,950 Amounts reclassified from accumulated other comprehensive income - 2,176 Net current period other comprehensive income 3,830 6,126 Balance at June 30, 2014 $ 20,779 ($36,722) Translation Adjustment Benefit Plan Adjustment Balance at June 30, 2014 $ 20,779 ($36,722) Other comprehensive loss before reclassifications (14,039) (7,518) Amounts reclassified from accumulated other comprehensive income - 2,019 Net current period other comprehensive income (14,039) (5,499) Balance at June 30, 2015 $ 6,740 ($42,221) |
Reconciliation for the Reclassifications Out of Accumulated Other Comprehensive Income (Loss), Net of Tax | A reconciliation for the reclassifications out of accumulated other comprehensive income (loss), net of tax for the year ended June 30, 2014 is as follows: Amount Reclassified Amortization of benefit plan items Actuarial losses ($3,496) Transition asset and prior service benefit (31 Total before tax benefit (3,527) Tax benefit 1,351 Total reclassification net of tax ($2,176) A reconciliation for the reclassifications out of accumulated other comprehensive income (loss), net of tax for the year ended June 30, 2015 is as follows: Amount Reclassified Amortization of benefit plan items Actuarial losses ($3,074) Transition asset and prior service benefit (36 Total before tax benefit (3,110) Tax benefit 1,091 Total reclassification net of tax ($2,019) |
BUSINESS SEGMENTS AND FOREIGN34
BUSINESS SEGMENTS AND FOREIGN OPERATIONS (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
BUSINESS SEGMENTS AND FOREIGN OPERATIONS [Abstract] | |
Net Sales by Product Group | Net sales by product group is summarized as follows (in thousands): 2015 2014 2013 Industrial $ 42,078 $ 41,188 $ 48,110 Land based transmissions 76,450 67,055 68,535 Marine and propulsion systems 141,137 149,432 162,823 Other 6,125 6,234 5,814 Total $265,790 $263,909 $285,282 |
Segment Information | Information about the Company's segments is summarized as follows (in thousands): Manufacturing Distribution Total 2015 Net sales $240,085 $100,708 $340,793 Intra-segment sales 19,901 6,961 26,862 Inter-segment sales 44,864 3,277 48,141 Interest income 171 33 204 Interest expense 946 - 946 Income taxes 7,312 1,459 8,771 Depreciation and amortization 8,106 482 8,588 Net earnings attributable to Twin Disc 14,409 5,013 19,422 Assets 254,749 53,759 308,508 Expenditures for segment assets 7,335 1,271 8,606 2014 Net sales $227,590 $121,389 $348,979 Intra-segment sales 18,416 9,926 28,342 Inter-segment sales 53,960 2,768 56,728 Interest income 311 22 333 Interest expense 2,565 45 2,610 Income taxes 6,233 1,432 7,665 Depreciation and amortization 8,566 549 9,115 Net earnings attributable to Twin Disc 7,029 6,285 13,314 Assets 254,652 57,233 311,885 Expenditures for segment assets 6,429 315 6,744 2013 Net sales $245,592 $130,360 $375,952 Intra-segment sales 16,140 15,127 31,267 Inter-segment sales 55,746 3,657 59,403 Interest income 479 19 498 Interest expense 3,248 62 3,310 Income taxes 5,112 1,630 6,742 Depreciation and amortization 8,817 497 9,314 Net earnings attributable to Twin Disc 10,141 5,840 15,981 Assets 258,617 56,965 315,582 Expenditures for segment assets 5,705 349 6,054 |
Reconciliation of Reportable Segment Net Sales to Consolidated Totals | The following is a reconciliation of reportable segment net sales, net earnings and assets to the Company’s consolidated totals (in thousands): 2015 2014 2013 Net sales Total net sales from reportable segments $340,793 $348,979 $375,952 Elimination of inter-company sales (75,003 (85,070 (90,670 Total consolidated net sales $265,790 $263,909 $285,282 |
Reconciliation of Reportable Segment Net Earnings Attributable to Twin Disc to Consolidated Totals | Net earnings attributable to Twin Disc: Total net earnings from reportable segments $ 19,422 $ 13,314 $ 15,981 Other corporate expenses (8,249) (9,670) (12,099) Total consolidated net earnings attributable to Twin Disc $ 11,173 $ 3,644 $ 3,882 |
Reconciliation of Reportable Segment Assets to Consolidated Totals | Assets Total assets for reportable segments $308,508 $311,885 Corporate assets and eliminations (58,646 (44,900 Total consolidated assets $249,862 $266,985 |
Reconciliation of Reportable Segments Other Significant Reconciling items to Consolidated Totals | Other significant items (in thousands): Segment Consolidated Totals Adjustments Totals 2015 Interest income $ 204 $ (80) $ 124 Interest expense 946 (340) 606 Income taxes 8,771 (4,256) 4,515 Depreciation and amortization 8,588 1,573 10,161 Expenditures for segment assets 8,606 443 9,049 2014 Interest income $ 333 $ (212) $ 121 Interest expense 2,610 (1,674) 936 Income taxes 7,665 (3,439) 4,226 Depreciation and amortization 9,115 1,542 10,657 Expenditures for segment assets 6,744 501 7,245 2013 Interest income $ 498 $ (396) $ 102 Interest expense 3,310 (1,875) 1,435 Income taxes 6,742 (1,756) 4,986 Depreciation and amortization 9,314 1,524 10,838 Expenditures for segment assets 6,054 528 6,582 |
Geographic Information | Geographic information about the Company is summarized as follows (in thousands): 2015 2014 2013 Net sales United States $131,198 $108,380 $127,844 China 19,712 33,830 29,119 Italy 14,457 17,396 19,140 Singapore 13,856 12,703 14,214 Canada 13,661 9,277 10,846 Other countries 72,906 82,323 84,119 Total $265,790 $263,909 $285,282 Net sales by geographic region are based on product shipment destination. 2015 2014 Long-lived assets United States $ 40,822 $ 46,821 Switzerland 7,686 8,196 Belgium 6,709 7,450 Italy 2,376 3,531 Other countries 2,586 2,074 Total $ 60,179 $ 68,072 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION [Abstract] | |
Shares Available for Future Options | Shares available for future options as of June 30 were as follows: 2015 2014 2010 Long-Term Incentive Compensation Plan 447,730 466,589 2010 Stock Incentive Plan for Non-employee Directors 171,986 193,858 |
Stock Option Transactions | Stock option transactions under the plans during 2015 were as follows: Weighted Weighted Average Aggregate Average Remaining Contractual Intrinsic 2015 Price Life (years) Value Non-qualified stock options: Options outstanding at beginning of year 21,600 $ 14.88 Granted - - Canceled/expired - - Exercised (2,400) 6.23 Options outstanding at June 30 19,200 $ 15.96 3.31 $81,492 Options price range ($10.01 - $27.55) Number of shares 19,200 Weighted average price $ 15.96 Weighted average remaining life 3.31 years |
PENSION AND OTHER POSTRETIREM36
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS [Abstract] | |
Net Funded Status of Pension and Postretirement Plans | The following table sets forth the Company's defined benefit pension plans’ and other postretirement benefit plans’ funded status and the amounts recognized in the Company's balance sheets and statement of operations and comprehensive income as of June 30 (in thousands): Other Pension Postretirement Benefits Benefits 2015 2014 2015 2014 Change in benefit obligation: Benefit obligation, beginning of year $123,832 $125,846 $16,584 $17,739 Service cost 465 536 30 37 Interest cost 4,862 5,425 579 659 Actuarial loss (gain) 8,384 1,221 882 (60) Contributions by plan participants 154 174 547 581 Settlements - (121) - - Benefits paid (9,964 (9,249 (2,250 (2,372 Benefit obligation, end of year $127,733 $123,832 $ 16,372 $ 16,584 Change in plan assets: Fair value of assets, beginning of year $102,495 $ 94,723 $ - $ - Actual return on plan assets 5,828 14,031 - - Employer contribution 6,168 2,816 1,703 1,791 Contributions by plan participants 154 174 547 581 Benefits paid (9,964 (9,249 (2,250 (2,372 Fair value of assets, end of year $104,681 $102,495 $ - $ - Funded status $(23,052 $(21,337 $ (16,372 $(16,584 |
Amounts Recognized in Balance Sheet | Amounts recognized in the balance sheet consist of: Other assets - noncurrent $ 638 $ 680 $ - $ - Accrued liabilities - current (764) (1,189) (2,040) (2,418) Accrued retirement benefits - noncurrent (22,926) (20,828) (14,332 (14,166 Net amount recognized $(23,052) $(21,337) $(16,372 $(16,584 |
Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive loss consist of (net of tax): Net transition obligation $ 296 $ 340 $ - $ - Actuarial net loss 38,613 33,220 3,312 3,163 Net amount recognized $ 38,909 $ 33,560 $ 3,312 $ 3,163 |
Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized Over Next Fiscal Year | The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during the next fiscal year for the qualified domestic defined benefit and other postretirement benefit plans are as follows (in thousands): Other Pension Postretirement Benefits Benefits Net transition obligation $ 35 $ - Actuarial net loss 3,646 728 Net amount to be recognized $3,681 $ 728 |
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with an accumulated benefit obligation in excess of plan assets (in thousands) : June 30 2015 2014 Projected and accumulated benefit obligation $126,242 $122,045 Fair value of plan assets 102,552 100,028 |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost (in thousands): Pension Benefits 2015 2014 2013 Service cost $ 465 $ 536 $ 367 Interest cost 4,862 5,425 5,399 Expected return on plan assets (7,272) (6,591) (6,382) Settlement loss - - 5 Amortization of transition obligation 36 32 35 Amortization of actuarial net loss 2,436 2,894 3,357 Net periodic benefit cost $ 527 $ 2,296 $ 2,781 Other Postretirement Benefits 2015 2014 2013 Service cost $ 30 $ 37 $ 34 Interest cost 579 659 766 Amortization of actuarial net loss 638 602 792 Net periodic benefit cost $1,247 $1,298 $1,592 |
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for Fiscal 2015 (Pre-tax, in thousands): Pension Other Postretirement Benefits Net loss $ 9,406 $ 882 Amortization of transition asset (36) - Amortization of net (loss) gain (2,436 (638) Total recognized in other comprehensive income 6,934 244 Net periodic benefit cost 527 1,247 Total recognized in net periodic benefit cost and other comprehensive income $ 7,461 $ 1,491 |
Schedule of Assumptions | Assumptions (as of June 30, 2015 and 2014) Other Pension Benefits Postretirement Benefits Weighted average assumptions used to determine benefit obligations at June 30 2015 2014 2015 2014 Discount rate 4.05% 4.06% 3.93% 3.76% Expected return on plan assets 7.11% 7.39% Weighted average assumptions used to determine net periodic benefit cost for years ended June 30 Other Pension Benefits Postretirement Benefits 2015 2014 2013 2015 2014 2013 Discount rate 4.06% 4.35% 4.20% 3.76% 3.99% 4.20% Expected return on plan assets 7.39% 7.41% 7.50% |
Pension Plan Weighted-Average Asset Allocations | The Company’s pension plan weighted-average asset allocations at June 30, 2015 and 2014 by asset category are as follows: Target June 30 Asset Category Allocation 2015 2014 Equity securities 65% 62% 65% Debt securities 25% 25% 23% Real estate 10% 13% 12% 100% 100% 100% Due to market conditions and other factors, actual asset allocation may vary from the target allocation outlined above. The U.S. pension plans held 98,211 shares of Company stock with a fair market value of $1,830,653 (1.8 percent of total plan assets) at June 30, 2015 and 98,211 shares with a fair market value of $3,245,874 (3.2 percent of total plan assets) at June 30, 2014. The plans have a long-term return assumption of 7.25%. This rate was derived based upon historical experience and forward-looking return expectations for major asset class categories. Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are classified into the following hierarchy: Level I Unadjusted quoted prices in active markets for identical instruments Level II Unadjusted quoted prices in active markets for similar instruments, or Unadjusted quoted prices for identical or similar instruments in markets that are not active, or Other inputs that are observable in the market or can be corroborated by observable market data Level III Use of one or more significant unobservable inputs The following table presents plan assets using the fair value hierarchy as of June 30, 2015 (in thousands): Total Level I Level II Level III Cash and cash equivalents $ 1,034 $ 1,034 $ - $ - Equity securities: U.S. (a) 28,035 28,035 - - International (b) 14,819 10,649 4,170 - Fixed income (c) 22,615 8,993 13,622 - Annuity contracts (d) 9,508 - - 9,508 Real estate (e) 12,770 - 12,770 - Other (f) 15,900 - - 15,900 Total $104,681 $48,711 $30,562 $25,408 The following table presents plan assets using the fair value hierarchy as of June 30, 2014 (in thousands): Total Level I Level II Level III Cash and cash equivalents $ 965 $ 965 $ - $ - Equity securities: U.S. (a) 30,727 30,727 - - International (b) 16,676 10,785 5,891 - Fixed income (c) 21,892 7,603 14,289 - Annuity contracts (d) 6,340 - - 6,340 Real estate (e) 11,206 - 11,206 - Other (f) 14,689 - - 14,689 Total $102,495 $50,080 $31,386 $21,029 (a) U.S. equity securities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks. These securities are valued at the closing price reported on the active market on which the individual securities are traded. (b) International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country, capitalization and equity style (i.e., growth and value strategies). Certain assets are invested in international commingled equity funds. The vast majority of the investments are made in companies in developed markets with a smaller percentage in emerging markets. Securities traded on exchanges are valued at the closing price reported on the active market on which the individual securities are traded. International commingled funds are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. (c) Fixed income consists of corporate bonds with investment grade BBB or better from diversified industries, as well as government debt securities. Corporate and government debt investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and inactive markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. (d) Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows. (e) Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell its holding in the funds. (f) Other consists of hedged equity mutual funds. These investments are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. |
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | The following tables present a reconciliation of the fair value measurements using significant unobservable inputs (Level III) as of June 30, 2015 and 2014 (in thousands): Annuity Contracts Other Balance – June 30, 2014 $ 6,340 $14,689 Actual return on plan assets: Relating to assets still held at reporting date 2,978 1,211 Relating to assets sold during the period - - Purchases, sales and settlements, net 190 - Transfers in and/or out of Level III - - Balance – June 30, 2015 $ 9,508 $ 15,900 Annuity Contracts Real Estate Other Balance – June 30, 2013 $ 5,819 $ 3,012 $13,153 Actual return on plan assets: Relating to assets still held at reporting date 433 - 1,536 Relating to assets sold during the period - 257 - Purchases, sales and settlements, net 88 (3,269) - Transfers in and/or out of Level III - - - Balance – June 30, 2014 $ 6,340 $ - $ 14,689 |
Defined Benefit Plan Estimated Future Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): Other Postretirement Benefits Pension Gross Part D Net Benefit Benefits Benefits Reimbursement Payments 2016 $10,446 $2,379 $ - $2,379 2017 9,927 2,349 - 2,349 2018 10,913 1,844 - 1,844 2019 9,756 1,734 - 1,734 2020 9,231 1,584 - 1,584 Years 2021- 2025 40,355 6,157 - 6,157 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
INCOME TAXES [Abstract] | |
Earnings Before Income Taxes and Noncontrolling Interest | United States and foreign earnings before income taxes and minority interest were as follows (in thousands): 2015 2014 2013 United States $ 5,614 $1,107 $3,935 Foreign 10,286 6,989 5,302 $15,900 $8,096 $9,237 |
Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes is comprised of the following (in thousands): 2015 2014 2013 Currently payable: Federal $1,607 $ 651 $1,745 State 518 104 (234) Foreign 2,832 2,837 2,788 4,957 3,592 4,299 Deferred: Federal 408 1,309 1,122 State 5 (95) 439 Foreign ( 855) (580) (874) (442) 634 687 $4,515 $4,226 $4,986 |
Components of Net Deferred Tax Assets | The components of the net deferred tax asset as of June 30 are summarized in the table below (in thousands). 2015 2014 Deferred tax assets: Retirement plans and employee benefits $15,157 $13,692 Foreign tax credit carryforwards - 706 Federal tax credits - 160 State net operating loss and other state credit carryforwards 369 348 Inventory 1,789 1,672 Reserves 2,587 2,578 Foreign NOL carryforwards 3,539 6,090 Accruals 584 681 Other assets 568 (54) 24,593 25,873 Deferred tax liabilities: Property, plant and equipment 7,221 8,650 Intangibles 4,778 5,528 Other liabilities 451 711 12,450 14,889 Valuation Allowance (3,577) (5,593) Total net deferred tax assets $ 8,566 $ 5,391 |
Reconciliation of U.S. Federal Income Taxes to Actual Income Taxes | Following is a reconciliation of the applicable U.S. federal income taxes to the actual income taxes reflected in the statements of operations (in thousands): 2015 2014 2013 U.S. federal income tax at 35% $5,491 $2,754 $3,104 Increases (reductions) in tax resulting from: Foreign tax items 362 (291) 88 State taxes 32 228 296 Valuation allowance (1,121) 1,551 1,216 Change in prior year estimate 157 139 309 Research and development tax credits (337) (267) (526) Section 199 deduction (96) (109) (84) Unrecognized tax benefits 5 183 539 Other, net 22 38 44 $4,515 $4,226 $4,986 |
Reconciliation of Unrecognized Tax Benefits | Below is a reconciliation of beginning and ending amount of unrecognized tax benefits (in thousands): June 30, 2015 June 30, 2014 Unrecognized tax benefits, beginning of year $ 1,603 $ 1,556 Additions based on tax positions related to the prior year - 7 Additions based on tax positions related to the current year 184 173 Reductions based on tax positions related to the prior year (3) - Subtractions due to statutes closing (60) (1) Settlements with Taxing Authorities (914) (132) Unrecognized tax benefits, end of year $ 810 $1,603 |
SIGNIFICANT ACCOUNTING POLICI38
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Sep. 27, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Translation of Foreign Currencies [Abstract] | |||||
Foreign currency transaction gains (losses) | $ 491,000 | $ 293,000 | $ 642,000 | ||
Receivables [Abstract] | |||||
Allowance for doubtful accounts | $ 2,183,000 | $ 2,183,000 | 3,637,000 | ||
Debt Instrument [Line Items] | |||||
Interest rate on senior notes (in hundredths) | 6.05% | 6.05% | |||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | $ 437,000 | ||||
Impact of errors correction on earnings net of tax attributable to parent | $ 69,000 | ||||
Increase (decrease) in impact of errors correction on net earnings | $ (175,000) | ||||
Increase in impact of errors on comprehensive loss | $ (470,000) | ||||
Building and Building Improvements [Member] | Minimum [Member] | |||||
Property, Plant and Equipment and Depreciation [Abstract] | |||||
Life assigned to building, improvements, machinery and equipment | 10 years | ||||
Building and Building Improvements [Member] | Maximum [Member] | |||||
Property, Plant and Equipment and Depreciation [Abstract] | |||||
Life assigned to building, improvements, machinery and equipment | 40 years | ||||
Machinery and Equipment [Member] | Minimum [Member] | |||||
Property, Plant and Equipment and Depreciation [Abstract] | |||||
Life assigned to building, improvements, machinery and equipment | 5 years | ||||
Machinery and Equipment [Member] | Maximum [Member] | |||||
Property, Plant and Equipment and Depreciation [Abstract] | |||||
Life assigned to building, improvements, machinery and equipment | 15 years | ||||
Overstatement of Payroll Accrual [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | 337,000 | ||||
Overstatement of Warranty Accrual [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | 217,000 | ||||
Overstatement of Work in Progress Inventory [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | (117,000) | ||||
Understatement of Deferred Tax Liabilities [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | $ 285,000 | ||||
Understatement of Tax Expenses [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | $ 175,000 | ||||
Understatement of Accrued Retirement Benefits [Member] | |||||
Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Abstract] | |||||
Impact of errors correction on earnings | $ 470,000 | ||||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate on senior notes (in hundredths) | 6.05% | 6.05% | 6.05% | ||
Fair value of senior notes | $ 3,726,000 | $ 3,726,000 | $ 7,605,000 | ||
Maturity date of senior notes | Apr. 10, 2016 | ||||
Reference rate used to estimate fair value of financial instruments (in hundredths) | 1.01% | 0.88% | |||
Basis spread on variable rate (in hundredths) | 1.00% | 1.00% | |||
Calculated rate used to estimate fair value of financial instruments (in hundredths) | 2.01% | 1.88% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2015 | Jun. 30, 2014 |
Major classes of inventories [Abstract] | ||
Finished parts | $ 56,982,000 | $ 66,418,000 |
Work-in-process | 8,292,000 | 12,419,000 |
Raw materials | 14,967,000 | 18,742,000 |
Total Inventories | $ 80,241,000 | $ 97,579,000 |
Percentage of LIFO inventory (in hundredths) | 28.00% | 28.00% |
Current cost of the LIFO inventories exceeded the LIFO cost | $ 26,816,000 | $ 27,180,000 |
Reserves for inventory obsolescence | $ 8,167,000 | $ 7,591,000 |
PROPERTY, PLANT AND EQUIPMENT40
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Property, plant and equipment [Abstract] | |||
Land | $ 6,646,000 | $ 5,310,000 | |
Buildings | 44,110,000 | 44,540,000 | |
Machinery and equipment | 133,432,000 | 141,665,000 | |
Property, plant and equipment, gross | 184,188,000 | 191,515,000 | |
Less: accumulated depreciation | 127,761,000 | 131,248,000 | |
Property, plant and equipment, net | 56,427,000 | 60,267,000 | |
Depreciation expense | $ 9,922,000 | $ 10,180,000 | $ 10,120,000 |
GOODWILL AND OTHER INTANGIBLE41
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Intangible assets with finite lives [Abstract] | |||
Gross Carrying Amount | $ 13,272,000 | $ 13,634,000 | |
Accumulated amortization | (10,022,000) | (9,783,000) | |
Accumulated Impairment | (1,277,000) | (1,277,000) | |
Total | 1,973,000 | 2,574,000 | |
Goodwill Net Book Value [Roll Forward] | |||
Gross Carrying Amount | 16,459,000 | 17,133,000 | $ 16,902,000 |
Accumulated Impairment | (3,670,000) | (3,670,000) | (3,670,000) |
Translation adjustment | (674,000) | 231,000 | |
Net Book Value | $ 12,789,000 | 13,463,000 | 13,232,000 |
Interest rate on senior notes (in hundredths) | 6.05% | ||
Impairment review of Long lived assets, resulting in an impairment charge | $ 0 | 0 | 1,405,000 |
Impairment review of Long lived assets, resulting in an impairment charge of fixed assets | (128,000) | ||
Weighted average remaining useful life | 16 years | ||
Intangible amortization expense | $ 239,000 | 477,000 | $ 718,000 |
Estimated intangible amortization expense [Abstract] | |||
2,016 | 146,000 | ||
2,017 | 141,000 | ||
2,018 | 141,000 | ||
2,019 | 141,000 | ||
2,020 | 141,000 | ||
Thereafter | 1,263,000 | ||
Total | 1,973,000 | 2,574,000 | |
Carrying amount of indefinite lived intangible assets, gross | 213,000 | 223,000 | |
Licensing agreements [Member] | |||
Intangible assets with finite lives [Abstract] | |||
Gross Carrying Amount | 3,015,000 | 3,015,000 | |
Accumulated amortization | (2,505,000) | (2,445,000) | |
Accumulated Impairment | 0 | 0 | |
Total | 510,000 | 570,000 | |
Estimated intangible amortization expense [Abstract] | |||
Total | 510,000 | 570,000 | |
Non-compete agreements [Member] | |||
Intangible assets with finite lives [Abstract] | |||
Gross Carrying Amount | 2,128,000 | 2,128,000 | |
Accumulated amortization | (2,045,000) | (2,045,000) | |
Accumulated Impairment | (83,000) | (83,000) | |
Total | 0 | 0 | |
Estimated intangible amortization expense [Abstract] | |||
Total | 0 | 0 | |
Trade name [Member] | |||
Intangible assets with finite lives [Abstract] | |||
Gross Carrying Amount | 1,653,000 | 2,009,000 | |
Accumulated amortization | (194,000) | (100,000) | |
Accumulated Impairment | 0 | 0 | |
Total | 1,459,000 | 1,909,000 | |
Estimated intangible amortization expense [Abstract] | |||
Total | 1,459,000 | 1,909,000 | |
Other [Member] | |||
Intangible assets with finite lives [Abstract] | |||
Gross Carrying Amount | 6,476,000 | 6,482,000 | |
Accumulated amortization | (5,278,000) | (5,193,000) | |
Accumulated Impairment | (1,194,000) | (1,194,000) | |
Total | 4,000 | 95,000 | |
Estimated intangible amortization expense [Abstract] | |||
Total | $ 4,000 | $ 95,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Jun. 30, 2015 | Jun. 30, 2014 |
Accrued liabilities [Abstract] | ||
Salaries and wages | $ 8,568,000 | $ 6,648,000 |
Retirement benefits | 3,773,000 | 4,909,000 |
Warranty | 3,310,000 | 3,917,000 |
Customer advances/deferred revenue | 2,602,000 | 3,082,000 |
Restructuring | 3,776,000 | 785,000 |
Distributor rebate | 2,989,000 | 3,242,000 |
Other | 7,736,000 | 8,682,000 |
Total accrued liabilities | $ 32,754,000 | $ 31,265,000 |
WARRANTY (Details)
WARRANTY (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
WARRANTY [Abstract] | ||
Minimum warranty period | 12 months | |
Maximum warranty period | 24 months | |
Activity in warranty reserve [Abstract] | ||
Reserve balance, beginning of period | $ 5,968,000 | $ 5,701,000 |
Current period expense | 1,989,000 | 2,214,000 |
Payments or credits to customers | (2,332,000) | (2,055,000) |
Translation adjustment | (380,000) | 108,000 |
Reserve balance, end of period | 5,245,000 | 5,968,000 |
Current portion of warranty accrual | 3,310,000 | 3,917,000 |
Long-term portion of warranty accrual | $ 1,935,000 | $ 2,051,000 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Line of Credit Facility [Line Items] | ||
Total notes payable | $ 0 | $ 0 |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Available credit lines | 1,689 | 3,372 |
Unused credit lines | $ 1,689 | $ 3,372 |
Weighted-average interest rates on credit lines (in hundredths) | 5.80% | 2.90% |
DEBT, (Long-term) (Details)
DEBT, (Long-term) (Details) | 12 Months Ended | ||
Jun. 30, 2015USD ($)Quarter | Jun. 30, 2014USD ($) | Jun. 30, 2010 | |
Debt Instrument [Line Items] | |||
Long-term debt, total | $ 13,802,000 | $ 18,404,000 | |
Less: current maturities | (3,571,000) | (3,604,000) | |
Total long-term debt | $ 10,231,000 | 14,800,000 | |
Interest rate on senior notes (in hundredths) | 6.05% | ||
Maturities of long-term debt [Abstract] | |||
2,016 | $ 3,571,000 | ||
2,017 | 0 | ||
2,018 | 10,208,000 | ||
2,019 | 0 | ||
2,020 | 0 | ||
Thereafter | 23,000 | ||
Long-term debt, total | 13,802,000 | 18,404,000 | |
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,689,000 | 3,372,000 | |
Revolving Loan Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, total | 10,208,000 | 11,200,000 | |
Maturities of long-term debt [Abstract] | |||
Long-term debt, total | $ 10,208,000 | $ 11,200,000 | |
Revolving Loan Agreement [Member] | Wells Fargo Bank, National Association [Member] | |||
Debt Instrument [Line Items] | |||
Expiration date | May 31, 2018 | ||
Basis spread on variable rate (in hundredths) | 1.00% | ||
Effective interest rate (in hundredths) | 1.20% | 1.16% | |
Number of recent quarters considered for minimum EBITDA | Quarter | 4 | ||
Minimum adjusted Equity requirement | $ 124,741,000 | ||
Outstanding balance | 10,208,000 | $ 11,200,000 | |
Maximum borrowing capacity | 60,000,000 | ||
Additional borrowing capacity | $ 10,000,000 | ||
Commitment fee percentage of unused capacity (in hundredths) | 0.15% | ||
EBITDA Ratio | 3 | ||
10-year Unsecured Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, total | $ 3,571,000 | 7,143,000 | |
Maturity period of unsecured senior notes | 10 years | ||
Maturities of long-term debt [Abstract] | |||
Long-term debt, total | $ 3,571,000 | 7,143,000 | |
Capital Lease Obligations [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, total | 0 | 29,000 | |
Maturities of long-term debt [Abstract] | |||
Long-term debt, total | 0 | 29,000 | |
Other Long-Term Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, total | 23,000 | 32,000 | |
Maturities of long-term debt [Abstract] | |||
Long-term debt, total | 23,000 | 32,000 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Less: current maturities | $ (3,571,429) | (3,571,429) | |
Total long-term debt | $ 3,571,429 | ||
Basis spread on variable rate (in hundredths) | 1.00% | 1.00% | |
Number of recent quarters considered for minimum EBITDA | Quarter | 4 | ||
Effective date of Note Agreement | Apr. 10, 2006 | ||
Interest rate on senior notes (in hundredths) | 6.05% | 6.05% | |
Maturity date of note agreement | Apr. 10, 2016 | ||
Periodic payment of interest and principal | $ 3,571,429 | ||
Date of first required payment | Apr. 10, 2010 | ||
Minimum amount attributable to covenants not covered | 1,000,000 | ||
Minimum EBITDA | $ 11,000,000 | ||
EBITDA Ratio | 3 | ||
Revised EBITDA | $ 3,300,000 | ||
Maximum potential sale and purchase value | $ 50,000,000 | ||
Issuance fees (in hundredths) | 0.10% | ||
Aggregate outstanding principal not to exceed | $ 35,000,000 |
LEASE COMMITMENTS (Details)
LEASE COMMITMENTS (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Future minimum rental commitments under noncancellable operating leases [Abstract] | |||
2,016 | $ 2,955,000 | ||
2,017 | 2,568,000 | ||
2,018 | 1,910,000 | ||
2,019 | 406,000 | ||
2,020 | 232,000 | ||
Thereafter | 11,000 | ||
Total | 8,082,000 | ||
Rent expense for operating leases, total | $ 3,550,000 | $ 3,920,000 | $ 3,863,000 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) | 12 Months Ended | ||||||||
Jun. 30, 2015USD ($)RightMultiple$ / sharesshares | Jun. 30, 2014USD ($)$ / sharesshares | Jun. 30, 2013USD ($)$ / sharesshares | Jun. 30, 2012USD ($)$ / sharesshares | Jun. 30, 2009USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)shares | Jul. 27, 2012shares | Feb. 01, 2008shares | |
SHAREHOLDERS' EQUITY [Abstract] | |||||||||
Total common stock outstanding (in shares) | shares | 11,212,952 | 11,267,347 | 11,261,873 | ||||||
Treasury stock, shares (in shares) | shares | 1,886,516 | 1,832,121 | 1,837,595 | ||||||
Treasury shares issued (in shares) | shares | 49,314 | 51,921 | 123,997 | ||||||
Forfeiture of restricted share (in shares) | shares | 46,240 | 3,000 | |||||||
Number of shares authorized to be repurchased at market value (in shares) | shares | 375,000 | 500,000 | |||||||
Stockholders Equity [Line Items] | |||||||||
Cash dividend (in dollars per share) | $ / shares | $ 0.36 | $ 0.36 | $ 0.36 | ||||||
Class of Stock [Line Items] | |||||||||
Number of business days following public announcement to exercise right | 10 days | ||||||||
Beneficial ownership of entity's common stock, minimum (in hundredths) | 20.00% | ||||||||
Beneficial ownership of entity's common stock for existing holder, minimum (in hundredths) | 30.00% | ||||||||
Beneficial ownership of entity's common stock as a result of transfer, minimum (in hundredths) | 20.00% | ||||||||
Number of business days following commencement of tender offer | 10 days | ||||||||
Beneficial ownership of entity's common stock, second condition, minimum (in hundredths) | 20.00% | ||||||||
Beneficial ownership of entity's common stock for existing holder, second condition, minimum (in hundredths) | 30.00% | ||||||||
Multiple of exercise price | Multiple | 2 | ||||||||
Maturity date of rights | Jun. 30, 2018 | ||||||||
Redemption price of a right (in dollars per share) | $ / shares | 0.01 | ||||||||
Preferred stock, shares authorized (in shares) | shares | 200,000 | 200,000 | |||||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | |||||||
Preferred stock designated for shareholder rights plan (in shares) | shares | 150,000 | ||||||||
Accumulated other comprehensive loss included in equity [Abstract] | |||||||||
Translation adjustments | $ 6,740,000 | $ 20,779,000 | |||||||
Benefit plan adjustments, net of income taxes of $24,411 and $21,436 respectively | (42,221,000) | (36,722,000) | |||||||
Accumulated other comprehensive loss | $ (15,943,000) | $ (15,943,000) | (35,481,000) | (15,943,000) | |||||
Tax effect on benefit plan adjustments | 24,411,000 | 21,436,000 | |||||||
Reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component [Roll Forward] | |||||||||
Balance, beginning of period | (15,943,000) | ||||||||
Balance, end of period | (35,481,000) | (15,943,000) | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Tax benefit | 4,515,000 | 4,226,000 | $ 4,986,000 | ||||||
Total reclassification net of tax | 11,385,000 | 3,870,000 | 4,251,000 | ||||||
Translation Adjustment [Member] | |||||||||
Accumulated other comprehensive loss included in equity [Abstract] | |||||||||
Accumulated other comprehensive loss | 20,779,000 | 16,949,000 | 16,949,000 | 6,740,000 | 20,779,000 | ||||
Reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component [Roll Forward] | |||||||||
Balance, beginning of period | 20,779,000 | 16,949,000 | |||||||
Other comprehensive loss before reclassifications | (14,039,000) | 3,830,000 | |||||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |||||||
Net current period other comprehensive income | (14,039,000) | 3,830,000 | |||||||
Balance, end of period | 6,740,000 | 20,779,000 | 16,949,000 | ||||||
Benefit Plan Adjustment [Member] | |||||||||
Accumulated other comprehensive loss included in equity [Abstract] | |||||||||
Accumulated other comprehensive loss | (36,722,000) | (36,722,000) | (42,848,000) | $ (42,221,000) | $ (36,722,000) | ||||
Reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component [Roll Forward] | |||||||||
Balance, beginning of period | (36,722,000) | (42,848,000) | |||||||
Other comprehensive loss before reclassifications | (7,518,000) | 3,950,000 | |||||||
Amounts reclassified from accumulated other comprehensive income | 2,019,000 | 2,176,000 | |||||||
Net current period other comprehensive income | (5,499,000) | 6,126,000 | |||||||
Balance, end of period | (42,221,000) | (36,722,000) | $ (42,848,000) | ||||||
Benefit Plan Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Actuarial losses | (3,074,000) | (3,496,000) | |||||||
Transition asset and prior service benefit | (36,000) | (31,000) | |||||||
Total before tax benefit | (3,110,000) | (3,527,000) | |||||||
Tax benefit | 1,091,000 | 1,351,000 | |||||||
Total reclassification net of tax | $ (2,019,000) | $ (2,176,000) | |||||||
Common Stock [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Common stock, average price (in dollars per share) | $ / shares | $ 16.59 | $ 19.40 | $ 7.25 | ||||||
Cost of shares purchased | $ 3,068,652 | $ 2,425,000 | $ 1,812,500 | ||||||
Number of shares repurchased (in shares) | shares | 185,000 | 125,000 | 250,000 | ||||||
Series A Junior Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of preferred stock purchase rights per outstanding share of common stock | Right | 1 | ||||||||
Number of shares exercised per right (in shares) | shares | 0.0025 | ||||||||
Exercise price of rights (in dollars per unit) | $ / shares | $ 125 |
BUSINESS SEGMENTS AND FOREIGN48
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Net Sales by Product Group (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net Sales by Product Group [Abstract] | |||
Net sales | $ 265,790 | $ 263,909 | $ 285,282 |
Industrial [Member] | |||
Net Sales by Product Group [Abstract] | |||
Net sales | 42,078 | 41,188 | 48,110 |
Land Based Transmissions [Member] | |||
Net Sales by Product Group [Abstract] | |||
Net sales | 76,450 | 67,055 | 68,535 |
Marine and Propulsion Systems [Member] | |||
Net Sales by Product Group [Abstract] | |||
Net sales | 141,137 | 149,432 | 162,823 |
Other [Member] | |||
Net Sales by Product Group [Abstract] | |||
Net sales | $ 6,125 | $ 6,234 | $ 5,814 |
BUSINESS SEGMENTS AND FOREIGN49
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Segment Information (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015USD ($)Segment | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | |
BUSINESS SEGMENTS AND FOREIGN OPERATIONS [Abstract] | |||
Number of reportable segments | Segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 265,790 | $ 263,909 | $ 285,282 |
Interest income | 124 | 121 | 102 |
Interest expense | 606 | 936 | 1,435 |
Income taxes | 4,515 | 4,226 | 4,986 |
Depreciation and amortization | 10,161 | 10,657 | 10,838 |
Net earnings attributable to Twin Disc | 11,173 | 3,644 | 3,882 |
Assets | 249,862 | 266,985 | |
Expenditures for segment assets | 9,049 | 7,245 | 6,582 |
Reportable Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 340,793 | 348,979 | 375,952 |
Interest income | 204 | 333 | 498 |
Interest expense | 946 | 2,610 | 3,310 |
Income taxes | 8,771 | 7,665 | 6,742 |
Depreciation and amortization | 8,588 | 9,115 | 9,314 |
Net earnings attributable to Twin Disc | 19,422 | 13,314 | 15,981 |
Assets | 308,508 | 311,885 | 315,582 |
Expenditures for segment assets | 8,606 | 6,744 | 6,054 |
Reportable Segment [Member] | Manufacturing [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 240,085 | 227,590 | 245,592 |
Interest income | 171 | 311 | 479 |
Interest expense | 946 | 2,565 | 3,248 |
Income taxes | 7,312 | 6,233 | 5,112 |
Depreciation and amortization | 8,106 | 8,566 | 8,817 |
Net earnings attributable to Twin Disc | 14,409 | 7,029 | 10,141 |
Assets | 254,749 | 254,652 | 258,617 |
Expenditures for segment assets | 7,335 | 6,429 | 5,705 |
Reportable Segment [Member] | Distribution [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 100,708 | 121,389 | 130,360 |
Interest income | 33 | 22 | 19 |
Interest expense | 0 | 45 | 62 |
Income taxes | 1,459 | 1,432 | 1,630 |
Depreciation and amortization | 482 | 549 | 497 |
Net earnings attributable to Twin Disc | 5,013 | 6,285 | 5,840 |
Assets | 53,759 | 57,233 | 56,965 |
Expenditures for segment assets | 1,271 | 315 | 349 |
Intra-segment Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 26,862 | 28,342 | 31,267 |
Intra-segment Sales [Member] | Manufacturing [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 19,901 | 18,416 | 16,140 |
Intra-segment Sales [Member] | Distribution [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 6,961 | 9,926 | 15,127 |
Inter-segment Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 48,141 | 56,728 | 59,403 |
Inter-segment Sales [Member] | Manufacturing [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 44,864 | 53,960 | 55,746 |
Inter-segment Sales [Member] | Distribution [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,277 | $ 2,768 | $ 3,657 |
BUSINESS SEGMENTS AND FOREIGN50
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Reconciliation of Reportable Segment Net Sales to Consolidated Totals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Segment Reconciliation [Abstract] | |||
Net sales | $ 265,790 | $ 263,909 | $ 285,282 |
Reportable Segments [Member] | |||
Segment Reconciliation [Abstract] | |||
Net sales | 340,793 | 348,979 | 375,952 |
Intercompany Elimination [Member] | |||
Segment Reconciliation [Abstract] | |||
Net sales | $ (75,003) | $ (85,070) | $ (90,670) |
BUSINESS SEGMENTS AND FOREIGN51
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Reconciliation of Reportable Segment Net Earnings Attributable to Twin Disc to Consolidated Totals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Segment Reconciliation [Abstract] | |||
Net earnings attributable to Twin Disc | $ 11,173 | $ 3,644 | $ 3,882 |
Reportable Segments [Member] | |||
Segment Reconciliation [Abstract] | |||
Net earnings attributable to Twin Disc | 19,422 | 13,314 | 15,981 |
Corporate [Member] | |||
Segment Reconciliation [Abstract] | |||
Net earnings attributable to Twin Disc | $ (8,249) | $ (9,670) | $ (12,099) |
BUSINESS SEGMENTS AND FOREIGN52
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Reconciliation of Reportable Segment Assets to Consolidated Totals (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 |
Segment Reconciliation [Abstract] | |||
Assets | $ 249,862 | $ 266,985 | |
Reportable Segments [Member] | |||
Segment Reconciliation [Abstract] | |||
Assets | 308,508 | 311,885 | $ 315,582 |
Corporate and Intercompany Eliminations [Member] | |||
Segment Reconciliation [Abstract] | |||
Assets | $ (58,646) | $ (44,900) |
BUSINESS SEGMENTS AND FOREIGN53
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Reconciliation of Reportable Segment Other Significant Items to Consolidated Totals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract] | |||
Interest income | $ 124 | $ 121 | $ 102 |
Interest expense | 606 | 936 | 1,435 |
Income taxes | 4,515 | 4,226 | 4,986 |
Depreciation and amortization | 10,161 | 10,657 | 10,838 |
Expenditures for segment assets | 9,049 | 7,245 | 6,582 |
Reportable Segments [Member] | |||
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract] | |||
Interest income | 204 | 333 | 498 |
Interest expense | 946 | 2,610 | 3,310 |
Income taxes | 8,771 | 7,665 | 6,742 |
Depreciation and amortization | 8,588 | 9,115 | 9,314 |
Expenditures for segment assets | 8,606 | 6,744 | 6,054 |
Adjustments [Member] | |||
Segment Reporting, Other Significant Reconciling Item, Consolidated [Abstract] | |||
Interest income | (80) | (212) | (396) |
Interest expense | (340) | (1,674) | (1,875) |
Income taxes | (4,256) | (3,439) | (1,756) |
Depreciation and amortization | 1,573 | 1,542 | 1,524 |
Expenditures for segment assets | $ 443 | $ 501 | $ 528 |
BUSINESS SEGMENTS AND FOREIGN54
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Geographic information [Abstract] | |||
Net sales | $ 265,790 | $ 263,909 | $ 285,282 |
Long-lived assets | 60,179 | 68,072 | |
United States [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Net sales | 131,198 | 108,380 | 127,844 |
Long-lived assets | 40,822 | 46,821 | |
China [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Net sales | 19,712 | 33,830 | 29,119 |
Switzerland [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Long-lived assets | 7,686 | 8,196 | |
Belgium [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Long-lived assets | 6,709 | 7,450 | |
Italy [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Net sales | 14,457 | 17,396 | 19,140 |
Long-lived assets | 2,376 | 3,531 | |
Singapore [Member] | |||
Geographic information [Abstract] | |||
Net sales | 13,856 | 12,703 | 14,214 |
Canada [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Net sales | 13,661 | 9,277 | 10,846 |
Other Countries [Member] | Reportable Geographical Components [Member] | |||
Geographic information [Abstract] | |||
Net sales | 72,906 | 82,323 | $ 84,119 |
Long-lived assets | $ 2,586 | $ 2,074 |
BUSINESS SEGMENTS AND FOREIGN55
BUSINESS SEGMENTS AND FOREIGN OPERATIONS, Major Customers (Details) - Sewart Supply, Inc. [Member] - Customer | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenue, Major Customer [Line Items] | |||
Number of customers | 1 | 1 | 1 |
Percentage of revenue generated from a single customer (in hundredths) | 11.00% | 11.00% | 11.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2015 | |
Options price range [Abstract] | ||||
Stock awards forfeited (in shares) | (46,240) | (3,000) | ||
Long-Term Incentive Compensation Plan 2010 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of shares of common stock that can be granted, maximum (in shares) | 650,000 | |||
Stock Incentive Plan for Non-employee Directors 2010 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of shares of common stock that can be granted, maximum (in shares) | 250,000 | |||
Options expiration period after the date of grant (in years) | 10 years | |||
Stock Options [Member] | ||||
Options price range [Abstract] | ||||
Percentage of options vested on adoption of statement (in hundredths) | 100.00% | |||
Compensation cost, recognized | $ 0 | $ 0 | $ 0 | |
Intrinsic value of options exercised | $ 55,000 | $ 0 | $ 539,000 | |
Stock Options [Member] | Long-Term Incentive Compensation Plan 2010 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Shares available for future options (in shares) | 466,589 | 447,730 | ||
Stock Options [Member] | Stock Incentive Plan for Non-employee Directors 2010 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Shares available for future options (in shares) | 193,858 | 171,986 | ||
Non-qualified stock options [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of stock options outstanding under specified plan (in shares) | 21,600 | 21,600 | 19,200 | |
Number of shares [Abstract] | ||||
Options outstanding at beginning of year (in shares) | 21,600 | |||
Stock granted (in shares) | 0 | 0 | 0 | |
Canceled/expired (in shares) | 0 | |||
Exercised (in shares) | (2,400) | |||
Options outstanding at end of year (in shares) | 19,200 | 21,600 | ||
Weighted Average Price [Abstract] | ||||
Options outstanding at beginning of year (in dollars per share) | $ 14.88 | |||
Granted (in dollars per share) | 0 | |||
Canceled/expired (in dollars per share) | 0 | |||
Exercised (in dollars per share) | 6.23 | |||
Options outstanding at end of year (in dollars per share) | $ 15.96 | $ 14.88 | ||
Weighted Average Remaining Contractual Life [Abstract] | ||||
Options outstanding at end of year | 3 years 3 months 22 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Options outstanding at end of year | $ 81,492 | |||
Options price range [Abstract] | ||||
Stock granted (in shares) | 0 | 0 | 0 | |
Non-qualified stock options [Member] | Exercise Price Range ($10.01 - $27.55) [Member] | ||||
Options price range [Abstract] | ||||
Options price range, lower range limit (in dollars per share) | $ 10.01 | |||
Options price range, upper range limit (in dollars per share) | $ 27.55 | |||
Number of shares (in shares) | 19,200 | |||
Weighted average price (in dollars per share) | $ 15.96 | |||
Weighted average remaining life | 3 years 3 months 22 days | |||
Non-qualified stock options [Member] | Stock Incentive Plan for Non employee Directors 2004 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of stock options outstanding under specified plan (in shares) | 19,200 | 19,200 | ||
Number of shares [Abstract] | ||||
Options outstanding at end of year (in shares) | 19,200 | |||
Performance Stock Unit Awards [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of shares of common stock that can be granted, maximum (in shares) | 22,205 | 22,487 | 13,621 | |
Options price range [Abstract] | ||||
Compensation cost, recognized | $ 0 | $ 0 | $ 1,238,000 | |
Stock awards granted (in shares) | 15,861 | 43,154 | 28,255 | |
Stock awards vesting period | 3 years | 3 years | 3 years | |
Unvested stock awards outstanding (in shares) | 41,160 | 42,962 | 29,855 | |
Weighted average grant date fair value of the unvested awards (in dollars per share) | $ 27.24 | |||
Unrecognized compensation expense related to the unvested shares | $ 537,000 | |||
Total fair value of stock awards vested | $ 0 | $ 0 | $ 2,787,000 | |
Performance Stock Awards [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Number of shares of common stock that can be granted, maximum (in shares) | 17,038 | 30,635 | 14,101 | |
Options price range [Abstract] | ||||
Compensation cost, recognized | $ 0 | $ 0 | $ 209,000 | |
Stock awards granted (in shares) | 16,261 | 17,312 | 28,535 | |
Stock awards vesting period | 3 years | 3 years | 3 years | |
Unvested stock awards outstanding (in shares) | 44,712 | 42,141 | 25,949 | |
Weighted average grant date fair value of the unvested awards (in dollars per share) | $ 27.36 | |||
Unrecognized compensation expense related to the unvested shares | $ 710,000 | |||
Total fair value of stock awards vested | $ 0 | $ 0 | $ 2,055,000 | |
Restricted Stock [Member] | ||||
Options price range [Abstract] | ||||
Compensation cost, recognized | $ 696,000 | $ 1,184,000 | $ 1,234,000 | |
Stock awards granted (in shares) | 59,494 | 51,004 | 83,729 | |
Unvested stock awards outstanding (in shares) | 116,297 | 186,469 | 94,183 | |
Unrecognized compensation expense related to the unvested shares | $ 923,000 | |||
Total fair value of stock awards vested | $ 993,000 | $ 3,053,000 | $ 2,177,000 | |
Stock awards forfeited (in shares) | (46,240) | (3,000) | (30,532) | |
Recognition period for unrecognized compensation expense | 3 years | |||
Restricted Stock [Member] | Maximum [Member] | ||||
Options price range [Abstract] | ||||
Stock awards vesting period | 3 years | |||
Restricted Stock [Member] | Minimum [Member] | ||||
Options price range [Abstract] | ||||
Stock awards vesting period | 1 year | |||
Incentive stock options [Member] | Long-Term Incentive Compensation Plan 2010 [Member] | ||||
Schedule of Share Based Compensation Arrangements by Options Activity and Exercise Price Range [Line Items] | ||||
Options expiration period after the date of grant (in years) | 5 years | |||
Percentage of combined voting power of the stock owned by optionee | More than 10% | |||
Percentage of grant date fair market value specified as price of incentive stock options based on condition minimum (in hundredths) | 110.00% | |||
Percentage of stock owned by shareholder to which no options were granted | Greater than 10% |
ENGINEERING AND DEVELOPMENT C57
ENGINEERING AND DEVELOPMENT COSTS (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
ENGINEERING AND DEVELOPMENT COSTS [Abstract] | |||
Research and development expenses | $ 2,288,000 | $ 3,028,000 | $ 3,058,000 |
Engineering and development costs | $ 11,091,000 | $ 10,900,000 | $ 10,242,000 |
PENSION AND OTHER POSTRETIREM58
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) | 12 Months Ended | |||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Cost of premium for health coverage plan (in hundredths) | 100.00% | |||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | $ 102,495,000 | |||||
Fair value of assets, end of year | 104,681,000 | $ 102,495,000 | ||||
Amounts recognized in accumulated other comprehensive loss consist of (net of tax) [Abstract] | ||||||
Net amount recognized | 42,221,000 | 36,722,000 | ||||
Amounts that will be recognized from accumulated other comprehensive income (loss) in next fiscal year [Abstract] | ||||||
Accumulated benefit obligation for all defined benefit pension plans | $ 127,733,000 | $ 123,832,000 | ||||
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ||||||
Weighted average healthcare cost trend rate (in hundredths) | 7.80% | |||||
Ultimate healthcare cost trend rate (in hundredths) | 5.00% | |||||
Percentage of increase in assumed healthcare cost trend rate (in hundredths) | 1.00% | |||||
Effect of one percentage point increase on accumulated postretirement benefit obligation | $ 336,000 | |||||
Effect of one percentage point increase on service and interest cost components | $ 13,000 | |||||
Percentage of decrease in assumed healthcare cost trend rate (in hundredths) | 1.00% | |||||
Effect of one percentage point decrease on accumulated postretirement benefit obligation | $ 322,000 | |||||
Effect of one percentage point decrease on service and interest cost components | $ 12,000 | |||||
Pension plan weighted-average asset allocations [Abstract] | ||||||
Target Allocation (in hundredths) | 100.00% | |||||
Actual Allocation (in hundredths) | 100.00% | 100.00% | ||||
Expected long term return on plan assets (in hundredths) | 7.25% | |||||
Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | $ 50,080,000 | |||||
Fair value of assets, end of year | 48,711,000 | $ 50,080,000 | ||||
Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 31,386,000 | |||||
Fair value of assets, end of year | 30,562,000 | 31,386,000 | ||||
Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 21,029,000 | |||||
Fair value of assets, end of year | $ 25,408,000 | $ 21,029,000 | ||||
Equity Securities [Member] | ||||||
Pension plan weighted-average asset allocations [Abstract] | ||||||
Target Allocation (in hundredths) | 65.00% | |||||
Actual Allocation (in hundredths) | 62.00% | 65.00% | ||||
Debt Securities [Member] | ||||||
Pension plan weighted-average asset allocations [Abstract] | ||||||
Target Allocation (in hundredths) | 25.00% | |||||
Actual Allocation (in hundredths) | 25.00% | 23.00% | ||||
Real Estate [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [1] | $ 11,206,000 | ||||
Fair value of assets, end of year | [1] | $ 12,770,000 | $ 11,206,000 | |||
Pension plan weighted-average asset allocations [Abstract] | ||||||
Target Allocation (in hundredths) | 10.00% | |||||
Actual Allocation (in hundredths) | 13.00% | 12.00% | ||||
Real Estate [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [1] | $ 0 | ||||
Fair value of assets, end of year | [1] | 0 | $ 0 | |||
Real Estate [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [1] | 11,206,000 | ||||
Fair value of assets, end of year | [1] | 12,770,000 | 11,206,000 | |||
Real Estate [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 0 | [1] | 3,012,000 | |||
Fair value of assets, end of year | $ 0 | [1] | $ 0 | [1] | $ 3,012,000 | |
Common Stock Held by U.S Pension Plans [Member] | ||||||
Pension plan weighted-average asset allocations [Abstract] | ||||||
Actual Allocation (in hundredths) | 1.80% | 3.20% | ||||
Number of shares of equity included in plan assets (in shares) | 98,211 | 98,211 | ||||
Fair market value of shares held in pension plans | $ 1,830,653 | $ 3,245,874 | ||||
Cash and Cash Equivalents [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 965,000 | |||||
Fair value of assets, end of year | 1,034,000 | 965,000 | ||||
Cash and Cash Equivalents [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 965,000 | |||||
Fair value of assets, end of year | 1,034,000 | 965,000 | ||||
Cash and Cash Equivalents [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 0 | |||||
Fair value of assets, end of year | 0 | 0 | ||||
Cash and Cash Equivalents [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 0 | |||||
Fair value of assets, end of year | 0 | 0 | ||||
Fixed Income Securities [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [2] | 21,892,000 | ||||
Fair value of assets, end of year | [2] | 22,615,000 | 21,892,000 | |||
Fixed Income Securities [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [2] | 7,603,000 | ||||
Fair value of assets, end of year | [2] | 8,993,000 | 7,603,000 | |||
Fixed Income Securities [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [2] | 14,289,000 | ||||
Fair value of assets, end of year | [2] | 13,622,000 | 14,289,000 | |||
Fixed Income Securities [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [2] | 0 | ||||
Fair value of assets, end of year | [2] | 0 | 0 | |||
Domestic Equity Securities [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [3] | 30,727,000 | ||||
Fair value of assets, end of year | [3] | 28,035,000 | 30,727,000 | |||
Domestic Equity Securities [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [3] | 30,727,000 | ||||
Fair value of assets, end of year | [3] | 28,035,000 | 30,727,000 | |||
Domestic Equity Securities [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [3] | 0 | ||||
Fair value of assets, end of year | [3] | 0 | 0 | |||
Domestic Equity Securities [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [3] | 0 | ||||
Fair value of assets, end of year | [3] | 0 | 0 | |||
Foreign Equity Securities [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [4] | 16,676,000 | ||||
Fair value of assets, end of year | [4] | 14,819,000 | 16,676,000 | |||
Foreign Equity Securities [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [4] | 10,785,000 | ||||
Fair value of assets, end of year | [4] | 10,649,000 | 10,785,000 | |||
Foreign Equity Securities [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [4] | 5,891,000 | ||||
Fair value of assets, end of year | [4] | 4,170,000 | 5,891,000 | |||
Foreign Equity Securities [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [4] | 0 | ||||
Fair value of assets, end of year | [4] | 0 | 0 | |||
Other Plan Assets [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [5] | 14,689,000 | ||||
Fair value of assets, end of year | [5] | 15,900,000 | 14,689,000 | |||
Other Plan Assets [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [5] | 0 | ||||
Fair value of assets, end of year | [5] | 0 | 0 | |||
Other Plan Assets [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [5] | 0 | ||||
Fair value of assets, end of year | [5] | 0 | 0 | |||
Other Plan Assets [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 14,689,000 | [5] | 13,153,000 | |||
Fair value of assets, end of year | 15,900,000 | [5] | 14,689,000 | [5] | 13,153,000 | |
Variable Annuity [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [6] | 6,340,000 | ||||
Fair value of assets, end of year | [6] | 9,508,000 | 6,340,000 | |||
Variable Annuity [Member] | Level I [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [6] | 0 | ||||
Fair value of assets, end of year | [6] | 0 | 0 | |||
Variable Annuity [Member] | Level II [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | [6] | 0 | ||||
Fair value of assets, end of year | [6] | 0 | 0 | |||
Variable Annuity [Member] | Level III [Member] | ||||||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 6,340,000 | [6] | 5,819,000 | |||
Fair value of assets, end of year | 9,508,000 | [6] | 6,340,000 | [6] | 5,819,000 | |
Pension Benefits [Member] | ||||||
Change in benefit obligation [Roll Forward] | ||||||
Benefit obligation, beginning of year | 123,832,000 | 125,846,000 | ||||
Service cost | 465,000 | 536,000 | 367,000 | |||
Interest cost | 4,862,000 | 5,425,000 | 5,399,000 | |||
Actuarial loss (gain) | 8,384,000 | 1,221,000 | ||||
Contributions by plan participants | 154,000 | 174,000 | ||||
Settlements | 0 | (121,000) | ||||
Benefits paid | (9,964,000) | (9,249,000) | ||||
Benefit obligation, end of year | 127,733,000 | 123,832,000 | 125,846,000 | |||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 102,495,000 | 94,723,000 | ||||
Actual return on plan assets | 5,828,000 | 14,031,000 | ||||
Employer contribution | 6,168,000 | 2,816,000 | ||||
Contributions by plan participants | 154,000 | 174,000 | ||||
Benefits paid | (9,964,000) | (9,249,000) | ||||
Fair value of assets, end of year | 104,681,000 | 102,495,000 | 94,723,000 | |||
Funded status | (23,052,000) | (21,337,000) | ||||
Amounts recognized in the balance sheet consist of [Roll Forward] | ||||||
Other assets - noncurrent | 638,000 | 680,000 | ||||
Accrued liabilities - current | (764,000) | (1,189,000) | ||||
Accrued retirement benefits - noncurrent | (22,926,000) | (20,828,000) | ||||
Net amounts recognized | (23,052,000) | (21,337,000) | ||||
Amounts recognized in accumulated other comprehensive loss consist of (net of tax) [Abstract] | ||||||
Net transition obligation | 296,000 | 340,000 | ||||
Actuarial net loss | 38,613,000 | 33,220,000 | ||||
Net amount recognized | 38,909,000 | 33,560,000 | ||||
Amounts that will be recognized from accumulated other comprehensive income (loss) in next fiscal year [Abstract] | ||||||
Net transition obligation | 35,000 | |||||
Actuarial net loss | 3,646,000 | |||||
Net amount to be recognized | 3,681,000 | |||||
Information for pension plans with an accumulated benefit obligations in excess of plan assets [Abstract] | ||||||
Projected and accumulated benefit obligation | 126,242,000 | 122,045,000 | ||||
Fair value of plan assets | 102,552,000 | 100,028,000 | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||||
Service cost | 465,000 | 536,000 | 367,000 | |||
Interest cost | 4,862,000 | 5,425,000 | 5,399,000 | |||
Expected return on plan assets | (7,272,000) | (6,591,000) | (6,382,000) | |||
Settlement loss | 0 | 0 | 5,000 | |||
Amortization of transition obligation | 36,000 | 32,000 | 35,000 | |||
Amortization of actuarial net loss | 2,436,000 | 2,894,000 | 3,357,000 | |||
Net periodic benefit cost | 527,000 | 2,296,000 | 2,781,000 | |||
Changes in plan assets and benefit obligations recognized in other comprehensive income [Abstract] | ||||||
Net gain | 9,406,000 | |||||
Amortization of transition asset | (36,000) | |||||
Amortization of net (loss) gain | (2,436,000) | |||||
Total recognized in other comprehensive income | 6,934,000 | |||||
Net periodic benefit cost | 527,000 | $ 2,296,000 | $ 2,781,000 | |||
Total recognized in net periodic benefit cost and other comprehensive income | $ 7,461,000 | |||||
Weighted average assumptions used to determine benefit obligations [Abstract] | ||||||
Discount rate (in hundredths) | 4.05% | 4.06% | ||||
Expected return on plan assets (in hundredths) | 7.11% | 7.39% | ||||
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ||||||
Discount rate (in hundredths) | 4.06% | 4.35% | 4.20% | |||
Expected return on plan assets (in hundredths) | 7.39% | 7.41% | 7.50% | |||
Other Postretirement Benefits [Member] | ||||||
Change in benefit obligation [Roll Forward] | ||||||
Benefit obligation, beginning of year | $ 16,584,000 | $ 17,739,000 | ||||
Service cost | 30,000 | 37,000 | $ 34,000 | |||
Interest cost | 579,000 | 659,000 | 766,000 | |||
Actuarial loss (gain) | 882,000 | (60,000) | ||||
Contributions by plan participants | 547,000 | 581,000 | ||||
Settlements | 0 | 0 | ||||
Benefits paid | (2,250,000) | (2,372,000) | ||||
Benefit obligation, end of year | 16,372,000 | 16,584,000 | 17,739,000 | |||
Change in plan assets [Roll Forward] | ||||||
Fair value of assets, beginning of year | 0 | 0 | ||||
Actual return on plan assets | 0 | 0 | ||||
Employer contribution | 1,703,000 | 1,791,000 | ||||
Contributions by plan participants | 547,000 | 581,000 | ||||
Benefits paid | (2,250,000) | (2,372,000) | ||||
Fair value of assets, end of year | 0 | 0 | 0 | |||
Funded status | (16,372,000) | (16,584,000) | ||||
Amounts recognized in the balance sheet consist of [Roll Forward] | ||||||
Other assets - noncurrent | 0 | 0 | ||||
Accrued liabilities - current | (2,040,000) | (2,418,000) | ||||
Accrued retirement benefits - noncurrent | (14,332,000) | (14,166,000) | ||||
Net amounts recognized | (16,372,000) | (16,584,000) | ||||
Amounts recognized in accumulated other comprehensive loss consist of (net of tax) [Abstract] | ||||||
Net transition obligation | 0 | 0 | ||||
Actuarial net loss | 3,312,000 | 3,163,000 | ||||
Net amount recognized | 3,312,000 | 3,163,000 | ||||
Amounts that will be recognized from accumulated other comprehensive income (loss) in next fiscal year [Abstract] | ||||||
Net transition obligation | 0 | |||||
Actuarial net loss | 728,000 | |||||
Net amount to be recognized | 728,000 | |||||
Components of Net Periodic Benefit Cost [Abstract] | ||||||
Service cost | 30,000 | 37,000 | 34,000 | |||
Interest cost | 579,000 | 659,000 | 766,000 | |||
Amortization of actuarial net loss | 638,000 | 602,000 | 792,000 | |||
Net periodic benefit cost | 1,247,000 | 1,298,000 | 1,592,000 | |||
Changes in plan assets and benefit obligations recognized in other comprehensive income [Abstract] | ||||||
Net gain | 882,000 | |||||
Amortization of transition asset | 0 | |||||
Amortization of net (loss) gain | (638,000) | |||||
Total recognized in other comprehensive income | 244,000 | |||||
Net periodic benefit cost | 1,247,000 | $ 1,298,000 | $ 1,592,000 | |||
Total recognized in net periodic benefit cost and other comprehensive income | $ 1,491,000 | |||||
Weighted average assumptions used to determine benefit obligations [Abstract] | ||||||
Discount rate (in hundredths) | 3.93% | 3.76% | ||||
Weighted average assumptions used to determine net periodic benefit cost [Abstract] | ||||||
Discount rate (in hundredths) | 3.76% | 3.99% | 4.20% | |||
[1] | Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell it's holding in the funds. | |||||
[2] | Fixed income consists of corporate bonds with investment grade BBB or better from diversified industries, as well as government debt securities. Corporate and government debt investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and inactive markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. | |||||
[3] | U.S. equity securities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks. These securities are valued at the closing price reported on the active market on which the individual securities are traded. | |||||
[4] | International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country, capitalization and equity style (i.e., growth and value strategies). Certain assets are invested in international commingled equity funds. The vast majority of the investments are made in companies in developed markets with a smaller percentage in emerging markets. Securities traded on exchanges are valued at the closing price reported on the active market on which the individual securities are traded. International commingled funds are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. | |||||
[5] | Other consists of hedged equity mutual funds. These investments are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. | |||||
[6] | Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows. |
PENSION AND OTHER POSTRETIREM59
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS, PLAN ASSETS USING FAIR VALUE HIERARCHY (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | $ 104,681 | $ 102,495 | ||||
Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 48,711 | 50,080 | ||||
Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 30,562 | 31,386 | ||||
Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 25,408 | 21,029 | ||||
Real Estate [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [1] | 12,770 | 11,206 | |||
Real Estate [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [1] | 0 | 0 | |||
Real Estate [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [1] | 12,770 | 11,206 | |||
Real Estate [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 0 | [1] | 0 | [1] | $ 3,012 | |
Cash and Cash Equivalents [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 1,034 | 965 | ||||
Cash and Cash Equivalents [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 1,034 | 965 | ||||
Cash and Cash Equivalents [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 0 | 0 | ||||
Cash and Cash Equivalents [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 0 | 0 | ||||
Fixed income [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [2] | 22,615 | 21,892 | |||
Fixed income [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [2] | 8,993 | 7,603 | |||
Fixed income [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [2] | 13,622 | 14,289 | |||
Fixed income [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [2] | 0 | 0 | |||
U.S. [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [3] | 28,035 | 30,727 | |||
U.S. [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [3] | 28,035 | 30,727 | |||
U.S. [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [3] | 0 | 0 | |||
U.S. [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [3] | 0 | 0 | |||
International [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [4] | 14,819 | 16,676 | |||
International [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [4] | 10,649 | 10,785 | |||
International [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [4] | 4,170 | 5,891 | |||
International [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [4] | 0 | 0 | |||
Other [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [5] | 15,900 | 14,689 | |||
Other [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [5] | 0 | 0 | |||
Other [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [5] | 0 | 0 | |||
Other [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 15,900 | [5] | 14,689 | [5] | 13,153 | |
Annuity contracts [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [6] | 9,508 | 6,340 | |||
Annuity contracts [Member] | Level I [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [6] | 0 | 0 | |||
Annuity contracts [Member] | Level II [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | [6] | 0 | 0 | |||
Annuity contracts [Member] | Level III [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 9,508 | [6] | 6,340 | [6] | 5,819 | |
Pension Benefits [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | 104,681 | 102,495 | 94,723 | |||
Other Postretirement Benefits [Member] | ||||||
Defined benefit plan, fair value hierarchy [Abstract] | ||||||
Defined Benefit Plan, fair value of plan assets | $ 0 | $ 0 | $ 0 | |||
[1] | Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell it's holding in the funds. | |||||
[2] | Fixed income consists of corporate bonds with investment grade BBB or better from diversified industries, as well as government debt securities. Corporate and government debt investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and inactive markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. | |||||
[3] | U.S. equity securities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks. These securities are valued at the closing price reported on the active market on which the individual securities are traded. | |||||
[4] | International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country, capitalization and equity style (i.e., growth and value strategies). Certain assets are invested in international commingled equity funds. The vast majority of the investments are made in companies in developed markets with a smaller percentage in emerging markets. Securities traded on exchanges are valued at the closing price reported on the active market on which the individual securities are traded. International commingled funds are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. | |||||
[5] | Other consists of hedged equity mutual funds. These investments are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. | |||||
[6] | Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows. |
PENSION AND OTHER POSTRETIREM60
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS, RECONCILIATION OF FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | |||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | $ 102,495 | |||
Actual return on plan assets [Abstract] | ||||
Fair value of assets, end of year | 104,681 | $ 102,495 | ||
Level III [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | 21,029 | |||
Actual return on plan assets [Abstract] | ||||
Fair value of assets, end of year | 25,408 | 21,029 | ||
Annuity Contracts [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | [1] | 6,340 | ||
Actual return on plan assets [Abstract] | ||||
Fair value of assets, end of year | [1] | 9,508 | 6,340 | |
Annuity Contracts [Member] | Level III [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | 6,340 | [1] | 5,819 | |
Actual return on plan assets [Abstract] | ||||
Relating to assets still held at reporting date | 2,978 | 433 | ||
Relating to assets sold during the period | 0 | 0 | ||
Purchases, sales and settlements, net | 190 | 88 | ||
Transfers in and/or out of Level III | 0 | 0 | ||
Fair value of assets, end of year | [1] | 9,508 | 6,340 | |
Real Estate [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | [2] | 11,206 | ||
Actual return on plan assets [Abstract] | ||||
Fair value of assets, end of year | [2] | 12,770 | 11,206 | |
Real Estate [Member] | Level III [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | 0 | [2] | 3,012 | |
Actual return on plan assets [Abstract] | ||||
Relating to assets still held at reporting date | 0 | |||
Relating to assets sold during the period | 257 | |||
Purchases, sales and settlements, net | (3,269) | |||
Transfers in and/or out of Level III | 0 | |||
Fair value of assets, end of year | [2] | 0 | 0 | |
Other [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | [3] | 14,689 | ||
Actual return on plan assets [Abstract] | ||||
Fair value of assets, end of year | [3] | 15,900 | 14,689 | |
Other [Member] | Level III [Member] | ||||
Defined benefit plan reconciliation of fair value measurements (Level III) [Abstract] | ||||
Fair value of assets, beginning of year | 14,689 | [3] | 13,153 | |
Actual return on plan assets [Abstract] | ||||
Relating to assets still held at reporting date | 1,211 | 1,536 | ||
Relating to assets sold during the period | 0 | 0 | ||
Purchases, sales and settlements, net | 0 | 0 | ||
Transfers in and/or out of Level III | 0 | 0 | ||
Fair value of assets, end of year | [3] | $ 15,900 | $ 14,689 | |
[1] | Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows. | |||
[2] | Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell it's holding in the funds. | |||
[3] | Other consists of hedged equity mutual funds. These investments are valued at the net asset value ("NAV") as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. |
PENSION AND OTHER POSTRETIREM61
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS, CASH FLOWS (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions to defined benefit plans in next fiscal year | $ 2,240,000 | ||
Other Postretirement Benefits, Gross Benefits [Abstract] | |||
Compensation expense in defined benefit plans | 2,526,000 | $ 2,218,000 | $ 2,074,000 |
Pension Benefits [Member] | |||
Expected benefit payments for future services [Abstract] | |||
2,016 | 10,446,000 | ||
2,017 | 9,927,000 | ||
2,018 | 10,913,000 | ||
2,019 | 9,756,000 | ||
2,020 | 9,231,000 | ||
Years 2021 - 2025 | 40,355,000 | ||
Other Postretirement Benefits [Member] | |||
Expected benefit payments for future services [Abstract] | |||
2,016 | 2,379,000 | ||
2,017 | 2,349,000 | ||
2,018 | 1,844,000 | ||
2,019 | 1,734,000 | ||
2,020 | 1,584,000 | ||
Years 2021 - 2025 | 6,157,000 | ||
Other Postretirement Benefits, Part D Reimbursement [Abstract] | |||
2,016 | 0 | ||
2,017 | 0 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2,020 | 0 | ||
Years 2021 - 2025 | 0 | ||
Other Postretirement Benefits, Gross Benefits [Abstract] | |||
2,016 | 2,379,000 | ||
2,017 | 2,349,000 | ||
2,018 | 1,844,000 | ||
2,019 | 1,734,000 | ||
2,020 | 1,584,000 | ||
Years 2021 - 2025 | $ 6,157,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Earnings before income taxes and noncontrolling interest [Abstract] | |||
United States | $ 5,614,000 | $ 1,107,000 | $ 3,935,000 |
Foreign | 10,286,000 | 6,989,000 | 5,302,000 |
Earnings before income taxes and noncontrolling interest | 15,900,000 | 8,096,000 | 9,237,000 |
Currently payable [Abstract] | |||
Federal | 1,607,000 | 651,000 | 1,745,000 |
State | 518,000 | 104,000 | (234,000) |
Foreign | 2,832,000 | 2,837,000 | 2,788,000 |
Currently payable, total | 4,957,000 | 3,592,000 | 4,299,000 |
Deferred [Abstract] | |||
Federal | 408,000 | 1,309,000 | 1,122,000 |
State | 5,000 | (95,000) | 439,000 |
Foreign | (855,000) | (580,000) | (874,000) |
Deferred, total | (442,000) | 634,000 | 687,000 |
Total provision (benefit) | 4,515,000 | 4,226,000 | $ 4,986,000 |
Deferred tax assets [Abstract] | |||
Retirement plans and employee benefits | 15,157,000 | 13,692,000 | |
Foreign tax credit carryforwards | 0 | 706,000 | |
Federal tax credits | 0 | 160,000 | |
State net operating loss and other state credit carryforwards | 369,000 | 348,000 | |
Inventory | 1,789,000 | 1,672,000 | |
Reserves | 2,587,000 | 2,578,000 | |
Foreign NOL carryforwards | 3,539,000 | 6,090,000 | |
Accruals | 584,000 | 681,000 | |
Other assets | 568,000 | (54,000) | |
Deferred tax assets, total | 24,593,000 | 25,873,000 | |
Deferred tax liabilities [Abstract] | |||
Property, plant and equipment | 7,221,000 | 8,650,000 | |
Intangibles | 4,778,000 | 5,528,000 | |
Other liabilities | 451,000 | 711,000 | |
Deferred tax liabilities, total | 12,450,000 | 14,889,000 | |
Valuation Allowance | (3,577,000) | (5,593,000) | |
Total net deferred tax assets | 8,566,000 | 5,391,000 | |
Net deferred tax position is included in Accrued Liabilities | 82,000 | $ 166,000 | |
Net decrease in valuation allowance | $ (2,016,000) | ||
Reconciliation of U.S. federal income taxes to actual income taxes [Abstract] | |||
Rate of federal income tax (in hundredths) | 35.00% | 35.00% | 35.00% |
U.S. federal income tax at 35% | $ 5,491,000 | $ 2,754,000 | $ 3,104,000 |
Increases (reductions) in tax resulting from [Abstract] | |||
Foreign tax items | 362,000 | (291,000) | 88,000 |
State taxes | 32,000 | 228,000 | 296,000 |
Valuation allowance | (1,121,000) | 1,551,000 | 1,216,000 |
Change in prior year estimate | 157,000 | 139,000 | 309,000 |
Research and development tax credits | (337,000) | (267,000) | (526,000) |
Section 199 deduction | (96,000) | (109,000) | (84,000) |
Unrecognized tax benefits | 5,000 | 183,000 | 539,000 |
Other, net | 22,000 | 38,000 | 44,000 |
Total provision (benefit) | 4,515,000 | 4,226,000 | 4,986,000 |
Undistributed earnings of foreign subsidiaries | 3,045,000 | ||
Income Tax Examination [Line Items] | |||
Unrecognized tax benefits, which, if recognized would impact the effective tax rate | 810,000 | ||
Reconciliation of unrecognized tax benefits [Roll Forward] | |||
Unrecognized tax benefits, beginning of year | 1,603,000 | 1,556,000 | |
Additions based on tax positions related to the prior year | 0 | 7,000 | |
Additions based on tax positions related to the current year | 184,000 | 173,000 | |
Reductions based on tax positions related to the prior year | (3,000) | 0 | |
Subtractions due to statutes closing | (60,000) | (1,000) | |
Settlements with Taxing Authorities | (914,000) | (132,000) | |
Unrecognized tax benefits, end of year | 810,000 | 1,603,000 | $ 1,556,000 |
Interest and penalties | $ 62,000 | $ 309,000 | |
Italy, Canada, Belgium, and Japan [Member] | |||
Income Tax Examination [Line Items] | |||
Tax years that remain subject to examination | 2011 through 2015 | ||
U.S. [Member] | |||
Income Tax Examination [Line Items] | |||
Tax years that remain subject to examination | subsequent to fiscal 2012 |
RESTRUCTURING OF OPERATIONS (De
RESTRUCTURING OF OPERATIONS (Details) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2013USD ($) | Jun. 30, 2015USD ($)Employee | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | |
RESTRUCTURING OF OPERATIONS [Abstract] | |||||
Pre-tax restructuring charges | $ 3,282,000 | $ 548,000 | $ 3,282,000 | $ 961,000 | $ 708,000 |
Number of manufacturing employees eligible for minimum legal indemnity | Employee | 79 | ||||
Cash payments | $ 156,000 | 857,000 | |||
Accrual balance of restructuring charge | 3,282,000 | 3,282,000 | $ 785,000 | ||
Accrual balance after foreign exchange impact | $ 494,000 | 494,000 | |||
Foreign exchange impact | $ 135,000 |
SCHEDULE II - VALUATION AND Q64
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |||
Allowance for losses on accounts receivable [Member] | |||||
Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at Beginning of Period | $ 3,637 | $ 2,884 | $ 2,194 | ||
Charged to Costs and Expenses | 304 | 1,169 | 1,385 | ||
Net Acquired | 0 | 0 | 0 | ||
Deductions | [1] | 1,758 | 416 | 695 | |
Balance at End of Period | 2,183 | 3,637 | 2,884 | ||
Deferred tax valuation allowance [Member] | |||||
Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at Beginning of Period | 5,593 | 3,724 | 3,811 | ||
Charged to Costs and Expenses | 805 | 2,140 | 1,112 | ||
Net Acquired | 0 | 0 | 0 | ||
Deductions | [1] | 2,821 | 271 | 1,199 | [2] |
Balance at End of Period | $ 3,577 | $ 5,593 | $ 3,724 | ||
[1] | Activity primarily represents amounts written-off during the year, along with other adjustments (primarily foreign currency translation adjustments). | ||||
[2] | Represents adjustments resulting from foreign tax audits. |