Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | ALLIED MOTION TECHNOLOGIES INC | |
Entity Central Index Key | 46,129 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
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 | 9,476,382 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 11,357 | $ 15,590 |
Trade receivables, net of allowance for doubtful accounts of $506 and $341 at September 30, 2018 and December 31, 2017, respectively | 45,230 | 31,822 |
Inventories | 44,887 | 32,568 |
Prepaid expenses and other assets | 3,490 | 3,460 |
Total current assets | 104,964 | 83,440 |
Property, plant and equipment, net | 43,026 | 38,403 |
Deferred income taxes | 129 | 14 |
Intangible assets, net | 33,075 | 32,073 |
Goodwill | 34,938 | 29,531 |
Other long-term assets | 5,981 | 4,461 |
Total Assets | 222,113 | 187,922 |
Current liabilities: | ||
Debt obligations | 437 | 461 |
Accounts payable | 24,587 | 15,351 |
Accrued liabilities | 18,051 | 14,270 |
Total current liabilities | 43,075 | 30,082 |
Long-term debt | 62,021 | 52,694 |
Deferred income taxes | 3,164 | 3,609 |
Pension and post-retirement obligations | 4,238 | 4,667 |
Other long-term liabilities | 9,132 | 9,523 |
Total liabilities | 121,630 | 100,575 |
Stockholders' Equity: | ||
Common stock, no par value, authorized 50,000 shares; 9,476 and 9,427 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 32,867 | 31,051 |
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding | ||
Retained earnings | 74,366 | 61,882 |
Accumulated other comprehensive loss | (6,750) | (5,586) |
Total stockholders' equity | 100,483 | 87,347 |
Total Liabilities and Stockholders' Equity | $ 222,113 | $ 187,922 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade receivables, allowance for doubtful accounts (in dollars) | $ 506 | $ 341 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized shares | 50,000 | 50,000 |
Common stock, shares issued | 9,476 | 9,427 |
Common stock, shares outstanding | 9,476 | 9,427 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized shares | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Revenues | $ 80,092 | $ 64,968 | $ 236,649 | $ 186,657 |
Cost of goods sold | 56,330 | 45,422 | 166,816 | 131,529 |
Gross profit | 23,762 | 19,546 | 69,833 | 55,128 |
Operating costs and expenses: | ||||
Selling | 2,762 | 2,822 | 8,402 | 8,135 |
General and administrative | 8,210 | 6,255 | 24,318 | 17,985 |
Engineering and development | 4,692 | 4,389 | 14,610 | 12,984 |
Amortization of intangible assets | 872 | 813 | 2,634 | 2,405 |
Total operating costs and expenses | 16,536 | 14,279 | 49,964 | 41,509 |
Operating income | 7,226 | 5,267 | 19,869 | 13,619 |
Other expense (income): | ||||
Interest expense | 623 | 633 | 1,839 | 1,797 |
Other (income) expense, net | (24) | 65 | (118) | 135 |
Total other expense, net | 599 | 698 | 1,721 | 1,932 |
Income before income taxes | 6,627 | 4,569 | 18,148 | 11,687 |
Provision for income taxes | (1,767) | (1,512) | (4,859) | (3,746) |
Net income | $ 4,860 | $ 3,057 | $ 13,289 | $ 7,941 |
Basic earnings per share: | ||||
Earnings per share (in dollars per share) | $ 0.52 | $ 0.33 | $ 1.44 | $ 0.87 |
Basic weighted average common shares (in shares) | 9,273 | 9,173 | 9,251 | 9,137 |
Diluted earnings per share: | ||||
Earnings per share (in dollars per share) | $ 0.52 | $ 0.33 | $ 1.42 | $ 0.86 |
Diluted weighted average common shares (in shares) | 9,371 | 9,294 | 9,337 | 9,265 |
Net income | $ 4,860 | $ 3,057 | $ 13,289 | $ 7,941 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (307) | 1,829 | (2,152) | 5,608 |
Income (loss) on derivatives | 137 | 45 | 988 | (178) |
Comprehensive income | $ 4,690 | $ 4,931 | $ 12,125 | $ 13,371 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net income | $ 13,289 | $ 7,941 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 8,454 | 7,590 |
Deferred income taxes | (484) | (99) |
Stock compensation expense | 1,787 | 1,473 |
Debt issue cost amortization recorded in interest expense | 113 | 113 |
Other | 521 | (26) |
Changes in operating assets and liabilities, net of acquisition: | ||
Trade receivables | (11,727) | (6,887) |
Inventories | (11,067) | (379) |
Prepaid expenses and other assets | (1,610) | 17 |
Accounts payable | 8,093 | 3,106 |
Accrued liabilities | 3,917 | 2,464 |
Net cash provided by operating activities | 11,286 | 15,313 |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (10,581) | (4,220) |
Cash paid for acquisition | (13,312) | |
Net cash used in investing activities | (23,893) | (4,220) |
Cash Flows From Financing Activities: | ||
Borrowings on long term debt | 17,658 | (441) |
Principal payments of long-term debt | (8,350) | (9,114) |
Dividends paid to stockholders | (800) | (709) |
Stock transactions under employee benefit stock plans | 262 | 355 |
Net cash provided by (used in) financing activities | 8,770 | (9,909) |
Effect of foreign exchange rate changes on cash | (396) | 933 |
Net (decrease) increase in cash and cash equivalents | (4,233) | 2,117 |
Cash and cash equivalents at beginning of period | 15,590 | 15,483 |
Cash and cash equivalents at end of period | $ 11,357 | $ 17,600 |
BASIS OF PREPARATION AND PRESEN
BASIS OF PREPARATION AND PRESENTATION | 9 Months Ended |
Sep. 30, 2018 | |
BASIS OF PREPARATION AND PRESENTATION | |
BASIS OF PREPARATION AND PRESENTATION | 1. BASIS OF PREPARATION AND PRESENTATION Allied Motion Technologies Inc. ("Allied Motion" or the "Company") is engaged in the business of designing, manufacturing and selling motion control solutions, which include integrated system solutions as well as individual motion control products, to a broad spectrum of customers throughout the world primarily for the commercial motor, industrial motion, automotive control, medical, and aerospace and defense markets. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end of period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included in accumulated other comprehensive income (loss), a component of stockholders’ equity in the accompanying condensed consolidated balance sheets. Revenue and expense transactions use an average rate prevailing during the month of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of each Technology Unit (“TU”) are included in the results of operations as incurred. The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all adjustments which are, in the opinion of management, necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements which are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures herein are adequate to make the information presented not misleading. The financial data for the interim periods may not necessarily be indicative of results to be expected for the year. The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. It is suggested that the accompanying condensed consolidated financial statements be read in conjunction with the Consolidated Financial Statements and related Notes to such statements included in the Annual Report on Form 10-K for the year ended December 31, 2017 that was previously filed by the Company. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2018 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 2. BUSINESS COMBINATION As part of the growth strategy of the Company, on January 19, 2018, the Company purchased substantially all of the operating assets associated with the original equipment steering business of Maval Industries, LLC (“Maval”) for $13,312 in cash. Consistent with the Company’s strategy to provide higher level system solutions, the addition of the Maval OE steering (“Maval OE Steering”) product line enables Allied to provide a fully integrated steering system solution to its customers. The following table represents the preliminary purchase price allocation and summarizes the aggregate estimated fair value of the assets acquired (in thousands): January 19, 2018 Intangible assets $ 3,870 Goodwill 5,921 Assets acquired (net of liabilities assumed) 3,521 Fair value of net assets acquired $ 13,312 Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. None of the goodwill recognized is deductible for income tax purposes. The purchase price allocation is subject to further adjustment to reflect, among other things, any adjustments in accordance with the Purchase Agreement and finalization of the opening balance sheet, including adjustments for final valuations, including intangible assets. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION Performance Obligations Performance Obligations Satisfied at a Point in Time The Company’s standard delivery method is “free on board” shipping point. Consequently, the Company considers control of most products to transfer at a single point in time when control is transferred to the customer, generally when the products are shipped in accordance with an agreement and/or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product. The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for generally monetary consideration from the customer. The Company considers the customer's purchase order, and the Company's corresponding sales order acknowledgment as the contract with the customer. For some customers, control, and a sale, is transferred at a point in time when the product is delivered to a customer. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Performance Obligations Satisfied Over Time The Company has certain contracts that have performance obligations that are satisfied over periods exceeding one year. Determining a measure of progress requires management to make judgments that affect the timing of revenue recognized. For a contract satisfied over time (greater than one year), revenue is recognized similarly to contracts satisfied at a point in time. The Company transfers control and recognizes a sale when the Company ships the product from a manufacturing facility to a customer. The only difference is that the shipments are not completed within a one-year timeframe. The revenue recognized for the contracts satisfied over time were immaterial for the quarter and nine months ended September 30, 2018. The Company has determined that the above methods provide a faithful depiction of the transfer of goods to the customer. Nature of Goods and Services The Company sells component and integrated motion control solutions to end customers and original equipment manufacturers (“OEM’s”) through the Company’s own direct sales force and authorized manufacturers’ representatives and distributors. The Company’s products include brush and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gearmotors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, and other motion control-related products. The Company’s target markets include Vehicle, Medical, Aerospace & Defense and Electronics/Industrial. Determining the Transaction Price The majority of the Company’s contracts have an original duration of less than one year. For these contracts, the Company applies the practical expedient and therefore does not consider the effects of the time value of money. For multiyear contracts, the Company uses judgment to determine whether there is a significant financing component. These contracts are generally those in which the customer has made an up-front payment. Contracts that management determines to include a significant financing component are discounted at the Company’s incremental borrowing rate. The Company incurs interest expense and accrues a contract liability. As the Company satisfies performance obligations and recognizes revenue from these contracts, interest expense is recognized simultaneously. Management does not have any contracts that include a significant financing component as of September 30, 2018. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into geographical regions and target markets. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the Segment Information footnote, the Company’s business consists of one reportable segment. A reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions is provided in Note 16, Segment Information. Three months ended Nine months ended Target Market September 30, 2018 September 30, 2018 Vehicle $ 31,717 $ 95,071 Industrial/Electronics 24,668 76,633 Medical 10,732 31,214 Aerospace & Defense 10,332 26,701 Other 2,643 7,030 Total $ 80,092 $ 236,649 Three months ended Nine months ended Geography September 30, 2018 September 30, 2018 United States $ 49,375 $ 140,031 Europe 29,975 94,754 Asia 742 1,864 Total $ 80,092 $ 236,649 Contract Balances When the timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Typically, contracts are paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists. The opening and closing balances of the Company’s receivables, contract asset, and contract liability are as follows (in thousands): Three months ended September 31, 2018 Nine months ended September 31, 2018 Contract Contract Receivables Contract Asset Liability Receivables Contract Asset Liability Opening balance $ — $ — $ 623 $ — $ — $ 719 Closing balance — — 579 — — 579 Decrease $ — $ — $ (44) $ — $ — $ (140) The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. Significant Payment Terms The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payments are typically due in full within 30-60 days of delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the majority of contracts do not contain variable consideration. Returns, Refunds, and Warranties In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The Company establishes provisions for estimated returns and warranties. All contracts include a standard warranty clause to guarantee that the product complies with agreed specifications. Practical Expedients Incremental costs of obtaining a contract - the Company elected to expense the incremental costs of obtaining a contract when the amortization period for such contracts would have been one year or less. Remaining performance obligations - the Company elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its contracts that are one year or less, as the revenue is expected to be recognized within the next year. The time value of money - the Company elected not to adjust the promised amount of consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays is equal to one year or less. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2018 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands): September 30, December 31, 2018 2017 Parts and raw materials $ 28,195 $ 20,509 Work-in-process 7,263 5,984 Finished goods 9,429 6,075 44,887 32,568 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is classified as follows (in thousands): September 30, December 31, 2018 2017 Land $ 985 $ 993 Building and improvements 11,083 10,678 Machinery, equipment, tools and dies 57,213 49,083 Furniture, fixtures and other 14,162 12,931 83,443 73,685 Less accumulated depreciation (40,417) (35,282) Property, plant and equipment, net $ 43,026 $ 38,403 Depreciation expense was approximately $1,960 and $1,817 for the quarters ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 and 2017, depreciation expense was approximately $5,820 and $5,185, respectively. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2018 | |
GOODWILL | |
GOODWILL | 6. GOODWILL The change in the carrying amount of goodwill for the nine months ended September 30, 2018 and year ended December 31, 2017 is as follows (in thousands): September 30, December 31, 2018 2017 Beginning balance $ 29,531 $ 27,522 Goodwill acquired (Note 2) 5,921 — Effect of foreign currency translation (514) 2,009 Ending balance $ 34,938 $ 29,531 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 7. INTANGIBLE ASSETS Intangible assets on the Company’s condensed consolidated balance sheets consist of the following (in thousands): September 30, 2018 December 31, 2017 Gross Accumulated Net Book Gross Accumulated Net Book Life Amount amortization Value Amount amortization Value Customer lists 8 - 17 years $ 42,326 $ (14,623) $ 27,703 $ 38,659 $ (12,721) $ 25,938 Trade name 10 - 12 years 6,168 (3,165) 3,003 6,213 (2,798) 3,415 Design and technologies 10 - 12 years 4,991 (2,637) 2,354 5,147 (2,443) 2,704 Patents 17 years 24 (9) 15 24 (8) 16 Total $ 53,509 $ (20,434) $ 33,075 $ 50,043 $ (17,970) $ 32,073 Intangible assets resulting from the acquisition of the Maval OE Steering business were approximately $3,870 (Note 2). The intangible assets acquired consist of customer lists (the valuation and useful life of which have not been finalized). Amortization expense for intangible assets was $872 and $813 for the quarters ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 and 2017, amortization expense was $2,634 and $2,405, respectively. Estimated future intangible asset amortization expense as of September 30, 2018 is as follows (in thousands): Estimated Amortization Expense Remainder of 2018 $ 883 2019 3,499 2020 3,499 2021 3,241 2022 3,241 2023 3,159 Thereafter 15,553 Total estimated amortization expense $ 33,075 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION Stock Incentive Plans The Company’s Stock Incentive Plans provide for the granting of stock awards, including restricted stock, stock options and stock appreciation rights, to employees and non-employees, including directors of the Company. Restricted Stock For the nine months ended September 30, 2018, 58,220 shares of unvested restricted stock were awarded at a weighted average market value of $34.25. Of the restricted shares granted, 30,603 shares have performance-based vesting conditions. The value of the shares is amortized to compensation expense over the related service period, which is normally three years, or over the estimated performance period. Shares of unvested restricted stock are generally forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards. The following is a summary of restricted stock activity for the nine months ended September 30, 2018: Number of shares Outstanding at beginning of period 221,968 Awarded 58,220 Vested (60,145) Forfeited (18,867) Outstanding at end of period 201,176 Stock based compensation expense, net of forfeitures, of $694 and $519 was recorded for the quarters ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 and 2017, stock compensation expense, net of forfeitures, of $1,787 and $1,473 was recorded, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2018 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 9. ACCRUED LIABILITIES Accrued liabilities consist of the following (in thousands): September 30, December 31, 2018 2017 Compensation and fringe benefits $ 9,715 $ 7,459 Warranty reserve 951 922 Income taxes payable 2,329 2,397 Other accrued expenses 5,056 3,492 $ 18,051 $ 14,270 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2018 | |
DEBT OBLIGATIONS | |
DEBT OBLIGATIONS | 10. DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands): September 30, December 31, 2018 2017 Current Borrowings China Credit Facility (4.9% at September 30, 2018) $ 437 $ 461 Current borrowings $ 437 $ 461 Long-term Debt Revolving Credit Facility, long-term (1) $ 62,480 $ 53,266 Unamortized debt issuance costs (459) (572) Long-term debt $ 62,021 $ 52,694 (1) Credit Agreement On October 28, 2016, the Company entered into a Credit Agreement (the “Credit Agreement”) for a $125,000 revolving credit facility (the "Revolving Credit Facility"), with an initial term of five years. Borrowings under the Revolving Credit Facility are subject to terms defined in the Credit Agreement. Borrowings bear interest at the LIBOR Rate plus a margin of 1.00% to 2.25% or the Prime Rate plus a margin of 0% to 1.25%, in each case depending on the Company’s ratio of total funded indebtedness to Consolidated EBITDA (the “Total Leverage Ratio"). At September 30, 2018, the applicable margin for LIBOR Rate borrowings was 1.50% and the applicable margin for Prime Rate borrowings was 0.5%. In addition, the Company is required to pay a commitment fee of between 0.10% and 0.25% quarterly (currently 0.15%) on the unused portion of the Revolving Credit Facility, also based on the Company's Total Leverage Ratio. The Credit Agreement contains certain financial covenants related to minimum interest coverage and total leverage ratio at the end of each quarter. The Credit Agreement also includes other covenants and restrictions, including limits on the amount of additional indebtedness, and restrictions on the Company's ability to merge, consolidate or sell all or substantially all of its assets. The Company was in compliance with all covenants at September 30, 2018. Other The China Facility provides credit of approximately $1,456 (Chinese Renminbi (“RMB”) 10,000). The China Facility is used for working capital and capital equipment needs at the Company’s China operations. The average balance for 2018 was $460 (RMB 3,000). At September 30, 2018, there was approximately $1,019 (RMB 7,000) available under the facility. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 11. DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During October 2013, the Company entered into two identical interest rate swaps with a combined notional of $25,000 that amortized quarterly to a notional of $6,673 at the September 2018 maturity. Neither of these interest rate swaps is currently active as the Company terminated one interest rate swap during October 2016 as part of its debt refinancing, and the second matured September 2018. In February 2017, the Company entered into three interest rate swaps with a combined notional of $40,000 that matures in February 2022. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (Loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2018 and 2017, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. There was no hedge ineffectiveness recorded in the Company’s earnings during the quarters ended September 30, 2018 and 2017. The Company estimates that an additional $252 will be reclassified as a decrease to interest expense over the next twelve months. Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 (in thousands): Asset Derivatives Liability Derivatives Derivatives designated Balance Fair value as of: Fair value as of: as hedging Sheet September 30, December 31, Balance Sheet September 30, December 31, instruments Location 2018 2017 Location 2018 2017 Interest rate products Other long-term assets $ 1,184 $ Other long-term liabilities $ — $ — The tables below presents the effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) for the quarter and nine months ended September 30, 2018 and 2017 (in thousands): Amount of gain (loss) recognized Amount of gain (loss) recognized in OCI on derivative in OCI on derivative Derivatives in cash flow Three months ended September 30, Nine months ended September 30, hedging relationships 2018 2017 2018 2017 Interest rate products $ 121 $ (34) $ 936 $ (417) Location of (gain) Amount of (gain) loss reclassified Amount of (gain) loss reclassified loss reclassified from accumulated OCI into income from accumulated OCI into income from accumulated Three months ended September 30, Nine months ended September 30, OCI into income 2018 2017 2018 2017 Interest expense $ 16 $ 79 $ 52 $ 239 The tables below presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2018 and 2017: Total amounts of income and expense Total amounts of income and expense line items presented that reflect the line items presented that reflect the Derivatives designated Balance effects of cash flow hedges recorded effects of cash flow hedges recorded as hedging Sheet Three months ended September 30, Nine months ended September 30, instruments Location 2018 2017 2018 2017 Interest rate products Other assets $ 623 $ 633 $ 1,839 $ 1,797 The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2018 and December 31, 2017. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the condensed consolidated balance sheets. Gross amounts Net amounts of Gross offset in the assets presented Gross amounts not offset in the condensed amounts of condensed in the condensed consolidated balance sheets As of recognized consolidated consolidated Financial Cash collateral September 30, 2018 assets balance sheets balance sheets instruments received Net amount Derivatives $ 1,184 $ — $ 1,184 $ — $ — $ 1,184 Gross amounts Net amounts of Gross offset in the assets presented Gross amounts not offset in the condensed As of amounts of condensed in the condensed consolidated balance sheets December 31, recognized consolidated consolidated Financial Cash collateral 2017 assets balance sheets balance sheets instruments received Net amount Derivatives $ 196 $ — $ 196 $ — $ — $ 196 The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2018 | |
FAIR VALUE | |
FAIR VALUE | 12. FAIR VALUE Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a framework for measuring fair value which utilizes observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs. These two types of inputs create the following three-level fair value hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. Level 3: Significant inputs to the valuation model that are unobservable. The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities. The carrying amounts reported in the condensed consolidated balance sheets for these assets approximate fair value because of the immediate or short-term maturities of these financial instruments. The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, respectively, by level within the fair value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Assets Pension plan assets $ 5,795 $ — $ — Other long-term assets 4,281 — — Interest rate swaps — 1,184 — December 31, 2017 Level 1 Level 2 Level 3 Assets Pension plan assets $ 5,362 $ — $ — Other long-term assets 3,929 — — Interest rate swaps — 196 — |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws, settlements with taxing authorities and foreign currency fluctuations. The effective income tax rate as a percentage of income before income taxes was 26.7% and 33.1% in the third quarters 2018 and 2017, respectively. The effective tax rate is net of a discrete tax benefit of ( 0.6% ) and ( 0.2% ) for the third quarters of 2018 and 2017, respectively, related primarily to the recognition of excess tax benefits for share-based payment awards. For the nine months ended September 30, 2018 and 2017, the effective income tax rate as a percentage of income before income taxes was 26.8% and 32.1%, respectively. For the nine month periods ended September 30, 2018 and 2017, the effective rate is net of a discrete tax benefit of (1.1% ), related primarily to the recognition of excess tax benefits for share-based payment awards. The effective rate before discrete items varies from the statutory rate primarily due to differences in state taxes, the impact of international tax provisions in the US, the difference in US and foreign tax rates and the mix of foreign and domestic income. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The provision of the Act reduces the US federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. The Company is applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. At September 30, 2018, the Company has not completed the accounting for all of the tax effects of the Act; however, in certain cases, as described below, aspects of the accounting are complete. Additionally, the Company has made a reasonable estimate of other effects. In other cases, the Company has not been able to make a reasonable estimate and continues to account for those items based on existing accounting under Accounting Standards Codification (“ASC”) 740, Income Taxes , and the provisions of the tax laws that were in effect immediately prior to enactment. As further discussed below, during the nine-month period ended September 30, 2018, the Company did not recognize any adjustments to the provisional amounts recorded at December 31, 2017. In all cases, the Company will continue to make and refine our calculations as additional analysis is completed. Estimates may also be affected as we gain a more thorough understanding of the tax law. These changes could be material to income tax expense. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The provisional amount of $(7) was recorded as of December 31, 2017 related to the remeasurement of certain deferred tax balances. Upon further analyses of certain aspects of the Act and refinement of the calculations during the nine months ended September 30, 2018, we have not adjusted the provisional amount. Aside from adjustments that may occur with the filing of the 2017 income tax return in the fourth quarter 2018, the Company considers the enactment-date remeasurement of all other deferred tax assets and liabilities to be complete. The one-time transition tax is based on total post-1986 earnings and profits ("E&P") which had been previously deferred from US income taxes under previous US law. The Company recorded a provisional amount for the one-time transition tax liability for foreign subsidiaries, resulting in a transition tax liability of $3,140 being recorded at December 31, 2017. Upon further analyses of certain aspects of the Act and refinement of calculations for foreign subsidiaries during the three and nine months ended September 30, 2018, we have not changed the provisional amount. The Company will continue to refine the E&P analysis and our calculations of the one-time transition tax, which could affect the measurement of this liability. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations outside the United States. The Act subjects a US shareholder to tax on Global Intangible Low Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and has not yet determined our accounting policy. At September 30, 2018, the Company has included GILTI related to current-year operations only in our annual effective tax rate and has not provided additional GILTI on deferred items. Refer to Note 17 – Recent Accounting Pronouncements for discussion of Accounting Standards Update ("ASU") 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 14. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated Other Comprehensive Income (Loss) ("AOCI") for the quarters ended September 30, 2018 and 2017 is comprised of the following (in thousands): Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At June 30, 2018 $ (945) $ 1,047 $ (6,682) $ (6,580) Unrealized gain on cash flow hedges — 121 — 121 Amounts reclassified from AOCI — 16 — 16 Foreign currency translation loss — — (307) (307) At September 30, 2018 $ (945) $ 1,184 $ (6,989) $ (6,750) Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At June 30, 2017 $ (822) $ (253) $ (7,372) $ (8,447) Unrealized loss on cash flow hedges — (34) — (34) Amounts reclassified from AOCI — 79 — 79 Foreign currency translation gain — — 1,829 1,829 At September 30, 2017 $ (822) $ (208) $ (5,543) $ (6,573) Accumulated Other Comprehensive Income for the nine months ended September 30, 2018 and 2017 is comprised of the following (in thousands): Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At December 31, 2017 $ (945) $ 196 $ (4,837) $ (5,586) Unrealized gain on cash flow hedges — 936 — 936 Amounts reclassified from AOCI — 52 — 52 Foreign currency translation loss — — (2,152) (2,152) At September 30, 2018 $ (945) $ 1,184 $ (6,989) $ (6,750) Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At December 31, 2016 $ (822) $ (30) $ (11,151) $ (12,003) Unrealized loss on cash flow hedges — (417) — (417) Amounts reclassified from AOCI — 239 — 239 Foreign currency translation gain — — 5,608 5,608 At September 30, 2017 $ (822) $ (208) $ (5,543) $ (6,573) The realized gains relating to the Company’s interest rate swap hedges were reclassified from accumulated other comprehensive income (loss) and included in interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Income. |
DIVIDENDS PER SHARE
DIVIDENDS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
DIVIDENDS PER SHARE | |
DIVIDENDS PER SHARE | 15. DIVIDENDS PER SHARE The Company declared a quarterly dividend of $0.025 per share in the first quarter of 2018 and $0.030 per share in the second and third quarters of 2018. Dividends declared for the first three quarters of 2017 were at $0.025 per share. Total dividends declared in the first nine months of 2018 and 2017 were $805 and $709, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE Basic and diluted weighted-average shares outstanding are as follows: Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Basic weighted average shares outstanding 9,273 9,173 9,251 9,137 Dilutive effect of equity awards 98 121 86 128 Diluted weighted average shares outstanding 9,371 9,294 9,337 9,265 For the three and nine months ended September 30, 2018 and 2017, the anti-dilutive common shares excluded from the calculation of diluted earnings per share were immaterial. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 17. SEGMENT INFORMATION ASC Topic “ Segment Reporting ” requires disclosure of operating segments, which as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one segment for the manufacture and marketing of motion control products for original equipment manufacturers and end user applications. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying condensed consolidated financial statements and within this note. The Company’s wholly-owned foreign subsidiaries, located in The Netherlands, Sweden, Germany, Portugal, China and Mexico are included in the accompanying condensed consolidated financial statements. Financial information related to the foreign subsidiaries is summarized below (in thousands): Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Revenues derived from foreign subsidiaries $ 30,717 $ 27,265 $ 96,618 $ 77,360 Identifiable foreign assets were $91,587 and $84,652 as of September 30, 2018 and December 31, 2017, respectively. Revenues derived from foreign subsidiaries and identifiable assets outside of the United States are primarily attributable to Europe. Sales to customers outside of the United States by all subsidiaries were $36,216 and $30,409 during the quarters ended September 30, 2018 and 2017, respectively; and $111,073 and $86,130 for the nine months ended September 30, 2018 and 2017, respectively. For third quarters 2018 and 2017, one customer accounted for 20% and 18% of revenues, respectively; and for the year to date 2018 and 2017 for 20% and 19% of revenues, respectively. As of September 30, 2018, and December 31, 2017 this customer represented 22% and 15% of trade receivables, respectively. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2018 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 18. RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “ Revenue from Contracts with Customers ” which is a comprehensive new revenue recognition model. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. We adopted ASU 2014-09 and its amendments on a modified retrospective basis effective January 1, 2018. The adoption of ASU 2014-09 did not have a material impact on our condensed consolidated financial statements. A significant majority of our revenue is recorded when we invoice customers and is largely aligned with the meeting of identified performance obligations under ASU 2014-09. There is no material change in our revenue recognition after the implementation of the standard. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ”. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The Company early adopted ASU 2017-12 in the first quarter of 2018. The implementation did not impact our condensed consolidated financial statements other than requiring enhanced disclosures. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations (Topic 805): Clarifying the Definition of a Business ”. The amendments affect all companies that must determine whether they have acquired or sold a business. The amendments are intended to help companies and evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. The new standard was effective for the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments .” The objective of ASU 2016-15 is to reduce existing diversity in practice by addressing eight specific cash flow issues related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard was effective for the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. Recently issued accounting pronouncements In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ”, to address a specific consequence of the Tax Cuts and Jobs Act (the “Act”) by allowing a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Act’s reduction of the U.S. federal corporate income tax rate. The ASU is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. Management has not yet completed its assessment of the impact of the ASU on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “ Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ”. The guidance in ASU 2017-04 eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact of adopting this guidance. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ”. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which amends the FASB Accounting Standards Codification and creates Topic 842, “ Leases .” The new topic supersedes Topic 840, “ Leases ,” and increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosures of key information about leasing arrangements. The guidance is effective for reporting periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method. The Company is continuing to evaluate the effect this guidance will have on its consolidated financial statements, including potential impacts on the amount and timing of adjustments to be recognized and additional information that may be necessary for the required expanded disclosures. The Company has substantially completed its inventory of leases and is in the process of evaluating the quantitative and qualitative impacts that the new standard will have on its reported results. At this time, the Company is unable to quantify the impact this new guidance will have on its consolidated financial statements. The Company expects to adopt this ASU, as amended, in the first quarter of fiscal year 2019. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
BUSINESS COMBINATION | |
Schedule of purchase price allocation and estimated fair value of the assets acquired | The following table represents the preliminary purchase price allocation and summarizes the aggregate estimated fair value of the assets acquired (in thousands): January 19, 2018 Intangible assets $ 3,870 Goodwill 5,921 Assets acquired (net of liabilities assumed) 3,521 Fair value of net assets acquired $ 13,312 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE RECOGNITION | |
Schedule of reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | Three months ended Nine months ended Target Market September 30, 2018 September 30, 2018 Vehicle $ 31,717 $ 95,071 Industrial/Electronics 24,668 76,633 Medical 10,732 31,214 Aerospace & Defense 10,332 26,701 Other 2,643 7,030 Total $ 80,092 $ 236,649 Three months ended Nine months ended Geography September 30, 2018 September 30, 2018 United States $ 49,375 $ 140,031 Europe 29,975 94,754 Asia 742 1,864 Total $ 80,092 $ 236,649 |
Schedule of opening and closing balances of the Company's receivables, contract asset, and contract liability | The opening and closing balances of the Company’s receivables, contract asset, and contract liability are as follows (in thousands): Three months ended September 31, 2018 Nine months ended September 31, 2018 Contract Contract Receivables Contract Asset Liability Receivables Contract Asset Liability Opening balance $ — $ — $ 623 $ — $ — $ 719 Closing balance — — 579 — — 579 Decrease $ — $ — $ (44) $ — $ — $ (140) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
INVENTORIES | |
Schedule of inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value | Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands): September 30, December 31, 2018 2017 Parts and raw materials $ 28,195 $ 20,509 Work-in-process 7,263 5,984 Finished goods 9,429 6,075 44,887 32,568 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of classification of property, plant and equipment | Property, plant and equipment is classified as follows (in thousands): September 30, December 31, 2018 2017 Land $ 985 $ 993 Building and improvements 11,083 10,678 Machinery, equipment, tools and dies 57,213 49,083 Furniture, fixtures and other 14,162 12,931 83,443 73,685 Less accumulated depreciation (40,417) (35,282) Property, plant and equipment, net $ 43,026 $ 38,403 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
GOODWILL | |
Schedule of change in the carrying amount of goodwill | The change in the carrying amount of goodwill for the nine months ended September 30, 2018 and year ended December 31, 2017 is as follows (in thousands): September 30, December 31, 2018 2017 Beginning balance $ 29,531 $ 27,522 Goodwill acquired (Note 2) 5,921 — Effect of foreign currency translation (514) 2,009 Ending balance $ 34,938 $ 29,531 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | Intangible assets on the Company’s condensed consolidated balance sheets consist of the following (in thousands): September 30, 2018 December 31, 2017 Gross Accumulated Net Book Gross Accumulated Net Book Life Amount amortization Value Amount amortization Value Customer lists 8 - 17 years $ 42,326 $ (14,623) $ 27,703 $ 38,659 $ (12,721) $ 25,938 Trade name 10 - 12 years 6,168 (3,165) 3,003 6,213 (2,798) 3,415 Design and technologies 10 - 12 years 4,991 (2,637) 2,354 5,147 (2,443) 2,704 Patents 17 years 24 (9) 15 24 (8) 16 Total $ 53,509 $ (20,434) $ 33,075 $ 50,043 $ (17,970) $ 32,073 |
Schedule of estimated amortization expense for intangible assets | Estimated future intangible asset amortization expense as of September 30, 2018 is as follows (in thousands): Estimated Amortization Expense Remainder of 2018 $ 883 2019 3,499 2020 3,499 2021 3,241 2022 3,241 2023 3,159 Thereafter 15,553 Total estimated amortization expense $ 33,075 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
STOCK-BASED COMPENSATION | |
Summary of restricted stock activity | The following is a summary of restricted stock activity for the nine months ended September 30, 2018: Number of shares Outstanding at beginning of period 221,968 Awarded 58,220 Vested (60,145) Forfeited (18,867) Outstanding at end of period 201,176 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2018 2017 Compensation and fringe benefits $ 9,715 $ 7,459 Warranty reserve 951 922 Income taxes payable 2,329 2,397 Other accrued expenses 5,056 3,492 $ 18,051 $ 14,270 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
DEBT OBLIGATIONS | |
Schedule of debt obligations | Debt obligations consisted of the following (in thousands): September 30, December 31, 2018 2017 Current Borrowings China Credit Facility (4.9% at September 30, 2018) $ 437 $ 461 Current borrowings $ 437 $ 461 Long-term Debt Revolving Credit Facility, long-term (1) $ 62,480 $ 53,266 Unamortized debt issuance costs (459) (572) Long-term debt $ 62,021 $ 52,694 (1) |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule fair value of the Company's derivative financial instruments as well as classification on the condensed consolidated balance sheets | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 (in thousands): Asset Derivatives Liability Derivatives Derivatives designated Balance Fair value as of: Fair value as of: as hedging Sheet September 30, December 31, Balance Sheet September 30, December 31, instruments Location 2018 2017 Location 2018 2017 Interest rate products Other long-term assets $ 1,184 $ Other long-term liabilities $ — $ — |
Schedule of effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) | The tables below presents the effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) for the quarter and nine months ended September 30, 2018 and 2017 (in thousands): Amount of gain (loss) recognized Amount of gain (loss) recognized in OCI on derivative in OCI on derivative Derivatives in cash flow Three months ended September 30, Nine months ended September 30, hedging relationships 2018 2017 2018 2017 Interest rate products $ 121 $ (34) $ 936 $ (417) Location of (gain) Amount of (gain) loss reclassified Amount of (gain) loss reclassified loss reclassified from accumulated OCI into income from accumulated OCI into income from accumulated Three months ended September 30, Nine months ended September 30, OCI into income 2018 2017 2018 2017 Interest expense $ 16 $ 79 $ 52 $ 239 |
Schedule of effect of the Company's derivative financial instruments on the condensed consolidated statements of income and comprehensive income | Total amounts of income and expense Total amounts of income and expense line items presented that reflect the line items presented that reflect the Derivatives designated Balance effects of cash flow hedges recorded effects of cash flow hedges recorded as hedging Sheet Three months ended September 30, Nine months ended September 30, instruments Location 2018 2017 2018 2017 Interest rate products Other assets $ 623 $ 633 $ 1,839 $ 1,797 |
Schedule of fair value provides the location that derivative assets and liabilities | Gross amounts Net amounts of Gross offset in the assets presented Gross amounts not offset in the condensed amounts of condensed in the condensed consolidated balance sheets As of recognized consolidated consolidated Financial Cash collateral September 30, 2018 assets balance sheets balance sheets instruments received Net amount Derivatives $ 1,184 $ — $ 1,184 $ — $ — $ 1,184 Gross amounts Net amounts of Gross offset in the assets presented Gross amounts not offset in the condensed As of amounts of condensed in the condensed consolidated balance sheets December 31, recognized consolidated consolidated Financial Cash collateral 2017 assets balance sheets balance sheets instruments received Net amount Derivatives $ 196 $ — $ 196 $ — $ — $ 196 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
FAIR VALUE | |
Schedule of financial assets that are accounted for at fair value on a recurring basis | The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, respectively, by level within the fair value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Assets Pension plan assets $ 5,795 $ — $ — Other long-term assets 4,281 — — Interest rate swaps — 1,184 — December 31, 2017 Level 1 Level 2 Level 3 Assets Pension plan assets $ 5,362 $ — $ — Other long-term assets 3,929 — — Interest rate swaps — 196 — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of accumulated other comprehensive income (loss) ("AOCI") | Accumulated Other Comprehensive Income (Loss) ("AOCI") for the quarters ended September 30, 2018 and 2017 is comprised of the following (in thousands): Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At June 30, 2018 $ (945) $ 1,047 $ (6,682) $ (6,580) Unrealized gain on cash flow hedges — 121 — 121 Amounts reclassified from AOCI — 16 — 16 Foreign currency translation loss — — (307) (307) At September 30, 2018 $ (945) $ 1,184 $ (6,989) $ (6,750) Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At June 30, 2017 $ (822) $ (253) $ (7,372) $ (8,447) Unrealized loss on cash flow hedges — (34) — (34) Amounts reclassified from AOCI — 79 — 79 Foreign currency translation gain — — 1,829 1,829 At September 30, 2017 $ (822) $ (208) $ (5,543) $ (6,573) Accumulated Other Comprehensive Income for the nine months ended September 30, 2018 and 2017 is comprised of the following (in thousands): Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At December 31, 2017 $ (945) $ 196 $ (4,837) $ (5,586) Unrealized gain on cash flow hedges — 936 — 936 Amounts reclassified from AOCI — 52 — 52 Foreign currency translation loss — — (2,152) (2,152) At September 30, 2018 $ (945) $ 1,184 $ (6,989) $ (6,750) Foreign Currency Defined Benefit Cash Flow Translation Plan Liability Hedges Adjustment Total At December 31, 2016 $ (822) $ (30) $ (11,151) $ (12,003) Unrealized loss on cash flow hedges — (417) — (417) Amounts reclassified from AOCI — 239 — 239 Foreign currency translation gain — — 5,608 5,608 At September 30, 2017 $ (822) $ (208) $ (5,543) $ (6,573) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted weighted-average shares outstanding | Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Basic weighted average shares outstanding 9,273 9,173 9,251 9,137 Dilutive effect of equity awards 98 121 86 128 Diluted weighted average shares outstanding 9,371 9,294 9,337 9,265 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
SEGMENT INFORMATION | |
Schedule of financial information related to the foreign subsidiaries | Financial information related to the foreign subsidiaries is summarized below (in thousands): Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Revenues derived from foreign subsidiaries $ 30,717 $ 27,265 $ 96,618 $ 77,360 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 19, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
BUSINESS COMBINATION | ||||
Intangible assets | $ 3,870 | |||
Goodwill | $ 34,938 | 5,921 | $ 29,531 | $ 27,522 |
Assets acquired (net of liabilities assumed) | 3,521 | |||
Fair value of net assets acquired | 13,312 | |||
Tax deductible amount | $ 0 |
REVENUE RECOGNITION (Details) -
REVENUE RECOGNITION (Details) - Performance Obligations (Details) | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE RECOGNITION | |
Performance obligations that are satisfied over periods exceeding | 1 year |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Number of reportable segment | segment | 1 | |||
Disaggregation of revenue | $ 80,092 | $ 64,968 | $ 236,649 | $ 186,657 |
United States | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 49,375 | 140,031 | ||
Europe | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 29,975 | 94,754 | ||
Asia | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 742 | 1,864 | ||
Vehicle | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 31,717 | 95,071 | ||
Industrial/Electronics | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 24,668 | 76,633 | ||
Medical | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 10,732 | 31,214 | ||
Aerospace & Defense | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | 10,332 | 26,701 | ||
Other | ||||
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions | ||||
Disaggregation of revenue | $ 2,643 | $ 7,030 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
REVENUE RECOGNITION | ||||
Contract Liability | $ 579 | $ 579 | $ 623 | $ 719 |
Decrease in contract liability | $ (44) | $ (140) |
REVENUE RECOGNITION - Practical
REVENUE RECOGNITION - Practical Expedients (Details) | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE RECOGNITION | |
Incremental costs of obtaining a contract | true |
Remaining performance obligations | true |
The time value of money | true |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
INVENTORIES | ||
Parts and raw materials | $ 28,195 | $ 20,509 |
Work-in-process | 7,263 | 5,984 |
Finished goods | 9,429 | 6,075 |
Inventories | $ 44,887 | $ 32,568 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, plant and equipment | |||||
Property, plant and equipment, gross | $ 83,443 | $ 83,443 | $ 73,685 | ||
Less accumulated depreciation | (40,417) | (40,417) | (35,282) | ||
Property, plant and equipment, net | 43,026 | 43,026 | 38,403 | ||
Depreciation expense | 1,960 | $ 1,817 | 5,820 | $ 5,185 | |
Land | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 985 | 985 | 993 | ||
Building and improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 11,083 | 11,083 | 10,678 | ||
Machinery, equipment, tools and dies | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | 57,213 | 57,213 | 49,083 | ||
Furniture, fixtures and other | |||||
Property, plant and equipment | |||||
Property, plant and equipment, gross | $ 14,162 | $ 14,162 | $ 12,931 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Change in goodwill | ||
Beginning balance | $ 29,531 | $ 27,522 |
Goodwill acquired (Note 2) | 5,921 | |
Effect of foreign currency translation | (514) | 2,009 |
Ending balance | $ 34,938 | $ 29,531 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 19, 2018 | Dec. 31, 2017 | |
Intangible assets subject to amortization | ||||||
Gross Amount | $ 53,509 | $ 53,509 | $ 50,043 | |||
Accumulated amortization | (20,434) | (20,434) | (17,970) | |||
Net Book Value | 33,075 | 33,075 | 32,073 | |||
Intangible assets resulting from acquisition | $ 3,870 | |||||
Amortization expense for intangible assets | 872 | $ 813 | 2,634 | $ 2,405 | ||
Estimated amortization expense | ||||||
Remainder of 2018 | 883 | 883 | ||||
2,019 | 3,499 | 3,499 | ||||
2,020 | 3,499 | 3,499 | ||||
2,021 | 3,241 | 3,241 | ||||
2,022 | 3,241 | 3,241 | ||||
2,023 | 3,159 | 3,159 | ||||
Thereafter | 15,553 | 15,553 | ||||
Total estimated amortization expense | 33,075 | 33,075 | ||||
Customer lists | ||||||
Intangible assets subject to amortization | ||||||
Gross Amount | 42,326 | 42,326 | 38,659 | |||
Accumulated amortization | (14,623) | (14,623) | (12,721) | |||
Net Book Value | 27,703 | $ 27,703 | 25,938 | |||
Customer lists | Minimum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 8 years | |||||
Customer lists | Maximum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 17 years | |||||
Trade name | ||||||
Intangible assets subject to amortization | ||||||
Gross Amount | 6,168 | $ 6,168 | 6,213 | |||
Accumulated amortization | (3,165) | (3,165) | (2,798) | |||
Net Book Value | 3,003 | $ 3,003 | 3,415 | |||
Trade name | Minimum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 10 years | |||||
Trade name | Maximum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 12 years | |||||
Design and technologies | ||||||
Intangible assets subject to amortization | ||||||
Gross Amount | 4,991 | $ 4,991 | 5,147 | |||
Accumulated amortization | (2,637) | (2,637) | (2,443) | |||
Net Book Value | 2,354 | $ 2,354 | 2,704 | |||
Design and technologies | Minimum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 10 years | |||||
Design and technologies | Maximum | ||||||
Intangible assets subject to amortization | ||||||
Estimated Life | 12 years | |||||
Patents | ||||||
Intangible assets subject to amortization | ||||||
Gross Amount | 24 | $ 24 | 24 | |||
Accumulated amortization | (9) | (9) | (8) | |||
Net Book Value | $ 15 | $ 15 | $ 16 | |||
Estimated Life | 17 years |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Additional disclosures | ||||
Compensation expense, net of forfeitures | $ 1,787 | $ 1,473 | ||
Restricted Stock | ||||
STOCK-BASED COMPENSATION | ||||
Weighted average market value (in dollars per share) | $ 34.25 | |||
Service period over which value of the shares is amortized to compensation expense | 3 years | |||
Number of Nonvested Restricted Shares | ||||
Outstanding at beginning of period (in shares) | 221,968 | |||
Awarded (in shares) | 58,220 | |||
Vested (in shares) | (60,145) | |||
Forfeited (in shares) | (18,867) | |||
Outstanding at end of period (in shares) | 201,176 | 201,176 | ||
Additional disclosures | ||||
Compensation expense, net of forfeitures | $ 694 | $ 519 | $ 1,787 | $ 1,473 |
Restricted Stock | Performance-based vesting | ||||
Number of Nonvested Restricted Shares | ||||
Awarded (in shares) | 30,603 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ACCRUED LIABILITIES | ||
Compensation and fringe benefits | $ 9,715 | $ 7,459 |
Warranty reserve | 951 | 922 |
Income taxes payable | 2,329 | 2,397 |
Other accrued expenses | 5,056 | 3,492 |
Accrued liabilities | $ 18,051 | $ 14,270 |
DEBT OBLIGATIONS (Details)
DEBT OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands | Oct. 28, 2016USD ($) | Sep. 30, 2018CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Obligations | |||||
Current borrowings | $ 437 | $ 461 | |||
Long-term debt | 62,021 | 52,694 | |||
Unamortized debt issuance costs | (459) | (572) | |||
Revolving Credit Facility | |||||
Debt Obligations | |||||
Long-term debt | $ 62,480 | 53,266 | |||
Maximum borrowing capacity | $ 125,000 | ||||
Commitment fees on unused portion of the Revolving credit facility ( as a percent) | 0.15% | 0.15% | |||
Revolving Credit Facility | Minimum | |||||
Debt Obligations | |||||
Commitment fees on unused portion of the Revolving credit facility ( as a percent) | 0.10% | 0.10% | |||
Revolving Credit Facility | Maximum | |||||
Debt Obligations | |||||
Commitment fees on unused portion of the Revolving credit facility ( as a percent) | 0.25% | 0.25% | |||
Revolving Credit Facility | LIBOR | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 1.50% | 1.50% | |||
Revolving Credit Facility | LIBOR | Minimum | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 1.00% | ||||
Revolving Credit Facility | LIBOR | Maximum | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 2.25% | ||||
Revolving Credit Facility | Prime Rate | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 0.50% | 0.50% | |||
Revolving Credit Facility | Prime Rate | Minimum | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 0.00% | ||||
Revolving Credit Facility | Prime Rate | Maximum | |||||
Debt Obligations | |||||
Applicable margin (as a percent) | 1.25% | ||||
Term Loan | |||||
Debt Obligations | |||||
Effective rate (as a percent) | 3.40% | 3.40% | |||
Debt instrument term | 5 years | ||||
China Credit Facility | |||||
Debt Obligations | |||||
Current borrowings | $ 437 | $ 461 | |||
Interest rate (as a percent) | 4.90% | 4.90% | |||
Maximum borrowing capacity | ¥ 10,000 | $ 1,456 | |||
Average outstanding borrowings | 3,000 | $ 460 | |||
Available borrowing capacity | ¥ 7,000 | $ 1,019 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Feb. 28, 2017USD ($)derivative | Oct. 31, 2013USD ($)derivative | |
Interest Rate Swaps | |||||||
Derivative financial instruments | |||||||
Number of derivative instruments | derivative | 3 | 2 | |||||
Notional amount of interest rate swap derivatives | $ 25,000 | ||||||
Notional amount of interest rate swap derivatives at maturity | $ 40,000 | $ 6,673 | |||||
Hedge ineffectiveness recorded in earnings | $ 0 | $ 0 | |||||
Estimated amount to be reclassified as an decrease to interest expense | $ (252) | ||||||
Derivatives in cash flow hedging relationships | Interest rate products | |||||||
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income | |||||||
Amount of gain (loss) recognized in OCI on derivative | 121 | (34) | 936 | $ (417) | |||
Amount of (gain) loss reclassified from accumulated OCI into income (effective portion) | 16 | 79 | 52 | 239 | |||
Derivatives designated as hedging instruments | Interest rate products | |||||||
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income | |||||||
Total amounts of income and expense line items presented that reflect the effects of cash flow hedges recorded | 623 | $ 633 | 1,839 | $ 1,797 | |||
Derivatives designated as hedging instruments | Interest rate products | Other long-term assets | |||||||
Derivative financial instruments | |||||||
Fair value of derivative Asset | $ 1,184 | $ 1,184 | $ 196 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Effects of offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Gross amounts offset in the condensed consolidated balance sheets | ||
Gross amounts of recognized assets | $ 1,184 | $ 196 |
Net amounts of assets presented in the condensed consolidated balance sheets | 1,184 | 196 |
Gross amounts not offset in the condensed consolidated balance sheets | ||
Net amount | $ 1,184 | $ 196 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Other long-term assets | $ 5,981 | $ 4,461 |
Recurring basis | Level 1 | ||
Assets | ||
Pension plan assets | 5,795 | 5,362 |
Other long-term assets | 4,281 | 3,929 |
Recurring basis | Level 2 | ||
Assets | ||
Interest rate swaps | $ 1,184 | $ 196 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Effective income tax rate | |||||
Effective income tax rate (as a percent) | 26.70% | 33.10% | 26.80% | 32.10% | |
Excess discreate tax (benefit) provision on share-based payment awards (as a percent) | 0.60% | 0.20% | 1.10% | 1.10% | |
US federal corporate tax rate (as a percent) | 21.00% | 35.00% | |||
Provisional amount related to the remeasurement of deferred tax balance | $ (7) | ||||
Transition tax liability for foreign subsidiaries, resulting in a transition tax liability | $ 3,140 | ||||
Deferred Income Tax Benefit From Foreign Operating Losses And Tax Credit Carryforwards | $ 0 | $ 0 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Balances | $ 87,347 | |||
Balances | $ 100,483 | 100,483 | ||
Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balances | (6,580) | $ (8,447) | (5,586) | $ (12,003) |
Unrealized gain (loss) on cash flow hedges | 121 | (34) | 936 | (417) |
Amounts reclassified from AOCI | 16 | 79 | 52 | 239 |
Foreign currency translation (loss) gain | (307) | 1,829 | (2,152) | 5,608 |
Balances | (6,750) | (6,573) | (6,750) | (6,573) |
Defined Benefit Plan Liability | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balances | (945) | (822) | (945) | (822) |
Balances | (945) | (822) | (945) | (822) |
Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balances | 1,047 | (253) | 196 | (30) |
Unrealized gain (loss) on cash flow hedges | 121 | (34) | 936 | (417) |
Amounts reclassified from AOCI | 16 | 79 | 52 | 239 |
Balances | 1,184 | (208) | 1,184 | (208) |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balances | (6,682) | (7,372) | (4,837) | (11,151) |
Foreign currency translation (loss) gain | (307) | 1,829 | (2,152) | 5,608 |
Balances | $ (6,989) | $ (5,543) | $ (6,989) | $ (5,543) |
DIVIDENDS PER SHARE (Details)
DIVIDENDS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
DIVIDENDS PER SHARE | ||||||||
Dividends declared (in dollars per share) | $ 0.030 | $ 0.030 | $ 0.025 | $ 0.025 | $ 0.025 | $ 0.025 | ||
Total dividends declared | $ 805 | $ 709 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic and diluted weighted-average shares outstanding | ||||
Basic weighted average shares outstanding (in shares) | 9,273 | 9,173 | 9,251 | 9,137 |
Dilutive effect of equity awards (in shares) | 98 | 121 | 86 | 128 |
Diluted weighted average shares outstanding (in shares) | 9,371 | 9,294 | 9,337 | 9,265 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment information | |||||
Number of operating segments | segment | 1 | ||||
Identifiable assets | $ 222,113 | $ 222,113 | $ 187,922 | ||
Total Revenue | |||||
Segment information | |||||
Percentage of concentration risk | 20.00% | 18.00% | 20.00% | 19.00% | |
Trade receivables | |||||
Segment information | |||||
Percentage of concentration risk | 22.00% | 15.00% | |||
Outside the United States | |||||
Segment information | |||||
Revenues derived from foreign subsidiaries | $ 36,216 | $ 30,409 | $ 111,073 | $ 86,130 | |
Wholly owned foreign subsidiaries | |||||
Segment information | |||||
Revenues derived from foreign subsidiaries | 30,717 | $ 27,265 | 96,618 | $ 77,360 | |
Identifiable assets | $ 91,587 | $ 91,587 | $ 84,652 |