Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Jan. 26, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | GLOBAL POWER EQUIPMENT GROUP INC. | |
Entity Central Index Key | 1,136,294 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 17,946,386 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 8,203 | $ 2,805 |
Restricted cash | 12,070 | 8,765 |
Accounts receivable, net of allowance of $1,513 and $1,289, respectively | 42,081 | 35,083 |
Raw material | 604 | 657 |
Inventory reserve | (321) | (312) |
Costs and estimated earnings in excess of billings | 18,465 | 25,807 |
Other current assets | 5,945 | 5,304 |
Total current assets | 143,076 | 158,242 |
Property, plant and equipment, net | 5,707 | 7,278 |
Goodwill | 35,400 | 35,400 |
Intangible assets, net | 22,826 | 24,801 |
Other long-term assets | 600 | 626 |
Total assets | 207,609 | 234,363 |
Current liabilities: | ||
Accounts payable | 17,368 | 13,470 |
Accrued compensation and benefits | 10,093 | 8,560 |
Billings in excess of costs and estimated earnings | 9,746 | 6,700 |
Accrued warranties | 1,215 | 1,307 |
Current portion of long-term debt | 10,190 | |
Other current liabilities | 22,664 | 19,357 |
Total current liabilities | 98,412 | 77,342 |
Long-term debt, net | 45,061 | 45,341 |
Deferred tax liabilities | 15,791 | 17,019 |
Other long-term liabilities | 2,331 | 2,509 |
Total liabilities | 164,580 | 147,229 |
Commitments and contingencies (Note 7 and 9) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 170,000,000 shares authorized and 19,189,764 and 18,855,409 shares issued, respectively, and 17,801,095 and 17,485,941 shares outstanding, respectively | 192 | 188 |
Paid-in capital | 78,567 | 76,708 |
Accumulated other comprehensive loss | (6,626) | (9,513) |
Retained earnings - (deficit) | (29,090) | 19,764 |
Treasury stock, at par (1,388,669 and 1,369,468 common shares, respectively) | (14) | (13) |
Total stockholders' equity | 43,029 | 87,134 |
Total liabilities and stockholders' equity | 207,609 | 234,363 |
Disposed of by sale | Hetsco Inc. | ||
Current assets: | ||
Current assets of discontinued operations | 22,832 | |
Current liabilities: | ||
Liabilities related to assets held for sale | 1,151 | |
Mechanical Solutions | Discontinued operations disposed of by sale | ||
Current assets: | ||
Current assets of discontinued operations | 56,029 | 57,301 |
Long-term assets of discontinued operations | 8,016 | |
Current liabilities: | ||
Liabilities related to assets held for sale | 27,136 | 26,797 |
Long-term liabilities of discontinued operations | $ 2,985 | $ 5,018 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable allowance for doubtful accounts | $ 1,513 | $ 1,289 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 19,189,764 | 18,855,409 |
Common stock, shares outstanding | 17,801,095 | 17,485,941 |
Treasury stock at par | 1,388,669 | 1,369,468 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenue | |||||
Total revenue | $ 50,630 | $ 66,046 | $ 173,922 | $ 230,423 | |
Cost of revenue | |||||
Total cost of revenue | 51,755 | 56,758 | 177,899 | 204,105 | |
Gross profit (loss) | (1,125) | 9,288 | (3,977) | 26,318 | |
Operating expenses | |||||
Selling and marketing expenses | 995 | 1,382 | 2,872 | 4,551 | |
General and administrative expenses | 11,148 | 11,560 | 31,930 | 37,526 | |
(Gain) loss on sale of business and net assets held for sale | 9 | (239) | 8,202 | ||
Depreciation and amortization expense(1) | [1] | 1,168 | 1,152 | 3,282 | 4,801 |
Total operating expenses | 13,311 | 14,103 | 37,845 | 55,080 | |
Operating income (loss) | (14,436) | (4,815) | (41,822) | (28,762) | |
Other expense (income) | |||||
Interest expense, net | 3,639 | 1,774 | 7,583 | 6,408 | |
Other (income) expense, net | (9) | (89) | (9) | 11 | |
Total other (income) expenses, net | 3,630 | 1,685 | 7,574 | 6,419 | |
Loss from continuing operations before income tax expense | (18,066) | (6,500) | (49,396) | (35,181) | |
Income tax expense (benefit) | 317 | 266 | (1,211) | 1,154 | |
Loss from continuing operations | (18,383) | (6,766) | (48,185) | (36,335) | |
Discontinued operations: | |||||
Income (loss) from discontinued operations before income tax expense (benefit) | 541 | 178 | 112 | 76 | |
Income tax expense (benefit) | (855) | 142 | 578 | 368 | |
Income (loss) from discontinued operations | 1,396 | 36 | (466) | (292) | |
Net loss | $ (16,987) | $ (6,730) | $ (48,651) | $ (36,627) | |
Basic earnings (loss) per common share | |||||
Loss from continuing operations (in dollars per share) | $ (1.04) | $ (0.39) | $ (2.74) | $ (2.10) | |
Earnings (loss) from discontinued operations (in dollars per share) | 0.08 | (0.03) | (0.01) | ||
Basic earnings (loss) per common share (in dollars per share) | (0.96) | (0.39) | (2.77) | (2.11) | |
Diluted earnings (loss) per common share | |||||
Loss from continuing operations (in dollars per share) | (1.04) | (0.39) | (2.74) | (2.10) | |
Earnings (loss) from discontinued operations (in dollars per share) | 0.08 | (0.03) | (0.01) | ||
Diluted loss per common share (in dollars per share) | $ (0.96) | $ (0.39) | $ (2.77) | $ (2.11) | |
Services | |||||
Revenue | |||||
Services revenue | $ 39,040 | $ 47,364 | $ 138,253 | $ 171,902 | |
Cost of revenue | |||||
Services cost of revenue | 34,280 | 40,688 | 132,694 | 150,158 | |
Electrical Solutions | |||||
Revenue | |||||
Products revenue | 11,590 | 18,682 | 35,669 | 58,521 | |
Cost of revenue | |||||
Products cost of revenue | $ 17,475 | $ 16,070 | $ 45,205 | $ 53,947 | |
[1] | Excludes depreciation and amortization expense for the three months ended September 30, 2017 and 2016 of $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2017 and 2016 of $0.6 million and $0.9 million, respectively, included in cost of revenue. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Depreciation and amortization included in cost of sales | $ 0.2 | $ 0.3 | $ 0.6 | $ 0.9 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net loss | $ (16,987) | $ (6,730) | $ (48,651) | $ (36,627) |
Foreign currency translation adjustment | 791 | 215 | 2,887 | 226 |
Comprehensive loss | $ (16,196) | $ (6,515) | $ (45,764) | $ (36,401) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Common Shares $0.01 Per Share | Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Shares | Total |
Balance, Beginning at Dec. 31, 2016 | $ 188 | $ 76,708 | $ (9,513) | $ 19,764 | $ (13) | $ 87,134 |
Balance, Beginning (in shares) at Dec. 31, 2016 | 18,855,409 | (1,369,468) | 18,855,409 | |||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of restricted stock units | $ 4 | (4) | ||||
Issuance of restricted stock units (in shares) | 334,355 | |||||
Tax withholding on restricted stock units | (462) | $ (1) | $ (463) | |||
Tax withholding on restricted stock units(in shares) | (19,201) | |||||
Share-based compensation | 2,131 | 2,131 | ||||
Dividends | (9) | (9) | ||||
Net loss | (48,651) | (48,651) | ||||
Foreign currency translation adjustment | 2,887 | 2,887 | ||||
Balance, Ending at Sep. 30, 2017 | $ 192 | 78,567 | $ (6,626) | (29,090) | $ (14) | $ 43,029 |
Balance, Ending (in shares) at Sep. 30, 2017 | 19,189,764 | (1,388,669) | 19,189,764 | |||
Increase (Decrease) in Shareholders' Equity | ||||||
Adoption of ASU 2016-09 (Note 3) | ASU 2016-09 | $ 194 | $ (194) |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net loss | $ (48,651) | $ (36,627) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Net loss from discontinued operations | 466 | 292 |
Deferred income tax expense (benefit) | (1,228) | 1,047 |
Depreciation and amortization on plant, property and equipment and intangible assets | 3,872 | 5,706 |
Amortization of deferred financing costs | 526 | 173 |
Loss on disposals of property, plant, and equipment | 30 | 65 |
(Gain) loss on sale of business and net assets held for sale | (239) | 8,202 |
Bad debt expense | 190 | (130) |
Stock-based compensation | 1,994 | 1,236 |
Payable-in-kind interest | 2,004 | |
Changes in operating assets and liabilities, net of business sold: | ||
Accounts receivable | (7,988) | 19,423 |
Inventories | 63 | 116 |
Costs and estimated earnings in excess of billings | 7,821 | (6,604) |
Other current assets | 3,328 | (944) |
Other assets | 3,507 | 62 |
Accounts payable | 3,861 | 6,309 |
Accrued and other liabilities | 1,978 | 766 |
Accrued warranties | (92) | (1,094) |
Billings in excess of costs and estimated earnings | 3,046 | 1,409 |
Net cash provided by (used in) operating activities, continuing operations | (25,512) | (593) |
Net cash provided by (used in) operating activities, discontinued operations | 6,534 | 6,261 |
Net cash provided by (used in) operating activities | (18,978) | 5,668 |
Investing activities: | ||
Proceeds from sale of business, net of restricted cash and transaction costs | 20,206 | |
Net transfers of restricted cash | (19) | (8,405) |
Proceeds from sale of property, plant and equipment | 19 | |
Purchase of property, plant and equipment | (208) | (537) |
Net cash provided by (used in ) investing activities, continuing operations | 19,979 | (8,923) |
Net cash provided by (used in ) investing activities, discontinued operations | (56) | 4,672 |
Net cash provided by (used in) investing activities | 19,923 | (4,251) |
Financing activities: | ||
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation | (463) | (231) |
Debt issuance costs | 1,872 | |
Dividends paid | (9) | |
Proceeds from long-term debt | 171,599 | 32,200 |
Payments of long-term debt | (165,515) | (48,097) |
Net cash provided by (used in) financing activities, continuing operations | 3,740 | (16,128) |
Net cash provided by (used in) financing activities, discontinued operations | 0 | 0 |
Net cash provided by (used in) financing activities | 3,740 | (16,128) |
Effect of exchange rate changes on cash, continuing operations | 0 | 0 |
Effect of exchange rate change on cash, discontinued operations | 713 | 287 |
Effect of exchange rate change on cash | 713 | 287 |
Net change in cash and cash equivalents | 5,398 | (14,424) |
Cash and cash equivalents, beginning of year | 2,805 | 22,239 |
Cash and cash equivalents, end of quarter | 8,203 | 7,815 |
Supplemental Disclosures: | ||
Cash paid for interest | 4,736 | 4,873 |
Cash paid for income taxes, net of refunds | 1,259 | $ 1,201 |
Noncash repayment of revolving credit facility | (36,224) | |
Noncash upfront fee related to senior secured term loan facility | $ (4,550) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1—BASIS OF PRESENTATION Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) on a basis consistent with that used in the Annual Report on Form 10-K for the year ended December 31, 2016 filed by Global Power Equipment Group Inc. and its wholly owned subsidiaries (“Global Power,” “we,” “us,” “our” or the “Company”) with the United States (the “U.S.”) Securities and Exchange Commission (“SEC”) on September 12, 2017 (the “2016 Form 10-K”) and include all normal recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets and statements of operations, comprehensive loss, cash flows and stockholders’ equity for the periods indicated. All significant intercompany transactions have been eliminated. These notes should be read in conjunction with the audited consolidated financial statements included in the 2016 Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three and nine month periods are not necessarily indicative of the results to be expected for the full year. The Company reports on a fiscal quarter basis utilizing a “modified” 4-4-5 calendar (modified in that the fiscal year always begins on January 1 and ends on December 31). However, the Company has continued to label its quarterly information using a calendar convention. The effects of this practice are modest and only exist when comparing interim period results. The reporting periods and corresponding fiscal interim periods are as follows: Reporting Interim Period Fiscal Interim Period 2017 2016 Three Months Ended March 31 January 1, 2017 to April 2, 2017 January 1, 2016 to April 3, 2016 Three Months Ended June 30 April 3, 2017 to July 2, 2017 April 4, 2016 to July 3, 2016 Three Months Ended September 30 July 3, 2017 to October 1, 2017 July 4, 2016 to October 2, 2016 |
LIQUIDITY
LIQUIDITY | 9 Months Ended |
Sep. 30, 2017 | |
LIQUIDITY | |
LIQUIDITY | NOTE 2—LIQUIDITY The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which assumes that it will be able to meet its obligations and continue its operations during the next year. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. For the three and nine months ended September 30, 2017, the Company had a net loss from continuing operations of $18.4 million and $48.2 million, respectively, and negative cash flows from continuing operations of $25.5 million for the nine months ended September 30, 2017. Historically, the Company has funded its operations through cash on hand, asset sales and draws against its $150.0 million revolving credit facility (as amended or supplemented from time to time, the “Revolving Credit Facility”), as necessary. As a result of the Company’s continued non-compliance with the financial and certain other covenants under the Revolving Credit Facility, in July 2016, the administrative agent exercised its rights and assumed control over certain of the Company’s accounts by implementing a cash dominion process that used receipts of collateral to directly pay down debt, while allowing the Company to continue to borrow, subject to certain restrictions. As a result of this action, the Company’s liquidity under the Revolving Credit Facility was severely constrained from that time until its termination in June 2017. Since June 2017, the Company’s liquidity has remained very constrained as a result of continued losses, inconsistent cash flows from operations and its inability to borrow additional amounts for short-term working capital needs or issue additional standby letters of credit. During 2017, the following series of significant events occurred: · During the first four months of 2017, the Company repatriated $10.0 million in cash from its former Netherlands subsidiary. · In June 2017, the Company refinanced the Revolving Credit Facility and entered into a $45.0 million, 4.5-year senior secured term loan facility (the “Initial Centre Lane Facility”) with an affiliate of Centre Lane Partners, LLC (“Centre Lane”). · In August 2017, the Company entered into an amendment to the Initial Centre Lane Facility (the “Centre Lane Amendment” and, together with the Initial Centre Lane Facility, the “Centre Lane Facility”) to provide for a $10.0 million first-out term loan (the “First-Out Loan”), which matures on September 30, 2018. The remaining balance on the Centre Lane Facility does not mature until 2021. · After repayment of the Revolving Credit Facility and fees associated with both the Initial Centre Lane Facility and the Centre Lane Amendment, the Company’s net cash proceeds were $15.3 million. · On October 11, 2017, the Company sold substantially all of the operating assets and liabilities of its Mechanical Solutions segment for $43.3 million in cash, resulting in net proceeds of $40.9 million. The net proceeds were used to pay down $34.0 million of the Company’s outstanding debt, including full repayment of the First-Out Loan. In addition, this payment removed the minimum liquidity requirements under the Centre Lane Facility and satisfied the criteria necessary to avoid a payable-in-kind (“PIK”) rate increase on January 1, 2018. · On October 31, 2017, the Company completed the sale of its manufacturing facility in Mexico and auctioned the remaining production equipment and other assets for net proceeds of $3.6 million. Net proceeds of $1.9 million from the sale of the facility and equipment were used to reduce outstanding debt under the Centre Lane Facility. The manufacturing facility was included in the Company’s Mechanical Solutions reporting segment. · The remaining proceeds of $8.6 million from the sale of Mechanical Solutions and the sale of the Mexican manufacturing facility and equipment were used to fund working capital requirements. Management, in conjunction with the Board of Directors of the Company, continues to assess and implement steps in its liquidity plan, which currently consists of the following. There is no assurance that the Company will be able to pursue these opportunities successfully. · Focusing on shortening the collection cycle time on the Company’s accounts receivables and lengthening the payment cycle time on its accounts payables; · Reducing ongoing operating expenses wherever possible, including workforce reductions and curtailments at underutilized facilities; · Seeking an asset-based lending facility that will enable the Company to issue letters of credit, as well as supplement its working capital needs and potentially reduce our outstanding term debt; and · Assessing strategic alternatives, including the potential complete divestiture of the Electrical Solutions segment in an effort to reduce our outstanding term debt. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3—RECENT ACCOUNTING PRONOUNCEMENTS New accounting pronouncements implemented by the Company during 2017 or requiring implementation in future periods are discussed below. In the first quarter of 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This ASU is intended to simplify various aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. As a result of the adoption of ASU 2016-09, excess tax benefits and tax deficiencies associated with option exercises and vested share awards are now recognized as income tax benefit or expense in the consolidated statement of operations instead of in additional paid-in capital. The previously unrecognized excess tax benefits as of December 31, 2016 were recorded as a decrease to deferred tax assets. However, given the valuation allowance placed on the Company’s deferred tax assets, the recognition of excess tax benefits and tax deficiencies upon adoption did not have an impact on the Company’s retained earnings. As a result of adopting the new standard utilizing the modified retrospective approach, the Company’s deferred tax assets increased $2.6 million, with a corresponding increase in its valuation allowance. Additionally, the excess tax benefits are now presented as an operating activity on the consolidated statement of cash flows, rather than as a financing activity. The adoption of the guidance affecting the cash flow presentation did not have an impact on the Company’s consolidated statements of cash flows. The Company also elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The adoption of this new guidance resulted in a cumulative-effect adjustment of $0.2 million decrease to retained earnings as of January 1, 2017, related to the accounting for forfeitures using the modified retrospective method. In the first quarter of 2017, the Company adopted ASU 2015-11, “Simplifying the Measurement of Inventory.” This ASU requires an entity to measure inventory, other than that measured using last-in-first-out or the retail inventory method, at the lower of cost or net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of ASU 2015-11 did not have a material impact on the Company’s financial position, results of operations or cash flows. In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities,” which is intended to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 is effective for annual and interim periods beginning after December 15, 2018 and should be applied on a retrospective basis for cash flow and net investment hedges existing on the date of adoption. The amendments to the presentation and disclosure guidance should be applied on a prospective basis. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, “Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” ASU 2016-18 requires an entity to include in its cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. We do not expect the adoption of ASU 2016-18 to have a material impact on our financial position or results of operations. We are currently evaluating the impact adoption will have on our statement of cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases.” The primary difference between the current requirement under generally accepted accounting principles in the U.S. and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. ASU 2016-02 requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases), while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. ASU 2016-02 must be adopted using a modified retrospective transition, and provides for certain practical expedients. The Company has not determined the potential impact of the adoption of ASU 2016-02 on its financial position, results of operations and cash flows. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides new guidance for revenue recognized from contracts with customers and will replace the existing revenue recognition guidance. ASU 2014-09 requires that revenue be recognized at an amount the Company is entitled to upon transferring control of goods or services to customers, as opposed to when risks and rewards transfer to a customer. In July 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 by one year, making it effective for the interim reporting periods within the annual reporting period beginning after December 15, 2017. This standard may be applied on a retrospective basis to all prior periods presented or on a modified retrospective basis with a cumulative adjustment to retained earnings in the year of adoption. The Company anticipates adopting the standard using the modified retrospective method. Although the Company does not expect the adoption of ASU 2014-09 to have a material impact on its consolidated financial statements, it is still assessing the impact the adoption will have on its related disclosures and internal controls. The FASB has issued several additional ASUs to provide implementation guidance on ASU 2014-09, including ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” issued in March 2016 and ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” issued in April 2016. The Company will consider this guidance in evaluating the impact of ASU 2014-09. |
CHANGES IN BUSINESS
CHANGES IN BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
CHANGES IN BUSINESS | |
CHANGES IN BUSINESS | NOTE 4—CHANGES IN BUSINESS Discontinued Operations During the third quarter of 2017, the Company made the decision to exit and sell substantially all of the operating assets and liabilities of its Mechanical Solutions segment in an effort to reduce the Company’s outstanding term debt. The Company determined that the decision to exit this segment met the definition of a discontinued operation. As a result, this segment, including TOG Manufacturing Company, Inc. which, along with TOG Holdings, Inc., was sold in July 2016, has been presented as a discontinued operation for all periods presented. The Mechanical Solutions segment was the only component of the business that qualified for discontinued operations for all periods presented. On October 11, 2017, the Company sold substantially all of the operating assets and liabilities of its Mechanical Solutions segment and used a portion of the proceeds to pay down $34.0 million of the Company’s outstanding debt and related fees, including full repayment of the First-Out Loan. Additionally, on October 31, 2017, the Company completed the sale of its manufacturing facility in Mexico and auctioned the remaining production equipment and other assets for net proceeds of $3.6 million, of which $1.9 million was used to reduce the principal amount of the Initial Centre Lane Facility. The remainder was used to fund working capital requirements. The Company’s gain on the sale of its Mechanical Solutions segment is currently being finalized for customary purchase price adjustments and will be included in discontinued operations in the consolidated statement of operations for the year ended December 31, 2017. The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of discontinued operations: (in thousands) September 30, 2017 December 31, 2016 Assets: Accounts receivable $ 17,301 $ 24,197 Inventories, net 3,779 3,583 Cost and estimated earnings in excess of billings 25,051 26,890 Other current assets 2,127 2,631 Current assets of discontinued operations* 57,301 Property, plant and equipment, net 5,230 5,318 Goodwill and other intangible assets 1,055 1,055 Other long-term assets 1,486 1,643 Long-term assets of discontinued operations* 8,016 Total assets of discontinued operations $ 56,029 $ 65,317 Liabilities: Accounts payable $ 5,025 $ 5,606 Accrued compensation and benefits 1,894 2,080 Billings in excess of costs and estimated earnings 2,355 54 Accrued warranties 2,921 4,499 Other current liabilities 12,789 14,558 Other long-term liabilities 2,152 — Current liabilities of discontinued operations 27,136 26,797 Other long-term Liabilities — 1,841 Liability for uncertain tax positions 2,985 3,177 Long-term liabilities of discontinued operations 2,985 5,018 Total liabilities of discontinued operations $ 30,121 $ 31,815 * The total assets of discontinued operations were classified as current on the September 30, 2017 condensed consolidated balance sheet because either the sale has subsequently occurred and proceeds were collected within one year or it is expected to occur. The following table presents a reconciliation of the major classes of line items constituting the net income or loss from discontinued operations. In accordance with GAAP, the amounts in the table below do not include an allocation of corporate overhead. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Revenue $ 16,262 $ 19,398 $ 50,841 $ 84,530 Cost of revenue 13,087 15,749 41,580 73,814 Selling and marketing expenses 690 744 2,507 2,792 General and administrative expenses 1,546 2,674 5,915 7,634 Other 398 53 727 214 Income (loss) from discontinued operations before income taxes 541 178 112 76 Income tax expense (benefit) (855) 142 578 368 Income (loss) from discontinued operations $ 1,396 $ 36 $ (466) $ (292) Disposition of Hetsco In June 2016, the Company engaged a financial advisor to assist with the sale of its wholly owned subsidiary, Hetsco, Inc. (“Hetsco”), in order to pay down debt. Hetsco was previously included in the Services segment. In connection with the Company’s decision to sell Hetsco, the net assets were adjusted to estimated fair value less estimated selling expenses which resulted in a write-down of $8.3 million in 2016. The assets and liabilities of Hetsco were reclassified to “assets held for sale-Hetsco” and “liabilities related to assets held for sale-Hetsco,” respectively, in the consolidated balance sheet for December 31, 2016. On January 13, 2017, the Company sold the stock of Hetsco for $23.2 million in cash, inclusive of working capital adjustments. After transaction costs and an escrow withholding of $1.5 million, the net proceeds of $20.2 million were used to reduce debt. In connection with the Company’s decision to sell Hetsco, the net assets were adjusted to estimated fair value less estimated selling expenses which, resulted in a write-down of $8.3 million in 2016. In the first quarter of 2017, the Company recorded a $0.2 million adjustment, which reduced the $8.3 million loss recorded in 2016. Hetsco was previously included in the Services segment. The significant assets and liabilities of Hetsco as of December 31, 2016 were as follows: (in thousands) December 31, 2016 Accounts receivable $ 4,739 Other assets 642 Property and equipment 1,230 Goodwill and other intangible assets 16,221 Assets held for sale-Hetsco $ 22,832 Accounts payable $ 355 Accrued liabilities 796 Liabilities related to assets held for sale-Hetsco $ 1,151 A summary of Hetsco’s income (loss) before income taxes for the three and nine months ended September 30, 2017 and 2016 is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Income (loss) before income taxes $ — $ 883 $ 489 $ (7,156) |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 5—EARNINGS PER SHARE As of September 30, 2017, the Company’s 17,801,095 shares outstanding included 15,279 shares of contingently issued but unvested restricted stock. As of September 30, 2016, the Company’s 17,466,756 shares outstanding included 36,073 shares of contingently issued but unvested restricted stock. Restricted stock is excluded from the calculation of basic weighted average shares outstanding, but its impact, if dilutive, is included in the calculation of diluted weighted average shares outstanding. Basic earnings per common share are calculated by dividing net income by the weighted average common shares outstanding during the period. Diluted earnings per common share are based on the weighted average common shares outstanding during the period, adjusted for the potential dilutive effect of common shares that would be issued upon the vesting and release of restricted stock awards and units. Basic and diluted loss per common share from continuing operations are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2017 2016 2017 2016 Loss from continuing operations $ (18,383) $ (6,766) $ (48,185) $ (36,335) Basic loss per common share: Weighted average common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Basic loss per common share $ (1.04) $ (0.39) $ (2.74) $ (2.10) Diluted loss per common share: Weighted average common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Diluted effect: Unvested portion of restricted stock units and awards — — — — Weighted average diluted common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Diluted loss per common share $ (1.04) $ (0.39) $ (2.74) $ (2.10) The weighted average number of shares outstanding used in the computation of basic and diluted earnings (loss) per share does not include the effect of the following potential outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted earnings (loss) per share because the effect would have been anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Unvested service-based restricted stock units and awards 130,616 116,200 130,616 214,533 Unvested performance- and market-based restricted stock units 512,515 931,253 512,515 931,254 Stock options 122,000 122,000 122,000 122,000 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 6—INCOME TAXES The effective income tax rate for continuing operations for the three and nine months ended September 30, 2017 and 2016 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Effective income tax rate for continuing operations (1.8)% (4.1)% 2.5% (3.3)% The effective income tax rate differs from the statutory federal income tax rate of 35% primarily because of the full valuation allowances recorded on the Company’s U.S. deferred tax assets. For the three and nine months ended September 30, 2017, the Company recorded income tax expense from continuing operations of $0.3 million, or (1.8)% of pretax loss from continuing operations, and income tax benefit from continuing operations of $1.2 million, or 2.5% of pretax loss from continuing operations, respectively, compared with income tax expense from continuing operations of $0.3 million, or (4.1)% of pretax loss from continuing operations, and $1.2 million, or (3.3)% of pretax loss from continuing operations, respectively, in the corresponding periods in 2016. The decrease in income tax provision from continuing operations for the nine months ended September 30, 2017 compared with the corresponding period in 2016 was related to a reduction in net deferred tax liabilities primarily from a $2.2 million decrease in indefinite-lived intangibles deferred tax liabilities that cannot be used to offset deferred tax assets subject to valuation allowance as a result of the disposition of Hetsco in the first quarter of 2017. As of September 30, 2017 and 2016, the Company would have needed to generate approximately $256.8 million and $202.5 million, respectively, of future financial taxable income to realize its deferred tax assets. The Company withdrew the permanent reinvestment assertion of its foreign earnings from its Netherlands-based operations in the third quarter of fiscal 2015; therefore, the Company provided for U.S. income taxes on the earnings generated by its Netherlands-based operations, as well as recognition of a corresponding deferred tax liability. As of September 30, 2017, the Company does not have any undistributed earnings in any of its other foreign subsidiaries because all of their earnings were taxed as deemed dividends. As of September 30, 2017, the Company provided for a total liability of $4.0 million, of which $1.4 million was related to our discontinued operations, and provided for a total liability as of December 31, 2016 of $4.2 million, of which $1.5 million was related to our discontinued operations, for unrecognized tax benefits related to various federal, foreign and state income tax matters, which was included in long-term deferred tax assets and other long-term liabilities. If recognized, the entire amount of the liability would affect the effective tax rate. As of September 30, 2017, the Company accrued approximately $1.9 million, of which $1.6 million was related to our discontinued operations, in other long-term liabilities for potential payment of interest and penalties related to uncertain income tax positions. On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Act includes numerous changes in existing tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%. The rate reduction took effect on January 1, 2018. In accordance with GAAP, the Company will revalue its net deferred tax liabilities at December 31, 2017. The Company estimates that this will result in a reduction in the value of its net deferred tax liabilities in the range of approximately $5.5 to $6.0 million, which reduction will be recorded as additional income tax benefit in the Company’s consolidated statement of operations for the fourth quarter of 2017. The Company’s revaluation of its deferred tax liabilities is subject to further clarification of the Act. As a result, the actual impact on the net deferred tax liabilities may vary from the estimated amount due to uncertainties in the Company’s preliminary review. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | NOTE 7—DEBT Revolving Credit Facility: In February 2012, the Company entered into a $100.0 million Revolving Credit Facility with Wells Fargo Bank, National Association, as Administrative Agent, U.S. Bank National Association, as Syndication Agent, and the various lending institutions party thereto. In December 2013, the Revolving Credit Facility was increased from $100.0 million to $150.0 million. The Company gave a first priority lien on substantially all of its assets as security for the Revolving Credit Facility, which was in place until the Company refinanced its debt with Centre Lane in June 2017. As a result of the refinancing, there were no amounts outstanding under the Revolving Credit Facility as of September 30, 2017. As of December 31, 2016, the Company had $45.3 million of revolving credit loans outstanding under the Revolving Credit Facility, and it was not in compliance with the financial and certain other covenants. As a result of the Company’s non-compliance under the Revolving Credit Facility, on a number of occasions in 2016 and 2017, prior to refinancing the Revolving Credit Facility, the Company entered into amendments and limited waivers with its lenders, which were in effect until the Company refinanced the outstanding debt balance on the Revolving Credit Facility in June 2017. Pursuant to the terms of such amendments and limited waivers, immediately following the sale of Hetsco in January 2017 until we refinanced our debt in June 2017, the Revolving Credit Facility provided total commitments available to the Company of $45.1 million and only allowed for borrowings up to a maximum of $31.6 million, exclusive of outstanding standby letters of credit, as well as other restrictions. The Revolving Credit Facility had a reduced revolving letter of credit facility of up to $13.5 million and no longer provided access to multi-currency funds. The Company paid an unused line fee of 0.75% pursuant to the terms of the Revolving Credit Facility. The Company was subject to interest rate changes on its London Interbank Offered Rate (“LIBOR”) based borrowings under the Revolving Credit Facility. During the first nine months of 2017, the Company borrowed $152.8 million on the Revolving Credit Facility, and it repaid $165.5 million. As a result of the subsequent refinancing, the outstanding debt balance was classified as long-term debt on the Company’s condensed consolidated balance sheets as of December 31, 2016. During the first nine months of 2016, the Company borrowed $32.2 million on the Revolving Credit Facility, and it repaid $48.1 million. Centre Lane Term Facility: In June 2017, funds affiliated with Centre Lane purchased and assumed the outstanding debt from the Company’s then-existing lenders under the Revolving Credit Facility. The Company replaced the Revolving Credit Facility with a 4.5-year senior secured term loan facility with an affiliate of Centre Lane as Administrative Agent and Collateral Agent, and the other lenders from time to time party thereto (collectively, the “Lenders”). The Centre Lane Facility is governed by the terms of the Senior Security Credit Agreement, dated June 16, 2017, as amended by the Centre Lane Amendment on August 17, 2017. While not a party to the Centre Lane Facility, entities associated with Wynnefield Capital, Inc., the Company’s largest equity investor, funded $6.0 million of the Centre Lane Facility. After payment of the Revolving Credit Facility and fees associated with both the Initial Centre Lane Facility and the Centre Lane Amendment, net cash proceeds were $15.3 million. The Initial Centre Lane Facility provides for an initial loan in an aggregate principal amount of $45.0 million, and the Centre Lane Amendment provides for a First-Out Loan, for an additional aggregate principal amount of $10.0 million. The Initial Centre Lane Facility has a maturity date of December 16, 2021. The First-Out Loan has a maturity date of September 30, 2018. The Initial Centre Lane Facility requires payment of an annual administration fee of $25,000 and an upfront fee equal to 7% of the aggregate commitments provided under the Centre Lane Facility. The upfront fee bears interest at a rate of LIBOR plus 19% annual PIK interest. The upfront fee is payable upon the earlier of maturity or the occurrence of certain events, including significant debt prepayments or asset sales that may occur prior to maturity. In addition to those fees, the Centre Lane Amendment also requires the Company to pay an upfront fee equal to 7% of the First-Out Loan commitments, which bears interest at the same rate as the initial upfront fee, and an exit fee equal to 7% of the aggregate outstanding principal amount of the First-Out Loan commitments, which is payable upon the maturity date of the First-Out Loan. Borrowings under the Centre Lane Facility initially bear interest at LIBOR plus the sum of 9% per year, payable in cash, plus 10% PIK interest. Cash interest is payable monthly, and the PIK interest accrues to and increases the principal balance on a monthly basis. Starting on January 1, 2018, the PIK interest rate will increase to 15% per year, unless the Company elects to make a prepayment of $25.0 million on the principal. The cash interest rate will remain unchanged. On October 11, 2017, the Company sold substantially all of the operating assets and liabilities of its Mechanical Solutions segment and used a portion of the proceeds to pay down $34.0 million of the Company’s outstanding debt and related fees, including full repayment of the First-Out Loan. This payment satisfied the criteria necessary to avoid the PIK rate increase on January 1, 2018. Additionally, on October 31, 2017, the Company completed the sale of its manufacturing facility in Mexico and auctioned the remaining production equipment and other assets for net proceeds of $3.6 million, of which $1.9 million was used to reduce the principal amount of the Initial Centre Lane Facility. The remainder was used to fund working capital requirements. The Company’s obligations under the Centre Lane Facility are guaranteed by all of its wholly owned domestic subsidiaries, subject to customary exceptions. The Company’s obligations are secured by first priority security interests on substantially all of its assets and those of its wholly owned domestic subsidiaries. This includes 100% of the voting equity interests of the Company’s domestic subsidiaries and certain specified foreign subsidiaries and 65% of the voting equity interests of other directly owned foreign subsidiaries, subject to customary exceptions. The Company may voluntarily prepay the Centre Lane Facility at any time or from time to time, in whole or in part, in a minimum amount of $1.0 million of the outstanding principal amount, plus any accrued but unpaid interest on the aggregate amount of the term loans being prepaid, plus a prepayment premium, to be calculated as follows (the “Prepayment Premium”): Prepayment Premium as a Percentage of Aggregate Period Outstanding Principal Prepaid June 16, 2017 to June 16, 2018 3% June 17, 2018 to June 16, 2019 2% June 17, 2019 to June 16, 2020 1% After June 16, 2020 0% Subject to certain exceptions, the Company must prepay an aggregate principal amount equal to 100% of its Excess Cash Flow (as defined in the Centre Lane Facility), minus the sum of all voluntary prepayments, within five business days after the date that is 90 days following the end of each fiscal year. The Centre Lane Facility also requires mandatory prepayment of certain amounts in the event the Company or its subsidiaries receive proceeds from certain events and activities, including, among others, asset sales, casualty events, the issuance of indebtedness and equity interests not otherwise permitted under the Centre Lane Facility and the receipt of tax refunds or extraordinary receipts in excess of $500,000, plus, in certain instances, the applicable Prepayment Premium, calculated as set forth above. The Centre Lane Facility contains customary representations and warranties, as well as customary affirmative and negative covenants. The Centre Lane Facility contains covenants that may, among other things, limit the Company’s ability to incur additional debt, incur liens, make investments or capital expenditures, declare or pay dividends, engage in mergers, acquisitions and dispositions, engage in new lines of business or certain transactions with affiliates and change accounting policies or fiscal year. The Centre Lane Facility also requires the Company to regularly provide financial information to the Lenders, as well as maintain certain total leverage ratios, beginning on September 30, 2018, and fixed charge coverage ratios, beginning on March 31, 2019. The Company’s capital expenditures are also limited. Events of default under the Centre Lane Facility include, but are not limited to, a breach of any of the financial covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters and impairment of security interests in collateral or invalidity of guarantees or security documents. If an event of default occurs, the Lenders may, among other things, declare all borrowings to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents related to the Centre Lane Facility. During the third quarter of 2017, the Company made the decision to exit and sell substantially all of the operating assets and liabilities of its Mechanical Solutions segment in an effort to reduce the Company’s outstanding term debt. As an initial step in this plan, the Company filed a certificate of dissolution and dissolved its wholly owned inactive subsidiary, Braden Construction Services, Inc. on September 5, 2017. As a result of this dissolution, the Company was in violation of one of its covenants under the Center Lane Facility as of September 30, 2017. On January 9, 2018, the Company entered into a second limited waiver and third amendment to the Centre Lane Facility which waived the event of default caused by the dissolution and extended the first required date for the Company to satisfy the fixed charge coverage ratios to March 31, 2019. The following table summarizes the Company’s long-term debt with Centre Lane: (in thousands) As of September 30, 2017 Current portion of term loan $ 11,555 Unamortized deferred financing costs (1,365) Current portion of long-term debt, net 10,190 Term loan, due 2021 49,711 Unamortized deferred financing costs (4,650) Long-term debt, net 45,061 Total term loan, net $ 55,251 The weighted average interest rate on borrowings under the Revolving Credit Facility and the Centre Lane Facility was 18.7% for the nine months ended September 30, 2017. European Credit Facility: On June 13, 2008, Braden-Europe B.V., Global Power Professional Services Netherlands B.V. and Global Power Netherlands B.V. (collectively, “Global Power Netherlands”) entered into a EUR 14,000,000 Credit Facility with an overdraft facility of EUR 1,000,000 and a contingent liability facility of EUR 13,000,000, under which letters of credit could be issued (as continued, amended or supplemented from time to time, the “ABN AMRO Credit Facility”) with ABN AMRO Bank N.V. The ABN AMRO Credit Facility automatically renewed each year on the same terms and conditions, so long as certain financial conditions were satisfied. In connection with the sale of substantially all of the operating assets and liabilities of the Company’s Mechanical Solutions segment on October 11, 2017, which included Global Power Netherlands, the ABN AMRO Credit Facility was assumed by the purchaser. Letters of Credit and Bonds: In line with industry practice, the Company is often required to provide letters of credit and surety and performance bonds to customers. These letters of credit and bonds provide credit support and security for the customer if the Company fails to perform its obligations under the applicable contract with such customer. The interest rate on letters of credit issued under the Revolving Credit Facility letter of credit sublimit was 8.5% per annum at the time the Company refinanced its debt. As of September 30, 2017, the Company had $9.6 million outstanding standby letters of credit that were originally issued under the Revolving Credit Facility and there were no amounts drawn upon these letters of credit. In addition, as of September 30, 2017, the Company had outstanding surety bonds on projects of $31.6 million. The Centre Lane Facility does not provide for letters of credit; therefore, the Company is currently unable to obtain new letters of credit. Deferred Financing Costs: Deferred financing costs are amortized over the terms of the related debt facilities using the effective yield method. The Company did not incur any interest expense associated with the amortization of deferred financing costs on the Revolving Credit Facility for the three months ended September 30, 2017 and incurred less than $0.1 million for the nine months ended September 30, 2017. Total interest expense associated with the amortization of deferred financing costs on the Company’s Revolving Credit Facility was less than $0.1 million for the three months ended September 30, 2016 and was $0.2 million for the nine months ended September 30, 2016. Total interest expense associated with the amortization of deferred financing costs on the Centre Lane Facility was $0.4 million and $0.5 million for the three and nine months ended September 30, 2017, respectively. As of September 30, 2017, the Company did not have any unamortized deferred financing costs related to the Revolving Credit Facility. The Company had total unamortized deferred financing costs of $6.0 million related to the Centre Lane Facility, of which $1.4 million was included in current portion of long-term debt, net and $4.6 million was included in long-term debt, net on the accompanying September 30, 2017 condensed consolidated balance sheet. The Company had unamortized deferred financing costs of less than $0.1 million related to the Revolving Credit Facility, which were included in other long-term assets on the accompanying December 31, 2016 condensed consolidated balance sheet. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 8 — FINANCIAL INSTRUMENTS Fair Value of Financial Instruments: ASC 820–Fair Value Measurement defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in the active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The Company’s financial instruments as of September 30, 2017 and December 31, 2016 consisted primarily of cash and cash equivalents, restricted cash, receivables, payables and debt instruments. The carrying values of these financial instruments approximate their respective fair values, as they are either short-term in nature or carry interest rates that are periodically adjusted to market rates. The foreign currency forward exchange contracts previously disclosed in the Company’s Quarterly Reports on Form 10-Q for the first and second quarter of 2017 and in the 2016 Form 10-K were held by its discontinued operations. . |
COMMITMENTS AND CONTIGENCIES
COMMITMENTS AND CONTIGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 9—COMMITMENTS AND CONTINGENCIES Litigation and Claims: The Company is from time to time party to various lawsuits, claims and other proceedings that arise in the ordinary course of its business. With respect to all such lawsuits, claims and proceedings, the Company records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that the resolution of any currently pending lawsuits, claims and proceedings, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any currently pending lawsuits, claims and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case. A putative shareholder class action, captioned Budde v. Global Power Equipment Group Inc., is pending in the U.S. District Court for the Northern District of Texas naming the Company and certain former officers as defendants. This action and another action were filed in May and June of 2015, and in July of 2015 the court consolidated the two actions. On May 1, 2017, the lead plaintiff filed a second consolidated amended complaint that names the Company and three of its former officers as defendants. It alleges violations of the federal securities laws arising out of matters related to the Company’s restatement of certain financial periods and claims that the defendants made material misrepresentations and omissions of material fact in certain public disclosures during the putative class period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5, as promulgated thereunder. The plaintiffs seek class certification on behalf of persons who acquired the Company’s stock between September 7, 2011 and May 6, 2015, monetary damages of “more than $200 million” on behalf of the putative class and an award of costs and expenses, including attorneys’ fees and experts’ fees. The Company intends to defend against this action. On June 26, 2017, the Company and the individual defendants filed a motion to dismiss the complaint. On August 23, 2017, the lead plaintiff filed its opposition to that motion. On September 22, 2017, defendants filed their reply brief in further support of their motion to dismiss. On December 27, 2017, the court issued a memorandum opinion and order granting the motion to dismiss, allowing the plaintiffs until January 15, 2018 to file an amended complaint. The court found that, with respect to each of the defendants, plaintiffs failed to plead facts supporting a strong inference of scienter, or the required intent to deceive, manipulate or defraud, or act with severe recklessness. On January 15, 2018, the plaintiffs filed their third amended complaint, which the Company is currently evaluating with counsel. Litigation is subject to many uncertainties, and the outcome of this action is not predictable with assurance. At this time, the Company is unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, or any potential effect such may have on the Company or its business or operations. The Division of Enforcement of the SEC is conducting a formal investigation into possible securities law violations by the Company relating to disclosures it made concerning certain financial information, including its cost of sales and revenue recognition, as well as related accounting issues. The Company is cooperating with the SEC in its investigation, including through the production of documents to, and the sharing of information with, the SEC Enforcement Staff. At this time, the Company cannot predict the outcome or the duration of the SEC investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on it arising out of the SEC investigation. A former operating unit of Global Power has been named as a defendant in a limited number of asbestos personal injury lawsuits. Neither the Company nor its predecessors ever mined, manufactured, produced or distributed asbestos fiber, the material that allegedly caused the injury underlying these actions. The bankruptcy court’s discharge order issued upon the Company’s emergence from bankruptcy in January 2008 extinguished the claims made by all plaintiffs who had filed asbestos claims against it before that time. The Company believes the bankruptcy court’s discharge order should serve as a bar against any later claim filed against it, including any of its subsidiaries, based on alleged injury from asbestos at any time before emergence from bankruptcy. In any event, in all of the asbestos cases finalized post-bankruptcy, the Company has been successful in having such cases dismissed without liability. Moreover, during 2012, the Company secured insurance coverage that will help to reimburse the defense costs and potential indemnity obligations of its former operating unit relating to these claims. The Company intends to vigorously defend all currently active actions, all without liability, and it does not anticipate that any of these actions will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any legal action cannot be predicted and, therefore, there can be no assurance that this will be the case. Contingencies: During 2014, the Company entered into an agreement with a partner in connection with a power plant equipment installation project. The agreement contains certain performance liquidated damage clauses in favor of the customer. While the Company believes its performance in the project met its direct contractual obligations, it nonetheless has joint and several liability for other aspects of the overall project performance. Therefore, it is possible, though unlikely, that the Company will not incur any liability for performance related issues under the contract. The Company currently estimates that the most likely range of potential liability arising from the contractual provisions described above will be between $4.9 million to $31.3 million. The maximum liability under the terms of the agreement is $33.0 million less the $1.7 million in liquidated damages that the Company has already incurred. The minimum liability per the agreement is 20 percent of the total contract value less the $1.7 million in liquidated damages that the Company has already incurred. Because the Company does not believe any amount in that $4.9 million to $31.3 million range is a better estimate than any other amount, it had accrued the minimum amount in the range as of both September 30, 2017 and December 31, 2016. The accrual for this matter is included in other current liabilities on the condensed consolidated balance sheets for the periods presented. In an effort to provide uninterrupted customer service, the Company has from time to time performed additional work under contracts without first obtaining the requisite customer approvals for change orders per the contract terms. In the event the customer subsequently disputes the change orders, they become claims under U.S. GAAP with strict criteria which must be met prior to recognizing revenue. Therefore, the Company defers recognizing revenue related to unsigned disputed change orders until the dispute is resolved. Since U.S. GAAP requires the Company to recognize the cost of performing the work covered by the change orders at the time of incurrence, to the extent the Company is able to resolve the disputes and recognize revenue in a future period, that revenue will have a 100% gross margin associated with it in that future period. As of September 30, 2017, the Company has deferred recognizing revenue on $22.9 million of unsigned, disputed change orders. The amount which the Company will ultimately be able to recognize in revenue is not reasonably estimable at this point in time and the amount recognized, if any, could be substantially less than the amount of the unsigned, disputed change orders. Loss Contract Accruals: Estimated losses on uncompleted contracts are recognized in the earliest open period in which they first become known. As of September 30, 2017, the Company recorded an accrual of $12.9 million for loss contracts, which is included in other current liabilities on its condensed consolidated balance sheet. Warranty: Estimated costs related to product warranty are accrued using the specific identification method. Estimated costs related to service warranty are accrued as revenue is recognized and included in the cost of revenue. Estimated costs are based upon past warranty claims, sales history, the applicable contract terms and the remaining warranty periods. Warranty terms vary by contract but generally provide for a term of four years or less. The Company manages its exposure to warranty claims by having its field service and quality assurance personnel regularly monitor projects and maintain ongoing and regular communications with the customer. A reconciliation of the changes to the Company’s warranty reserve during the nine month period ended September 30, 2017 is as follows: (in thousands) September 30, 2017 Balance at the beginning of the period $ 1,307 Provision for the period 821 Settlements made (in cash or in kind) for the period (913) Balance at the end of the period $ 1,215 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION PLANS | NOTE 10—STOCK-BASED COMPENSATION PLANS During the first nine months of 2017, service-based restricted stock units totaling 295,376 were granted to employees at a grant date fair value of $4.30 per share. Restricted stock units granted to employees in 2017 generally vest over a period of two years. The fair value of restricted stock units represents the closing price of the Company’s common stock on the date of grant. During the first nine months of 2017, performance-based restricted stock units totaling 332,469 were awarded to employees at a grant date fair value of $4.67 per share. The 2017 performance-based restricted stock units contain performance conditions based on either a two year relative total shareholder return goal or a stock price goal. These restricted stock units will vest at the end of the two year relative total shareholder return performance period. However, if the relative total shareholder return goal is not met, then the restricted stock units will vest on the later of the last day of the performance period or the date that the stock price is achieved. The share price goal will be met if the Company’s common stock price per share equals or exceeds $6.00 for any period of 30 consecutive trading days during the three-year period ending on March 31, 2020. The fair value of the performance-based restricted stock units is estimated using the Monte Carlo simulation model. The 2017 service-based and performance-based restricted stock units discussed above have the potential to be settled in cash or other assets if our shareholders do not approve additional shares under the Company’s 2015 Equity Incentive Plan. Therefore, the fair value of these units is re-measured each reporting period. As of September 30, 2017, the Company had a $0.5 million liability related to these units which was included in other long-term liabilities on the Company’s condensed consolidated balance sheet. During the first nine months of 2017, cash-based awards totaling $0.9 million were awarded to employees. The cash-based awards granted to employees generally vest over a period of two years and are accounted for as liability awards. During the first nine months of 2017, service-based and performance-based restricted stock units of 46,600 and 27,000, respectively, were granted to certain employees outside of the 2015 Equity Incentive Plan. These restricted stock units generally vest over a period of two years and will be settled in common stock. Therefore, these restricted stock units are accounted for as equity awards. Total stock-based compensation expense for the three months ended September 30, 2017 and 2016 was $0.4 million and $0.1 million, respectively, and $2.0 million and $1.2 million for the nine months ended September 30, 2017 and 2016, respectively, and was included in general and administrative expenses on the Company’s condensed consolidated statement of operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 11—SEGMENT INFORMATION The Company’s operating segments engage in business activities from which they may earn revenues and incur expenses and for which discrete information is available. Operating results for the operating segments are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segments and to assess performance. Operating segments are aggregated for reporting purposes when the operating segments are identified as similar in accordance with the basic principles and aggregation criteria in the accounting standards. The Company’s reporting segments are based primarily on product lines. The reporting segments have different lines of management responsibility as each business requires different marketing strategies and management expertise. During the third quarter of 2017, the Company made the decision to exit its Mechanical Solutions segment and determined that the decision to exit this segment met the definition of a discontinued operation. As a result, as of September 30, 2017, the Company structured its business into the following two reporting segments: Services and Electrical Solutions. See “Item 1. Business” in the Company’s 2016 Form 10-K for more information about the Services and Electrical Solutions reporting segments, including types of products and services from which each reporting segment derives its revenue. Corporate includes expenses related to the Company’s corporate headquarters and interest expense related to its long-term debt. The operations of the Mechanical Solutions segment have been classified as discontinued operations in the consolidated statement of operations. See “Note 4—Changes in Business” for additional information. The Company uses operating income (loss) to compare and evaluate the financial performance of its reporting segments. The accounting policies for the Company’s reporting segments are the same as those described in “Note 3—Summary of Significant Accounting Policies” of the audited consolidated financial statements included in the Company’s 2016 Form 10-K. The following tables present certain financial information from continuing operations by reportable segment: Three Months Ended September 30, Nine Months Ended September 30, External Revenue (in thousands) 2017 2016 2017 2016 Services $ 39,040 $ 47,364 $ 138,253 $ 171,902 Electrical Solutions 11,590 18,682 35,669 58,521 Total external revenue $ 50,630 $ 66,046 $ 173,922 $ 230,423 For each of the three and nine months ended September 30, 2017 and 2016, the Company had no inter-segment revenue. Three Months Ended September 30, Nine Months Ended September 30, Depreciation and Amortization (1) (in thousands) 2017 2016 2017 2016 Services $ 125 $ 155 $ 371 $ 1,765 Electrical Solutions 869 1,106 2,724 3,214 Corporate 360 220 777 727 Total depreciation and amortization $ 1,354 $ 1,481 $ 3,872 $ 5,706 (1) Depreciation and amortization included in cost of revenue for the three months ended September 30, 2017 and 2016 was $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2017 and 2016 was $0.6 million and $0.9 million, respectively. A reconciliation of total segment operating income (loss) from continuing operations to loss from continuing operations before income tax is as follows: Three Months Ended September 30, Nine Months Ended September 30, Operating Income (Loss) (in thousands) 2017 2016 2017 2016 Services $ 1,405 $ 1,556 $ (4,716) $ (3,625) Electrical Solutions (8,594) 242 (16,931) (2,947) Corporate (7,247) (6,613) (20,175) (22,190) Operating (loss) income (14,436) (4,815) (41,822) (28,762) Interest expense, net 3,639 1,774 7,583 6,408 Other (income) expense, net (9) (89) (9) 11 Loss from continuing operations before income tax $ (18,066) $ (6,500) $ (49,396) $ (35,181) A reconciliation of segment assets to total assets is as follows: September 30, December 31, Assets (in thousands) 2017 2016 Services $ 86,926 $ 111,792 Electrical Solutions 36,237 38,435 Corporate 28,417 18,819 Total assets* $ 151,580 $ 169,046 *Excludes total assets from discontinued operations of $56.0 million at September 30, 2017 and $65.3 million at December 31, 2016. Total assets in the Services segment as of September 30, 2017 and December 31, 2016 included amounts related to subcontracts with Westinghouse Electric Company, LLC (“Westinghouse”) for two nuclear power plant projects. On March 29, 2017, Westinghouse filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, Southern District of New York. As of September 30, 2017, the Company was due $8.7 million for pre-petition services rendered to Westinghouse on the two projects. In November 2017, pursuant to agreements with the owners of both projects, the Company received a partial payment of $6.4 million for pre-petition services. Based on the Company’s evaluation of available information, it expects the remaining amount outstanding for pre-petition services of $2.3 million to be recoverable. The Company has filed mechanic’s liens in Georgia against the property of the owners of the project for the remainder of the amount due for pre-petition services rendered to Westinghouse. On July 31, 2017, one of the projects was cancelled by the owner of the project, and the Company demobilized from the site. The Company continues to provide services to the remaining project site at the request of the owner of the project. The amounts for post-petition services have been billed to the owners of the projects and, to the extent not already collected, are expected to be recoverable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 12—SUBSEQUENT EVENTS In January 2018, the Company entered into a second limited waiver and third amendment to the Centre Lane facility which waived the event of default caused by the dissolution of an inactive subsidiary and extended the first required date for the Company to satisfy the fixed charge coverage ratios to March 31, 2019. See “Note 7—Debt” for additional information on the Centre Lane facility. In December 2017, the Company received a memorandum opinion and order from the U.S. District Court for the Northern District of Texas related to its putative shareholder class action lawsuit. The memorandum opinion and order granted the Company’s motion to dismiss and allowed the plaintiffs to file an amended complaint by January 15, 2018. The court found that, with respect to each of the defendants, plaintiffs failed to plead facts supporting a strong inference of scienter, or the required intent to deceive, manipulate or defraud, or act with severe recklessness. On January 15, 2018, the plaintiffs filed their third amended complaint, which the Company is currently evaluating with counsel. See “Note 9—Commitments and Contingencies” for additional information. In November 2017, the Company received a payment of $6.4 million for amounts due from Westinghouse. See “Note 11—Segment Information” for additional information. In October 2017, the Company sold substantially all of the operating assets and liabilities of its Mechanical Solutions segment for approximately $43.3 million in cash, subject to certain customary working capital adjustments. Approximately $0.2 million was withheld and placed in escrow to satisfy certain indemnification obligations. The full amount is eligible for release after one year. The Company used $34.0 million of the net proceeds to repay debt under the Centre Lane Facility. The remaining proceeds were used for general working capital requirements. In addition, on October 31, 2017, the Company completed the sale of its manufacturing facility in Mexico and auctioned the remaining production equipment and other assets for net proceeds of $3.6 million. Net proceeds of $1.9 million from the sale of the facility and equipment were used to reduce debt, and the remainder was used to fund working capital requirements. The facility was included in the Company’s Mechanical Solutions reporting segment. As a result of these disposals, the Mechanical Solutions segment has been presented as a discontinued operation for all periods presented. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION | |
Reporting periods and applicable reports | Reporting Interim Period Fiscal Interim Period 2017 2016 Three Months Ended March 31 January 1, 2017 to April 2, 2017 January 1, 2016 to April 3, 2016 Three Months Ended June 30 April 3, 2017 to July 2, 2017 April 4, 2016 to July 3, 2016 Three Months Ended September 30 July 3, 2017 to October 1, 2017 July 4, 2016 to October 2, 2016 |
CHANGES IN BUSINESS (Tables)
CHANGES IN BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Services | Hetsco Inc. | Disposed of by sale | |
Schedule of Financial Information of Disposal Group | (in thousands) December 31, 2016 Accounts receivable $ 4,739 Other assets 642 Property and equipment 1,230 Goodwill and other intangible assets 16,221 Assets held for sale-Hetsco $ 22,832 Accounts payable $ 355 Accrued liabilities 796 Liabilities related to assets held for sale-Hetsco $ 1,151 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Income (loss) before income taxes $ — $ 883 $ 489 $ (7,156) |
Mechanical Solutions | Discontinued operations disposed of by sale | |
Schedule of Financial Information of Disposal Group | (in thousands) September 30, 2017 December 31, 2016 Assets: Accounts receivable $ 17,301 $ 24,197 Inventories, net 3,779 3,583 Cost and estimated earnings in excess of billings 25,051 26,890 Other current assets 2,127 2,631 Current assets of discontinued operations* 57,301 Property, plant and equipment, net 5,230 5,318 Goodwill and other intangible assets 1,055 1,055 Other long-term assets 1,486 1,643 Long-term assets of discontinued operations* 8,016 Total assets of discontinued operations $ 56,029 $ 65,317 Liabilities: Accounts payable $ 5,025 $ 5,606 Accrued compensation and benefits 1,894 2,080 Billings in excess of costs and estimated earnings 2,355 54 Accrued warranties 2,921 4,499 Other current liabilities 12,789 14,558 Other long-term liabilities 2,152 — Current liabilities of discontinued operations* 27,136 26,797 Other long-term Liabilities — 1,841 Liability for uncertain tax positions 2,985 3,177 Long-term liabilities of discontinued operations* 2,985 5,018 Total liabilities of discontinued operations $ 30,121 $ 31,815 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Revenue $ 16,262 $ 19,398 $ 50,841 $ 84,530 Cost of revenue 13,087 15,749 41,580 73,814 Selling and marketing expenses 690 744 2,507 2,792 General and administrative expenses 1,546 2,674 5,915 7,634 Other 398 53 727 214 Income (loss) from discontinued operations before income taxes 541 178 112 76 Income tax expense (benefit) (855) 142 578 368 Income (loss) from discontinued operations $ 1,396 $ 36 $ (466) $ (292) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER SHARE | |
Schedule of calculation of basic and diluted earnings per common share | Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2017 2016 2017 2016 Loss from continuing operations $ (18,383) $ (6,766) $ (48,185) $ (36,335) Basic loss per common share: Weighted average common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Basic loss per common share $ (1.04) $ (0.39) $ (2.74) $ (2.10) Diluted loss per common share: Weighted average common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Diluted effect: Unvested portion of restricted stock units and awards — — — — Weighted average diluted common shares outstanding 17,707,459 17,396,079 17,577,358 17,319,546 Diluted loss per common share $ (1.04) $ (0.39) $ (2.74) $ (2.10) |
Schedule anti-dilutive potentially outstanding shares were not included in the calculation of diluted earnings (loss) per share | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Unvested service-based restricted stock units and awards 130,616 116,200 130,616 214,533 Unvested performance- and market-based restricted stock units 512,515 931,253 512,515 931,254 Stock options 122,000 122,000 122,000 122,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
Schedule of effective income tax rate for continuing operations | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Effective income tax rate for continuing operations (1.8)% (4.1)% 2.5% (3.3)% |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of debt | (in thousands) As of September 30, 2017 Current portion of term loan $ 11,555 Unamortized deferred financing costs (1,365) Current portion of long-term debt, net 10,190 Term loan, due 2021 49,711 Unamortized deferred financing costs (4,650) Long-term debt, net 45,061 Total term loan, net $ 55,251 |
Schedule of prepayment premium | Prepayment Premium as a Percentage of Aggregate Period Outstanding Principal Prepaid June 16, 2017 to June 16, 2018 3% June 17, 2018 to June 16, 2019 2% June 17, 2019 to June 16, 2020 1% After June 16, 2020 0% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
Reconciliation of the changes to warranty reserve | (in thousands) September 30, 2017 Balance at the beginning of the period $ 1,307 Provision for the period 821 Settlements made (in cash or in kind) for the period (913) Balance at the end of the period $ 1,215 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
SEGMENT INFORMATION | |
Reconciliation of Revenue from Segments to Consolidated | Three Months Ended September 30, Nine Months Ended September 30, External Revenue (in thousands) 2017 2016 2017 2016 Services $ 39,040 $ 47,364 $ 138,253 $ 171,902 Electrical Solutions 11,590 18,682 35,669 58,521 Total external revenue $ 50,630 $ 66,046 $ 173,922 $ 230,423 |
Reconciliation of Depreciation and Amortization to Consolidated | Three Months Ended September 30, Nine Months Ended September 30, Depreciation and Amortization (1) (in thousands) 2017 2016 2017 2016 Services $ 125 $ 155 $ 371 $ 1,765 Electrical Solutions 869 1,106 2,724 3,214 Corporate 360 220 777 727 Total depreciation and amortization $ 1,354 $ 1,481 $ 3,872 $ 5,706 (1) Depreciation and amortization included in cost of revenue for the three months ended September 30, 2017 and 2016 was $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2017 and 2016 was $0.6 million and $0.9 million, respectively. |
Reconciliation of Operating Income (Loss) from Segments to Consolidated | A reconciliation of total segment operating income (loss) from continuing operations to loss from continuing operations before income tax is as follows: Three Months Ended September 30, Nine Months Ended September 30, Operating Income (Loss) (in thousands) 2017 2016 2017 2016 Services $ 1,405 $ 1,556 $ (4,716) $ (3,625) Electrical Solutions (8,594) 242 (16,931) (2,947) Corporate (7,247) (6,613) (20,175) (22,190) Operating (loss) income (14,436) (4,815) (41,822) (28,762) Interest expense, net 3,639 1,774 7,583 6,408 Other (income) expense, net (9) (89) (9) 11 Loss from continuing operations before income tax $ (18,066) $ (6,500) $ (49,396) $ (35,181) |
Reconciliation of Assets from Segment to Consolidated | September 30, December 31, Assets (in thousands) 2017 2016 Services $ 86,926 $ 111,792 Electrical Solutions 36,237 38,435 Corporate 28,417 18,819 Total assets* $ 151,580 $ 169,046 *Excludes total assets from discontinued operations of $56.0 million at September 30, 2017 and $65.3 million at December 31, 2016. |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 11, 2017 | Aug. 17, 2017 | Jun. 16, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2013 | Feb. 29, 2012 |
Income from continuing operations | $ (18,383) | $ (6,766) | $ (48,185) | $ (36,335) | ||||||||
Net cash provided by (used in) operating activities, continuing operations | (25,512) | (593) | ||||||||||
Repatriation of cash from subsidiary | $ 10,000 | |||||||||||
Proceeds from sale of business, net of restricted cash and transaction costs | 20,206 | |||||||||||
Proceeds from sale of property, plant and equipment | 19 | |||||||||||
Net remaining proceeds from sale | $ 8,600 | |||||||||||
Repayments of long-term debt | 165,515 | $ 48,097 | ||||||||||
Revolving Credit Facility | ||||||||||||
Maximum borrowing capacity | $ 45,100 | $ 150,000 | $ 100,000 | |||||||||
Centre Lane Term Facility | ||||||||||||
Long-term Debt, Gross | $ 45,000 | $ 49,711 | $ 49,711 | |||||||||
Term loan, term | 4 years 6 months | |||||||||||
Term loan, net proceeds from borrowing | $ 15,300 | |||||||||||
Centre Lane Term Facility | First Out Term Loan | ||||||||||||
Long-term Debt, Gross | $ 10,000 | |||||||||||
Discontinued operations disposed of by sale | Subsequent Event | Mechanical Solutions | ||||||||||||
Proceeds from sale of business | $ 43,300 | |||||||||||
Proceeds from sale of business, net of restricted cash and transaction costs | 40,900 | |||||||||||
Discontinued operations disposed of by sale | Subsequent Event | Mechanical Solutions | Mexico | ||||||||||||
Proceeds from sale of property, plant and equipment | 3,600 | |||||||||||
Discontinued operations disposed of by sale | Centre Lane Term Facility | Subsequent Event | Mechanical Solutions | ||||||||||||
Repayments of long-term debt | $ 34,000 | |||||||||||
Discontinued operations disposed of by sale | Centre Lane Term Facility | Subsequent Event | Mechanical Solutions | Mexico | ||||||||||||
Repayments of long-term debt | $ 1,900 |
RECENT ACCOUNTING PRONOUNCEME29
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - ASU 2016-09 $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase in deferred tax assets | $ 2.6 |
Increases in valuation allowance | $ 2.6 |
CHANGES IN BUSINESS (Details)
CHANGES IN BUSINESS (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 11, 2017 | Jan. 13, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Income (loss) before income taxes | |||||||||
Income (loss) from discontinued operations before income taxes | $ 541 | $ 178 | $ 112 | $ 76 | |||||
Income tax expense (benefit) | (855) | 142 | 578 | 368 | |||||
Income (loss) from discontinued operations | 1,396 | 36 | (466) | (292) | |||||
Income (loss) before income taxes | (18,066) | (6,500) | (49,396) | (35,181) | |||||
Proceeds from sale of property, plant and equipment | 19 | ||||||||
Repayments of Long-term Debt | 165,515 | 48,097 | |||||||
(Gain) loss on sale of business and net assets held for sale | 9 | (239) | 8,202 | ||||||
Hetsco Inc. | Disposed of by sale | |||||||||
Assets: | |||||||||
Accounts receivable | $ 4,739 | ||||||||
Other current assets | 642 | ||||||||
Total assets of discontinued operations | 22,832 | ||||||||
Property, plant and equipment, net | 1,230 | ||||||||
Goodwill and other intangible assets | 16,221 | ||||||||
Total assets of discontinued operations | 22,832 | ||||||||
Liabilities: | |||||||||
Accounts payable | 355 | ||||||||
Accrued liabilities | 796 | ||||||||
Current liabilities of discontinued operations | 1,151 | ||||||||
Total liabilities of discontinued operations | 1,151 | ||||||||
Mechanical Solutions | Discontinued operations disposed of by sale | |||||||||
Assets: | |||||||||
Accounts receivable | 17,301 | 17,301 | 24,197 | ||||||
Inventories, net | 3,779 | 3,779 | 3,583 | ||||||
Costs and estimated earnings in excess of billings | 25,051 | 25,051 | 26,890 | ||||||
Other current assets | 2,127 | 2,127 | 2,631 | ||||||
Total assets of discontinued operations | 56,029 | 56,029 | 57,301 | ||||||
Property, plant and equipment, net | 5,318 | ||||||||
Property, plant and equipment, net | 5,230 | 5,230 | |||||||
Goodwill and other intangible assets | 1,055 | 1,055 | |||||||
Goodwill and other intangible assets | 1,055 | ||||||||
Other long-term assets | 1,643 | ||||||||
Other long-term assets | 1,486 | 1,486 | |||||||
Long-term assets of discontinued operations | 8,016 | ||||||||
Total assets of discontinued operations | 56,029 | 56,029 | 65,317 | ||||||
Liabilities: | |||||||||
Accounts payable | 5,025 | 5,025 | 5,606 | ||||||
Accrued liabilities | 1,894 | 1,894 | 2,080 | ||||||
Billings in excess of costs and estimated earnings | 2,355 | 2,355 | 54 | ||||||
Accrued warranties | 2,921 | 2,921 | 4,499 | ||||||
Other current liabilities | 12,789 | 12,789 | 14,558 | ||||||
Other long-term liabilities | 2,152 | 2,152 | |||||||
Current liabilities of discontinued operations | 27,136 | 27,136 | 26,797 | ||||||
Other long-term Liabilities | 1,841 | ||||||||
Liability for uncertain tax positions | 2,985 | 2,985 | 3,177 | ||||||
Long-term liabilities of discontinued operations | 2,985 | 2,985 | 5,018 | ||||||
Total liabilities of discontinued operations | 30,121 | 30,121 | 31,815 | ||||||
Mechanical Solutions | Discontinued Operations | |||||||||
Income (loss) before income taxes | |||||||||
Revenue | 16,262 | 19,398 | 50,841 | 84,530 | |||||
Cost of revenue | 13,087 | 15,749 | 41,580 | 73,814 | |||||
Selling and marketing expenses | 690 | 744 | 2,507 | 2,792 | |||||
General and administrative expenses | 1,546 | 2,674 | 5,915 | 7,634 | |||||
Other | 398 | 53 | 727 | 214 | |||||
Income (loss) from discontinued operations before income taxes | 541 | 178 | 112 | 76 | |||||
Income tax expense (benefit) | (855) | 142 | 578 | 368 | |||||
Income (loss) from discontinued operations | $ 1,396 | 36 | (466) | (292) | |||||
Services | Hetsco Inc. | Disposed of by sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Disposal group, not discontinued operation, loss (gain) on write-down | $ 8,300 | ||||||||
Income (loss) before income taxes | |||||||||
Income (loss) before income taxes | $ 883 | $ 489 | $ (7,156) | ||||||
Proceeds from sale of business | $ 23,200 | ||||||||
Escrow deposit | 1,500 | ||||||||
Repayment of debt | $ 20,200 | ||||||||
(Gain) loss on sale of business and net assets held for sale | $ (239) | ||||||||
Subsequent Event | Mechanical Solutions | Discontinued operations disposed of by sale | |||||||||
Income (loss) before income taxes | |||||||||
Proceeds from sale of business | $ 43,300 | ||||||||
Escrow deposit | 200 | ||||||||
Subsequent Event | Mechanical Solutions | Mexico | Discontinued operations disposed of by sale | |||||||||
Income (loss) before income taxes | |||||||||
Proceeds from sale of property, plant and equipment | $ 3,600 | ||||||||
Subsequent Event | Mechanical Solutions | Centre Lane Term Facility | Discontinued operations disposed of by sale | |||||||||
Income (loss) before income taxes | |||||||||
Repayments of Long-term Debt | $ 34,000 | ||||||||
Subsequent Event | Mechanical Solutions | Centre Lane Term Facility | Mexico | Discontinued operations disposed of by sale | |||||||||
Income (loss) before income taxes | |||||||||
Repayments of Long-term Debt | $ 1,900 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |||||
Common stock, shares outstanding | 17,801,095 | 17,466,756 | 17,801,095 | 17,466,756 | 17,485,941 |
Net (loss) income (basic and diluted): | |||||
Loss from continuing operations | $ (18,383) | $ (6,766) | $ (48,185) | $ (36,335) | |
Basic loss per common share: | |||||
Weighted Average Common Shares Outstanding | 17,707,459 | 17,396,079 | 17,577,358 | 17,319,546 | |
Basic loss per common share from continuing operations (in dollars per share) | $ (1.04) | $ (0.39) | $ (2.74) | $ (2.10) | |
Diluted loss per common share: | |||||
Weighted Average Common Shares Outstanding | 17,707,459 | 17,396,079 | 17,577,358 | 17,319,546 | |
Diluted effect: | |||||
Weighted average diluted common shares outstanding | 17,707,459 | 17,396,079 | 17,577,358 | 17,319,546 | |
Diluted loss per common share | $ (1.04) | $ (0.39) | $ (2.74) | $ (2.10) | |
Restricted Stock | Service vesting | |||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |||||
Unvested restricted stock included in reportable shares | 15,279 | 36,073 | 15,279 | 36,073 |
EARNINGS PER SHARE Antidulitive
EARNINGS PER SHARE Antidulitive (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restricted Stock | Service vesting | ||||
Anti-dilutive shares | 130,616 | 116,200 | 130,616 | 214,533 |
Restricted Stock | Performance And Market Vesting | ||||
Anti-dilutive shares | 512,515 | 931,253 | 512,515 | 931,254 |
Stock options | ||||
Anti-dilutive shares | 122,000 | 122,000 | 122,000 | 122,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Effective income tax rate (as a percent) | (1.80%) | (4.10%) | 2.50% | (3.30%) | |||
Tax expense (benefit) computed at the maximum U.S. statutory rate, as a percent | 21.00% | 35.00% | |||||
Amount of future financial taxable income needed to realize deferred tax assets | $ 256,800 | $ 202,500 | $ 256,800 | $ 202,500 | |||
Income tax expense (benefit) | 317 | 266 | (1,211) | 1,154 | |||
Liability for unrecognized tax benefits | 4,000 | 4,000 | $ 4,200 | ||||
Accrued interest and penalties related to uncertain income tax positions | 1,900 | 1,900 | |||||
Disposed of by sale | Hetsco Inc. | |||||||
Deferred tax liabilities, indefinite-lived intangibles | $ 2,200 | $ 2,200 | |||||
Scenario, Forecast | Minimum | |||||||
Reduction in net deferred tax liabilities | $ (5,500) | ||||||
Scenario, Forecast | Maximum | |||||||
Reduction in net deferred tax liabilities | $ (6,000) | ||||||
Mechanical Solutions | Discontinued operations disposed of by sale | |||||||
Liability for unrecognized tax benefits | 1,400 | 1,400 | $ 1,500 | ||||
Accrued interest and penalties related to uncertain income tax positions | $ 1,600 | $ 1,600 |
DEBT (Details)
DEBT (Details) | Oct. 31, 2017USD ($) | Oct. 11, 2017USD ($) | Aug. 17, 2017USD ($) | Jun. 16, 2017USD ($)item | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2013USD ($) | Feb. 29, 2012USD ($) | Jun. 13, 2008EUR (€) |
Debt Instrument [Line Items] | |||||||||||||
Repayments of long-term debt | $ 165,515,000 | $ 48,097,000 | |||||||||||
Proceeds from sale of property, plant and equipment | 19,000 | ||||||||||||
Weighted-average interest rate on Revolving Credit Facility borrowings | 18.70% | 18.70% | |||||||||||
Term loan, net Proceeds from borrowing | $ 171,599,000 | 32,200,000 | |||||||||||
Current portion of long-term debt, net | $ 10,190,000 | 10,190,000 | |||||||||||
Long-term debt, net | 45,061,000 | 45,061,000 | $ 45,341,000 | ||||||||||
Amortization of deferred financing costs | 526,000 | 173,000 | |||||||||||
Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | 45,100,000 | $ 150,000,000 | $ 100,000,000 | ||||||||||
Long-term debt | 0 | 0 | 45,341,000 | ||||||||||
Line of credit facility, current borrowing capacity | 31,600,000 | ||||||||||||
Proceeds from long-term debt | 152,800,000 | 32,200,000 | |||||||||||
Repayment of revolving credit facility | $ 165,500,000 | 48,100,000 | |||||||||||
Unused line fee (as a percent) | 0.75% | ||||||||||||
Unamortized deferred financing costs | 0 | $ 0 | |||||||||||
Amortization of deferred financing costs | 0 | $ 100,000 | $ 200,000 | ||||||||||
Revolving Credit Facility | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Unamortized deferred financing costs | $ (100,000) | ||||||||||||
Amortization of deferred financing costs | 100,000 | ||||||||||||
Letters of credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, current borrowing capacity | $ 13,500,000 | ||||||||||||
Interest rate on letters of credit issued under the revolving letter of credit sublimit | 8.50% | ||||||||||||
Stand-by letters of credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding letter of credit | 9,600,000 | 9,600,000 | |||||||||||
Amounts drawn upon letters of credit | 0 | 0 | |||||||||||
ABN AMRO Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | € | € 14,000,000 | ||||||||||||
ABN AMRO credit facility, overdraft facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | € | 1,000,000 | ||||||||||||
ABN AMRO credit facility, contingent liability facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | € | € 13,000,000 | ||||||||||||
Surety bonds | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding surety bond | 31,600,000 | 31,600,000 | |||||||||||
Centre Lane Term Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, term | 4 years 6 months | ||||||||||||
Term loan, closing date | Jun. 16, 2017 | ||||||||||||
Term loan, net Proceeds from borrowing | $ 15,300,000 | ||||||||||||
Current portion of term loan | 11,555,000 | 11,555,000 | |||||||||||
Unamortized deferred financing costs | 1,365,000 | 1,365,000 | |||||||||||
Current portion of long-term debt, net | 10,190,000 | 10,190,000 | |||||||||||
Term loan, due 2021 | $ 45,000,000 | 49,711,000 | 49,711,000 | ||||||||||
Unamortized deferred financing costs | (4,650,000) | (4,650,000) | |||||||||||
Long-term debt, net | 45,061,000 | 45,061,000 | |||||||||||
Total term loan, net | 55,251,000 | 55,251,000 | |||||||||||
Term loan, maturity date | Dec. 16, 2021 | ||||||||||||
Term loan, annual administrative fee | $ 25,000 | ||||||||||||
Upfront fee (as a percent) | 7.00% | ||||||||||||
Term loan, voting equity interests description | The Company's obligations under the Centre Lane Facility are guaranteed by all of its wholly owned domestic subsidiaries, subject to customary exceptions. The Company's obligations are secured by first priority security interests on substantially all of its assets and those of its wholly owned domestic subsidiaries. This includes 100% of the voting equity interests of the Company's domestic subsidiaries and certain specified foreign subsidiaries and 65% of the voting equity interests of other directly owned foreign subsidiaries, subject to customary exceptions. | ||||||||||||
Percentage of voting equity interests of domestic subsidiaries and certain specified foreign subsidiaries | 100.00% | ||||||||||||
Percentage of voting equity interests of other directly owned foreign subsidiaries, subject to customary exceptions | 65.00% | ||||||||||||
Prepayment of aggregate principal amount, as percentage of excess cash flow | 100.00% | ||||||||||||
Threshold business days | item | 5 | ||||||||||||
Threshold consecutive days | 90 days | ||||||||||||
Term loan, mandatory prepayment | $ 500,000 | ||||||||||||
Term loan, mandatory prepayment term | Subject to certain exceptions, the Company must prepay an aggregate principal amount equal to 100% of its Excess Cash Flow (as defined in the Centre Lane Facility), minus the sum of all voluntary prepayments, within five business days after the date that is 90 days following the end of each fiscal year. The Centre Lane Facility also requires mandatory prepayment of certain amounts in the event the Company or its subsidiaries receive proceeds from certain events and activities, including, among others, asset sales, casualty events, the issuance of indebtedness and equity interests not otherwise permitted under the Centre Lane Facility and the receipt of tax refunds or extraordinary receipts in excess of $500,000, plus, in certain instances, the applicable Prepayment Premium, calculated as set forth above. | ||||||||||||
Amortization of deferred financing costs | $ 400,000 | $ 500,000 | |||||||||||
Centre Lane Term Facility | Minimum voluntary prepayment | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, periodic principal repayment | $ 1,000,000 | ||||||||||||
Centre Lane Term Facility | Prepayment on January 1, 2018 unless we elect to increase PIK to 15% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, expected prepayment on January 1, 2018 | 25,000,000 | ||||||||||||
Centre Lane Term Facility | Majority Shareholder [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, Proceeds from related party debt | $ 6,000,000 | ||||||||||||
Centre Lane Term Facility | First Out Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, due 2021 | $ 10,000,000 | ||||||||||||
Term loan, maturity date | Sep. 30, 2018 | ||||||||||||
Upfront fee (as a percent) | 7.00% | ||||||||||||
Term loan, exit fee (as a percent) | 7.00% | ||||||||||||
Centre Lane Term Facility | Payment In Cash | LIBOR-based loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, interest rate over LIBOR | 9.00% | ||||||||||||
Centre Lane Term Facility | Payment In Kind PIK | LIBOR-based loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, interest rate over LIBOR | 10.00% | ||||||||||||
Centre Lane Term Facility | Payment In Kind PIK | LIBOR-based loans | PIK interest rate unless we elect to make $25.0 million principal prepayment | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, interest rate over LIBOR | 15.00% | ||||||||||||
Centre Lane Term Facility | Upfront Fee Payment In Kind PIK | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan, interest rate over LIBOR | 19.00% | ||||||||||||
Discontinued operations disposed of by sale | Mexico | Mechanical Solutions | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Proceeds from sale of property, plant and equipment | $ 3,600,000 | ||||||||||||
Discontinued operations disposed of by sale | Centre Lane Term Facility | Mechanical Solutions | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of long-term debt | $ 34,000,000 | ||||||||||||
Discontinued operations disposed of by sale | Centre Lane Term Facility | Mexico | Mechanical Solutions | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of long-term debt | $ 1,900,000 | ||||||||||||
June 16, 2017 to June 16, 2018 | Centre Lane Term Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Prepayment premium, percentage | 3.00% | ||||||||||||
June 17, 2018 to June 16, 2019 | Centre Lane Term Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Prepayment premium, percentage | 2.00% | ||||||||||||
June 17, 2019 to June 16, 2020 | Centre Lane Term Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Prepayment premium, percentage | 1.00% | ||||||||||||
After June 16, 2020 | Centre Lane Term Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Prepayment premium, percentage | 0.00% |
COMMITMENTS AND CONTINGENCIES35
COMMITMENTS AND CONTINGENCIES (Detail) $ in Thousands | 9 Months Ended | 12 Months Ended | 44 Months Ended | ||
Sep. 30, 2017USD ($) | Dec. 31, 2014USD ($) | May 06, 2015USD ($) | May 01, 2017item | Jul. 31, 2015item | |
Number of cases consolidated | item | 2 | ||||
Number of former officers named as defendants | item | 3 | ||||
Minimum monetary damages | $ 200,000 | ||||
Unsigned disputed change orders | $ 22,900 | ||||
Warranty | |||||
Maximum product warranty term | 4 years | ||||
Reconciliation of the changes to warranty reserve | |||||
Balance at the beginning of the period | $ 1,307 | ||||
Provision for the period | 821 | ||||
Settlements made (in cash or in kind) for the period | (913) | ||||
Balance at the end of the period | 1,215 | ||||
Other Current Liabilities | |||||
Contract loss pvovision | 12,900 | ||||
Liquidated damages | |||||
Loss contingency, liability as percentage of contract value | 20.00% | ||||
Liquidated damages | Minimum | |||||
Loss contingency, maximum liability | 4,900 | ||||
Liquidated damages incurred | $ 1,700 | ||||
Liquidated damages | Maximum | |||||
Loss contingency, maximum liability | $ 31,300 | $ 33,000 |
STOCK-BASED COMPENSATION Expens
STOCK-BASED COMPENSATION Expense (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.4 | $ 0.1 | $ 2 | $ 1.2 |
Restricted Stock | 2015 Plan | Service vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 295,376 | |||
Weighted average grant date fair value | $ 4.30 | $ 4.30 | ||
Vesting period | 2 years | |||
Restricted Stock | 2015 Plan | Performance and Service Vesting | Other long-term liabilities | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Liability | $ 0.5 | $ 0.5 | ||
Restricted Stock | 2015 Plan | Market-based vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 332,469 | |||
Weighted average grant date fair value | $ 4.67 | $ 4.67 | ||
Share price achievement condition period | 2 years | |||
Vesting period | 3 years | |||
Common stock price goals | $ 6 | |||
Threshold consecutive trading days | 30 days | |||
Restricted Stock | Outside of 2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Restricted Stock | Outside of 2015 Plan | Service vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 46,600 | |||
Restricted Stock | Outside of 2015 Plan | Performance vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 27,000 | |||
Liabilities-Classified Awards | 2015 Plan | Service vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Initial value | $ 0.9 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment reporting disclosures | ||||
Number of reportable segments | segment | 2 | |||
Total revenue | $ 50,630 | $ 66,046 | $ 173,922 | $ 230,423 |
Depreciation and amortization | 1,354 | 1,481 | 3,872 | 5,706 |
Depreciation and amortization included in cost of sales | 200 | 300 | 600 | 900 |
Operating (loss) income: | (14,436) | (4,815) | (41,822) | (28,762) |
Interest expense, net | 3,639 | 1,774 | 7,583 | 6,408 |
Other (income) expense, net | (9) | (89) | (9) | 11 |
Loss before income tax | (18,066) | (6,500) | (49,396) | (35,181) |
Services | ||||
Segment reporting disclosures | ||||
Services revenue | 39,040 | 47,364 | 138,253 | 171,902 |
Electrical Solutions | ||||
Segment reporting disclosures | ||||
Revenues | 11,590 | 18,682 | 35,669 | 58,521 |
Non-allocated corp HQ | ||||
Segment reporting disclosures | ||||
Depreciation and amortization | 360 | 220 | 777 | 727 |
Operating (loss) income: | (7,247) | (6,613) | (20,175) | (22,190) |
Operating segments | Services | ||||
Segment reporting disclosures | ||||
Services revenue | 39,040 | 47,364 | 138,253 | 171,902 |
Depreciation and amortization | 125 | 155 | 371 | 1,765 |
Operating (loss) income: | 1,405 | 1,556 | (4,716) | (3,625) |
Operating segments | Electrical Solutions | ||||
Segment reporting disclosures | ||||
Revenues | 11,590 | 18,682 | 35,669 | 58,521 |
Depreciation and amortization | 869 | 1,106 | 2,724 | 3,214 |
Operating (loss) income: | (8,594) | 242 | (16,931) | (2,947) |
Intersegment Revenue Eliminations | ||||
Segment reporting disclosures | ||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT INFORMATION Reconciliat
SEGMENT INFORMATION Reconciliation of assets (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Nov. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Segment reporting disclosures | |||
Total assets | $ 207,609 | $ 234,363 | |
Services | |||
Segment reporting disclosures | |||
Total assets | 86,926 | 111,792 | |
Services | Westinghouse | |||
Segment reporting disclosures | |||
Accounts receivable | $ 2,300 | 8,700 | |
Electrical Solutions | |||
Segment reporting disclosures | |||
Total assets | 36,237 | 38,435 | |
Non-allocated corp HQ | |||
Segment reporting disclosures | |||
Total assets | 28,417 | 18,819 | |
Subsequent Event | Services | Westinghouse | |||
Segment reporting disclosures | |||
Cash payment received | $ 6,400 | ||
Continuing Operations | |||
Segment reporting disclosures | |||
Total assets | $ 151,580 | $ 169,046 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 11, 2017 | Nov. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent events | |||||
Proceeds from sale of property, plant and equipment | $ 19 | ||||
Repayments of long-term debt | $ 165,515 | $ 48,097 | |||
Subsequent Event | Mechanical Solutions | Discontinued operations disposed of by sale | |||||
Subsequent events | |||||
Proceed from sale of subsidiary | $ 43,300 | ||||
Escrow deposit | $ 200 | ||||
Period of release of amount held in escrow | 1 year | ||||
Mexico | Subsequent Event | Mechanical Solutions | Discontinued operations disposed of by sale | |||||
Subsequent events | |||||
Proceeds from sale of property, plant and equipment | $ 3,600 | ||||
Centre Lane Term Facility | Subsequent Event | Mechanical Solutions | Discontinued operations disposed of by sale | |||||
Subsequent events | |||||
Repayments of long-term debt | $ 34,000 | ||||
Centre Lane Term Facility | Mexico | Subsequent Event | Mechanical Solutions | Discontinued operations disposed of by sale | |||||
Subsequent events | |||||
Repayments of long-term debt | $ 1,900 | ||||
Westinghouse | Subsequent Event | Services | |||||
Subsequent events | |||||
Cash payment received | $ 6,400 |