Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 |
Summary of Significant Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies |
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Basis of Presentation |
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The accompanying consolidated financial statements include the accounts of Stoneridge, Inc. and its wholly-owned and majority-owned subsidiaries (collectively, the “Company”). Intercompany transactions and balances have been eliminated in consolidation. The Company analyzes its ownership interests in accordance with Accounting Standards Codification “ASC” Topic 810 to determine whether they are VIE’s and, if so, whether the Company is the primary beneficiary. The Company’s investment in Minda Stoneridge Instruments Ltd. (“Minda”) at December 31, 2013, 2012 and 2011 was determined under the provisions of ASC Topic 810 to be an unconsolidated entity and was accounted for under the equity method of accounting based on our 49% noncontrolling interest. |
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On December 31, 2011, the Company completed the acquisition of an additional 24% controlling interest in PST Eletrônica Ltda. (“PST”). As a result, the Company owns 74% of the outstanding equity of PST. |
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PST’s results for the years ended December 31, 2013 and 2012 were consolidated such that 100% of PST’s operations were included in each line from net sales through net income in the Company’s consolidated statements of operations with the 26% noncontrolling interest reduced (increased) in the net income (loss) attributable to noncontrolling interest line. |
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PST’s results for the year ended December 31, 2011 were accounted for as an unconsolidated joint venture under the equity method of accounting such that our 50% portion of PST’s after-tax earnings were included within equity in earnings of investees in the consolidated statements of operations as a controlling interest in PST was not acquired until the close of business on December 31, 2011. |
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Accounting Estimates |
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The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including certain self-insured risks and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because actual results could differ from those estimates, the Company revises its estimates and assumptions as new information becomes available. |
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Cash and Cash Equivalents |
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The Company’s cash and cash equivalents are actively traded money market funds with short-term investments in marketable securities, primarily U.S. government securities. Cash and cash equivalents are stated at cost, which approximates fair value, due to the highly liquid nature and short-term duration of the underlying securities. |
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Accounts Receivable and Concentration of Credit Risk |
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Revenues are principally generated from the commercial, automotive, agricultural, motorcycle and off-highway vehicle markets. The Company’s largest customers were Deere & Company (“Deere”) and Navistar International Corporation (“Navistar”), primarily related to the Wiring reportable segment, and accounted for the following percentages of consolidated net sales for the years ended December 31, 2013, 2012 and 2011: |
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Deere | | 14 | % | | 13 | % | | 15 | % | |
Navistar | | 13 | % | | 18 | % | | 24 | % | |
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Accounts receivable are recorded at the invoice price net of an estimate of allowance for doubtful accounts and other reserves. |
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Allowance for Doubtful Accounts |
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The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific allowance for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. Additionally, the Company reviews historical trends for collectability in determining an estimate for its allowance for doubtful accounts. If economic circumstances change substantially, estimates of the recoverability of amounts due to the Company could be reduced by a material amount. The Company does not have collateral requirements with its customers. |
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Inventories |
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Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or market. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following: |
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As of December 31 | | | 2013 | | 2012 | | | | | |
Raw materials | | $ | 71,631 | $ | 64,340 | | | | | |
Work-in-progress | | | 16,168 | | 13,621 | | | | | |
Finished goods | | | 26,259 | | 18,071 | | | | | |
Total inventories, net | | $ | 114,058 | $ | 96,032 | | | | | |
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Inventory valued using the FIFO method was $67,750 and $57,004 at December 31, 2013 and 2012, respectively. Inventory valued using the average cost method was $46,308 and $39,028 at December 31, 2013 and 2012, respectively. |
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Pre-production Costs Related to Long-term Supply Arrangements |
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Engineering, research and development and other design and development costs for products sold on long-term supply arrangements are expensed as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company either has title to the assets or has the noncancelable right to use the assets during the term of the supply arrangement are capitalized in property, plant and equipment and amortized to cost of sales over the shorter of the term of the arrangement or over the estimated useful lives of the assets, typically three to five years. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has a contractual guarantee to a lump sum reimbursement from the customer are capitalized as a component of prepaid expenses and other current assets within the consolidated balance sheets. The amounts recorded related to these pre-production costs as of December 31, 2013 and 2012 were $12,944 and $8,631, respectively. |
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Property, Plant and Equipment |
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Property, plant and equipment are recorded at cost and consist of the following: |
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As of December 31 | | | 2013 | | 2012 | | | | | |
Land and land improvements | | $ | 4,861 | $ | 5,117 | | | | | |
Buildings and improvements | | | 43,630 | | 45,940 | | | | | |
Machinery and equipment | | | 208,243 | | 196,003 | | | | | |
Office furniture and fixtures | | | 8,351 | | 8,856 | | | | | |
Tooling | | | 70,050 | | 71,045 | | | | | |
Information technology | | | 33,759 | | 33,009 | | | | | |
Vehicles | | | 426 | | 1,456 | | | | | |
Leasehold improvements | | | 3,447 | | 3,560 | | | | | |
Construction in progress | | | 14,336 | | 17,656 | | | | | |
Total property, plant, and equipment | | | 387,103 | | 382,642 | | | | | |
Less: accumulated depreciation | | | -276,231 | | -263,495 | | | | | |
Property, plant and equipment, net | | $ | 110,872 | $ | 119,147 | | | | | |
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Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $28,989, $28,519 and $18,847, respectively. Depreciable lives within each property classification are as follows: |
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Buildings and improvements | | | 10-40 years | | | | | | | |
Machinery and equipment | | | 3-10 years | | | | | | | |
Office furniture and fixtures | | | 3-10 years | | | | | | | |
Tooling | | | 2-5 years | | | | | | | |
Information technology | | | 3-5 years | | | | | | | |
Vehicles | | | 3-5 years | | | | | | | |
Leasehold improvements | shorter of lease term or 3-10 years | | | | | | | |
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Maintenance and repair expenditures that are not considered improvements and do not extend the useful life of the property, plant and equipment are charged to expense as incurred. Expenditures for improvements and major renewals are capitalized. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss on the disposition is recorded in the consolidated statements of operations as a component of selling, general and administrative expenses. |
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Impairment of Long-Lived or Finite-Lived Assets |
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The Company reviews the carrying value of its long-lived assets and finite-lived intangible assets for impairment when events or circumstances indicate that their carrying value may not be recoverable. Factors the Company considers important that could trigger testing of the related asset groups for an impairment include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses, significant adverse changes in the business climate within a particular business or current expectations that a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life. To test for impairment, the estimated undiscounted cash flows expected to be generated from the use and disposal of the asset or asset group is compared to its carrying value. An asset group is established by identifying the lowest level of cash flows generated by the group of assets that are largely independent of cash flows of other assets. If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment has occurred for the group of assets for which we can identify projected cash flows. If these undiscounted cash flows are less than their respective carrying values, an impairment charge would be recognized to the extent that the carrying values exceed estimated fair values. Although third-party estimates of fair value are utilized when available, the estimation of undiscounted cash flows and fair value requires us to make assumptions regarding future operating results. The results of the impairment testing are dependent on these estimates which require judgment. The occurrence of certain events, including changes in economic and competitive conditions, could impact cash flows eventually realized and management’s ability to accurately assess whether an asset is impaired. |
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During the year ended December 31, 2011, the Company recorded an impairment charge of $807 in its Wiring reportable segment related to certain capitalized software costs that were determined to no longer represent a future realizable benefit. This charge is recorded in the consolidated statements of operations as a component of selling, general and administrative expenses. No material impairment charges were recorded in 2013 or 2012 for long-lived or finite-lived intangible assets. |
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Acquisitions |
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PST Eletrônica Ltda. |
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On December 31, 2011, the Company acquired a controlling interest in PST, by increasing its interest from 50% to 74%. Prior to the acquisition of the additional interest, the PST joint venture was accounted for under the equity method of accounting. On the date of acquisition of controlling interest, PST became a consolidated subsidiary and a new reportable segment of the Company. PST’s results of operations were consolidated and included in the Company’s consolidated statements of operations, comprehensive income and cash flows for the year ended December 31, 2013 and 2012. For the year ended December 31, 2011, PST’s results of operations and cash flows were included in the Company’s consolidated statements of operations and cash flows as equity in earnings of investees. PST’s financial position is included in the consolidated balance sheets at December 31, 2013 and 2012. |
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As a result of obtaining a controlling interest in PST, the Company’s previously held 50% equity interest in PST of $38,746 was remeasured to an acquisition date fair value of $104,118. The Company recognized a one-time non-cash pre-tax gain on previously held equity interest of $65,372 as a result of this remeasurment in the fourth quarter of 2011. |
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The acquisition date fair value of the total consideration transferred consisted of the following: |
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Cash | $ | 29,669 | | | | | | | | |
Common Shares (1,940,413 shares) | | 15,310 | | | | | | | | |
Fair value of consideration transferred | | 44,979 | | | | | | | | |
Fair value of the Company's previously held equity interest | | 104,118 | | | | | | | | |
Fair value of noncontrolling interest | | 48,727 | | | | | | | | |
Total fair value of PST | $ | 197,824 | | | | | | | | |
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Of the $44,979 consideration transferred for the additional 24% interest, $29,976 ($19,779 of cash and $10,197 of the fair value of 1,293,609 Company Common Shares) was transferred on January 5, 2012, in accordance with the terms of the purchase agreement. |
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The fair value of the Common Shares transferred was based on the closing market price of the Company’s Common Shares on the acquisition date, less a discount for a lack of short-term marketability as the Common Shares transferred were issued through a private placement. |
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Goodwill of $67,118 was calculated as the excess of the fair value of consideration transferred over the fair market value of the identifiable assets and liabilities and represents the future economic benefits arising from other assets acquired that could not be separately recognized. Goodwill is reported in the Company’s PST segment and is not deductible for income tax purposes. |
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The Company identified $97,398 of intangible assets that include; $47,126 assigned to customer lists with a 15 year useful life; $31,400 assigned to trademarks with a 20 year useful life; and $18,872 assigned to technology with a 17 year weighted-average useful life. The fair value of the identifiable intangible assets was determined using an income approach. |
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The following unaudited pro forma information reflects the Company’s consolidated results of operations as if the acquisition had occurred on January 1, 2011. The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the transaction actually occurred at the beginning this period, nor is it necessarily indicative of future results. |
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Years ended December 31 | | 2011 | | | | | | | | |
Net sales | | $ 999,553 | | | | | | | | |
Net income attributable to Stoneridge, Inc. | | $ 10,608 | | | | | | | | |
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The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are directly related to the business combination and factually supportable. These tax affected adjustments include, but are not limited to depreciation and amortization related to fair value adjustments to property, plant, and equipment, intangible assets and inventory. |
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Bolton Conductive Systems, LLC |
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On October 13, 2009, the Company acquired a 51% controlling interest in Bolton Conductive Systems, LLC (“BCS”) for a purchase price of $5,967, net of cash acquired. BCS designs and manufactures a wide variety of electrical solutions for the military, automotive, marine and specialty vehicle markets. The Company purchased the remaining 49% noncontrolling interest in BCS in February 2013 for a nominal amount, which was treated as an equity transaction. |
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During the period from February 2013 through December 2013, 100% of BCS results of operations were included in the Company’s consolidated statements of operations. During the years ended December 31, 2012 and 2011, 49% of BCS’s results were included within loss attributable to noncontrolling interest within the consolidated statements of operations. |
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Goodwill and Other Intangible Assets |
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The total purchase price associated with acquisitions is allocated to the acquisition date fair values of identifiable assets acquired and liabilities assumed, with the excess purchase price assigned to goodwill. |
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In 2011, the Company recorded goodwill of $67,118 related to the acquisition of PST (see Acquisitions above). In 2009, the Company recorded goodwill of $9,118 within the Wiring segment related to the BCS acquisition. The goodwill related to these acquisitions is not deductible for income tax purposes. The remainder of the December 31, 2013 and 2012 goodwill balance relates to the 2008 acquisition of Magnum Trade AB, which is included within the Electronics segment. |
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Goodwill as of December 31, 2013 and 2012, and changes in the carrying amount of goodwill by segment were as follows: |
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| | Electronics | | Wiring | | Devices | | PST | | Total |
Balance at January 1, 2012 | $ | 564 | $ | 4,173 | $ | - | $ | 67,118 | $ | 71,855 |
Currency translation | | 34 | | - | | - | | -5,508 | | -5,474 |
Balance at December 31, 2012 | | 598 | | 4,173 | | - | | 61,610 | | 66,381 |
Currency translation | | 6 | | - | | - | | -7,866 | | -7,860 |
Balance at December 31, 2013 | $ | 604 | $ | 4,173 | $ | - | $ | 53,744 | $ | 58,521 |
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Goodwill is subject to an annual assessment for impairment (or more frequently if impairment indicators arise) by applying a fair value-based test. |
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The Company performed its annual impairment test of goodwill as of the beginning of the fourth quarter. The Company utilized an income approach (discounted cash flow method) valuation technique in determining the fair value of the Company’s applicable reporting units in the annual impairment test of goodwill. The discounted cash flow method utilizes a market-derived rate of return to discount anticipated performance. |
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The income approach methodology is applied to the reporting units’ projected future financial performance. The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of impairment charge recorded, if any. The discounted cash flow method is dependent upon assumption of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. Other significant assumptions include growth rates and the discount rate applicable to future cash flows. |
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During the year ended December 31, 2011, the Company recorded a goodwill impairment charge of $4,945 within the Wiring reportable segment. The goodwill impairment charge reduced the carrying value of BCS goodwill to $4,173 and was the result of a decline in business activity due to a reduction in military and defense related spending by customers since the Company’s acquisition of BCS. No impairment was identified in the Wiring segment for the years ended December 31, 2013 or 2012. |
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The Company’s accumulated goodwill impairment loss for the years ended December 31, 2013 and 2012 was $253,570. |
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Intangible assets, net at December 31, 2013 and 2012 consisted of the following: |
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As of December 31, 2013 | | cost | | amortization | | Net | | | | |
Customer lists | $ | 38,451 | $ | -5,402 | $ | 33,049 | | | | |
Trademarks | | 25,572 | | -2,943 | | 22,629 | | | | |
Technology | | 15,111 | | -1,947 | | 13,164 | | | | |
Other | | 57 | | -57 | | - | | | | |
Total | $ | 79,191 | $ | -10,349 | $ | 68,842 | | | | |
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As of December 31, 2012 | | cost | | amortization | | Net | | | | |
Customer lists | $ | 43,973 | $ | -3,166 | $ | 40,807 | | | | |
Trademarks | | 29,252 | | -1,870 | | 27,382 | | | | |
Technology | | 17,323 | | -1,115 | | 16,208 | | | | |
Other | | 66 | | -66 | | - | | | | |
Total | $ | 90,614 | $ | -6,217 | $ | 84,397 | | | | |
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The Company recognized $5,275, $5,940 and $238 of amortization expense in 2013, 2012 and 2011, respectively. Amortization expense is included as a component of selling, general and administrative on the consolidated statements of operations. Amortization expense for intangible assets is estimated to be approximately $5,000 for the years 2014 through 2019 and the weighted-average remaining amortization period is approximately 15 years. |
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Accrued Expenses and Other Current Liabilities |
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Accrued expenses and other current liabilities consist of the following: |
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As of December 31 | | 2013 | | 2012 | | | | | | |
Compensation related liabilities | $ | 24,631 | $ | 22,620 | | | | | | |
Product warranty and recall obligations | | 5,462 | | 5,613 | | | | | | |
Other (A) | | 26,558 | | 28,848 | | | | | | |
Total accrued expenses and other current liabilities | $ | 56,651 | $ | 57,081 | | | | | | |
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(A)“Other” is comprised of miscellaneous accruals, none of which contributed a significant portion of the total. |
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Income Taxes |
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The Company accounts for income taxes using the liability method. Deferred income taxes reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not to occur. |
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The Company's policy is to provide for uncertain tax positions and the related interest and penalties based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2013, the Company believes it has appropriately accounted for any unrecognized tax benefits (see Note 5). To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company's effective tax rate in a given financial statement period may be affected. |
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Currency Translation |
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The financial statements of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using exchange rates in effect at the period end for assets and liabilities and average exchange rates during each reporting period for the results of operations. Adjustments resulting from translation of financial statements are reflected as a component of accumulated other comprehensive loss. Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction, with the resulting adjustments included on the consolidated statements of operations within other expense, net. These foreign currency transaction losses, including the impact of hedging activities, were $1,752, $4,275 and $106 for the years ended December 31, 2013, 2012 and 2011, respectively. |
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Revenue Recognition and Sales Commitments |
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The Company recognizes revenues from the sale of products, net of actual and estimated returns, at the point of passage of title, which is either at the time of shipment or upon customer receipt based upon the terms of the sale. The Company collects certain taxes and fees on behalf of government agencies and remits such collections on a periodic basis. The taxes are collected from customers but are not included in net sales. Estimated returns are based on historical authorized returns. The Company often enters into agreements with its customers at the beginning of a given vehicle’s expected production life. Once such agreements are entered into, it is the Company’s obligation to fulfill the customers’ purchasing requirements for the entire production life of the vehicle. These agreements are subject to renegotiation, which may affect product pricing. |
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Shipping and Handling Costs |
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Shipping and handling costs are included in cost of goods sold on the consolidated statements of operations. |
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Product Warranty and Recall Reserves |
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Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued or beyond what the Company may recover from its suppliers. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets. Product warranty and recall includes $1,019 and $494 of a long-term liability at December 31, 2013 and 2012, respectively, which is included as a component of other long-term liabilities on the consolidated balance sheets. |
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The following provides a reconciliation of changes in the product warranty and recall reserve: |
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Years ended December 31 | | 2013 | | 2012 | | | | | | |
Product warranty and recall at beginning of period | $ | 6,107 | $ | 5,301 | | | | | | |
Accruals for products shipped during period | | 4,793 | | 3,288 | | | | | | |
Aggregate changes in pre-existing liabilities due to claim developments | | 1,715 | | 1,062 | | | | | | |
Settlements made during the period (in cash or in kind) | | -6,134 | | -3,544 | | | | | | |
Product warranty and recall at end of period | $ | 6,481 | $ | 6,107 | | | | | | |
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Product Development Expenses |
Expenses associated with the development of new products and changes to existing products are charged to expense as incurred and are included in the Company’s consolidated statements of operations as a component of selling, general and administrative. These product development costs amounted to $45,261, $44,798 and $35,263 in years ended December 31, 2013, 2012 and 2011, respectively, or 4.8%, 4.8% and 4.6% of net sales for these respective periods. |
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Share-Based Compensation |
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At December 31, 2013, the Company had three types of share-based compensation plans: (1) Long-Term Incentive Plan, as amended, (2) Directors’ Share Option Plan and (3) the Amended Directors’ Restricted Shares Plan. One plan is for employees and two plans are for non-employee directors. The Long-Term Incentive Plan is made up of the Long-Term Incentive Plan that was approved by the Company's shareholders on September 30, 1997, which expired on June 30, 2007, and the Amended and Restated Long-Term Incentive Plan, as amended, that was approved by shareholders on May 17, 2010, and expires on April 24, 2016. |
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Total compensation expense recognized as a component of selling, general and administrative on the consolidated statements of operations for share-based compensation arrangements was $4,974, $4,890 and $4,423 for the years ended December 31, 2013, 2012 and 2011, respectively. Of these amounts, $155, $47 and $375 for the years ended December 31, 2013, 2012 and 2011, respectively, were related to the Long-Term Cash Incentive Plan “Phantom Shares” discussed in Note 8. There was no share-based compensation expense capitalized in inventory during 2013, 2012 or 2011. |
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Financial Instruments and Derivative Financial Instruments |
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Financial instruments, including derivative financial instruments, held by the Company include cash and cash equivalents, accounts receivable, accounts payable, long-term debt, an interest rate swap, fixed price commodity contracts and foreign currency forward contracts. The carrying value of cash and cash equivalents, accounts receivable and accounts payable is considered to be representative of fair value because of the short maturity of these instruments. See Note 9 for fair value disclosures of the Company’s financial instruments. |
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Common Shares Held in Treasury |
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The Company accounts for Common Shares held in treasury under the cost method and includes such shares as a reduction of total shareholders’ equity. |
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Net Income Per Share |
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Basic net income per share was computed by dividing net income by the weighted-average number of Common Shares outstanding for each respective period. Diluted net income per share was calculated by dividing net income by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. |
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Actual weighted-average Common Shares outstanding used in calculating basic and diluted net income per share were as follows: |
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Years ended December 31 | | 2013 | | 2012 | | 2011 | | | | |
Basic weighted-average shares outstanding | | 26,670,501 | | 26,377,352 | | 24,180,671 | | | | |
Effect of dilutive securities | | 522,984 | | 654,518 | | 464,258 | | | | |
Diluted weighted-average shares outstanding | | 27,193,485 | | 27,031,870 | | 24,644,929 | | | | |
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Options not included in the computation of diluted net income per share to purchase 20,000, 59,000 and 50,000 Common Shares at an average price of $15.73, $12.20 and $15.73 per share were outstanding at December 31, 2013, 2012 and 2011, respectively. These outstanding options were not included in the computation of diluted net income per share because their respective exercise prices were greater than the average closing market price of Company Common Shares. |
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There were 663,750, 635,850 and 419,100 performance-based restricted Common Shares outstanding at December 31, 2013, 2012 and 2011, respectively. These shares were not included in the computation of diluted net income per share because all vesting conditions have not been and are not expected to be achieved as of December 31, 2013, 2012 and 2011. These shares may become dilutive based on the Company’s ability to meet or exceed future performance targets. |
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Deferred Finance Costs |
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Deferred finance costs are being amortized over the life of the related financial instrument using the straight-line method, which approximates the effective interest method. The 2.5% discount to the initial purchasers of the Company’s senior secured notes is being accreted using the effective interest rate of 10.0% over the life of the senior secured notes. Deferred finance cost amortization and debt discount accretion for the years ended December 31, 2013, 2012 and 2011 was $961, $862 and $875, respectively, and is included as a component of interest expense, net on the consolidated statements of operations. As of December 31, 2013 and 2012, deferred financing costs, net were $1,168 and $1,564, respectively and were included on the consolidated balance sheets as a component of investments and other long-term assets, net. |
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Changes in Accumulated Other Comprehensive Loss by Component |
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Changes in accumulated other comprehensive loss for the years ended December 31, 2013 and 2012 were as follows: |
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| | translation | | Derivatives | | liability | | Total | | |
Balance at January 1, 2013 | $ | -12,410 | $ | 2,140 | $ | -12 | $ | -10,282 | | |
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Other comprehensive loss before reclassifications | | -17,925 | | -325 | | - | | -18,250 | | |
Amounts reclassified from accumulated other | | | | | | | | | | |
comprehensive loss | | - | | -1,926 | | - | | -1,926 | | |
Net other comprehensive loss, net of tax | | -17,925 | | -2,251 | | - | | -20,176 | | |
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Balance at December 31, 2013 | $ | -30,335 | $ | -111 | $ | -12 | $ | -30,458 | | |
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Balance at January 1, 2012 | $ | -1,908 | $ | -7,722 | $ | 15 | $ | -9,615 | | |
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Other comprehensive income (loss) before reclassifications | | -10,502 | | 7,106 | | - | | -3,396 | | |
Amounts reclassified from accumulated other | | | | | | | | | | |
comprehensive loss | | - | | 2,756 | | -27 | | 2,729 | | |
Net other comprehensive income (loss), net of tax | | -10,502 | | 9,862 | | -27 | | -667 | | |
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Balance at December 31, 2012 | $ | -12,410 | $ | 2,140 | $ | -12 | $ | -10,282 | | |
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Recently Adopted Accounting Standards |
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In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012. We adopted this standards update on January 1, 2013 and revised our disclosures, see above. |
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In December 2011, the FASB issued an accounting standards update requiring new disclosures about financial instruments and derivative instruments that are either offset by or subject to an enforceable master netting arrangement or similar agreement. The standards update is effective for fiscal years beginning after December 15, 2012. We adopted this standards update on January 1, 2013 which had no impact on our disclosures. |
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Reclassifications |
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Certain prior period amounts have been reclassified to conform to their 2013 presentation in the consolidated financial statements. |
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