Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 10, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | DOUGLAS DYNAMICS, INC | |
Entity Central Index Key | 1,287,213 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,501,640 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 48,394 | $ 36,844 |
Accounts receivable, net | 28,965 | 67,707 |
Inventories | 73,729 | 51,584 |
Refundable income taxes paid | 433 | 4,850 |
Deferred income taxes | 6,155 | 6,154 |
Prepaid and other current assets | 2,298 | 2,104 |
Total current assets | 159,974 | 169,243 |
Property, plant, and equipment, net | 42,418 | 42,636 |
Goodwill | 160,932 | 160,932 |
Other intangible assets, net | 125,921 | 127,647 |
Other long-term assets | 3,499 | 2,708 |
Total assets | 492,744 | 503,166 |
Current liabilities: | ||
Accounts payable | 10,250 | 14,555 |
Accrued expenses and other current liabilities | 16,909 | 25,549 |
Current portion of long-term debt | 1,629 | 1,629 |
Total current liabilities | 28,788 | 41,733 |
Retiree health benefit obligation | 6,767 | 6,656 |
Pension obligation | 10,641 | 10,839 |
Deferred income taxes | 55,575 | 54,932 |
Long-term debt, less current portion | 182,214 | 182,506 |
Other long-term liabilities | 8,207 | 6,004 |
Stockholders' equity: | ||
Common Stock, par value $0.01, 200,000,000 shares authorized, 22,501,640 and 22,387,797 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 225 | 224 |
Additional paid-in capital | 142,838 | 141,626 |
Retained earnings | 64,746 | 64,829 |
Accumulated other comprehensive loss, net of tax | (7,257) | (6,183) |
Total stockholders' equity | 200,552 | 200,496 |
Total liabilities and stockholders' equity | $ 492,744 | $ 503,166 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 22,501,640 | 22,387,797 |
Common Stock, shares outstanding | 22,501,640 | 22,387,797 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales | $ 48,789 | $ 53,890 |
Cost of sales | 34,658 | 37,453 |
Gross profit | 14,131 | 16,437 |
Selling, general, and administrative expense | 10,913 | 11,417 |
Intangibles amortization | 1,726 | 1,903 |
Income from operations | 1,492 | 3,117 |
Interest expense, net | (2,872) | (2,454) |
Litigation proceeds | 10,050 | |
Other expense, net | (64) | (60) |
Income before taxes | 8,606 | 603 |
Income tax expense | 3,328 | 220 |
Net income | 5,278 | 383 |
Less net income attributable to participating securities | 70 | 5 |
Net income attributable to common shareholders | $ 5,208 | $ 378 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 22,417,337 | 22,247,802 |
Diluted (in shares) | 22,417,337 | 22,269,022 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.23 | $ 0.02 |
Diluted (in dollars per share) | 0.23 | 0.01 |
Cash dividends declared per share (in dollars per share) | 0.24 | 0.22 |
Cash dividends paid per share (in dollars per share) | $ 0.24 | $ 0.22 |
Comprehensive income | $ 4,204 | $ (271) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net income | $ 5,278 | $ 383 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 3,109 | 3,055 |
Inventory step up of acquired business included in cost of sales | 1,956 | |
Amortization of deferred financing costs and debt discount | 183 | 167 |
Stock-based compensation | 1,213 | 1,124 |
Provision for losses on accounts receivable | (9) | 58 |
Deferred income taxes | 642 | 2,228 |
Earnout liability | 66 | 232 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 38,751 | 36,953 |
Inventories | (22,145) | (24,661) |
Prepaid and other assets | 3,432 | (3,809) |
Accounts payable | (4,305) | 499 |
Accrued expenses and other current liabilities | (8,640) | (6,002) |
Benefit obligations and other long-term liabilities | 976 | (857) |
Net cash provided by operating activities | 18,551 | 11,326 |
Investing activities | ||
Capital expenditures | (1,165) | (1,254) |
Acquisition of business | (7,931) | |
Net cash used in investing activities | (1,165) | (9,185) |
Financing activities | ||
Shares withheld on restricted stock vesting paid for employees' taxes | (27) | |
Dividends paid | (5,361) | (5,034) |
Repayment of long-term debt | (475) | (475) |
Net cash provided by (used in) financing activities | (5,836) | (5,536) |
Change in cash and cash equivalents | 11,550 | (3,395) |
Cash and cash equivalents at beginning of year | 36,844 | 36,844 |
Cash and cash equivalents at end of year | $ 48,394 | $ 20,800 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for fiscal year-end financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and related footnotes included in our 2015 Form 10-K (Commission File No. 001-34728) filed with the Securities and Exchange Commission on March 8, 2016. We operate as a single business segment. Certain reclassifications have been made to the prior period financial statements to conform to the 2016 presentation. In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ ASU”) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU requires an entity to present such costs on the balance sheet as a direct deduction from the related debt liability rather than as an asset. The Company adopted ASU No. 2015-03 during the quarter ended March 31, 2016 and applied it retrospectively. The adoption resulted in the reclassification of debt issuance costs from Deferred Financing Costs to Long-term Debt on the balance sheet of $2,222 and $2,337 as of March 31, 2016 and December 31, 2015, respectively. Interim Consolidated Financial Information The accompanying consolidated balance sheet as of March 31, 2016 and the consolidated statements of operations and comprehensive income for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015 have been prepared by the Company and have not been audited. The Company is a counterparty to interest-rate swap agreements to hedge against the potential impact on earnings from increases in market interest rates. The Company entered into three interest rate swap agreements during the first quarter of 2015 with notional amounts of $45,000 , $90,000 and $135,000 effective for the periods December 31, 2015 through March 29, 2018, March 29, 2018 through March 31, 2020 and March 31, 2020 through June 30, 2021, respectively. Under the interest rate swap agreement, effective as of December 31, 2015 the Company will either receive or make payments on a monthly basis based on the differential between 6.105% and London Interbank Offered Rate (“LIBOR”) plus 4.25% (with a LIBOR floor of 1.0%) . Under the interest rate swap agreement, effective as of March 29, 2018 the Company will either receive or make payments on a monthly basis based on the differential between 6.916% and LIBOR plus 4.25% (with a LIBOR floor of 1.0%) . Under the interest rate swap agreement effective as of March 31, 2020 the Company will either receive or make payments on a monthly basis based on the differential between 7.168% and LIBOR plus 4.25% (with a LIBOR floor of 1.0% ). The negative fair value of the interest rate swap, net of tax, of ($2,104) at March 31, 2016 is included in Accumulated other comprehensive loss on the Consolidated Balance Sheet. This fair value was determined using Level 2 inputs as defined in Accounting Standards Codification Topic (“ASC”) 820. Additionally, other comprehensive income includes the net income of the Company plus the Company’s adjustments for its defined benefit retirement plans based on the measurement date as of the Company’s year-end. For further disclosure, refer to Note 13 to the Unaudited Consolidated Financial Statements. The Company’s business is seasonal and consequently its results of operations and financial condition vary from quarter-to-quarter. Because of this seasonality, the Company’s results of operations for any quarter may not be indicative of results of operations that may be achieved for a subsequent quarter or the full year, and may not be similar to results of operations experienced in prior years. The Company attempts to manage the seasonal impact of snowfall on its revenues in part through its pre-season sales program. This pre-season sales program encourages the Company’s distributors to re-stock their inventory during the second and third quarters in anticipation of the peak fourth quarter retail sales period by offering favorable pre-season pricing and payment deferral until the fourth quarter. Thus, the Company tends to generate its greatest volume of sales during the second and third quarters. By contrast, its revenue and operating results tend to be lowest during the first quarter, as management believes the Company’s end-users prefer to wait until the beginning of a snow season to purchase new equipment and as the Company’s distributors sell off inventory and wait for the pre-season sales incentive period to re-stock inventory. Fourth quarter sales vary from year-to-year as they are primarily driven by the level, timing and location of snowfall during the quarter. This is because most of the Company’s fourth quarter sales and shipments consist of re-orders by distributors seeking to restock inventory to meet immediate customer needs caused by snowfall during the winter months. The Company relies on a combination of patents, trade secrets and trademarks to protect certain of the proprietary aspects of its business and technology. In the three months ended March 31, 2016, the Company received a settlement resulting from an ongoing lawsuit with one of its competitors. Previously under the same lawsuit the competitor was required to stop using the Company’s intellectual property. Under the settlement agreement the Company received $10,050 as part of defending its intellectual property. The proceeds of the lawsuit are included on the Consolidated Statements of Operations and Comprehensive Income as Litigation proceeds. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value | |
Fair Value | 2. Fair Value Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). The following table presents financial assets and liabilities measured at fair value on a recurring basis and discloses the fair value of long-term debt: Fair Value at Fair Value at March 31, December 31, 2016 2015 Assets: Other long-term assets (a) $ $ Total Assets $ $ Liabilities: Interest rate swaps (b) $ $ Long term debt (c) Earnout - TrynEx (d) - Earnout - Henderson (e) Total Liabilities $ $ (a) Included in other assets is the cash surrender value of insurance policies on various individuals that are associated with the Company. The carrying amounts of these insurance policies approximates their fair value . (b) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g. interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to determine fair value of the interest rate swap are Level 2 inputs. Interest rate swaps of $379 and $3,002 at March 31, 2016 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively . Interest rate swaps of $286 and $1,215 at December 31, 2015 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively. (c) The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, which is a Level 2 input for all periods presented. Meanwhile, long-term debt is recorded at carrying amount, net of discount and deferred debt issuance costs, as disclosed on the face of the balance sheet. (d) Included in accrued expenses and other current liabilities in the amount of $0 and $2,032 at March 31, 2016 and March 31, 2015, respectively, is an obligation for a portion of the potential earn out incurred in conjunction with the acquisition of substantially all of the assets of TrynEx, Inc. (“TrynEx”). The carrying amount of the earn out approximates its fair value. Fair value is based upon Level 3 inputs of a monte carlo simulation analysis using key inputs of forecasted future sales and financial performance as well as a growth rate reduced by the market required rate of return. See reconciliation of liability included below: Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ - $ (e) Included in accrued expenses and other current liabilities and other long term liabilities in the amounts of $267 and $442 , respectively, at March 31, 2016 is the fair value of an obligation for a portion of the potential earn out acquired in conjunction with the acquisition of Henderson Enterprise Group, Inc. (“Henderson”). Included in accrued expenses and other current liabilities and other long term liabilities in the amounts of $193 and $442 , respectively, at March 31, 2015 is the fair value of an obligation for a portion of the potential earn out acquired in conjunction with the acquisition of Henderson. Fair value is based upon Level 3 discounted cash flow analysis using key inputs of forecasted future sales as well as a growth rate reduced by the market required rate of return. See reconciliation of liability included below: Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ $ |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventories | |
Inventories | 3. Inventories Inventories consist of the following: March 31, December 31, 2016 2015 Finished goods and work-in-process $ $ Raw material and supplies $ $ |
Property, plant and equipment
Property, plant and equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property, plant and equipment | |
Property, plant and equipment | 4. Property, plant and equipment Property, plant and equipment are summarized as follows: March 31, December 31, 2016 2015 Land $ $ Land improvements Leasehold Improvements Buildings Machinery and equipment Furniture and fixtures Mobile equipment and other Construction-in-process Total property, plant and equipment Less accumulated depreciation Net property, plant and equipment $ $ |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Long-Term Debt | |
Long-Term Debt | 5. Long-Term Debt Long-term debt is summarized below: March 31, December 31, 2016 2015 Term Loan, net of debt discount of $1,561 and $1,629 at March 31, 2016 and December 31, 2015, respectively $ $ Less current maturities Long term debt before deferred financing costs Deferred financing costs, net Long term debt, net $ $ The Company’s senior credit facilities consist of a $190,000 term loan facility and a $100,000 revolving credit facility with a group of banks, of which $10,000 will be available in the form of letters of credit and $5,000 will be available for the issuance of short-term swing line loans . The agreement for the term loan (the “Term Loan Credit Agreement”) provides for a senior secured term loan facility in the aggregate principal amount of $190,000 and generally bears interest (at the Company’s election) at either (i) 3.25% per annum plus the greatest of (a) the Prime Rate (as defined in the Term Loan Credit Agreement) in effect on such day, (b) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers plus 0.50% and (c) 1.00% plus the greater of (1) the LIBOR for a one month interest period multiplied by the Statutory Reserve Rate (as defined in the Term Loan Credit Agreement) and (2) 1.00% or (ii) 4.25% per annum plus the greater of (a) the LIBOR for the applicable interest period multiplied by the Statutory Reserve Rate and (b) 1.00% . The Term Loan Credit Agreement also allows the Company to request the establishment of one or more additional term loan commitments in an aggregate amount not in excess of $80,000 subject to specified terms and conditions, which amount may be further increased so long as the First Lien Debt Ratio (as defined in the Term Loan Credit Agreement) is not greater than 3.25 to 1.00. The revolving credit facility (the “Revolving Credit Agreement”) provides that the Company has the option to select whether borrowings will bear interest at either (i) a margin ranging from 1.50% to 2.00% per annum, depending on the utilization of the facility, plus the LIBOR for the applicable interest period multiplied by the Statutory Reserve Rate (as defined by the Revolving Credit Agreement) or (ii) a margin ranging from 0.50% to 1.00% per annum, depending on the utilization of the facility, plus the greatest of (a) the Prime Rate (as defined in the Revolving Credit Agreement) in effect on such day, (b) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers plus 0.50% and (c) the L IBOR for a one month interest period multiplied by the Statutory Reserve Rate plus 1% . The maturity date for the Revolving Credit Agreement is December 31, 2019, and the Company’s term loan amortizes in nominal amounts quarterly with the balance payable on December 31, 2021. The term loan was issued at a $1,900 discount which is being amortized over the term of the term loan. At March 31, 2016, the Company had no outstanding borrowings on the Revolving Credit Agreement and remaining borrowing availability of $97,776 . There were no outstanding borrowings on the Revolving – Credit Agreement at December 31, 2015. The Company’s senior credit facilities include certain negative and operating covenants, including restrictions on its ability to pay dividends, and other customary covenants, representations and warranties and events of default. The senior credit facilities entered into and recorded by the Company’s subsidiaries significantly restrict its subsidiaries from paying dividends and otherwise transferring assets to Douglas Dynamics, Inc. The terms of the Revolving Credit Agreement specifically restrict subsidiaries from paying dividends if a minimum availability under the Revolving Credit Agreement is not maintained, and both senior credit facilities restrict subsidiaries from paying dividends above certain levels or at all if an event of default has occurred. These restrictions would affect the Company indirectly since the Company relies principally on distributions from its subsidiaries to have funds available for the payment of dividends. In addition, the Revolving Credit Agreement includes a requirement that, subject to certain exceptions, capital expenditures may not exceed $12,500 in any calendar year (plus the unused portion of permitted capital expenditures from the preceding year subject to a $12,500 cap and a separate one-time $15,000 capital expenditures to be used for the consolidation of facilities and costs associated with the acquiring and/or development and construction of one new manufacturing facility) and, if certain minimum availability under the Revolving Credit Agreement is not maintained, that the Company comply with a monthly minimum fixed charge coverage ratio test of 1.0:1 .0. Compliance with the fixed charge coverage ratio test is subject to certain cure rights under the Revolving Credit Agreement. At March 31, 2016, the Company was in compliance with the respective covenants. The credit facilities are collateralized by substantially all assets of the Company. In accordance with the senior credit facilities, the Company is required to make additional principal prepayments over the above scheduled payments under certain conditions. This includes, in the case of the term loan facility, 100% of the net cash proceeds of certain asset sales, certain insurance or condemnation events, certain debt issuances, and, within 150 days of the end of the fiscal year, 50% of excess cash flow, as defined, including a deduction for certain distributions (which percentage is reduced to 0% upon the achievement of certain leverage ratio thresholds), for any fiscal year. Excess cash flow is defined in the senior credit facilities as consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) plus a working capital adjustment less the sum of repayments of debt and capital expenditures subject to certain adjustments, interest and taxes paid in cash, management fees and certain restricted payments (including dividends or distributions). Working capital adjustment is defined in the senior credit facilities as the change in working capital, defined as current assets excluding cash and cash equivalents less current liabilities excluding current portion of long term debt. As of March 31, 2016, the Company was not required to make an excess cash flow payment. The Company entered into interest rate swap agreements on February 20, 2015 to reduce its exposure to interest rate volatility. The three interest rate swap agreements have notional amounts of $45,000 , $90,000 and $135,000 effective for the periods December 31, 2015 through March 29, 2018, March 29, 2018 through March 31, 2020 and March 31, 2020 through June 30, 2021, respectively. The interest rate swaps’ negative fair value at March 31, 2016 was $3,381 , of which $379 and $3,002 are included in accrued expenses and other current liabilities and Other long-term liabilities on the Consolidated Balance Sheet, respectively. Meanwhile, the interest rate swaps’ negative fair value at March 31, 2015 was $1,293 , of which $88 and $1,205 are included in Accrued expenses and Other current liabilities and Other long-term liabilities on the Consolidated Balance Sheet, respectively. The Company has counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going basis. This risk lies with one global financial institution. Under the interest rate swap agreement, effective as of December 31, 2015, the Company will either receive or make payments on a monthly basis based on the differential between 6.105% and LIBOR plus 4.25% (with a LIBOR floor of 1.0%) . Under the interest rate swap agreement, effective as of March 29, 2018, the Company will either receive or make payments on a monthly basis based on the differential between 6.916% and LIBOR plus 4.25% (with a LIBOR floor of 1.0%). Under the interest rate swap agreement, effective as of March 31, 2020, the Company will either receive or make payments on a monthly basis based on the differential between 7.168% and LIBOR plus 4.25% (with a LIBOR floor of 1.0%). |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other liabilities are summarized as follows: March 31, December 31, 2016 2015 Payroll and related costs $ $ Employee benefits Accrued warranty Other $ $ |
Warranty Liability
Warranty Liability | 3 Months Ended |
Mar. 31, 2016 | |
Warranty Liability | |
Warranty Liability | 7. Warranty Liability The Company accrues for estimated warranty costs as sales are recognized and periodically assesses the adequacy of its recorded warranty liability and adjusts the amount as necessary. The Company’s warranties generally provide, with respect to its snow and ice control equipment, that all material and workmanship will be free from defect for a period of two years after the date of purchase by the end-user, and with respect to its parts and accessories purchased separately, that such parts and accessories will be free from defect for a period of one year after the date of purchase by the end-user. Certain snowplows only provide for a one year warranty. The Company determines the amount of the estimated warranty costs (and its corresponding warranty reserve) based on the Company’s prior five years of warranty history utilizing a formula driven by historical warranty expense and applying management’s judgment. The Company adjusts its historical warranty costs to take into account unique factors such as the introduction of new products into the marketplace that do not provide a historical warranty record to assess. The warranty reserve is $ 6,504 at March 31, 2016 of which $1,000 is included in Other long term liabilities and $5,504 is included in Accrued expenses and other current liabilities in the accompanying consolidated balance sheet. Meanwhile at December 31, 2015 $7,423 is included in accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheet. The following is a rollforward of the Company’s warranty liability: Three Months Ended March 31, March 31, 2016 2015 Balance at the beginning of the period $ $ Warranty provision Claims paid/settlements Balance at the end of the period $ $ |
Employee Retirement Plans
Employee Retirement Plans | 3 Months Ended |
Mar. 31, 2016 | |
Employee Retirement Plans | |
Employee Retirement Plans | 8. Employee Retirement Plans The components of net periodic pension cost consist of the following: Three Months Ended March 31, March 31, 2016 2015 Component of net periodic pension cost: Service cost $ $ Interest cost Expected return on plan assets Amortization of net loss Net periodic pension cost $ $ The Company estimates its total required minimum contributions to its pension plans in 2016 will be $967 . During the first quarter of 201 6, the Company made $193 of cash contributions to the pension plans versus $ 226 through the same period in 2015. Components of net periodic other postretirement benefit cost consist of the following: Three Months Ended March 31, March 31, 2016 2015 Component of periodic other postretirement benefit cost: Service cost $ $ Interest cost Amortization of net gain Net periodic other postretirement benefit cost $ $ |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings per Share | |
Earnings per Share | 9. Earnings per Share Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the weighted average number of common shares and common stock equivalents related to the assumed exercise of stock options, using the two-class method. Stock options for which the exercise price exceeds the average fair value have an anti-dilutive effect on earnings per share and are excluded from the calculation. As restricted shares and restricted stock units both participate in dividends, in accordance with ASC 260, the Company has calculated earnings per share pursuant to the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. ` Three Months Ended March 31, March 31, 2016 2015 Basic earnings per common share Net income $ $ Less income allocated to participating securities Net income allocated to common shareholders $ $ Weighted average common shares outstanding $ $ Earnings per common share assuming dilution Net income $ $ Less income allocated to participating securities Net income allocated to common shareholders $ $ Weighted average common shares outstanding Incremental shares applicable to stock based compensation - Weighted average common shares assuming dilution $ $ |
Employee Stock Plans
Employee Stock Plans | 3 Months Ended |
Mar. 31, 2016 | |
Employee Stock Plans | |
Employee Stock Plans | 10. Employee Stock Plans 2010 Stock Incentive Plan In May 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”). The Company’s Board of Directors approved an amendment and restatement of the 2010 Plan on March 5, 2014, contingent on stockholder approval of the performance goals under the 2010 Plan, and the amendment and restatement became effective upon stockholder approval of the performance goals at the 2014 annual meeting of stockholders held on April 30, 2014. The 2010 Plan provides for the issuance of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards and restricted stock units (“RSUs”), any of which may be performance-based, and for incentive bonuses, which may be paid in cash or stock or a combination of both, to eligible employees, officers, non-employee directors and other service providers to the Company and its subsidiaries. A maximum of 2,130,000 shares of common stock may be issued pursuant to all awards under the 2010 Plan. Restricted Stock Awards A summary of restricted stock activity for the three months ended March 31, 2016 is as follows: Weighted Weighted Average Average Remaining Grant Date Contractual Shares Fair value Term Unvested at December 31, 2015 $ years Granted - - - Vested $ Cancelled and forfeited — — Unvested at March 31, 2016 - $ - - years Expected to vest in the future at March 31, 2016 - $ - - years The fair value of the Company’s restricted stock awards is the closing stock price on the date of grant. The Company recognized $0 and $165 of compensation expense related to restricted stock awards granted for the three months ended March 31, 2016 and March 31, 2015, respectively. In the year ending December 31, 2013, the company transitioned from granting restricted stock awards to granting RSUs. The 14,701 restricted stock awards that vested in the three month period ended March 31, 2016 were the final tranche of restricted stock awards granted prior to the transition to RSUs. Performance Share Unit Awards The Company granted performance share units as performance based awards under the 2010 Plan in the first quarter of 2016 that are subject to performance conditions. Upon meeting the prescribed performance conditions, in the first quarter of the year subsequent to grant, employees will be issued RSUs, a portion of which will be subject to vesting over the two years following the end of the performance period. In accordance with ASC 718, such awards are being expensed over the vesting period from the date of grant through the requisite service period, based upon the most probable outcome. The fair value per share of the awards is the closing stock price on the date of grant, which was $19.88 . The Company recognized $127 and $127 of compensation expense related to the awards in the three months ended March 31, 2016 and March 31, 2015, respectively. The unrecognized compensation expense calculated under the fair value method for shares that were, as of March 31, 2016, expected to be earned through the requisite service period was approximately $1,430 and is expected to be recognized through 201 9. Restricted Stock Unit Awards RSUs are granted to both non-employee directors and management. RSUs carry dividend equivalent rights but do not carry voting rights. Each RSU represents the right to receive one share of the Company’s common stock and is subject to time based vesting restrictions. Participants are not required to pay any consideration to the Company at either the time of grant of a RSU or upon vesting. RSUs issued to management include a retirement provision under which members of management who either (1) are age 65 or older or (2) have at least ten years of service and are at least age 55 will continue to vest in unvested RSUs upon retirement. As the retirement provision does not qualify as a substantive service condition, the Company incurred $528 and $303 in additional expense in the first quarter of 2016 and 2015, respectively, for employees who meet the thresholds of the retirement provision. In 2013, the Company’s nominating and governance committee approved a retirement provision for the RSUs issued to non-employee directors that accelerates the vesting of such RSUs upon retirement. Such awards are fully expensed immediately upon grant in accordance with ASC 718, as the retirement provision eliminates substantive service conditions associated with the awards. A summary of RSU activity for the three months ended March 31, 2016 is as follows: Weighted Weighted Average Average Remaining Grant Date Contractual Shares Fair value Term Unvested at December 31, 2015 $ years Granted $ years Vested $ Cancelled and forfeited - $ - Unvested at March 31, 2016 $ years Expected to vest in the future at March 31, 2016 $ years The Company recognized $742 and $832 of compensation expense related to the RSU awards in the three months ended March 31, 2016 and March 31, 2015, respectively. The unrecognized compensation expense, net of expected forfeitures, calculated under the fair value method for shares that were, as of March 31, 2016, expected to be earned through the requisite service period was approximately $829 and is expected to be recognized through 201 9. Vested director RSUs are ‘‘settled’’ by the delivery to the participant or a designated brokerage firm of one share of common stock per vested RSU as soon as reasonably practicable following a termination of service of the participant that constitutes a separation from service, and in all events no later than the end of the calendar year in which such termination of service occurs or, if later, two and one-half months after such termination of service. Vested management RSUs are “settled” by the delivery to the participant or a designated brokerage firm of one share of common stock per vested RSU as soon as reasonably practicable following vesting. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies In the ordinary course of business, the Company is engaged in various litigation including product liability and intellectual property disputes. However, the Company does not believe that any pending litigation will have a material adverse effect on its consolidated financial position. In addition, the Company is not currently a party to any environmental-related claims or legal matters. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The largest item affecting deferred taxes is the difference between book and tax amortization of goodwill and other intangibles amortization. The Company’s effective tax rate was 38.7% and 36.5 % for the three months ended March 31, 2016 and 2015, respectively. The effective tax rate for the three months ended March 31, 2016 is higher than the corresponding period in 2015 due to state tax expense adjustments resulting from changes in apportionment. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 3 Months Ended |
Mar. 31, 2016 | |
Changes in Accumulated Other Comprehensive Loss by Component | |
Changes in Accumulated Other Comprehensive Loss by Component | 13. Changes in Accumulated Other Comprehensive Loss by Component Changes to accumulated other comprehensive loss by component for the three months ended March 31, 2016 are as follows: Unrealized Net Loss Retiree on Interest Health Rate Benefit Pension Swap Obligation Obligation Total Balance at December 31, 2015 $ $ $ $ Other comprehensive loss before reclassifications — — Amounts reclassified from accumulated other comprehensive loss: (1) Balance at March 31, 2016 $ $ $ $ (1) Amounts reclassified from accumulated other comprehensive loss: Amortization of Other Postretirement Benefit items: Actuarial gains (a) Tax expense Reclassification net of tax $ Amortization of pension items: Actuarial losses (a) Tax benefit Reclassification net of tax $ Realized losses on interest rate swaps reclassified to interest expense Tax benefit Reclassification net of tax $ (a) These components are included in the computation of benefit plan costs in Note 8. Changes to accumulated other comprehensive loss by component for the three months ended March 31, 2015 are as follows: Unrealized Net Loss Retiree on Interest Health Rate Benefit Pension Swap Obligation Obligation Total Balance at December 31, 2014 $ - $ $ $ Other comprehensive loss before reclassifications - - Amounts reclassified from accumulated other comprehensive loss: (1) - Balance at March 31, 2015 $ $ $ $ (1) Amounts reclassified from accumulated other comprehensive loss: Amortization of Other Postretirement Benefit items: Actuarial gains (a) Tax expense Reclassification net of tax $ Amortization of pension items: Actuarial losses (a) Tax benefit Reclassification net of tax $ (a) These components are included in the computation of benefit plan costs in Note 8. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 14. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 Leases: Amendments to the FASB Accounting Standards Codification . ASU 2016 -02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the expected impact of this standard. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis and disclosure of the fair value of long-term debt | Fair Value at Fair Value at March 31, December 31, 2016 2015 Assets: Other long-term assets (a) $ $ Total Assets $ $ Liabilities: Interest rate swaps (b) $ $ Long term debt (c) Earnout - TrynEx (d) - Earnout - Henderson (e) Total Liabilities $ $ (a) Included in other assets is the cash surrender value of insurance policies on various individuals that are associated with the Company. The carrying amounts of these insurance policies approximates their fair value . (b) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g. interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to determine fair value of the interest rate swap are Level 2 inputs. Interest rate swaps of $379 and $3,002 at March 31, 2016 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively . Interest rate swaps of $286 and $1,215 at December 31, 2015 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively. (c) The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, which is a Level 2 input for all periods presented. Meanwhile, long-term debt is recorded at carrying amount, net of discount and deferred debt issuance costs, as disclosed on the face of the balance sheet. (d) Included in accrued expenses and other current liabilities in the amount of $0 and $2,032 at March 31, 2016 and March 31, 2015, respectively, is an obligation for a portion of the potential earn out incurred in conjunction with the acquisition of substantially all of the assets of TrynEx, Inc. (“TrynEx”). The carrying amount of the earn out approximates its fair value. Fair value is based upon Level 3 inputs of a monte carlo simulation analysis using key inputs of forecasted future sales and financial performance as well as a growth rate reduced by the market required rate of return. See reconciliation of liability included below: Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ - $ (e) Included in accrued expenses and other current liabilities and other long term liabilities in the amounts of $267 and $442 , respectively, at March 31, 2016 is the fair value of an obligation for a portion of the potential earn out acquired in conjunction with the acquisition of Henderson Enterprise Group, Inc. (“Henderson”). Included in accrued expenses and other current liabilities and other long term liabilities in the amounts of $193 and $442 , respectively, at March 31, 2015 is the fair value of an obligation for a portion of the potential earn out acquired in conjunction with the acquisition of Henderson. Fair value is based upon Level 3 discounted cash flow analysis using key inputs of forecasted future sales as well as a growth rate reduced by the market required rate of return. See reconciliation of liability included below: Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ $ |
Trynex | |
Schedule of reconciliation of liability | Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ - $ |
Henderson | |
Schedule of reconciliation of liability | Three Months Ended Three Months Ended March 31, March 31, 2016 2015 Beginning Balance $ $ Additions — — Adjustments to fair value — Payment to former owners Ending balance $ $ |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventories | |
Schedule of inventories | March 31, December 31, 2016 2015 Finished goods and work-in-process $ $ Raw material and supplies $ $ |
Property, plant and equipment (
Property, plant and equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, plant and equipment | |
Summary of property, plant and equipment | March 31, December 31, 2016 2015 Land $ $ Land improvements Leasehold Improvements Buildings Machinery and equipment Furniture and fixtures Mobile equipment and other Construction-in-process Total property, plant and equipment Less accumulated depreciation Net property, plant and equipment $ $ |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Long-Term Debt | |
Summary of long-term debt | March 31, December 31, 2016 2015 Term Loan, net of debt discount of $1,561 and $1,629 at March 31, 2016 and December 31, 2015, respectively $ $ Less current maturities Long term debt before deferred financing costs Deferred financing costs, net Long term debt, net $ $ |
Accrued Expenses and Other Cu24
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Summary of accrued expenses and other current liabilities | March 31, December 31, 2016 2015 Payroll and related costs $ $ Employee benefits Accrued warranty Other $ $ |
Warranty Liability (Tables)
Warranty Liability (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Warranty Liability | |
Schedule of rollforward of Company's warranty liability | Three Months Ended March 31, March 31, 2016 2015 Balance at the beginning of the period $ $ Warranty provision Claims paid/settlements Balance at the end of the period $ $ |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Pension plan | |
Employee retirement plans | |
Schedule of components of net periodic pension or other postretirement benefit cost | Three Months Ended March 31, March 31, 2016 2015 Component of net periodic pension cost: Service cost $ $ Interest cost Expected return on plan assets Amortization of net loss Net periodic pension cost $ $ |
Other postretirement benefit cost | |
Employee retirement plans | |
Schedule of components of net periodic pension or other postretirement benefit cost | Three Months Ended March 31, March 31, 2016 2015 Component of periodic other postretirement benefit cost: Service cost $ $ Interest cost Amortization of net gain Net periodic other postretirement benefit cost $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings per Share | |
Schedule of computation of basic and diluted earnings per share | Three Months Ended March 31, March 31, 2016 2015 Basic earnings per common share Net income $ $ Less income allocated to participating securities Net income allocated to common shareholders $ $ Weighted average common shares outstanding $ $ Earnings per common share assuming dilution Net income $ $ Less income allocated to participating securities Net income allocated to common shareholders $ $ Weighted average common shares outstanding Incremental shares applicable to stock based compensation - Weighted average common shares assuming dilution $ $ |
Employee Stock Plans (Tables)
Employee Stock Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Employee Stock Plans | |
Summary of restricted stock activity | Weighted Weighted Average Average Remaining Grant Date Contractual Shares Fair value Term Unvested at December 31, 2015 $ years Granted - - - Vested $ Cancelled and forfeited — — Unvested at March 31, 2016 - $ - - years Expected to vest in the future at March 31, 2016 - $ - - years |
Summary of RSU activity | Weighted Weighted Average Average Remaining Grant Date Contractual Shares Fair value Term Unvested at December 31, 2015 $ years Granted $ years Vested $ Cancelled and forfeited - $ - Unvested at March 31, 2016 $ years Expected to vest in the future at March 31, 2016 $ years |
Changes in Accumulated Other 29
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Changes in Accumulated Other Comprehensive Loss by Component | |
Schedule of changes to accumulated other comprehensive loss by component | Unrealized Net Loss Retiree on Interest Health Rate Benefit Pension Swap Obligation Obligation Total Balance at December 31, 2015 $ $ $ $ Other comprehensive loss before reclassifications — — Amounts reclassified from accumulated other comprehensive loss: (1) Balance at March 31, 2016 $ $ $ $ (1) Amounts reclassified from accumulated other comprehensive loss: Amortization of Other Postretirement Benefit items: Actuarial gains (a) Tax expense Reclassification net of tax $ Amortization of pension items: Actuarial losses (a) Tax benefit Reclassification net of tax $ Realized losses on interest rate swaps reclassified to interest expense Tax benefit Reclassification net of tax $ (a) These components are included in the computation of benefit plan costs in Note 8. Changes to accumulated other comprehensive loss by component for the three months ended March 31, 2015 are as follows: Unrealized Net Loss Retiree on Interest Health Rate Benefit Pension Swap Obligation Obligation Total Balance at December 31, 2014 $ - $ $ $ Other comprehensive loss before reclassifications - - Amounts reclassified from accumulated other comprehensive loss: (1) - Balance at March 31, 2015 $ $ $ $ (1) Amounts reclassified from accumulated other comprehensive loss: Amortization of Other Postretirement Benefit items: Actuarial gains (a) Tax expense Reclassification net of tax $ Amortization of pension items: Actuarial losses (a) Tax benefit Reclassification net of tax $ (a) These components are included in the computation of benefit plan costs in Note 8. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($)contract | Dec. 31, 2015USD ($) | |
Interim Consolidated Financial Information | |||
Reclassification of debt issuance costs from Deferred financing costs to Long term debt | $ 2,222,000 | $ 2,337,000 | |
Derivative Number of Contracts | contract | 3 | ||
Notional amount | (3,381,000) | $ 1,293,000 | |
Litigation proceeds | 10,050,000 | ||
Interest rate swap | |||
Interim Consolidated Financial Information | |||
Negative fair value included in accumulated other comprehensive loss, net of tax | $ (2,104,000) | ||
Interest Rate Swap Effective 31 December 2015 through 29 March 2018 [Member] | |||
Interim Consolidated Financial Information | |||
Notional amount | 45,000,000 | ||
Fixed interest rate (as a percent) | 6.105% | ||
Interest Rate Swap Effective 31 December 2015 through 29 March 2018 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Interim Consolidated Financial Information | |||
Interest rate added to variable rate (as a percent) | 4.25% | ||
LIBOR floor (as a percent) | 1.00% | ||
Interest Rate Swap Effective 29 March 2018 through 31 March 2020 [Member] | |||
Interim Consolidated Financial Information | |||
Notional amount | 90,000,000 | ||
Fixed interest rate (as a percent) | 6.916% | ||
Interest Rate Swap Effective 29 March 2018 through 31 March 2020 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Interim Consolidated Financial Information | |||
Interest rate added to variable rate (as a percent) | 4.25% | ||
LIBOR floor (as a percent) | 1.00% | ||
Interest Rate Swap Effective 31 March 2020 through 30 June 2021 [Member] | |||
Interim Consolidated Financial Information | |||
Notional amount | $ 135,000,000 | ||
Fixed interest rate (as a percent) | 7.168% | ||
Interest Rate Swap Effective 31 March 2020 through 30 June 2021 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Interim Consolidated Financial Information | |||
Interest rate added to variable rate (as a percent) | 4.25% | ||
LIBOR floor (as a percent) | 1.00% |
Summary of Significant Accounti
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Liabilities: | |||
Long term debt | $ 186,529 | $ 185,540 | |
Interest rate swaps | 3,381 | 1,501 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at the beginning of the period | $ 600 | ||
Adjustments to fair value | 96 | ||
Payments to former owners | (61) | ||
Balance at the end of the period | 635 | ||
Derivative Liability, Current | 379 | 88 | |
Derivative Liability, Noncurrent | 3,002 | 1,205 | |
Henderson | |||
Liabilities: | |||
Earnout | 709 | 761 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Current | 193 | ||
Derivative Liability, Noncurrent | 442 | ||
Trynex | |||
Liabilities: | |||
Earnout | 1,606 | ||
Level 2 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Current | 379 | 286 | |
Derivative Liability, Noncurrent | 3,002 | 1,215 | |
Level 3 | Henderson | |||
Liabilities: | |||
Earnout, portion in other current liabilities | 267 | ||
Earnout, portion in other long term liabilities | 442 | ||
Recurring | |||
Assets: | |||
Other assets | 3,264 | 2,500 | |
Total Assets | 3,264 | 2,500 | |
Liabilities: | |||
Total Liabilities | 190,619 | $ 189,408 | |
Recurring | Level 3 | Henderson | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at the beginning of the period | 761 | ||
Payments to former owners | (52) | ||
Balance at the end of the period | 709 | ||
Recurring | Level 3 | Trynex | |||
Liabilities: | |||
Earnout, portion in other current liabilities | 0 | 2,032 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at the beginning of the period | 1,606 | 1,987 | |
Adjustments to fair value | 313 | ||
Payments to former owners | $ (1,606) | (268) | |
Balance at the end of the period | $ 2,032 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventories | ||
Finished goods and work-in-process | $ 63,901 | $ 40,984 |
Raw material and supplies | 9,828 | 10,600 |
Inventories | $ 73,729 | $ 51,584 |
Property, plant and equipment33
Property, plant and equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Property, plant and equipment | ||
Total property, plant and equipment | $ 82,472 | $ 81,540 |
Less accumulated depreciation | (40,054) | (38,904) |
Net property, plant and equipment | 42,418 | 42,636 |
Land | ||
Property, plant and equipment | ||
Total property, plant and equipment | 1,500 | 1,500 |
Land improvements | ||
Property, plant and equipment | ||
Total property, plant and equipment | 3,010 | 3,010 |
Leasehold Improvements | ||
Property, plant and equipment | ||
Total property, plant and equipment | 859 | 859 |
Buildings | ||
Property, plant and equipment | ||
Total property, plant and equipment | 24,481 | 24,476 |
Machinery and equipment | ||
Property, plant and equipment | ||
Total property, plant and equipment | 36,777 | 35,628 |
Furniture and fixtures | ||
Property, plant and equipment | ||
Total property, plant and equipment | 11,663 | 11,657 |
Mobile equipment and other | ||
Property, plant and equipment | ||
Total property, plant and equipment | 2,430 | 2,255 |
Construction-in-process | ||
Property, plant and equipment | ||
Total property, plant and equipment | $ 1,752 | $ 2,155 |
Long-Term Debt (Details)
Long-Term Debt (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Long-term debt | |||
Term Loan, net of debt discount | $ 186,065,000 | $ 186,472,000 | |
Less current maturities | 1,629,000 | 1,629,000 | |
Long-term Debt, Excluding Current Maturities, Total | 182,214,000 | 182,506,000 | |
Deferred financing costs, net | 2,222,000 | 2,337,000 | |
Total long-term debt | 182,214,000 | 182,506,000 | |
Term loan facility | |||
Long-term debt | |||
Less current maturities | 1,629,000 | 1,629,000 | |
Long-term Debt, Excluding Current Maturities, Total | 184,436,000 | 184,843,000 | |
Long-term debt, additional disclosure | |||
Unamortized discount on issuance of debt | 1,561,000 | 1,629,000 | $ 1,900,000 |
Revolving credit facility | Maximum | |||
Long-term debt, additional disclosure | |||
Facilities consolidation expenditure allowed | 15,000,000 | ||
Senior credit facilities | |||
Long-term debt, additional disclosure | |||
Maximum borrowing capacity | 10,000,000 | ||
Senior credit facilities | Term loan facility | |||
Long-term debt, additional disclosure | |||
Borrowings under senior credit facility | $ 190,000,000 | ||
Percentage of net cash proceeds of certain asset sales, certain insurance or condemnation events, requirement for additional principal prepayments | 100.00% | ||
Period before end of the fiscal year, for additional principal prepayments of debt, from excess cash flow | 150 days | ||
Percentage of excess cash flow paid as additional principal prepayments | 50.00% | ||
Reduced percentage of excess cash flow paid as additional principal prepayments upon achievement of certain leverage ratio thresholds, one | 0.00% | ||
Senior credit facilities | Term loan facility | Maximum | |||
Long-term debt, additional disclosure | |||
Additional term loan commitments | $ 80,000,000 | ||
Debt ratio | 3.25 | ||
Senior credit facilities | Term loan facility | First option | Minimum | |||
Long-term debt, additional disclosure | |||
Additional fixed interest rate spread (as a percent) | 1.00% | ||
Additional interest margin added to fixed and variable rates (as a percent) | 1.00% | ||
Senior credit facilities | Term loan facility | First option | Base rate | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 3.25% | ||
Senior credit facilities | Term loan facility | First option | Federal funds | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | Federal funds | ||
Interest rate added to variable rate (as a percent) | 0.50% | ||
Senior credit facilities | Term loan facility | First option | One month London Interbank Offered Rate | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | LIBOR for a one month interest period | ||
Senior credit facilities | Term loan facility | First option | Prime | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | Prime Rate | ||
Senior credit facilities | Term loan facility | Second option | Minimum | |||
Long-term debt, additional disclosure | |||
Additional fixed interest rate spread (as a percent) | 1.00% | ||
Senior credit facilities | Term loan facility | Second option | Base rate | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 4.25% | ||
Senior credit facilities | Revolving credit facility | |||
Long-term debt, additional disclosure | |||
Borrowings under senior credit facility | $ 100,000,000 | ||
Outstanding borrowings | $ 0 | ||
Remaining borrowing availability | $ 97,776,000 | ||
Fixed charge coverage ratio to be maintained if certain minimum availability under the credit facility is not maintained. | 1 | ||
Senior credit facilities | Revolving credit facility | Maximum | |||
Long-term debt, additional disclosure | |||
Annual acquisitions allowed | $ 12,500,000 | ||
Senior credit facilities | Revolving credit facility | Fixed rate | Maximum | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 2.00% | ||
Senior credit facilities | Revolving credit facility | First option | Fixed rate | Minimum | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 1.50% | ||
Senior credit facilities | Revolving credit facility | Second option | Federal funds | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | Federal funds | ||
Interest rate added to variable rate (as a percent) | 0.50% | ||
Senior credit facilities | Revolving credit facility | Second option | Fixed rate | Maximum | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 1.00% | ||
Senior credit facilities | Revolving credit facility | Second option | Fixed rate | Minimum | |||
Long-term debt, additional disclosure | |||
Fixed interest rate base (as a percent) | 0.50% | ||
Senior credit facilities | Revolving credit facility | Second option | One month London Interbank Offered Rate | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | LIBOR for a one month interest period | ||
Interest rate added to variable rate (as a percent) | 1.00% | ||
Senior credit facilities | Revolving credit facility | Second option | Prime | |||
Long-term debt, additional disclosure | |||
Variable rate basis description | Prime Rate | ||
Revolving credit facility | |||
Long-term debt, additional disclosure | |||
Outstanding borrowings | $ 0 | ||
Swingline Loan [Member] | |||
Long-term debt, additional disclosure | |||
Maximum borrowing capacity | $ 5,000,000 |
Long-Term Debt - Swaps (Details
Long-Term Debt - Swaps (Details) | 3 Months Ended | ||
Mar. 31, 2015USD ($)contract | Mar. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Derivative Instrument Detail [Abstract] | |||
Derivative Number of Contracts | contract | 3 | ||
Derivative Liability, Notional Amount | $ 1,293,000 | $ (3,381,000) | |
Interest Rate Derivative Liabilities, at Fair Value | 3,381,000 | $ 1,501,000 | |
Derivative Liability, Current | 88,000 | 379,000 | |
Derivative Liability, Noncurrent | 1,205,000 | $ 3,002,000 | |
Interest rate swap | |||
Derivative Instrument Detail [Abstract] | |||
Number of financial institutions for which the entity is exposed to counterparty credit risk | item | 1 | ||
Interest Rate Swap Effective 29 March 2018 through 31 March 2020 [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative Liability, Notional Amount | 90,000,000 | ||
Derivative, Fixed Interest Rate | 6.916% | ||
Interest Rate Swap Effective 29 March 2018 through 31 March 2020 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative, Basis Spread on Variable Rate | 4.25% | ||
Derivative, Floor Interest Rate | 1.00% | ||
Interest Rate Swap Effective 31 December 2015 through 29 March 2018 [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative Liability, Notional Amount | 45,000,000 | ||
Derivative, Fixed Interest Rate | 6.105% | ||
Interest Rate Swap Effective 31 December 2015 through 29 March 2018 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative, Basis Spread on Variable Rate | 4.25% | ||
Derivative, Floor Interest Rate | 1.00% | ||
Interest Rate Swap Effective 31 March 2020 through 30 June 2021 [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative Liability, Notional Amount | $ 135,000,000 | ||
Derivative, Fixed Interest Rate | 7.168% | ||
Interest Rate Swap Effective 31 March 2020 through 30 June 2021 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Derivative Instrument Detail [Abstract] | |||
Derivative, Basis Spread on Variable Rate | 4.25% | ||
Derivative, Floor Interest Rate | 1.00% |
Accrued Expenses and Other Cu36
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses and Other Current Liabilities | ||||
Payroll and related costs | $ 4,063 | $ 8,927 | ||
Employee benefits | 4,265 | 4,113 | ||
Accrued warranty | 5,504 | 7,423 | $ 5,188 | $ 6,279 |
Other | 3,077 | 5,086 | ||
Accrued expenses and other current liabilities | $ 16,909 | $ 25,549 |
Warranty Liability (Details)
Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Warranty liability | |||
Period of warranty history used in estimating warranty costs | 5 years | ||
Other long-term liabilities | $ 8,207 | $ 6,004 | |
Accrued expenses and other current liabilities | 16,909 | $ 25,549 | |
Company's warranty liability: | |||
Balance at the beginning of the period | 7,423 | $ 6,279 | |
Warranty provision | 471 | 648 | |
Claims paid/settlements | (1,390) | (1,739) | |
Balance at the end of the period | 5,504 | $ 5,188 | |
Standard Product Warranty Accrual, Ending Balance | 6,504 | ||
Warranty Reserves [Member] | |||
Warranty liability | |||
Other long-term liabilities | 1,000 | ||
Accrued expenses and other current liabilities | $ 5,504 | ||
Snow and ice control equipment | |||
Warranty liability | |||
Warranty period | 2 years | ||
Parts and accessories | |||
Warranty liability | |||
Warranty period | 1 year | ||
Certain snowplows | |||
Warranty liability | |||
Warranty period | 1 year |
Employee Retirement Plans (Deta
Employee Retirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Amounts recognized in the consolidated balance sheets consisted | |||
Retiree health benefit obligation | $ 6,767 | $ 6,656 | |
Pension plan | |||
Components of net periodic cost: | |||
Service cost | 80 | $ 64 | |
Interest cost | 410 | 372 | |
Expected return on plan assets | (456) | (407) | |
Amortization of net (gain) loss | 181 | 255 | |
Net periodic cost | 215 | 284 | |
Employer contributions during the period | 193 | 226 | |
Pension plan | Minimum | |||
Components of net periodic cost: | |||
Estimated total required contributions | 967 | ||
Other postretirement benefit cost | |||
Components of net periodic cost: | |||
Service cost | 53 | 57 | |
Interest cost | 70 | 64 | |
Amortization of net (gain) loss | (32) | (17) | |
Net periodic cost | $ 91 | $ 104 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Basic earnings per common share | ||
Net income | $ 5,278 | $ 383 |
Less income allocated to participating securities | 70 | 5 |
Net income attributable to common shareholders | $ 5,208 | $ 378 |
Weighted average common shares outstanding | 22,417,337 | 22,247,802 |
Basic income per common share (in dollars per share) | $ 0.23 | $ 0.02 |
Earnings per common share assuming dilution | ||
Net income | $ 5,278 | $ 383 |
Less income allocated to participating securities | 70 | 5 |
Net income attributable to common shareholders | $ 5,208 | $ 378 |
Weighted average common shares outstanding | 22,417,337 | 22,247,802 |
Incremental shares applicable to stock based compensation | 21,220 | |
Weighted average common shares assuming dilution | 22,417,337 | 22,269,022 |
Earnings per common share assuming dilution (in dollars per share) | $ 0.23 | $ 0.01 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)age$ / sharesshares | Mar. 31, 2015USD ($) | Dec. 31, 2015$ / sharesshares | |
2010 Plan | |||
Stock-based compensation | |||
Maximum number of shares of common stock that may be issued | 2,130,000 | ||
Restricted Stock Share Awards | |||
Shares | |||
Unvested at the beginning of the period (in shares) | 14,701 | ||
Vested (in shares) | (14,701) | ||
Cancelled and forfeited (in shares) | 0 | ||
Unvested at the end of the period (in shares) | 14,701 | ||
Weighted Average Grant Date Fair Value | |||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 14.78 | ||
Granted (in dollars per share) | $ / shares | 0 | ||
Vested (in dollars per share) | $ / shares | $ 14.78 | ||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 14.78 | ||
Weighted Average Remaining Contractual Term | |||
Unvested at the beginning of the period | 4 days | ||
Unvested at the end of the period | 4 days | ||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Compensation expenses recognized | $ | $ 0 | $ 165 | |
Performance Share Unit Awards | 2010 Plan | |||
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ / shares | $ 19.88 | ||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Vesting period of awards | 2 years | ||
Compensation expenses recognized | $ | $ 127 | 127 | |
Unrecognized compensation expense, net of expected forfeitures, calculated under the fair value method for shares expected to vest | $ | $ 1,430 | ||
Restricted Stock Unit Awards | |||
Shares | |||
Unvested at the beginning of the period (in shares) | 48,665 | ||
Granted (in shares) | 131,765 | ||
Vested (in shares) | (131,638) | ||
Unvested at the end of the period (in shares) | 48,792 | 48,665 | |
Expected to vest in the future, at the end of the period (in shares) | 47,035 | ||
Weighted Average Grant Date Fair Value | |||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 17.33 | ||
Granted (in dollars per share) | $ / shares | 21.37 | ||
Vested (in dollars per share) | $ / shares | 20.27 | ||
Cancelled and forfeited (in dollars per share) | $ / shares | 0 | ||
Unvested at the end of the period (in dollars per share) | $ / shares | 20.30 | $ 17.33 | |
Expected to vest in the future, at the end of the period (in dollars per share) | $ / shares | $ 20.30 | ||
Weighted Average Remaining Contractual Term | |||
Unvested at the beginning of the period | 1 year 8 months 27 days | 1 year | |
Granted | 6 months 26 days | ||
Unvested at the end of the period | 1 year 8 months 27 days | 1 year | |
Expected to vest in future, at the end of the period | 1 year 8 months 27 days | ||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Compensation expenses recognized | $ | $ 742 | 832 | |
Unrecognized compensation expense, net of expected forfeitures, calculated under the fair value method for shares expected to vest | $ | $ 829 | ||
Restricted Stock Unit Awards | Non-employee director | |||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Number of shares issued upon exercise of units other than options | 1 | ||
Restricted Stock Unit Awards | Management | |||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Minimum age of employee, attaining which awards are continued to be vested upon retirement | age | 65 | ||
Minimum service period, upon serving which awards are continued to be vested upon retirement | 10 years | ||
Minimum age of employee along with service period condition, attaining which awards are continued to be vested upon retirement | age | 55 | ||
Accelerated stock based compensation expense | $ | $ 528 | $ 303 | |
Restricted Stock Unit Awards | Common Stock | Management | |||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Number of shares issued upon exercise of units other than options | 1 | ||
Restricted Stock Unit Awards | 2010 Plan | |||
Recognized and unrecognized compensation expense with weighted average recognition period | |||
Maximum period following a termination of service in which the share-based award will be settled | 2 months 15 days |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes | ||
Effective tax rate (as a percent) | 38.70% | 36.50% |
Changes in Accumulated Other 42
Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Changes to accumulated other comprehensive loss by component | ||
Balance at the beginning of the period | $ (6,183) | $ (6,028) |
Other comprehensive earning (loss) before reclassifications | (1,227) | (802) |
Amounts reclassified from accumulated other comprehensive loss | 153 | 148 |
Balance at the end of the period | (7,257) | (6,682) |
Unrealized Net Loss on Interest Rate Swap | ||
Changes to accumulated other comprehensive loss by component | ||
Balance at the beginning of the period | (937) | |
Other comprehensive earning (loss) before reclassifications | (1,227) | (802) |
Amounts reclassified from accumulated other comprehensive loss | 60 | |
Balance at the end of the period | (2,104) | (802) |
Other Postretirement Benefit Liability | ||
Changes to accumulated other comprehensive loss by component | ||
Balance at the beginning of the period | 1,048 | 807 |
Amounts reclassified from accumulated other comprehensive loss | (20) | (11) |
Balance at the end of the period | 1,028 | 796 |
Pension Liability | ||
Changes to accumulated other comprehensive loss by component | ||
Balance at the beginning of the period | (6,294) | (6,835) |
Amounts reclassified from accumulated other comprehensive loss | 113 | 159 |
Balance at the end of the period | $ (6,181) | $ (6,676) |
Changes in AOCLoss - Reclassifi
Changes in AOCLoss - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest expense, net | $ 2,872 | $ 2,454 |
Tax expense (benefit) | 3,328 | 220 |
Reclassification net of tax | (5,208) | (378) |
Other Postretirement Benefit Liability | Amount reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive loss: | ||
Actuarial (gains) losses | (32) | (17) |
Tax expense (benefit) | 12 | 6 |
Reclassification net of tax | (20) | (11) |
Pension Liability | Amount reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive loss: | ||
Actuarial (gains) losses | 181 | 255 |
Tax expense (benefit) | (68) | (96) |
Reclassification net of tax | 113 | $ 159 |
Unrealized Net Loss on Interest Rate Swap | Interest rate swap | ||
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest expense, net | 97 | |
Tax expense (benefit) | (37) | |
Reclassification net of tax | $ 60 |