Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | BEL FUSE INC /NJ | |
Entity Central Index Key | 729,580 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,174,912 | |
Class B Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,072,352 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 54,296 | $ 69,354 |
Accounts receivable, net of allowance for doubtful accounts of $2,191 in 2018 and $1,745 in 2017 | 97,577 | 78,808 |
Unbilled receivables | 16,553 | 0 |
Inventories | 114,434 | 107,719 |
Other current assets | 9,626 | 10,218 |
Total current assets | 292,486 | 266,099 |
Property, plant and equipment, net | 42,994 | 43,495 |
Intangible assets, net | 64,161 | 69,366 |
Goodwill | 19,135 | 20,177 |
Deferred income taxes | 2,083 | 4,155 |
Other assets | 27,044 | 27,973 |
Total assets | 447,903 | 431,265 |
Current Liabilities: | ||
Accounts payable | 62,415 | 47,947 |
Accrued expenses | 32,533 | 30,508 |
Current portion of long-term debt | 2,507 | 2,641 |
Other current liabilities | 3,836 | 6,204 |
Total current liabilities | 101,291 | 87,300 |
Long-term Liabilities: | ||
Long-term debt | 112,331 | 120,053 |
Liability for uncertain tax positions | 27,180 | 27,948 |
Minimum pension obligation and unfunded pension liability | 19,943 | 19,134 |
Deferred income taxes | 1,472 | 1,567 |
Other liabilities | 12,375 | 17,303 |
Total liabilities | 274,592 | 273,305 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, no par value, 1,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 30,602 | 28,575 |
Retained earnings | 165,518 | 147,807 |
Accumulated other comprehensive loss | (24,033) | (19,625) |
Total stockholders' equity | 173,311 | 157,960 |
Total liabilities and stockholders' equity | 447,903 | 431,265 |
Class A Common Stock [Member] | ||
Stockholders' Equity: | ||
Common Stock | 217 | 217 |
Class B Common Stock [Member] | ||
Stockholders' Equity: | ||
Common Stock | $ 1,007 | $ 986 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Accounts receivable, allowance for doubtful accounts | $ 2,191 | $ 1,745 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Class A Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, outstanding (in shares) | 2,174,912 | 2,174,912 |
Common stock, treasury shares (in shares) | 1,072,769 | 1,072,769 |
Class B Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, outstanding (in shares) | 10,072,352 | 9,859,352 |
Common stock, treasury shares (in shares) | 3,218,307 | 3,218,307 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales | $ 146,489 | $ 126,386 | $ 405,451 | $ 371,671 |
Cost of sales | 117,282 | 98,686 | 326,096 | 291,481 |
Gross profit | 29,207 | 27,700 | 79,355 | 80,190 |
Selling, general and administrative expenses | 18,691 | 20,906 | 57,690 | 63,604 |
Restructuring charges | 17 | 0 | 62 | 171 |
Income from operations | 10,499 | 6,794 | 21,603 | 16,415 |
Interest expense | (1,391) | (1,466) | (3,917) | (4,476) |
Interest income and other, net | 43 | (244) | (479) | (720) |
Earnings before provision for income taxes | 9,151 | 5,084 | 17,207 | 11,219 |
(Benefit from) provision for income taxes | (2,201) | 60 | 523 | 2,329 |
Net earnings available to common stockholders | 11,352 | 5,024 | 16,684 | 8,890 |
Class A Common Share [Member] | ||||
Net earnings available to common stockholders | $ 1,942 | $ 860 | $ 2,852 | $ 1,507 |
Net earnings per common share: | ||||
Common share - basic and diluted (in dollars per share) | $ 0.89 | $ 0.40 | $ 1.31 | $ 0.69 |
Weighted-average number of shares outstanding: | ||||
Common share - basic and diluted (in shares) | 2,175 | 2,175 | 2,175 | 2,175 |
Dividends paid per common share: | ||||
Common share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
Class B Common Share [Member] | ||||
Net earnings available to common stockholders | $ 9,410 | $ 4,164 | $ 13,832 | $ 7,383 |
Net earnings per common share: | ||||
Common share - basic and diluted (in dollars per share) | $ 0.94 | $ 0.42 | $ 1.40 | $ 0.75 |
Weighted-average number of shares outstanding: | ||||
Common share - basic and diluted (in shares) | 9,972 | 9,864 | 9,891 | 9,856 |
Dividends paid per common share: | ||||
Common share (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.21 | $ 0.21 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ||||
Net earnings available to common stockholders | $ 11,352 | $ 5,024 | $ 16,684 | $ 8,890 |
Other comprehensive income (loss): | ||||
Currency translation adjustment, net of taxes of ($1) in the three months ended September 30, 2018, $101 in the three months ended September 30, 2017, $11 in the nine months ended September 30, 2018 and $285 in the nine months ended September 30, 2017 | (1,032) | 3,476 | (4,463) | 11,047 |
Unrealized (losses) on marketable securities arising during the period, net of taxes of $3 in the three months ended September 30, 2018, ($21) in the three months ended September 30, 2017, ($17) in the nine months ended September 30, 2018 and ($191) in the nine months ended September 30, 2017 | (170) | (33) | (201) | (300) |
Change in unfunded SERP liability, net of taxes of $25 in the three months ended September 30, 2018, $32 in the three months ended September 30, 2017, $76 in the nine months ended September 30, 2018 and $97 in the nine months ended September 30, 2017 | 85 | 61 | 256 | 184 |
Other comprehensive income (loss) | (1,117) | 3,504 | (4,408) | 10,931 |
Comprehensive income | $ 10,235 | $ 8,528 | $ 12,276 | $ 19,821 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other comprehensive income (loss): | ||||
Currency translation adjustment, tax | $ (1) | $ 101 | $ 11 | $ 285 |
Unrealized gains (losses) on marketable securities arising during the period, tax | 3 | (21) | (17) | (191) |
Change in unfunded SERP liability, tax | $ 25 | $ 32 | $ 76 | $ 97 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 16,684 | $ 8,890 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 13,738 | 15,712 |
Stock-based compensation | 2,046 | 2,310 |
Amortization of deferred financing costs | 413 | 993 |
Deferred income taxes | 1,740 | (3,072) |
Net unrealized (gains) losses on foreign currency revaluation | (2,396) | 2,679 |
Other, net | 963 | 1,548 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (18,985) | (7,913) |
Unbilled receivables | (2,017) | 0 |
Inventories | (18,844) | (3,306) |
Account payable | 15,545 | (3,563) |
Accrued expenses | 1,969 | (2,031) |
Other operating assets/liabilities, net | (6,687) | 1,949 |
Net cash provided by operating activities | 4,169 | 14,196 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (8,770) | (3,756) |
Proceeds from disposal/sale of property, plant and equipment | 53 | 10 |
Proceeds from sale of marketable securities within rabbi trust | 1,348 | 0 |
Purchase of marketable securities within rabbi trust | (1,348) | 0 |
Net cash used in investing activities | (8,717) | (3,746) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (8,268) | (25,208) |
Dividends paid to common stockholders | (2,376) | (2,347) |
Borrowings under revolving credit line | 7,500 | 6,000 |
Repayments of revolving credit line | (7,500) | (2,000) |
Reduction in notes payable | 0 | (55) |
Net cash used in financing activities | (10,644) | (23,610) |
Effect of exchange rate changes on cash and cash equivalents | 134 | 1,855 |
Net decrease in cash and cash equivalents | (15,058) | (11,305) |
Cash and cash equivalents - beginning of period | 69,354 | 73,411 |
Cash and cash equivalents - end of period | 54,296 | 62,106 |
Cash paid during the period for: | ||
Income tax payments, net of refunds received | 6,291 | 1,688 |
Interest payments | $ 3,485 | $ 3,471 |
BASIS OF PRESENTATION AND ACCOU
BASIS OF PRESENTATION AND ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES The condensed consolidated balance sheets, statements of operations, comprehensive income and cash flows for the periods presented herein have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows for all periods presented have been made. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Bel Fuse Annual Report on Form 10-K for the year ended December 31, 2017. Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted from the following condensed consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements, of the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. The Company's significant accounting policies are summarized in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2017. There were no significant changes to these accounting policies during the nine months ended September 30, 2018, except as discussed in Note 2, Revenue, related to the adoption of the new revenue standards. All amounts included in the tables to these notes to condensed consolidated financial statements, except per share amounts, are in thousands. Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Upon adoption, the new revenue standards replaced most existing revenue recognition guidance in U.S. GAAP. Based on our review of representative samples of contracts and other forms of agreements with customers globally and our evaluation of the provisions under the five-step model specified by the new revenue standards, the Company has implemented changes with respect to timing of revenue recognition primarily related to arrangements for which the customer takes the Company's products from a facility holding consignment inventory. In connection with the modified retrospective application of the new revenue standards, we recorded an adjustment to increase retained earnings of $3.4 million upon the January 1, 2018 adoption date. Apart from this adjustment and the inclusion of additional required disclosures in Note 2, the adoption of the new revenue standards did not have a material impact on the Company's condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments guidance was adopted by the Company effective January 1, 2018 and it did not have any impact on the Company's condensed consolidated statement of cash flows in the periods presented. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . Current U.S. GAAP prohibits the recognition of current and deferred income taxes for intra-entity asset transfer until the asset has been sold to an was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This guidance was adopted by the Company effective January 1, 2018 and it did not have a material impact on the Company's condensed consolidated financial position or results of operations. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09") Accounting Standards Issued But Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to provide a new comprehensive model for lease accounting. Under In January 2017, the FASB issued Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income We are currently in the process of evaluating this new standard update. In May 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Cost |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE [Abstract] | |
REVENUE | 2. REVENUE Significant Accounting Policy On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the transfer of control of the Company's goods and services and provides financial statement readers with enhanced disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. Nature of Goods and Services Our revenues are substantially derived from sales of our products. In our connectivity solutions product group, we provide connectors and cable assemblies to the aerospace, military/defense, commercial, rugged harsh environment and communication markets. This group also includes passive jacks, plugs and cable assemblies that provide connectivity in networking equipment, as well as modular plugs and cable assemblies used within the structured cabling system, known as premise wiring. In our power solutions and protection group, we provide AC-DC and DC-DC power conversion devices and circuit protection products. Applications range from board-mount power to system-level architectures for servers, storage, networking, industrial and transportation. In our magnetic solutions group, we provide an extensive line of integrated connector modules (ICM), where an Ethernet magnetic solution is integrated into a connector package. Products within the Company's magnetic solutions group are primarily used in networking and industrial applications. The Company also provides incremental services to our customers in the form of training, technical support, special tooling, and other support as deemed necessary from time to time. For purposes of ASC 606, all such incremental services were concluded to be immaterial in the context of the contracts. Types of Contracts Substantially all of the Company's revenue is derived from contracts with its customers under one of the following types of contracts: · Direct with customer: · Distributor: · Consignment: · Licensing Agreements: Warranties Warranties vary by product line and are competitive for the markets in which the Company operates. Warranties generally extend for one to three years from the date of sale, providing customers with assurance that the related product will function as intended. The Company reviews its warranty liability quarterly based on an analysis of actual expenses and failure rates accompanied with estimated future costs and projected failure rate trends. Factors taken into consideration when evaluating our warranty reserve are (i) historical claims for each product, (ii) volume increases, (iii) life of warranty, (iv) historical warranty repair costs and (v) other factors. To the extent that actual experience differs from our estimate, the provision for product warranties will be adjusted in future periods. Actual warranty repair costs are charged against the reserve balance as incurred. See Note 7, "Accrued Expenses." Product Returns We estimate product returns, including product exchanges under warranty, based on historical experience. In general, the Company is not contractually obligated to accept returns except for defective product or in instances where the product does not meet the Company's product specifications. However, the Company may permit its customers to return product for other reasons. In certain instances, the Company would generally require a significant cancellation penalty payment by the customer. The Company estimates such returns, where applicable, based upon management's evaluation of historical experience, market acceptance of products produced and known negotiations with customers. Such estimates are deducted from sales and provided for at the time revenue is recognized. Distribution customers often receive what is referred to as "ship and debit" arrangements, whereby Bel will invoice them at an agreed upon unit price upon shipment of product and a price reduction may be granted if the market price of the product declines after shipment. Distributors may also be entitled to special pricing discount credits, and certain customers are entitled to return allowances based on previous sales volumes. Bel deducts estimates for anticipated credits, refunds and returns from sales each quarter based on historical experience. Significant Payment Terms Contracts with customers indicate the general terms and conditions in which business will be conducted for a set period of time. Individual purchase orders state the description, quantity and price of each product purchased. Payment for products sold under direct contracts with customers or contracts with distributors is typically due in full within 30-90 days from the transfer of title to customer. Payment for products sold under consignment contracts is typically due within 60 days of the customer pulling the product from the hub. Payment due related to our licensing agreements is generally within 30 days of receiving the licensee sales data, which is either on a quarterly or annual basis. Since the customer agrees to a stated price for each product on each purchase order, the majority of contracts are not subject to variable consideration. However, the "ship and debit" arrangements with distributors, royalty income associated with our licensing agreements, and the product returns described above are each deemed to be variable consideration which requires the Company to make constrained estimates based on historical data. Disaggregation of Revenue The following table provides information about disaggregated revenue by product group and sales channel, and includes a reconciliation of the disaggregated revenue to our reportable segments: Three Months Ended September 30, 2018 North America Asia Europe Consolidated By Product Group: Connectivity solutions $ 34,919 $ 5,293 $ 8,314 $ 48,526 Magnetic solutions 10,586 40,100 2,286 52,972 Power solutions and protection 25,149 8,135 11,707 44,991 $ 70,654 $ 53,528 $ 22,307 $ 146,489 By Sales Channel: Direct to customer $ 46,802 $ 46,965 $ 15,184 $ 108,951 Through distribution 23,852 6,563 7,123 37,538 $ 70,654 $ 53,528 $ 22,307 $ 146,489 Nine Months Ended September 30, 2018 North America Asia Europe Consolidated By Product Group: Connectivity solutions $ 100,797 $ 13,533 $ 26,043 $ 140,373 Magnetic solutions 28,795 100,769 7,184 136,748 Power solutions and protection 71,759 23,760 32,811 128,330 $ 201,351 $ 138,062 $ 66,038 $ 405,451 By Sales Channel: Direct to customer $ 128,754 $ 119,294 $ 45,368 $ 293,416 Through distribution 72,597 18,768 20,670 112,035 $ 201,351 $ 138,062 $ 66,038 $ 405,451 The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 were as follows: Balance at Adjustments Balance at December 31, Due to January 1, 2017 ASC 606 2018 Balance Sheet Unbilled receivables $ - $ 14,536 $ 14,536 Inventory 107,719 (11,044 ) 96,675 Other current liabilities 6,204 43 6,247 Retained earnings 147,807 3,449 151,256 In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our balance sheet as of September 30, 2018 and consolidated statement of operations for the three and nine months ended September 30, 2018 was as follows: As of September 30, 2018 Balances Effect of As Without Adoption Change Reported of ASC 606 Higher/(Lower) Balance Sheet Assets Unbilled receivables $ 16,553 $ - $ 16,553 Inventories 114,434 126,737 (12,303 ) Liabilities Other current liabilities 3,836 3,715 121 Equity Retained earnings 165,518 161,389 4,129 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Balances Effect of Balances Effect of As Without Adoption Change As Without Adoption Change Reported of ASC 606 Higher/(Lower) Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 146,489 $ 145,523 $ 966 $ 405,451 $ 403,434 $ 2,017 Cost of sales 117,282 116,312 970 326,096 324,837 1,259 Operating income 10,499 10,503 (4 ) 21,603 20,845 758 (Benefit from) provision for income taxes (2,201 ) (2,163 ) (38 ) 523 445 78 Net earnings 11,352 11,318 34 16,684 16,004 680 Contract Assets and Contract Liabilities A contract asset results when goods or services have been transferred to the customer but payment is contingent upon a future event, other than passage of time. In the case of our consignment arrangements, we are unable to invoice the customer until product is pulled from the hub by the customer, which generates an unbilled receivable (a contract asset) when revenue is initially recognized. A contract liability results when cash payments are received or due in advance of our performance obligation being met. We have certain customers who provide payment in advance of product being shipped, which results in deferred revenue (a contract liability). The balances of the Company's contract assets and contract liabilities at September 30, 2018 are as follows: September 30, January 1, 2018 2018 Contract assets - current (unbilled receivable) $ 16,553 $ 14,536 Contract liabilities - current (deferred revenue) $ 776 $ 855 The change in balance of our unbilled receivables from January 1, 2018 to September 30, 2018 primarily relates to a timing difference between the Company's performance (i.e. when our product is shipped to a customer-controlled hub) and the point at which the Company can invoice the customer per the terms of the customer contract (i.e. when the customer pulls our product from the customer-controlled hub). A tabular presentation of the activity within the deferred revenue account for the nine months ended September 30, 2018 is presented below: Nine Months Ended September 30, 2018 Balance, January 1 $ 855 New advance payments received 6,180 Recognized as revenue during period (6,251 ) Currency translation (8 ) Balance, September 30 $ 776 Transaction Price Allocated to Future Obligations The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of September 30, 2018 related to contracts that exceed one year in duration amounted to $17.6 million, with expected contract expiration dates that range from 2019 - 2024. It is expected that 14% of this aggregate amount will be recognized in the fourth quarter of 2019, 52% will be recognized in 2020 and the remainder will be recognized in years beyond 2020. The majority of the Company's total backlog of orders at September 30, 2018 is related to contracts that have an original expected duration of one year or less, for which the Company is electing to utilize the practical expedient available within the guidance, and are excluded from the transaction price related to these future obligations. The Company will generally satisfy the remaining performance obligations as we transfer control of the products ordered to our customers. The transaction price related to these future obligations also excludes variable consideration consisting of sales or usage-based royalties earned on licensing agreements. The variability related to these sales or usage-based royalties will be resolved in the periods when the licensee generates sales related to the licensed intellectual property. Other Practical Expedients: In the application of the recognition and measurement principles of ASC 606, the Company elected to utilize the following additional practical expedients which are provided for within the guidance: · Financing Components · Costs to Obtain a Contract |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 3. EARNINGS PER SHARE The following table sets forth the calculation of basic and diluted net earnings per common share under the two-class method for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net earnings $ 11,352 $ 5,024 $ 16,684 $ 8,890 Less dividends declared: Class A 130 131 391 392 Class B 689 691 2,079 2,079 Undistributed earnings $ 10,533 $ 4,202 $ 14,214 $ 6,419 Undistributed earnings allocation - basic and diluted: Class A undistributed earnings $ 1,812 $ 729 $ 2,461 $ 1,115 Class B undistributed earnings 8,721 3,473 11,753 5,304 Total undistributed earnings $ 10,533 $ 4,202 $ 14,214 $ 6,419 Net earnings allocation - basic and diluted: Class A net earnings $ 1,942 $ 860 $ 2,852 $ 1,507 Class B net earnings 9,410 4,164 13,832 7,383 Net earnings $ 11,352 $ 5,024 $ 16,684 $ 8,890 Denominator: Weighted-average shares outstanding: Class A - basic and diluted 2,175 2,175 2,175 2,175 Class B - basic and diluted 9,972 9,864 9,891 9,856 Net earnings per share: Class A - basic and diluted $ 0.89 $ 0.40 $ 1.31 $ 0.69 Class B - basic and diluted $ 0.94 $ 0.42 $ 1.40 $ 0.75 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | 4. FAIR VALUE MEASUREMENTS F Level 1 Observable inputs such as quoted market prices in active markets; Level 2 Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of December 31, 2017, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of securities that are among the Company's investments in a rabbi trust which are intended to fund the Company's Supplemental Executive Retirement Plan ("SERP") obligations. The gross unrealized gains associated with the investment securities held in the rabbi trust were $0.2 million at December 31, 2017. Such unrealized gains are included, net of tax, in accumulated other comprehensive loss. During the nine months ended September 30, 2018, the Company sold its securities and realized a gain on sale of $0.2 million. The proceeds of $1.3 million were reinvested in other securities within the rabbi trust. As of September 30, 2018 and December 31, 2017, our securities primarily consisted of investments held in a rabbi trust of $1.3 million and $1.5 million, respectively, which were measured at fair value using quoted prices in active markets for identical assets (Level 1) inputs. The Company does not have any financial assets measured at fair value on a recurring basis categorized as Level 3, and there were no transfers in or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, 2018 or September 30, 2017. Excluding the changes made in accordance with the Company’s adoption of ASU 2016-01, there were no changes to the Company's valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the nine months ended September 30, 2018. There were no financial assets accounted for at fair value on a nonrecurring basis as of September 30, 2018 or December 31, 2017. The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, restricted cash, accounts payable, accrued expenses and notes payable, which are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company's long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities. At September 30, 2018 and December 31, 2017, the estimated fair value of total debt was $116.9 million and $124.8 million, respectively, compared to a carrying amount of $114.8 million and $122.7 million, respectively. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of September 30, 2018. Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment upon the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. There were no triggering events that occurred during the nine months ended September 30, 2018 that would warrant interim impairment testing. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2018 | |
INVENTORIES [Abstract] | |
INVENTORIES | 5. INVENTORIES The components of inventories are as follows: September 30, December 31, 2018 2017 Raw materials $ 62,373 $ 46,712 Work in progress 21,602 17,688 Finished goods 30,459 43,319 Inventories $ 114,434 $ 107,719 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following: September 30, December 31, 2018 2017 Land $ 2,256 $ 2,259 Buildings and improvements 30,572 30,761 Machinery and equipment 124,160 122,773 Construction in progress 4,133 1,511 161,121 157,304 Accumulated depreciation (118,128 ) (113,809 ) Property, plant and equipment, net $ 42,993 $ 43,495 Depreciation expense for the three months ended September 30, 2018 and 2017 was $2.8 million and $3.6 million, respectively. Depreciation expense for the nine months ended September 30, 2018 and 2017 was $8.9 million and $10.6 million, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2018 | |
ACCRUED EXPENSES [Abstract] | |
ACCRUED EXPENSES | 7. ACCRUED EXPENSES Accrued expenses consist of the following: September 30, December 31, 2018 2017 Sales commissions $ 2,685 $ 2,461 Subcontracting labor 1,542 1,408 Salaries, bonuses and related benefits 19,177 16,531 Warranty accrual 1,104 1,769 Other 8,025 8,339 $ 32,533 $ 30,508 A tabular presentation of the activity within the warranty accrual account for the nine months ended September 30, 2018 and 2017 is presented below: Nine Months Ended September 30, 2018 2017 Balance, January 1 $ 1,769 $ 2,718 Charges and costs accrued - 211 Adjustments related to pre-existing warranties (including changes in estimates) (494 ) (779 ) Less repair costs incurred (181 ) (173 ) Currency translation 10 66 Balance, September 30 $ 1,104 $ 2,043 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2018 | |
DEBT [Abstract] | |
DEBT | 8. DEBT The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "CSA"). The CSA consists of (i) a term loan, with outstanding borrowings of $116.7 million and $125.0 million at September 30, 2018 and December 31, 2017, respectively and (ii) a $75 million revolving credit facility ("Revolver"), with no outstanding borrowings at September 30, 2018 or December 31, 2017. The CSA has a maturity date of December 11, 2022. At September 30, 2018 and December 31, 2017, the carrying value of the debt on the condensed consolidated balance sheet is reflected net of $1.9 million and $2.3 million, respectively, of deferred financing costs. During the nine months ended September 30, 2018, the Company made voluntary prepayments of $6.0 million. Per the terms of the CSA, such voluntary prepayments reduce the amount of future scheduled payments on a pro rata basis. The weighted-average interest rate in effect was 4.25% at September 30, 2018 and 3.38% at December 31, 2017 and consisted of LIBOR plus the Company's credit spread, as determined per the terms of the CSA. The Company incurred $1.4 million and $1.5 million of interest expense during the three months ended September 30, 2018 and September 30, 2017, respectively, and $3.9 million and $4.5 million of interest expense during the nine months ended September 30, 2018 and September 30, 2017, respectively. The CSA contains customary representations and warranties, covenants and events of default and financial covenants that measure (i) the ratio of the Company's total funded indebtedness, on a consolidated basis, to the amount of the Company's consolidated EBITDA, as defined, ("Leverage Ratio") and (ii) the ratio of the amount of the Company's consolidated EBITDA to the Company's consolidated fixed charges. If an event of default occurs, the lenders under the CSA would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor. At September 30, 2018, the Company was in compliance with its debt covenants, including its most restrictive covenant, the Fixed Charge Coverage Ratio. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 9. INCOME TAXES The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2015 and for state examinations before 2012. Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before 2008 in Asia and generally 2010 in Europe. As a result of the expiration of the statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized benefits for tax positions taken regarding previously filed tax returns may change materially from those recorded as liabilities for uncertain tax positions in the Company's consolidated financial statements at September 30, 2018. The Company's liabilities for uncertain tax positions totaled $28.2 million and $30.4 million at September 30, 2018 and December 31, 2017, respectively, of which $1.1 million and $2.5 million is included in other current liabilities at September 30, 2018 and December 31, 2017, respectively. These amounts, if recognized, would reduce the Company's effective tax rate. As of September 30, 2018, approximately $2.5 million of the Company's liabilities for uncertain tax positions were resolved during 2018 by way of expiration of the related statute of limitations. The Company's policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes. During the nine months ended September 30, 2018 and 2017, the Company recognized $0.7 million and $0.6 million, respectively, in interest and penalties in the consolidated statements of operations. During the three and nine months ended September 30, 2018, the Company recognized for the reversal of such interest and penalties, relating to the expiration of statutes of limitations and settlement of the acquired liability for uncertain tax positions. The Company has approximately $3.1 million and $3.2 million accrued for the payment of interest and penalties at September 30, 2018 and December 31, 2017, respectively, which is included in both income taxes payable and liability for uncertain tax positions in the consolidated balance sheets. Tax Reform The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the U.S. federal corporate 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. At December 31, 2017, we had not completed our accounting for the tax effects of enactment of the Act; however, we had made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax in which we recognized a provisional amount of $18.1 million, which was included as a component of income tax expense from continuing operations. During the nine months ended September 30, 2018, the Company has made measurement-period adjustments related to foreign earnings and profits computations and foreign income tax calculations for the Company's non-U.S. subsidiaries. The Company's measurement-period adjustment reduced its estimate of the deemed repatriation tax by $2.6 million, resulting in the reduction of the Company's provisional estimate from $18.1 million to $15.5 million. The Company plans to pay the tax in installments in accordance with the Act. Effective January 1, 2018, the Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries. The Company has elected an accounting policy to provide for the tax expense related to the GILTI in the period the tax is incurred. |
RETIREMENT FUND AND PROFIT SHAR
RETIREMENT FUND AND PROFIT SHARING PLAN | 9 Months Ended |
Sep. 30, 2018 | |
RETIREMENT FUND AND PROFIT SHARING PLAN [Abstract] | |
RETIREMENT FUND AND PROFIT SHARING PLAN | 10. RETIREMENT FUND AND PROFIT SHARING PLAN The Company maintains the Bel Fuse Inc. Employees' Savings Plan, a defined contribution plan that is intended to meet the applicable requirements for tax-qualification under sections 401(a) and (k) of the Internal Revenue Code of 1986, as amended (the "Code"). The expense for the three months ended September 30, 2018 and 2017 amounted to $0.3 million in both periods. The expense for the nine months ended September 30, 2018 and 2017 amounted to $0.8 million and $0.9 million, respectively. The Company's matching contribution is made in the form of Bel Fuse Inc. Class A common stock. As of September 30, 2018, the plan owned 111,393 and 137,700 shares of Bel Fuse Inc. Class A and Class B common stock, respectively. The Company's subsidiaries in Asia have a retirement fund covering substantially all of their Hong Kong based full-time employees. The expense for the three months ended September 30, 2018 and 2017 amounted to $0.1 million in both periods. The expense for the nine months ended September 30, 2018 and 2017 amounted to $0.3 million in both periods. As of September 30, 2018, the plan owned 3,323 and 17,342 shares of Bel Fuse Inc. Class A and Class B common stock, respectively. The Company maintains a SERP, which is designed to provide a limited group of key management and other key employees of the Company supplemental retirement and death benefits. As discussed in Note 4 above, the Company has investments in a rabbi trust which are intended to fund the obligations of the SERP. The components of SERP expense are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost $ 183 $ 175 $ 549 $ 525 Interest cost 166 168 498 505 Net amortization 111 94 332 281 Net periodic benefit cost $ 460 $ 437 $ 1,379 $ 1,311 The service cost component of net benefit cost is presented within cost of sales or selling, general and administrative expense on the accompanying statements of operations, in accordance with where compensation cost for the related associate is reported. All other components of net benefit cost, including interest cost and net amortization noted above, are presented within other income/expense, net in the accompanying statements of operations. The following amounts are recognized net of tax in accumulated other comprehensive loss: September 30, December 31, 2018 2017 Prior service cost $ 943 $ 1,135 Net loss 3,591 3,732 $ 4,534 $ 4,867 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 11. ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss at September 30, 2018 and December 31, 2017 are summarized below: September 30, December 31, 2018 2017 Foreign currency translation adjustment, net of taxes of ($790) at September 30, 2018 and ($801) at December 31, 2017 $ (21,000 ) $ (16,537 ) Unrealized holding (losses) gains on available-for-sale securities, net of taxes of $67 at September 30, 2018 and $85 at December 31, 2017 (56 ) 145 Unfunded SERP liability, net of taxes of ($1,558) at September 30, 2018 and ($1,635) at December 31, 2017 (2,977 ) (3,233 ) Accumulated other comprehensive loss $ (24,033 ) $ (19,625 ) Changes in accumulated other comprehensive loss by component during the nine months ended September 30, 2018 are as follows. All amounts are net of tax. Unrealized Foreign Currency Holding Gains (Losses) on Translation Available-for- Unfunded Adjustment Sale Securities SERP Liability Total Balance at January 1, 2018 $ (16,537 ) $ 145 $ (3,233 ) $ (19,625 ) Other comprehensive (loss) income before reclassifications (4,463 ) (31 ) 39 (4,455 ) Amount reclassified from accumulated other comprehensive loss - (170 ) 217 (a) 47 Net current period other comprehensive (loss) income (4,463 ) (201 ) 256 (4,408 ) Balance at September 30, 2018 $ (21,000 ) $ (56 ) $ (2,977 ) $ (24,033 ) (a) This reclassification relates to the amortization of prior service costs and gains/losses associated with the Company's SERP plan. This expense is allocated between cost of sales and selling, general and administrative expense based upon the employment classification of the plan participants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is party to a number of legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material adverse effect on the Company's consolidated results of operations or financial position. In connection with the acquisition of Power Solutions, there is an ongoing claim by the Arezzo Revenue Agency in Italy concerning certain tax matters related to what was then Power-One Asia Pacific Electronics Shenzhen Co. Ltd. (now Bel Power Solutions Asia Pacific Electronics Shenzhen Co. Ltd, or "BPS China") for the years 2004 to 2006. In September 2012, the Tax Court of Arezzo ruled in favor of BPS China and cancelled the claim. In February 2013, the Arezzo Revenue Agency filed an appeal of the Tax Court's ruling. The hearing of the appeal was held on October 2, 2014. On October 13, 2014, BPS China was informed of the Regional Tax Commission of Florence ruling which was in favor of the Arezzo Revenue Agency and against BPS China. An appeal was filed on July 18, 2015 before the Regional Tax Commission of Florence and rejected. On December 5, 2016, the Arezzo Revenue Agency filed an appeal with the Supreme Court and BPS China filed a counter-appeal on January 4, 2017. The Supreme Court has yet to render its judgment. The estimated liability related to this matter is approximately $12.0 million and has been included as a liability for uncertain tax positions on the accompanying condensed consolidated balance sheets. As Bel is fully indemnified in this matter per the terms of the stock purchase agreement with ABB, a corresponding other asset for indemnification is also included in other assets on the accompanying consolidated balance sheets at September 30, 2018 and December 31, 2017. In 2015, the Company was provided notice of a potential patent infringement claim by Setec Netzwerke AG ("Setec"), a German company for the alleged infringement of their patent EP 306 934 B1. Setec subsequently filed a lawsuit against the Company and three of its subsidiaries in the Regional Court of Dusseldorf, Germany on January 29, 2016 for patent infringement. The Company filed its defense to Setec's Complaint and a nullity lawsuit against Setec's patent on August 31 2016. The Court hearing on infringement took place on March 23, 2017. Upon hearing argument from both parties, the Court issued a decision on April 6, 2017 staying final judgment in the infringement case pending resolution of the nullity lawsuit in the Federal Patents Courts in Munich, Germany. The Federal Patents Courts issued its preliminary opinion regarding the patent-in-suit on March 29, 2018, stating that it considers the patent-in-suit to not be novel over the prior art documents presented in the case. The parties agreed to withdraw from the pending infringement and nullity proceedings and entered into a settlement agreement on June 29, 2018. The Company paid Setec 75,000 Euro in exchange for a perpetual, worldwide royalty-free license to the patent-in-suit and all its counterparts. In 2015, one of the Company's subsidiaries in the PRC, Dongguan Transpower Electric Products Co., Ltd. ("Dongguan Transpower"), was provided notice of a claim by DG Yu Shing Industrial Development Company Limited against Dongguan Transpower and three other defendants for past due construction costs of approximately $3.2 million. In April 2018, the 3 rd People Court of Dongguan ruled and provided an unfavorable judgment against Dongguan Transpower and two of the other defendants requiring payment of the aforementioned amount. The defendants were held to be jointly and severally liable for approximately $3.2 million in costs. Due to the fact that none of the other defendants had sufficient funds to pay the damages amount, the Court ordered the entire amount (CNY 20,133,174.10) to be paid by Dongguan Transpower. On May 25, 2018, the Court enforced its order and withdrew the damages amount from Dongguan Transpower's bank accounts. On May 31, 2018, Dongguan Transpower filed an action against the other defendants in CP Court to recoup the damages amount paid pursuant to an indemnification letter dated October 16, 2015. The Court heard arguments on July 2, 2018 and rendered a verdict on July 9, 2018 ordering the Jinmei entities (defendants) to pay CNY 20,133,174 back to Dongguan Transpower together with the incurred interest. On August 27, 2018, Dongguan Transpower received payment of CNY 20,430,203 (approximately $3.2 million) from the defendants and this case was closed. On June 1, 2018, the Company filed an action against Unipower, LLC in the United States District Court for the Southern District of New York for breach of contract. Specifically, the Company alleges in its Complaint that Unipower has willfully violated the Master Services Agreement ("MSA") entered into by the parties on January 23, 2015 by failing to make payment for the products it contracted for under the MSA. The Company is claiming irreparable harm and substantial damages in excess of $1.0 million. The case is currently in the discovery phase of the litigation. The Company is not a party to any other legal proceeding, the adverse outcome of which is likely to have a material adverse effect on the Company's consolidated financial condition or results of operations. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2018 | |
SEGMENTS [Abstract] | |
SEGMENTS | 13. SEGMENTS The Company operates in one industry with three reportable operating segments, which are geographic in nature. The segments consist of North America, Asia and Europe. The primary criteria by which financial performance is evaluated and resources are allocated are net sales and income from operations. The following is a summary of key financial data: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net Sales to External Customers: North America $ 70,654 $ 59,537 $ 201,351 $ 184,873 Asia 53,528 45,919 138,062 127,801 Europe 22,307 20,930 66,038 58,997 $ 146,489 $ 126,386 $ 405,451 $ 371,671 Net Sales: North America $ 73,932 $ 62,348 $ 211,105 $ 193,473 Asia 78,008 66,534 204,152 193,364 Europe 25,398 23,633 77,341 67,434 Less intercompany net sales (30,849 ) (26,129 ) (87,147 ) (82,600 ) $ 146,489 $ 126,386 $ 405,451 $ 371,671 Income from Operations: North America $ 3,360 $ 366 $ 6,021 $ 2,566 Asia 5,753 5,408 10,987 11,759 Europe 1,386 1,020 4,595 2,090 $ 10,499 $ 6,794 $ 21,603 $ 16,415 Net Sales – Segment net sales are attributed to individual segments based on the geographic source of the billing for such customer sales. Intercompany sales include finished products manufactured in foreign countries which are then transferred to the United States and Europe for sale; finished goods manufactured in the United States which are transferred to Europe and Asia for sale; and semi-finished components manufactured in the United States are sold to Asia for further processing. Income from operations represents net sales less operating costs and expenses and does not include any amounts related to intercompany transactions. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2018 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT On October 1, 2018, the Company completed the acquisition of BCMZ Precision Engineering Limited, a UK manufacturer of precision machined components, for approximately $2.6 million in cash. The final purchase price remains subject to certain adjustments related to working capital. The transaction was funded with cash on hand. BCMZ has a diversified portfolio of customers in the automotive, aerospace, defense, telecommunication, fibre-optic and medical industrial sectors and has been a long-term key supplier of precision machined components for our Cinch Connectivity Solutions UK business. BCMZ is additionally expected to give Cinch the capability to continue to support key defense and industrial customers across Europe with localized in-house machining ability. The purchase price allocation was still in progress and was not available at the time of filing of this Quarterly Report. |
BASIS OF PRESENTATION AND ACC_2
BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Upon adoption, the new revenue standards replaced most existing revenue recognition guidance in U.S. GAAP. Based on our review of representative samples of contracts and other forms of agreements with customers globally and our evaluation of the provisions under the five-step model specified by the new revenue standards, the Company has implemented changes with respect to timing of revenue recognition primarily related to arrangements for which the customer takes the Company's products from a facility holding consignment inventory. In connection with the modified retrospective application of the new revenue standards, we recorded an adjustment to increase retained earnings of $3.4 million upon the January 1, 2018 adoption date. Apart from this adjustment and the inclusion of additional required disclosures in Note 2, the adoption of the new revenue standards did not have a material impact on the Company's condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments guidance was adopted by the Company effective January 1, 2018 and it did not have any impact on the Company's condensed consolidated statement of cash flows in the periods presented. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . Current U.S. GAAP prohibits the recognition of current and deferred income taxes for intra-entity asset transfer until the asset has been sold to an was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This guidance was adopted by the Company effective January 1, 2018 and it did not have a material impact on the Company's condensed consolidated financial position or results of operations. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09") |
Accounting Standards Issued But Not Yet Adopted | Accounting Standards Issued But Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to provide a new comprehensive model for lease accounting. Under In January 2017, the FASB issued Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income We are currently in the process of evaluating this new standard update. In May 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Cost |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
REVENUE [Abstract] | |
Disaggregation of Revenue | The following table provides information about disaggregated revenue by product group and sales channel, and includes a reconciliation of the disaggregated revenue to our reportable segments: Three Months Ended September 30, 2018 North America Asia Europe Consolidated By Product Group: Connectivity solutions $ 34,919 $ 5,293 $ 8,314 $ 48,526 Magnetic solutions 10,586 40,100 2,286 52,972 Power solutions and protection 25,149 8,135 11,707 44,991 $ 70,654 $ 53,528 $ 22,307 $ 146,489 By Sales Channel: Direct to customer $ 46,802 $ 46,965 $ 15,184 $ 108,951 Through distribution 23,852 6,563 7,123 37,538 $ 70,654 $ 53,528 $ 22,307 $ 146,489 Nine Months Ended September 30, 2018 North America Asia Europe Consolidated By Product Group: Connectivity solutions $ 100,797 $ 13,533 $ 26,043 $ 140,373 Magnetic solutions 28,795 100,769 7,184 136,748 Power solutions and protection 71,759 23,760 32,811 128,330 $ 201,351 $ 138,062 $ 66,038 $ 405,451 By Sales Channel: Direct to customer $ 128,754 $ 119,294 $ 45,368 $ 293,416 Through distribution 72,597 18,768 20,670 112,035 $ 201,351 $ 138,062 $ 66,038 $ 405,451 |
Cumulative Effect of Changes Made to Consolidated Balance Sheet | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 were as follows: Balance at Adjustments Balance at December 31, Due to January 1, 2017 ASC 606 2018 Balance Sheet Unbilled receivables $ - $ 14,536 $ 14,536 Inventory 107,719 (11,044 ) 96,675 Other current liabilities 6,204 43 6,247 Retained earnings 147,807 3,449 151,256 |
Impact of Adoption of Balance Sheet and Consolidated Statement of Operations | In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our balance sheet as of September 30, 2018 and consolidated statement of operations for the three and nine months ended September 30, 2018 was as follows: As of September 30, 2018 Balances Effect of As Without Adoption Change Reported of ASC 606 Higher/(Lower) Balance Sheet Assets Unbilled receivables $ 16,553 $ - $ 16,553 Inventories 114,434 126,737 (12,303 ) Liabilities Other current liabilities 3,836 3,715 121 Equity Retained earnings 165,518 161,389 4,129 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Balances Effect of Balances Effect of As Without Adoption Change As Without Adoption Change Reported of ASC 606 Higher/(Lower) Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 146,489 $ 145,523 $ 966 $ 405,451 $ 403,434 $ 2,017 Cost of sales 117,282 116,312 970 326,096 324,837 1,259 Operating income 10,499 10,503 (4 ) 21,603 20,845 758 (Benefit from) provision for income taxes (2,201 ) (2,163 ) (38 ) 523 445 78 Net earnings 11,352 11,318 34 16,684 16,004 680 |
Contract Assets and Contract Liabilities | The balances of the Company's contract assets and contract liabilities at September 30, 2018 are as follows: September 30, January 1, 2018 2018 Contract assets - current (unbilled receivable) $ 16,553 $ 14,536 Contract liabilities - current (deferred revenue) $ 776 $ 855 |
Deferred Revenue | A tabular presentation of the activity within the deferred revenue account for the nine months ended September 30, 2018 is presented below: Nine Months Ended September 30, 2018 Balance, January 1 $ 855 New advance payments received 6,180 Recognized as revenue during period (6,251 ) Currency translation (8 ) Balance, September 30 $ 776 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE [Abstract] | |
Earnings and Weighted Average Shares Outstanding used in Computation of Basic and Diluted Earnings Per Share | The following table sets forth the calculation of basic and diluted net earnings per common share under the two-class method for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net earnings $ 11,352 $ 5,024 $ 16,684 $ 8,890 Less dividends declared: Class A 130 131 391 392 Class B 689 691 2,079 2,079 Undistributed earnings $ 10,533 $ 4,202 $ 14,214 $ 6,419 Undistributed earnings allocation - basic and diluted: Class A undistributed earnings $ 1,812 $ 729 $ 2,461 $ 1,115 Class B undistributed earnings 8,721 3,473 11,753 5,304 Total undistributed earnings $ 10,533 $ 4,202 $ 14,214 $ 6,419 Net earnings allocation - basic and diluted: Class A net earnings $ 1,942 $ 860 $ 2,852 $ 1,507 Class B net earnings 9,410 4,164 13,832 7,383 Net earnings $ 11,352 $ 5,024 $ 16,684 $ 8,890 Denominator: Weighted-average shares outstanding: Class A - basic and diluted 2,175 2,175 2,175 2,175 Class B - basic and diluted 9,972 9,864 9,891 9,856 Net earnings per share: Class A - basic and diluted $ 0.89 $ 0.40 $ 1.31 $ 0.69 Class B - basic and diluted $ 0.94 $ 0.42 $ 1.40 $ 0.75 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
INVENTORIES [Abstract] | |
Components of Inventories | The components of inventories are as follows: September 30, December 31, 2018 2017 Raw materials $ 62,373 $ 46,712 Work in progress 21,602 17,688 Finished goods 30,459 43,319 Inventories $ 114,434 $ 107,719 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consist of the following: September 30, December 31, 2018 2017 Land $ 2,256 $ 2,259 Buildings and improvements 30,572 30,761 Machinery and equipment 124,160 122,773 Construction in progress 4,133 1,511 161,121 157,304 Accumulated depreciation (118,128 ) (113,809 ) Property, plant and equipment, net $ 42,993 $ 43,495 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
ACCRUED EXPENSES [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following: September 30, December 31, 2018 2017 Sales commissions $ 2,685 $ 2,461 Subcontracting labor 1,542 1,408 Salaries, bonuses and related benefits 19,177 16,531 Warranty accrual 1,104 1,769 Other 8,025 8,339 $ 32,533 $ 30,508 |
Warranty Accrual Account for the Period from the Acquisition Date | A tabular presentation of the activity within the warranty accrual account for the nine months ended September 30, 2018 and 2017 is presented below: Nine Months Ended September 30, 2018 2017 Balance, January 1 $ 1,769 $ 2,718 Charges and costs accrued - 211 Adjustments related to pre-existing warranties (including changes in estimates) (494 ) (779 ) Less repair costs incurred (181 ) (173 ) Currency translation 10 66 Balance, September 30 $ 1,104 $ 2,043 |
RETIREMENT FUND AND PROFIT SH_2
RETIREMENT FUND AND PROFIT SHARING PLAN (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
RETIREMENT FUND AND PROFIT SHARING PLAN [Abstract] | |
SERP Expense | The components of SERP expense are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost $ 183 $ 175 $ 549 $ 525 Interest cost 166 168 498 505 Net amortization 111 94 332 281 Net periodic benefit cost $ 460 $ 437 $ 1,379 $ 1,311 |
Gross Amounts Recognized in Accumulated Other Comprehensive Loss, Net of Tax | The following amounts are recognized net of tax in accumulated other comprehensive loss: September 30, December 31, 2018 2017 Prior service cost $ 943 $ 1,135 Net loss 3,591 3,732 $ 4,534 $ 4,867 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss at September 30, 2018 and December 31, 2017 are summarized below: September 30, December 31, 2018 2017 Foreign currency translation adjustment, net of taxes of ($790) at September 30, 2018 and ($801) at December 31, 2017 $ (21,000 ) $ (16,537 ) Unrealized holding (losses) gains on available-for-sale securities, net of taxes of $67 at September 30, 2018 and $85 at December 31, 2017 (56 ) 145 Unfunded SERP liability, net of taxes of ($1,558) at September 30, 2018 and ($1,635) at December 31, 2017 (2,977 ) (3,233 ) Accumulated other comprehensive loss $ (24,033 ) $ (19,625 ) |
Changes in Accumulated Other Comprehensive Loss by Component | Changes in accumulated other comprehensive loss by component during the nine months ended September 30, 2018 are as follows. All amounts are net of tax. Unrealized Foreign Currency Holding Gains (Losses) on Translation Available-for- Unfunded Adjustment Sale Securities SERP Liability Total Balance at January 1, 2018 $ (16,537 ) $ 145 $ (3,233 ) $ (19,625 ) Other comprehensive (loss) income before reclassifications (4,463 ) (31 ) 39 (4,455 ) Amount reclassified from accumulated other comprehensive loss - (170 ) 217 (a) 47 Net current period other comprehensive (loss) income (4,463 ) (201 ) 256 (4,408 ) Balance at September 30, 2018 $ (21,000 ) $ (56 ) $ (2,977 ) $ (24,033 ) (a) This reclassification relates to the amortization of prior service costs and gains/losses associated with the Company's SERP plan. This expense is allocated between cost of sales and selling, general and administrative expense based upon the employment classification of the plan participants. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
SEGMENTS [Abstract] | |
Key Financial Data | The following is a summary of key financial data: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net Sales to External Customers: North America $ 70,654 $ 59,537 $ 201,351 $ 184,873 Asia 53,528 45,919 138,062 127,801 Europe 22,307 20,930 66,038 58,997 $ 146,489 $ 126,386 $ 405,451 $ 371,671 Net Sales: North America $ 73,932 $ 62,348 $ 211,105 $ 193,473 Asia 78,008 66,534 204,152 193,364 Europe 25,398 23,633 77,341 67,434 Less intercompany net sales (30,849 ) (26,129 ) (87,147 ) (82,600 ) $ 146,489 $ 126,386 $ 405,451 $ 371,671 Income from Operations: North America $ 3,360 $ 366 $ 6,021 $ 2,566 Asia 5,753 5,408 10,987 11,759 Europe 1,386 1,020 4,595 2,090 $ 10,499 $ 6,794 $ 21,603 $ 16,415 |
BASIS OF PRESENTATION AND ACC_3
BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Recently Adopted Accounting Standards [Abstract] | ||
Retained earnings | $ 165,518 | $ 147,807 |
ASU 2014-09 [Member] | ||
Recently Adopted Accounting Standards [Abstract] | ||
Retained earnings | 151,256 | |
Adjustments Due to ASC 606 [Member] | ASU 2014-09 [Member] | ||
Recently Adopted Accounting Standards [Abstract] | ||
Retained earnings | $ 4,129 | $ 3,449 |
REVENUE, Significant Payment Te
REVENUE, Significant Payment Terms (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Significant Payment Terms [Abstract] | |
Period of payment for products sold under consignment contracts due from customer pulling the product from the hub | 60 days |
Minimum [Member] | |
Warranties [Abstract] | |
Standard warranty period of product | 1 year |
Maximum [Member] | |
Warranties [Abstract] | |
Standard warranty period of product | 3 years |
Direct to Customer [Member] | Minimum [Member] | |
Significant Payment Terms [Abstract] | |
Period of payment for products sold due | 30 days |
Direct to Customer [Member] | Maximum [Member] | |
Significant Payment Terms [Abstract] | |
Period of payment for products sold due | 90 days |
Through Distribution [Member] | Minimum [Member] | |
Significant Payment Terms [Abstract] | |
Period of payment for products sold due | 30 days |
Through Distribution [Member] | Maximum [Member] | |
Significant Payment Terms [Abstract] | |
Period of payment for products sold due | 90 days |
Power Solutions and Protection [Member] | Maximum [Member] | |
Licensing Agreements [Abstract] | |
Payment received on reporting date, quarterly or annual | 30 days |
REVENUE, Disaggregation of Reve
REVENUE, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | $ 146,489 | $ 126,386 | $ 405,451 | $ 371,671 |
Direct to Customer [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 108,951 | 293,416 | ||
Through Distribution [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 37,538 | 112,035 | ||
Connectivity Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 48,526 | 140,373 | ||
Magnetic Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 52,972 | 136,748 | ||
Power Solutions and Protection [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 44,991 | 128,330 | ||
North America [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 70,654 | 59,537 | 201,351 | 184,873 |
North America [Member] | Direct to Customer [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 46,802 | 128,754 | ||
North America [Member] | Through Distribution [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 23,852 | 72,597 | ||
North America [Member] | Connectivity Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 34,919 | 100,797 | ||
North America [Member] | Magnetic Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 10,586 | 28,795 | ||
North America [Member] | Power Solutions and Protection [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 25,149 | 71,759 | ||
Asia [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 53,528 | 45,919 | 138,062 | 127,801 |
Asia [Member] | Direct to Customer [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 46,965 | 119,294 | ||
Asia [Member] | Through Distribution [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 6,563 | 18,768 | ||
Asia [Member] | Connectivity Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 5,293 | 13,533 | ||
Asia [Member] | Magnetic Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 40,100 | 100,769 | ||
Asia [Member] | Power Solutions and Protection [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 8,135 | 23,760 | ||
Europe [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 22,307 | $ 20,930 | 66,038 | $ 58,997 |
Europe [Member] | Direct to Customer [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 15,184 | 45,368 | ||
Europe [Member] | Through Distribution [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 7,123 | 20,670 | ||
Europe [Member] | Connectivity Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 8,314 | 26,043 | ||
Europe [Member] | Magnetic Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | 2,286 | 7,184 | ||
Europe [Member] | Power Solutions and Protection [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Disaggregation of revenue | $ 11,707 | $ 32,811 |
REVENUE, Cumulative Effect of C
REVENUE, Cumulative Effect of Changes made to Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet [Abstract] | ||
Unbilled receivables | $ 16,553 | $ 0 |
Inventory | 114,434 | 107,719 |
Other current liabilities | 3,836 | 6,204 |
Retained earnings | 165,518 | 147,807 |
ASU 2014-09 [Member] | ||
Balance Sheet [Abstract] | ||
Unbilled receivables | 14,536 | |
Inventory | 96,675 | |
Other current liabilities | 6,247 | |
Retained earnings | 151,256 | |
Adjustments Due to ASC 606 [Member] | ASU 2014-09 [Member] | ||
Balance Sheet [Abstract] | ||
Unbilled receivables | 16,553 | 14,536 |
Inventory | (12,303) | (11,044) |
Other current liabilities | 121 | 43 |
Retained earnings | 4,129 | $ 3,449 |
Balances Without Adoption of ASC 606 [Member] | ASU 2014-09 [Member] | ||
Balance Sheet [Abstract] | ||
Unbilled receivables | 0 | |
Inventory | 126,737 | |
Other current liabilities | 3,715 | |
Retained earnings | $ 161,389 |
REVENUE, Disclosure of Impact o
REVENUE, Disclosure of Impact of Adoption on Balance Sheet and Consolidated Statement of Operations (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 | |
Assets [Abstract] | |||||
Unbilled receivables | $ 16,553 | $ 16,553 | $ 0 | ||
Inventories | 114,434 | 114,434 | 107,719 | ||
Liabilities [Abstract] | |||||
Other current liabilities | 3,836 | 3,836 | 6,204 | ||
Equity [Abstract] | |||||
Retained earnings | 165,518 | 165,518 | 147,807 | ||
Statement of Operations [Abstract] | |||||
Net sales | 146,489 | $ 126,386 | 405,451 | $ 371,671 | |
Cost of sales | 117,282 | 98,686 | 326,096 | 291,481 | |
Operating income | 10,499 | 6,794 | 21,603 | 16,415 | |
(Benefit from) provision for income taxes | (2,201) | 60 | 523 | 2,329 | |
Net earnings | 11,352 | $ 5,024 | 16,684 | $ 8,890 | |
ASU 2014-09 [Member] | |||||
Assets [Abstract] | |||||
Unbilled receivables | 14,536 | ||||
Inventories | 96,675 | ||||
Liabilities [Abstract] | |||||
Other current liabilities | 6,247 | ||||
Equity [Abstract] | |||||
Retained earnings | 151,256 | ||||
Balances Without Adoption of ASC 606 [Member] | ASU 2014-09 [Member] | |||||
Assets [Abstract] | |||||
Unbilled receivables | 0 | 0 | |||
Inventories | 126,737 | 126,737 | |||
Liabilities [Abstract] | |||||
Other current liabilities | 3,715 | 3,715 | |||
Equity [Abstract] | |||||
Retained earnings | 161,389 | 161,389 | |||
Statement of Operations [Abstract] | |||||
Net sales | 145,523 | 403,434 | |||
Cost of sales | 116,312 | 324,837 | |||
Operating income | 10,503 | 20,845 | |||
(Benefit from) provision for income taxes | (2,163) | 445 | |||
Net earnings | 11,318 | 16,004 | |||
Effect of Change Higher/(Lower) [Member] | ASU 2014-09 [Member] | |||||
Assets [Abstract] | |||||
Unbilled receivables | 16,553 | 16,553 | 14,536 | ||
Inventories | (12,303) | (12,303) | (11,044) | ||
Liabilities [Abstract] | |||||
Other current liabilities | 121 | 121 | 43 | ||
Equity [Abstract] | |||||
Retained earnings | 4,129 | 4,129 | $ 3,449 | ||
Statement of Operations [Abstract] | |||||
Net sales | 966 | 2,017 | |||
Cost of sales | 970 | 1,259 | |||
Operating income | (4) | 758 | |||
(Benefit from) provision for income taxes | (38) | 78 | |||
Net earnings | $ 34 | $ 680 |
REVENUE, Contract Assets and Co
REVENUE, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets - current (unbilled receivable) | $ 16,553 | $ 0 |
Contract liabilities - current (deferred revenue) | 776 | |
Deferred Revenue [Roll Forward] | ||
Balance, beginning of period | 855 | |
New advance payments received | 6,180 | |
Recognized as revenue during period | (6,251) | |
Currency translation | (8) | |
Balance, end of period | $ 776 | |
ASU 2014-09 [Member] | ||
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets - current (unbilled receivable) | 14,536 | |
Contract liabilities - current (deferred revenue) | $ 855 |
REVENUE, Transaction Price Allo
REVENUE, Transaction Price Allocated to Future Obligations (Details) $ in Millions | Sep. 30, 2018USD ($) |
REVENUE [Abstract] | |
Revenue, remaining performance obligation | $ 17.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Transaction Price Allocated to Future Obligations [Abstract] | |
Remaining performance obligation percentage | 14.00% |
Remaining performance satisfaction period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Transaction Price Allocated to Future Obligations [Abstract] | |
Remaining performance obligation percentage | 52.00% |
Remaining performance satisfaction period | 1 year |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator [Abstract] | ||||
Net earnings | $ 11,352 | $ 5,024 | $ 16,684 | $ 8,890 |
Undistributed earnings | 10,533 | 4,202 | 14,214 | 6,419 |
Class A [Member] | ||||
Numerator [Abstract] | ||||
Net earnings | 1,942 | 860 | 2,852 | 1,507 |
Less dividends declared | 130 | 131 | 391 | 392 |
Undistributed earnings | $ 1,812 | $ 729 | $ 2,461 | $ 1,115 |
Weighted-average shares outstanding [Abstract] | ||||
Basic and diluted (in shares) | 2,175 | 2,175 | 2,175 | 2,175 |
Net earnings per share [Abstract] | ||||
Basic and diluted (in dollars per share) | $ 0.89 | $ 0.40 | $ 1.31 | $ 0.69 |
Class B [Member] | ||||
Numerator [Abstract] | ||||
Net earnings | $ 9,410 | $ 4,164 | $ 13,832 | $ 7,383 |
Less dividends declared | 689 | 691 | 2,079 | 2,079 |
Undistributed earnings | $ 8,721 | $ 3,473 | $ 11,753 | $ 5,304 |
Weighted-average shares outstanding [Abstract] | ||||
Basic and diluted (in shares) | 9,972 | 9,864 | 9,891 | 9,856 |
Net earnings per share [Abstract] | ||||
Basic and diluted (in dollars per share) | $ 0.94 | $ 0.42 | $ 1.40 | $ 0.75 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value Measurement [Abstract] | |||
Realized gain on sale of securities | $ 200 | ||
Proceeds from sale of marketable securities within rabbi trust | 1,348 | $ 0 | |
Purchase of marketable securities within rabbi trust | (1,348) | 0 | |
Transfers in (out) between levels | 0 | $ 0 | |
Fair value of total debt | 116,900 | $ 124,800 | |
Carrying amount of long-term debt | 114,800 | 122,700 | |
Investments held in Rabbi Trust [Member] | |||
Fair Value Measurement [Abstract] | |||
Proceeds from sale of marketable securities within rabbi trust | 1,300 | ||
Purchase of marketable securities within rabbi trust | (1,348) | ||
Securities measured at fair value | 1,300 | 1,500 | |
Investments held in Rabbi Trust [Member] | us-gaap_SupplementalEmployeeRetirementPlanDefinedBenefitMember | |||
Fair Value Measurement [Abstract] | |||
Gross unrealized gains associated with the investment held in the rabbi trust | 200 | ||
Nonrecurring [Member] | |||
Fair Value Measurement [Abstract] | |||
Financial assets accounted at fair value | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Components of inventories [Abstract] | ||
Raw materials | $ 62,373 | $ 46,712 |
Work in progress | 21,602 | 17,688 |
Finished goods | 30,459 | 43,319 |
Inventories | $ 114,434 | $ 107,719 |
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 [Abstract] | |||||
Property, plant and equipment, gross | $ 161,121 | $ 161,121 | $ 157,304 | ||
Accumulated depreciation | (118,127) | (118,127) | (113,809) | ||
Property, plant and equipment, net | 42,994 | 42,994 | 43,495 | ||
Depreciation expense | 2,800 | $ 3,600 | 8,900 | $ 10,600 | |
Land [Member] | |||||
Property, plant and equipment [Abstract] | |||||
Property, plant and equipment, gross | 2,256 | 2,256 | 2,259 | ||
Buildings and Improvements [Member] | |||||
Property, plant and equipment [Abstract] | |||||
Property, plant and equipment, gross | 30,572 | 30,572 | 30,761 | ||
Machinery and Equipment [Member] | |||||
Property, plant and equipment [Abstract] | |||||
Property, plant and equipment, gross | 124,160 | 124,160 | 122,773 | ||
Construction in Progress [Member] | |||||
Property, plant and equipment [Abstract] | |||||
Property, plant and equipment, gross | $ 4,133 | $ 4,133 | $ 1,511 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
ACCRUED EXPENSES [Abstract] | |||
Sales commissions | $ 2,685 | $ 2,461 | |
Subcontracting labor | 1,542 | 1,408 | |
Salaries, bonuses and related benefits | 19,177 | 16,531 | |
Warranty accrual | 1,104 | 1,769 | |
Other | 8,025 | 8,339 | |
Accrued expenses | 32,533 | $ 30,508 | |
Warranty Accrual Activity Account [Roll Forward] | |||
Balance | 1,769 | $ 2,718 | |
Charges and costs accrued | 0 | 211 | |
Adjustments related to pre-existing warranties (including changes in estimates) | (494) | (779) | |
Less repair costs incurred | (181) | (173) | |
Currency translation | 10 | 66 | |
Balance | $ 1,104 | $ 2,043 |
DEBT (Details)
DEBT (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 | |
Credit and Security Agreement [Abstract] | |||||
Deferred finance cost net | $ 1,900 | $ 1,900 | $ 2,300 | ||
Repayments of long-term debt | $ (8,268) | $ (25,208) | |||
KeyBank [Member] | |||||
Credit and Security Agreement [Abstract] | |||||
Line of credit facility, maturity date | Dec. 11, 2022 | ||||
Weighted average interest rate | 4.25% | 4.25% | 3.38% | ||
Interest expense incurred | $ 1,400 | $ 1,500 | $ 3,900 | $ 4,500 | |
KeyBank [Member] | Term Loan [Member] | |||||
Credit and Security Agreement [Abstract] | |||||
Outstanding borrowings | 116,700 | 116,700 | $ 125,000 | ||
Repayments of long-term debt | (6,000) | ||||
KeyBank [Member] | Revolving Credit Facility [Member] | |||||
Credit and Security Agreement [Abstract] | |||||
Outstanding borrowings | 0 | 0 | 0 | ||
Available line of credit | $ 75,000 | $ 75,000 | $ 75,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes Uncertain Tax Positions and Tax Reform [Abstract] | ||||||
Liability for uncertain tax positions | $ 28.2 | $ 28.2 | $ 30.4 | |||
Liability for uncertain tax positions - current | 1.1 | 1.1 | 2.5 | |||
Liability for uncertain tax positions - lapse of statute of limitations | (2.5) | |||||
Interest and penalties uncertain tax positions recognized | 0.7 | $ 0.6 | ||||
(Benefit) on reversal of interest and penalties | (0.3) | $ 0 | (0.7) | $ 0 | ||
Accrued interest and penalties uncertain tax positions | $ 3.1 | $ 3.1 | $ 3.2 | |||
Federal statutory income tax rate | 21.00% | 35.00% | ||||
Estimated deemed repatriation tax | $ (2.6) | |||||
One-time transition tax | $ 18.1 | $ 15.5 |
RETIREMENT FUND AND PROFIT SH_3
RETIREMENT FUND AND PROFIT SHARING PLAN, Employees' Savings Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Class A Common Stock [Member] | UNITED STATES | ||||
Compensation Expense [Abstract] | ||||
Shares owned by plan (in shares) | 111,393 | 111,393 | ||
Class B Common Stock [Member] | UNITED STATES | ||||
Compensation Expense [Abstract] | ||||
Shares owned by plan (in shares) | 137,700 | 137,700 | ||
401K Plan [Member] | UNITED STATES | ||||
Compensation Expense [Abstract] | ||||
Compensation expense | $ 0.3 | $ 0.3 | $ 0.8 | $ 0.9 |
Retirement Fund [Member] | HONG KONG | ||||
Compensation Expense [Abstract] | ||||
Compensation expense | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 |
Retirement Fund [Member] | Class A Common Stock [Member] | HONG KONG | ||||
Compensation Expense [Abstract] | ||||
Shares owned by plan (in shares) | 3,323 | 3,323 | ||
Retirement Fund [Member] | Class B Common Stock [Member] | HONG KONG | ||||
Compensation Expense [Abstract] | ||||
Shares owned by plan (in shares) | 17,342 | 17,342 |
RETIREMENT FUND AND PROFIT SH_4
RETIREMENT FUND AND PROFIT SHARING PLAN, SERP (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 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Type [Extensible List] | us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember | us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember | |||
SERP [Member] | |||||
Components of SERP expense [Abstract] | |||||
Service cost | $ 183 | $ 175 | $ 549 | $ 525 | |
Interest cost | 166 | 168 | 498 | 505 | |
Net amortization | 111 | 94 | 332 | 281 | |
Net periodic benefit cost | 460 | $ 437 | 1,379 | $ 1,311 | |
Amounts recognized in accumulated other comprehensive loss, net of tax [Abstract] | |||||
Prior service cost | 943 | 943 | $ 1,135 | ||
Net loss | 3,591 | 3,591 | 3,732 | ||
Total amounts recognized in accumulated other comprehensive loss | $ 4,534 | $ 4,534 | $ 4,867 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS, Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accumulated other comprehensive loss [Abstract] | ||
Foreign currency translation adjustment, net of taxes | $ (21,000) | $ (16,537) |
Unrealized holding (losses) gains on available-for-sale securities, net of taxes | (56) | 145 |
Unfunded SERP liability, net of taxes | (2,977) | (3,233) |
Accumulated other comprehensive loss | (24,033) | (19,625) |
Accumulated other comprehensive loss, tax [Abstract] | ||
Foreign currency translation adjustment, tax | (790) | (801) |
Unrealized holding gains on available-for-sale securities, tax | 67 | 85 |
Change in unfunded SERP liability, tax | $ (1,558) | $ (1,635) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS, Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||
Balance | $ 157,960 | ||||
Other comprehensive (loss) income before reclassifications | (4,455) | ||||
Amount reclassified from accumulated other comprehensive loss | 47 | ||||
Net current period other comprehensive (loss) income | $ (1,117) | $ 3,504 | (4,408) | $ 10,931 | |
Balance | 173,311 | 173,311 | |||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||
Balance | (19,625) | ||||
Balance | (24,033) | (24,033) | |||
Foreign Currency Translation Adjustment [Member] | |||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||
Balance | (16,537) | ||||
Other comprehensive (loss) income before reclassifications | (4,463) | ||||
Amount reclassified from accumulated other comprehensive loss | 0 | ||||
Net current period other comprehensive (loss) income | (4,463) | ||||
Balance | (21,000) | (21,000) | |||
Unrealized Holding Gains (Losses) on Available-for-Sale Securities [Member] | |||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||
Balance | 145 | ||||
Other comprehensive (loss) income before reclassifications | (31) | ||||
Amount reclassified from accumulated other comprehensive loss | (170) | ||||
Net current period other comprehensive (loss) income | (201) | ||||
Balance | (56) | (56) | |||
Unfunded SERP Liability [Member] | |||||
Changes in Accumulated Other Comprehensive Loss by Component [Roll Forward] | |||||
Balance | (3,233) | ||||
Other comprehensive (loss) income before reclassifications | 39 | ||||
Amount reclassified from accumulated other comprehensive loss | [1] | 217 | |||
Net current period other comprehensive (loss) income | 256 | ||||
Balance | $ (2,977) | $ (2,977) | |||
[1] | This reclassification relates to the amortization of prior service costs and gains/losses associated with the Company's SERP plan. This expense is allocated between cost of sales and selling, general and administrative expense based upon the employment classification of the plan participants. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Aug. 27, 2018USD ($) | Aug. 27, 2018CNY (¥) | Jul. 09, 2018CNY (¥) | Jun. 01, 2018USD ($) | Sep. 30, 2018USD ($)Defendant | Sep. 30, 2018EUR (€)Defendant | Sep. 30, 2018CNY (¥)Defendant | Dec. 31, 2015Subsidiary |
Dongguan Transpower [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Damages received with incurred interest | $ 3.2 | ¥ 20,430,203 | ||||||
Arezzo Revenue Agency [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Estimated liability | $ 12 | |||||||
Setec [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Number of subsidiaries named in the lawsuit | Subsidiary | 3 | |||||||
Setec [Member] | Dongguan Transpower [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Amount paid in exchange for perpetual, worldwide royalty-free license to patent-in-suit | € | € 75,000 | |||||||
DG Yu Shing Industrial Development Company Limited [Member] | Dongguan Transpower [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Number of defendants | Defendant | 3 | 3 | 3 | |||||
Damages sought | $ 3.2 | |||||||
Damages awarded | ¥ | ¥ 20,133,174.10 | |||||||
Jinmei Entities [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Damages received with incurred interest | ¥ | ¥ 20,133,174 | |||||||
Unipower, LLC [Member] | ||||||||
Legal Proceedings [Abstract] | ||||||||
Damages sought | $ 1 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)IndustrySegment | Sep. 30, 2017USD ($) | |
SEGMENTS [Abstract] | ||||
Number of industry in which entity operates | Industry | 1 | |||
Number of reportable operating segments | Segment | 3 | |||
Summary of key financial data [Abstract] | ||||
Net sales | $ 146,489 | $ 126,386 | $ 405,451 | $ 371,671 |
Income from operations | 10,499 | 6,794 | 21,603 | 16,415 |
North America [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 70,654 | 59,537 | 201,351 | 184,873 |
Asia [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 53,528 | 45,919 | 138,062 | 127,801 |
Europe [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 22,307 | 20,930 | 66,038 | 58,997 |
Reportable Operating Segments [Member] | North America [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 73,932 | 62,348 | 211,105 | 193,473 |
Income from operations | 3,360 | 366 | 6,021 | 2,566 |
Reportable Operating Segments [Member] | Asia [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 78,008 | 66,534 | 204,152 | 193,364 |
Income from operations | 5,753 | 5,408 | 10,987 | 11,759 |
Reportable Operating Segments [Member] | Europe [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | 25,398 | 23,633 | 77,341 | 67,434 |
Income from operations | 1,386 | 1,020 | 4,595 | 2,090 |
Intersegment Elimination [Member] | ||||
Summary of key financial data [Abstract] | ||||
Net sales | $ (30,849) | $ (26,129) | $ (87,147) | $ (82,600) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | Oct. 01, 2018USD ($) |
Subsequent Event [Member] | BCMZ Precision Engineering Limited Member [Member] | |
Business Combination [Abstract] | |
Purchase price in cash | $ 2.6 |