Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 28, 2020 | May 01, 2020 | |
Document Information | ||
Entity Registrant Name | ASTRONICS CORPORATION | |
Trading Symbol | ATRO | |
Entity Central Index Key | 0000008063 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 28, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Transition Report | false | |
Entity Address, Postal Zip Code | 14052 | |
Entity Address, State or Province | NY | |
Entity Address, City or Town | East Aurora | |
Entity Address, Address Line One | 130 Commerce Way | |
Entity Tax Identification Number | 16-0959303 | |
Entity Incorporation, State or Country Code | NY | |
Document Quarterly Report | true | |
Entity File Number | 0-7087 | |
Local Phone Number | 805-1599 | |
City Area Code | 716 | |
Security Exchange Name | NASDAQ | |
Entity Shell Company | false | |
Common Class Undefined | ||
Document Information | ||
Entity Common Stock, Shares Outstanding (in shares) | 23,258,552 | |
Convertible Class B Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding (in shares) | 7,497,311 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and Cash Equivalents | $ 188,364 | $ 31,906 |
Accounts Receivable, Net of Allowance for Doubtful Accounts | 133,729 | 147,998 |
Inventories | 151,798 | 145,787 |
Prepaid Expenses and Other Current Assets | 20,658 | 15,853 |
Assets Held for Sale | 0 | 1,537 |
Total Current Assets | 494,549 | 343,081 |
Property, Plant and Equipment, Net of Accumulated Depreciation | 111,522 | 112,499 |
Operating Right-of-Use Assets | 22,018 | 23,602 |
Other Assets | 27,932 | 31,271 |
Intangible Assets, Net of Accumulated Amortization | 123,008 | 127,293 |
Goodwill | 70,997 | 144,970 |
Total Assets | 850,026 | 782,716 |
Current Liabilities: | ||
Current Maturities of Long-term Debt | 223 | 224 |
Accounts Payable | 42,080 | 35,842 |
Current Operating Lease Liabilities | 4,687 | 4,517 |
Accrued Expenses and Other Current Liabilities | 42,380 | 48,697 |
Customer Advance Payments and Deferred Revenue | 30,832 | 31,360 |
Total Current Liabilities | 120,202 | 120,640 |
Long-term Debt | 333,000 | 188,000 |
Long-term Operating Lease Liabilities | 19,992 | 21,039 |
Other Liabilities | 63,023 | 64,180 |
Total Liabilities | 536,217 | 393,859 |
Shareholders’ Equity: | ||
Common Stock | 346 | 345 |
Accumulated Other Comprehensive Loss | (17,717) | (15,628) |
Other Shareholders’ Equity | 331,180 | 404,140 |
Total Shareholders’ Equity | 313,809 | 388,857 |
Total Liabilities and Shareholders’ Equity | $ 850,026 | $ 782,716 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Income Statement [Abstract] | ||
Sales | $ 157,584 | $ 208,174 |
Cost of Products Sold | 121,865 | 156,097 |
Gross Profit | 35,719 | 52,077 |
Selling, General and Administrative Expenses | 28,867 | 29,196 |
Impairment Loss | 74,408 | 0 |
(Loss) Income from Operations | (67,556) | 22,881 |
Gain on Sale of Business | 0 | (80,133) |
Other Expense, Net of Other Income | 388 | 215 |
Interest Expense, Net of Interest Income | 1,333 | 1,804 |
(Loss) Income Before Income Taxes | (69,277) | 100,995 |
(Benefit from) Provision for Income Taxes | (2,314) | 22,849 |
Net (Loss) Income | $ (66,963) | $ 78,146 |
(Loss) Earnings Per Share: | ||
Basic (in usd per share) | $ (2.17) | $ 2.40 |
Diluted (in usd per share) | $ (2.17) | $ 2.35 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net (Loss) Income | $ (66,963) | $ 78,146 |
Other Comprehensive (Loss) Income: | ||
Foreign Currency Translation Adjustments | (2,304) | (270) |
Retirement Liability Adjustment – Net of Tax | 215 | 150 |
Total Other Comprehensive Loss | (2,089) | (120) |
Comprehensive (Loss) Income | $ (69,052) | $ 78,026 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Cash Flows From Operating Activities: | ||
Net (Loss) Income | $ (66,963) | $ 78,146 |
Adjustments to Reconcile Net (Loss) Income to Cash Flows from Operating Activities, Excluding the Effects of Divestitures: | ||
Depreciation and Amortization | 7,971 | 8,076 |
Provisions for Non-Cash Losses on Inventory and Receivables | 872 | 2,498 |
Equity-based Compensation Expense | 1,703 | 1,193 |
Deferred Tax Expense (Benefit) | 2,050 | (3,398) |
Operating Lease Amortization Expense | 1,210 | 988 |
Gain on Sale of Business, Before Taxes | 0 | (80,133) |
Impairment Loss | 74,408 | 0 |
Other | 968 | (736) |
Cash Flows from Changes in Operating Assets and Liabilities, Excluding the Effects of Divestitures: | ||
Accounts Receivable | 13,644 | (6,414) |
Inventories | (7,224) | (5,943) |
Accounts Payable | 6,295 | (2,032) |
Accrued Expenses | (5,730) | (9,283) |
Other Current Assets and Liabilities | (557) | (2,860) |
Customer Advanced Payments and Deferred Revenue | (490) | 4,055 |
Income Taxes | (3,591) | 26,824 |
Operating Lease Liabilities | (1,217) | (1,005) |
Supplemental Retirement and Other Liabilities | (99) | 1,378 |
Cash Flows from Operating Activities | 23,250 | 11,354 |
Cash Flows from Investing Activities: | ||
Proceeds on Sale of Business | 0 | 103,793 |
Capital Expenditures | (2,793) | (3,474) |
Cash Flows from Investing Activities | (2,793) | 100,319 |
Cash Flows from Financing Activities: | ||
Proceeds from Long-term Debt | 150,000 | 10,000 |
Payments for Long-term Debt | (5,000) | (122,026) |
Purchase of Outstanding Shares for Treasury | (7,732) | 0 |
Stock Options Activity | 33 | 159 |
Finance Lease Principal Payments | (461) | (395) |
Cash Flows from Financing Activities | 136,840 | (112,262) |
Effect of Exchange Rates on Cash | (839) | (67) |
Increase (Decrease) in Cash and Cash Equivalents | 156,458 | (656) |
Cash and Cash Equivalents at Beginning of Period | 31,906 | 16,622 |
Cash and Cash Equivalents at End of Period | $ 188,364 | $ 15,966 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common StockCommon Class Undefined | Common StockConvertible Class B Stock | Additional Paid in Capital | Accumulated Comprehensive Loss | Retained Earnings | Treasury Stock |
Beginning of Period at Dec. 31, 2018 | $ 260 | $ 83 | $ 73,044 | $ (13,329) | $ 376,567 | $ (50,000) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Class B Stock Converted to Common Stock | 2 | (2) | |||||
Net Exercise of Stock Options | 1,352 | ||||||
Foreign Currency Translation Adjustments | (270) | ||||||
Retirement Liability Adjustment – Net of Tax | $ 150 | 150 | |||||
Net (Loss) Income | 78,146 | 78,146 | |||||
End of Period at Mar. 30, 2019 | 466,003 | $ 262 | $ 81 | 74,396 | (13,449) | 454,713 | $ (50,000) |
Beginning of Period (in shares) at Dec. 31, 2018 | 25,978,000 | 8,290,000 | 1,675,000 | ||||
Increase (Decrease) in Stockholders' Equity (in shares) | |||||||
Net Issuance from Exercise of Stock Options (in shares) | 21,000 | 35,000 | |||||
Conversion of Class B Shares to Common Shares (in shares) | 179,000 | (179,000) | |||||
End of Period (in shares) at Mar. 30, 2019 | 26,178,000 | 8,146,000 | 1,675,000 | ||||
Beginning of Period at Dec. 31, 2019 | 388,857 | $ 269 | $ 76 | 76,340 | (15,628) | 428,584 | $ (100,784) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Class B Stock Converted to Common Stock | 2 | (2) | |||||
Net Exercise of Stock Options | 1 | 1,735 | |||||
Foreign Currency Translation Adjustments | (2,304) | ||||||
Retirement Liability Adjustment – Net of Tax | 215 | 215 | |||||
Net (Loss) Income | (66,963) | (66,963) | |||||
Purchase of Shares | (7,732) | ||||||
End of Period at Mar. 28, 2020 | $ 313,809 | $ 271 | $ 75 | $ 78,075 | $ (17,717) | $ 361,621 | $ (108,516) |
Beginning of Period (in shares) at Dec. 31, 2019 | 26,874,000 | 7,650,000 | 3,526,000 | ||||
Increase (Decrease) in Stockholders' Equity (in shares) | |||||||
Net Issuance from Exercise of Stock Options (in shares) | 25,000 | 15,000 | |||||
Conversion of Class B Shares to Common Shares (in shares) | 189,000 | (189,000) | |||||
Purchase of shares (in shares) | 282,000 | ||||||
End of Period (in shares) at Mar. 28, 2020 | 27,088,000 | 7,476,000 | 3,808,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 28, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating Results The results of operations for any interim period are not necessarily indicative of results for the full year. In addition, the COVID-19 pandemic could increase the volatility we experience in our financial results in future interim and annual periods. Operating results for the three months ended March 28, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. For further information, refer to the financial statements and footnotes thereto included in Astronics Corporation’s 2019 annual report on Form 10-K. Description of the Business Astronics Corporation (“Astronics” or the “Company”) is a leading provider of advanced technologies to the global aerospace, defense and electronics industries. Our products and services include advanced, high-performance electrical power generation, distribution and motion systems, lighting and safety systems, avionics products, systems and certification, aircraft structures and automated test systems. We have principal operations in the United States (“U.S.”), Canada, France and England, as well as engineering offices in the Ukraine and India. On February 13, 2019, the Company completed a divestiture of its semiconductor test business within the Test Systems segment. The business was not core to the future of the Test Systems segment. The total proceeds of the divestiture amounted to $103.8 million plus certain contingent purchase consideration (“earn-out”) as described in Note 18. The Company recorded a pre-tax gain on the sale of $80.1 million in the first quarter of 2019. The Company recorded income tax expense relating to the gain of $19.7 million. On July 1, 2019, the Company acquired all of the issued and outstanding capital stock of Freedom Communication Technologies, Inc. (“Freedom”). Freedom, located in Kilgore, Texas, is a leader in wireless communication testing, primarily for the civil land mobile radio market. Freedom is included in our Test Systems segment. The total consideration for the transaction was $21.8 million, net of $0.6 million in cash acquired. On July 12, 2019, the Company sold intellectual property and certain assets associated with its Airfield Lighting product line for $1.0 million in cash. The Airfield Lighting product line, part of the Aerospace segment, was not core to the business and represented less than 1% of revenue. The Company recorded a pre-tax loss on the sale of approximately $1.3 million. On October 4, 2019, the Company acquired the stock of the primary operating subsidiaries as well as certain other assets from mass transit and defense market test solution provider, Diagnosys Test Systems Limited, for $7.0 million in cash, plus earn-outs estimated at a fair value of $2.5 million. Diagnosys Inc. and its affiliates (“Diagnosys”) is included in our Test Systems segment. Diagnosys is a developer and manufacturer of comprehensive automated test equipment providing test, support, and repair of high value electronics, electro-mechanical, pneumatic and printed circuit boards focused on the global mass transit and defense markets. The terms of the acquisition allow for a potential earn-out of up to an additional $13.0 million over the three years post-acquisition based on achievement of new order levels of over $72.0 million during that period. The acquired business has operations in Westford, Massachusetts as well as Ferndown, England, and an engineering center of excellence in Bangalore, India. For additional information regarding these acquisitions and divestitures see Note 18. Impact of the COVID-19 Pandemic On March 11, 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic. The COVID-19 pandemic has had a sudden and significant impact on the global economy, and particularly in the aerospace industry, resulting in the grounding of the majority of the global commercial transportation fleet and significant cost cutting and cash preservation actions by the global airlines. This in turn has resulted in a significant reduction in airlines spending for both new aircraft and on upgrading their existing fleet with the Company’s products. We expect this low level of investment by the airlines will continue at least through 2020, however, the ultimate impact of COVID-19 on our business results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy and the aerospace industry, which are uncertain and cannot be predicted at this time. Trade Accounts Receivable and Contract Assets The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as the age of the receivable balances, historical experience, credit quality, current economic conditions, and reasonable and supportable forecasts of future economic conditions that may affect a customer’s ability to pay. The allowance for doubtful accounts balance was $3.7 million and $3.6 million at March 28, 2020 and December 31, 2019, respectively. The Company‘s year-to-date bad debt expense was insignificant in the three months ended March 28, 2020 and March 30, 2019. The Company's exposure to credit losses may increase if its customers are adversely affected by global economic recessions, disruption associated with the current COVID-19 pandemic, industry conditions, or other customer-specific factors. Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables and contract assets as airlines and other aerospace company’s cash flows are impacted by the COVID-19 pandemic. Cost of Products Sold, Engineering and Development, Interest, and Selling, General and Administrative Expenses Cost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and development costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. Research and development, design and related engineering amounted to $26.2 million and $26.7 million for the three months ended March 28, 2020 and March 30, 2019, respectively. Selling, general and administrative expenses include costs primarily related to our sales and marketing departments and administrative departments. Interest expense is shown net of interest income. Interest income was insignificant for the three months ended March 28, 2020 and March 30, 2019. Goodwill Impairment The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As a result of the qualitative factors related to the COVID-19 pandemic, as discussed above, we performed interim quantitative assessments for the reporting units which had goodwill as of March 28, 2020. Based on our quantitative assessment, the Company recorded goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $73.7 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020. For additional information regarding the quantitative test and the related goodwill impairment see Note 6. Valuation of Long-Lived Assets Long-lived assets are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to right-of-use (“ROU”) assets of approximately $0.7 million incurred in one reporting unit in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020. No other long-lived asset impairments were warranted based on the quantitative analysis performed. Foreign Currency Translation The aggregate transaction gain or loss included in operations was insignificant for the three months ended March 28, 2020 and March 30, 2019. Newly Adopted and Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Standard Description Financial Statement Effect or Other Significant Matters ASU No. 2016-13 The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires a Company to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the standard are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The amendment requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance as of January 1, 2020. The standard changed the way entities recognize impairment of most financial assets. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. The adoption of this standard had an immaterial impact on our condensed consolidated financial statements. Date of adoption: Q1 2020 ASU No. 2018-13 The standard removes the disclosure requirements for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The provisions of this ASU are effective for years beginning after December 15, 2019, with early adoption permitted. This ASU did not have a significant impact on our consolidated financial statements, as it only includes changes to disclosure requirements. Date of adoption: Q1 2020 Recent Accounting Pronouncements Not Yet Adopted Standard Description Financial Statement Effect or Other Significant Matters ASU No. 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) The standard includes updates to the disclosure requirements for defined benefit plans including several additions, deletions and modifications to the disclosure requirements. The provisions of this ASU are effective for years beginning after December 15, 2020, with early adoption permitted. This ASU does not have a significant impact on our consolidated financial statements, as it only includes changes to disclosure requirements. Planned date of adoption: Q1 2021 ASU No. 2019-12 Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance. The amendments of this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued, with the amendments to be applied on a respective, modified retrospective or prospective basis, depending on the specific amendment. The Company is currently evaluating the requirements of this standard. The standard is not expected to have a material impact on the Company's financial statements. Planned date of adoption: Q1 2021 ASU No. 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides the following optional expedients: simplify accounting analyses under current U.S. GAAP for contract modifications, simplify the assessment of hedge effectiveness, allow hedging relationships affected by reference rate reform to continue and allow a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. After 2021, it is unclear whether banks will continue to provide LIBOR submissions to the administrator of LIBOR, and no consensus currently exists as to what benchmark rate or rates may become accepted alternatives to LIBOR. The Company is currently evaluating the impact of adopting this guidance. We consider the applicability and impact of all ASUs. ASUs not listed above were assessed and determined to be either not applicable, or had or are expected to have minimal impact on our financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue is recognized when, or as, the Company transfers control of promised products or services to a customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those products or services. Sales shown on the Company's Consolidated Statements of Operations are from contracts with customers. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within a range from 30 to 90 days after the performance obligation has been satisfied; or in certain cases, up-front deposits. In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts generally do not include a significant financing component. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales. The Company recognizes an asset for the incremental, material costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year and the costs are expected to be recovered. These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer. As of March 28, 2020, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year. The Company recognizes an asset for certain, material costs to fulfill a contract if it is determined that the costs relate directly to a contract or an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. Such costs are amortized on a systematic basis that is consistent with the transfer to the customer of the goods to which the asset relates. Start-up costs are expensed as incurred. Capitalized fulfillment costs are included in Inventories in the accompanying Consolidated Condensed Balance Sheets. Should future orders not materialize or it is determined the costs are no longer probable of recovery, the capitalized costs are written off. As of March 28, 2020, the Company does not have material capitalized fulfillment costs. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct. Thus, the contract's transaction price is the revenue recognized when or as that performance obligation is satisfied. Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus margin approach, under which expected costs are forecast to satisfy a performance obligation and then an appropriate margin is added for that distinct good or service. Shipping and handling activities that occur after the customer has obtained control of the good are considered fulfillment activities, not performance obligations. Some of our contracts offer price discounts or free units after a specified volume has been purchased. The Company evaluates these options to determine whether they provide a material right to the customer, representing a separate performance obligation. If the option provides a material right to the customer, revenue is allocated to these rights and recognized when those future goods or services are transferred, or when the option expires. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as new contracts. The effect of modifications has been reflected when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The majority of the Company’s revenue from contracts with customers is recognized at a point in time, when the customer obtains control of the promised product, which is generally upon delivery and acceptance by the customer. These contracts may provide credits or incentives, which may be accounted for as variable consideration. Variable consideration is estimated at the most likely amount to predict the consideration to which the Company will be entitled, and only to the extent it is probable that a subsequent change in estimate will not result in a significant revenue reversal when estimating the amount of revenue to recognize. Variable consideration is treated as a change to the sales transaction price and based on an assessment of all information (i.e., historical, current and forecasted) that is reasonably available to the Company, and estimated at contract inception and updated at the end of each reporting period as additional information becomes available. Most of our contracts do not contain rights to return product; where this right does exist, it is evaluated as possible variable consideration. For contracts that are subject to the requirement to accrue anticipated losses, the company recognizes the entire anticipated loss in the period that the loss becomes probable. For contracts with customers in which the Company promises to provide a product to the customer that has no alternative use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the Company satisfies the performance obligation and recognizes revenue over time, using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material and overhead. The Company also recognizes revenue from service contracts (including service-type warranties) over time. The Company recognizes revenue over time during the term of the agreement as the customer is simultaneously receiving and consuming the benefits provided throughout the Company’s performance. The Company typically recognizes revenue on a straight-line basis throughout the contract period. On March 28, 2020, we had $369.4 million of remaining performance obligations, which we refer to as total backlog. We expect to recognize approximately $268.1 million of our remaining performance obligations as revenue in 2020. As a result of the COVID-19 pandemic, the Company received order cancellations from customers subsequent to the period ending March 28, 2020. Of the Company’s backlog at March 28, 2020 of $369.4 million, $3.0 million is no longer expected to be recognized as revenue as a result of order cancellations received subsequent to quarter end in the Aerospace segment. Costs in excess of billings includes unbilled amounts resulting from revenues under contracts with customers that are satisfied over time and when the cost-to-cost measurement method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs in excess of billings are classified as current assets, within Accounts Receivable, Net of Allowance for Doubtful Accounts on our Consolidated Condensed Balance Sheet. Billings in excess of cost includes billings in excess of revenue recognized as well as other elements of deferred revenue, which includes advanced payments, up-front payments, and progress billing payments. Billings in excess of cost are reported in our Consolidated Condensed Balance Sheet classified as current liabilities, within Customer Advance Payments and Deferred Revenue, and non-current liabilities, within Other Liabilities. To determine the revenue recognized in the period from the beginning balance of billings in excess of cost, the contract liability as of the beginning of the period is recognized as revenue on a contract-by-contract basis when the Company satisfies the performance obligation related to the individual contract. Once the beginning contract liability balance for an individual contract has been fully recognized as revenue, any additional payments received in the period are recognized as revenue once the related costs have been incurred. We recognized $8.7 million and $8.2 million during the three months ended March 28, 2020 and March 30, 2019, respectively, in revenues that were included in the contract liability balance at the beginning of the period. The Company's contract assets and contract liabilities consist primarily of costs and profits in excess of billings and billings in excess of cost and profits, respectively. The following table presents the beginning and ending balances of contract assets and contract liabilities during the three months ended March 28, 2020: (In thousands) Contract Assets Contract Liabilities Beginning Balance, January 1, 2020 $ 19,567 $ 38,758 Ending Balance, March 28, 2020 $ 17,127 $ 37,750 The following table presents our revenue disaggregated by Market Segments as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Aerospace Segment Commercial Transport $ 102,775 $ 141,778 Military 18,113 20,953 Business Jet 15,006 19,837 Other 5,176 5,933 Aerospace Total 141,070 188,501 Test Systems Segment Semiconductor 1,634 3,354 Aerospace & Defense 14,880 16,319 Test Systems Total 16,514 19,673 Total $ 157,584 $ 208,174 The following table presents our revenue disaggregated by Product Lines as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Aerospace Segment Electrical Power & Motion $ 69,456 $ 92,537 Lighting & Safety 37,922 48,605 Avionics 22,143 33,861 Systems Certification 3,331 1,618 Structures 3,042 5,947 Other 5,176 5,933 Aerospace Total 141,070 188,501 Test Systems 16,514 19,673 Total $ 157,584 $ 208,174 |
Inventories
Inventories | 3 Months Ended |
Mar. 28, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: ( In thousands ) March 28, 2020 December 31, 2019 Finished Goods $ 33,452 $ 33,434 Work in Progress 29,742 25,594 Raw Material 88,604 86,759 $ 151,798 $ 145,787 The Company has evaluated the carrying value of existing inventories and believe they are properly reflected at their lower of carrying value or net realizable value. Future changes in demand or other market developments could result in future inventory charges. The Company is actively managing inventories and aligning them to meet known current and future demand. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 28, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, Plant and Equipment consisted of the following: (In thousands) March 28, 2020 December 31, 2019 Land $ 9,795 $ 9,802 Buildings and Improvements 74,817 74,723 Machinery and Equipment 116,906 115,202 Construction in Progress 5,752 5,453 207,270 205,180 Less Accumulated Depreciation 95,748 92,681 $ 111,522 $ 112,499 Additionally, net Property, Plant and Equipment of $1.5 million are classified in Assets Held for Sale at December 31, 2019. Refer to Note 18. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following table summarizes acquired intangible assets as follows: March 28, 2020 December 31, 2019 (In thousands) Weighted Average Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 11 years $ 2,146 $ 1,826 $ 2,146 $ 1,804 Non-compete Agreement 4 years 11,318 8,363 11,318 7,696 Trade Names 10 years 11,433 6,797 11,438 6,550 Completed and Unpatented Technology 9 years 48,192 22,268 48,201 21,196 Customer Relationships 15 years 142,194 53,021 142,212 50,776 Total Intangible Assets 12 years $ 215,283 $ 92,275 $ 215,315 $ 88,022 All acquired intangible assets other than goodwill and one trade name are being amortized. Amortization expense for acquired intangibles is summarized as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Amortization Expense $ 4,265 $ 4,224 Amortization expense for acquired intangible assets expected for 2020 and for each of the next five years is summarized as follows: (In thousands) 2020 $ 17,198 2021 $ 15,404 2022 $ 14,973 2023 $ 13,938 2024 $ 12,917 2025 $ 10,994 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in the carrying amount of goodwill for the three months ended March 28, 2020: (In thousands) December 31, 2019 Impairment Charges Foreign Currency Translation March 28, 2020 Aerospace $ 123,038 $ (73,704) $ (269) $ 49,065 Test Systems 21,932 — — 21,932 $ 144,970 $ (73,704) $ (269) $ 70,997 Goodwill Impairment Testing The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In the first quarter of 2020, the World Health Organization characterized COVID-19 a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The United States, France, Canada and many other countries have issued formal stay-at-home orders to combat the pandemic, which require residents to stay home and non-essential businesses to temporarily close. Beginning in the first quarter of 2020 the pandemic negatively impacted the global economy and aerospace industry resulting in an abrupt and significant decrease of airline passenger travel. In response, the global airlines grounded a significant portion of their fleet and are likely to defer or cancel aircraft scheduled for delivery this year. Additionally, airlines have announced plans to reduce capital and discretionary spending to conserve cash in the immediate future. In turn, aircraft manufacturers and tier one suppliers have experienced a disruption in production and demand as their customers defer delivery of new aircraft, resulting in slowed or halted production at facilities throughout the world. Commercial airlines and manufacturers are focusing on conserving cash to preserve liquidity, which will have a negative impact on airframe and aftermarket sales as compared with pre-pandemic forecasts. Management considered these qualitative factors and the impact to each reporting unit’s revenue and earnings, and determined that it is more likely than not that the fair value of several reporting units is less than its carrying value. Therefore, we performed a quantitative test for all eight reporting units with goodwill as of March 28, 2020. Quantitative testing requires a comparison of the fair value of each reporting unit to its carrying value. We use the discounted cash flow method to estimate the fair value of our reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected sales growth rates, operating margins and cash flows, the terminal growth rate and the weighted average cost of capital. If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired and any loss must be measured. Accordingly, goodwill impairment is measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying value of goodwill. We determined that the estimated fair value of four of the eight reporting units with goodwill significantly exceeded their respective carrying values and therefore, did not result in a goodwill impairment. For the remaining four reporting units with goodwill, we determined that the estimated fair value was less than their respective carrying values. As a result, we recorded non-cash goodwill impairment charges of approximately $73.7 million in the Aerospace segment, reported within the Impairment Loss line of the Consolidated Condensed Statements of Operations in the three months ended March 28, 2020. We recognized full impairments of the goodwill of our Astronics Connectivity Systems and Certification (“ACSC”), PGA and Custom Control Concepts (“CCC”) reporting units, and a partial impairment of the goodwill of our PECO reporting unit. The goodwill remaining in our PECO reporting unit after the write off is $32.8 million. For the PECO reporting unit with a partial goodwill write-off, the Company performed sensitivity analyses, utilizing reasonably possible changes in the assumption for the discount rate and revenue growth rates to demonstrate the potential impacts to the estimated fair value. In isolation, a 100 basis point increase to the discount rate or a 100 basis point decrease to the normalized revenue growth rate, would result in incremental impairment charges of $9.3 million or $4.4 million, respectively. There is greater risk of future impairments in the reporting unit with partial impairment as any further deterioration in its performance compared to forecast, as well as any changes in economic forecasts and expected recovery in the aerospace industry, may require the Company to complete additional interim impairment tests in future quarters and could result in the reporting unit’s fair value again falling below carrying value in subsequent quarters. Further, if the composition of the reporting unit’s assets and liabilities were to change and result in an increase in the reporting unit’s carrying value, it could lead to additional impairment testing and further impairment losses. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 3 Months Ended |
Mar. 28, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Notes Payable | Long-term Debt and Notes Payable The Company's Fifth Amended and Restated Credit Agreement (the “Agreement”) provided for a $500 million revolving credit line with the option to increase the line by up to $150 million. The maturity date of the loans under the Agreement is February 16, 2023. At March 28, 2020, there was $333.0 million outstanding on the revolving credit facility and there remained $165.5 million available, net of outstanding letters of credit and bank guarantees. The credit facility allocates up to $20 million of the $500 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At March 28, 2020, outstanding letters of credit and bank guarantees totaled $1.5 million. The maximum permitted leverage ratio of funded debt, net of cash to Adjusted EBITDA (as defined in the Agreement) was 3.75 to 1, increasing to 4.50 to 1 for up to four fiscal quarters following the closing of an acquisition permitted under the Agreement, subject to limitations. The Company was in compliance with its financial covenant at March 28, 2020. The Company paid interest on the unpaid principal amount of the facility at a rate equal to one-, three- or six-month LIBOR plus between 1.00% and 1.50% based upon the Company’s leverage ratio. The Company also paid a commitment fee to the lenders in an amount equal to between 0.10% and 0.20% on the undrawn portion of the credit facility, based upon the Company’s leverage ratio. The COVID-19 pandemic has significantly impacted the global economy, and particularly the aerospace industry, resulting in reduced expectations of the Company’s future operating results. As a result, the Company was projected to exceed its maximum permitted leverage ratio in the fourth quarter of 2020. Accordingly, on May 4, 2020, the Company executed an amendment to the Agreement (the “amended facility”), which reduced the revolving credit line from $500 million to $375 million. There remains the option to increase the line by up to $150 million. The amended facility suspends the application of the leverage ratio up through and including the second quarter of 2021 (the “suspension period”). The maximum net leverage ratio will be 6.00 to 1 for the third quarter of 2021, 5.50 to 1 for the fourth quarter of 2021, 4.50 to 1 for the first quarter of 2022, and return to 3.75 to 1 for each quarter thereafter. During the suspension period, the amended facility requires the Company to maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $180 million at all times, and a minimum interest coverage ratio of 1.75x on a quarterly basis, except for the first quarter of 2021, which is set at 1.50x. During the suspension period, the Company will pay interest on the unpaid principal amount of the amended facility at a rate equal to one-, three- or six-month LIBOR (which shall be at least 1.00%) plus 2.25%. The Company will also pay a commitment fee to the lenders in an amount equal to 0.35% on the undrawn portion of the credit facility. After the suspension period, the Company will pay interest on the unpaid principal amount of the amended facility at a rate equal to one-, three- or six-month LIBOR (which shall be at least 1.00%) plus between 1.00% to 2.25% based upon the Company’s leverage ratio. The Company will also pay a commitment fee to the lenders in an amount equal to 0.10% to 0.35% on the undrawn portion of the credit facility, based upon the Company’s leverage ratio. The amended facility provides for the payment of a consent fee of 15 basis points of the commitment for each consenting lender. The amended facility also temporarily restricts certain activities, including acquisitions and share repurchases, and requires mandatory repayments during the suspension period when the Company’s cash balance exceeds $100 million. We expect to make a mandatory repayment in the second quarter of 2020 under this requirement. The Company’s obligations under the Credit Agreement as amended are jointly and severally guaranteed by each domestic subsidiary of the Company other than non-material subsidiaries. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets. In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the agent the option to declare all such amounts immediately due and payable. |
Product Warranties
Product Warranties | 3 Months Ended |
Mar. 28, 2020 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship typically over periods ranging from twelve Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Balance at Beginning of Period $ 7,660 $ 5,027 Warranties Divested or Acquired — (123) Warranties Issued 877 529 Warranties Settled (691) (588) Reassessed Warranty Exposure (724) (16) Balance at End of Period $ 7,122 $ 4,829 |
Leases
Leases | 3 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Leases | LeasesThe Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised. The weighted-average remaining term for the Company's operating and financing leases are approximately 7 years and 2 years, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 5.3%, respectively. The following is a summary of the Company's ROU assets and liabilities: (In thousands) March 28, 2020 December 31, 2019 Operating Leases: Operating Right-of-Use Assets, Gross $ 28,988 $ 28,788 Less Accumulated Right-of-Use Asset Impairment 1,710 1,019 Less Accumulated Amortization 5,260 4,167 Operating Right-of-Use Assets, Net $ 22,018 $ 23,602 Short-term Operating Lease Liabilities $ 4,687 $ 4,517 Long-term Operating Lease Liabilities 19,992 21,039 Operating Lease Liabilities $ 24,679 $ 25,556 Finance Leases: Finance Right-of-Use Assets, Gross $ 3,484 $ 3,484 Less Accumulated Amortization 1,275 1,020 Finance Right-of-Use Assets, Net — Included in Other Assets $ 2,209 $ 2,464 Short-term Finance Lease Liabilities — Included in Accrued Expenses and Other Current Liabilities $ 1,962 $ 1,922 Long-term Finance Lease Liabilities — Included in Other Liabilities 2,314 2,815 Finance Lease Liabilities $ 4,276 $ 4,737 The following is a summary of the Company's total lease costs: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Finance Lease Cost: Amortization of ROU Assets $ 255 $ 255 Interest on Lease Liabilities 63 86 Total Finance Lease Cost $ 318 $ 341 Operating Lease Cost $ 1,448 $ 1,205 Right-of-Use Asset Impairment 691 — Variable Lease Cost 272 370 Short-term Lease Cost (excluding month-to-month) 67 47 Less Sublease and Rental (Income) Expense (331) (212) Total Operating Lease Cost $ 2,147 $ 1,410 Total Net Lease Cost $ 2,465 $ 1,751 The following is a summary of the Company's maturity of lease liabilities: (In thousands) Operating Leases Finance Leases 2020 $ 3,933 $ 1,605 2021 5,470 2,181 2022 5,278 743 2023 3,904 — 2024 2,837 — Thereafter 5,941 — Total Lease Payments $ 27,363 $ 4,529 Less: Interest 2,684 253 Total Lease Liability $ 24,679 $ 4,276 |
Leases | LeasesThe Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised. The weighted-average remaining term for the Company's operating and financing leases are approximately 7 years and 2 years, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 5.3%, respectively. The following is a summary of the Company's ROU assets and liabilities: (In thousands) March 28, 2020 December 31, 2019 Operating Leases: Operating Right-of-Use Assets, Gross $ 28,988 $ 28,788 Less Accumulated Right-of-Use Asset Impairment 1,710 1,019 Less Accumulated Amortization 5,260 4,167 Operating Right-of-Use Assets, Net $ 22,018 $ 23,602 Short-term Operating Lease Liabilities $ 4,687 $ 4,517 Long-term Operating Lease Liabilities 19,992 21,039 Operating Lease Liabilities $ 24,679 $ 25,556 Finance Leases: Finance Right-of-Use Assets, Gross $ 3,484 $ 3,484 Less Accumulated Amortization 1,275 1,020 Finance Right-of-Use Assets, Net — Included in Other Assets $ 2,209 $ 2,464 Short-term Finance Lease Liabilities — Included in Accrued Expenses and Other Current Liabilities $ 1,962 $ 1,922 Long-term Finance Lease Liabilities — Included in Other Liabilities 2,314 2,815 Finance Lease Liabilities $ 4,276 $ 4,737 The following is a summary of the Company's total lease costs: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Finance Lease Cost: Amortization of ROU Assets $ 255 $ 255 Interest on Lease Liabilities 63 86 Total Finance Lease Cost $ 318 $ 341 Operating Lease Cost $ 1,448 $ 1,205 Right-of-Use Asset Impairment 691 — Variable Lease Cost 272 370 Short-term Lease Cost (excluding month-to-month) 67 47 Less Sublease and Rental (Income) Expense (331) (212) Total Operating Lease Cost $ 2,147 $ 1,410 Total Net Lease Cost $ 2,465 $ 1,751 The following is a summary of the Company's maturity of lease liabilities: (In thousands) Operating Leases Finance Leases 2020 $ 3,933 $ 1,605 2021 5,470 2,181 2022 5,278 743 2023 3,904 — 2024 2,837 — Thereafter 5,941 — Total Lease Payments $ 27,363 $ 4,529 Less: Interest 2,684 253 Total Lease Liability $ 24,679 $ 4,276 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates were approximately 3.3% and 22.6% for the three months ended March 28, 2020 and March 30, 2019, respectively. The 2020 tax rate was impacted by permanently non-deductible goodwill impairments and a Federal valuation allowance recorded during the three months ended March 28, 2020 of approximately $7.0 million. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the economic uncertainty resulting from the COVID-19 pandemic. The CARES Act includes many measures to assist companies, including temporary changes to income and non-income based laws, some of which were enacted as part of the Tax Cuts and Jobs Act of 2017 (“TCJA”). Some of the key changes include eliminating the 80% of taxable income limitation by allowing corporate entities to fully utilize net operating losses (“NOL”) to offset taxable income in 2018, 2019 and 2020, allowing NOLs originating in 2018, 2019 and 2020 to be carried back five years and retroactively clarifying the immediate recovery of qualified improvement property costs rather than over a 39-year recovery period. During the three months ended March 28, 2020, the Company recorded a $0.7 million benefit relating to the NOL carryback provisions and the technical correction for qualified improvement property provided for in the CARES Act. The Company will continue to monitor additional guidance issued and assess the impact that various provisions will have on its business. As a result of the COVID-19 pandemic and its adverse effects on the global economy and aerospace industry that began to take shape in the first quarter of fiscal 2020, the Company is now forecasting to generate a taxable loss in 2020 which can be carried back under the CARES Act to recover previously paid income taxes. After consideration of deferred tax liabilities that reverse in 2021 and beyond, the Company must rely on future taxable income in 2021 and beyond for purposes of asserting that the Company’s remaining U.S. Federal deferred tax assets are realizable on a more-likely-than-not basis as required under ASC 740. Losses in recent periods and projected losses, combined with the significant uncertainty brought about by the COVID-19 pandemic, is collectively considered significant negative evidence under ASC 740 when assessing whether an entity can use projected income as a basis for concluding that deferred tax assets are realizable on a more-likely-than-not basis. Accordingly, during the three months ended March 28, 2020, the Company determined that a portion of its deferred tax assets are not expected to be realizable in the future. As a result, the Company recorded a partial valuation allowance of approximately $7.0 million during the three months ended March 28, 2020 against its U.S. Federal deferred tax assets. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and diluted weighted-average shares outstanding are as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Weighted Average Shares - Basic 30,814 32,619 Net Effect of Dilutive Stock Options — 595 Weighted Average Shares - Diluted 30,814 33,214 Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive. The number of common shares covered by out-of-the-money stock options was approximately 785,000 shares as of |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Buyback Program The Company’s Board of Directors from time to time authorizes the repurchase of common stock, which allows the Company to purchase shares of its common stock in accordance with applicable securities laws on the open market or through privately negotiated transactions. Most recently, on September 17, 2019, the Company’s Board of Directors authorized a repurchase of up to $50 million. Approximately 282,000 shares were repurchased in the first quarter of 2020 at a cost of $7.7 million before the 10b5-1 plan associated with the share repurchase program was terminated on February 3, 2020. Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: (In thousands) March 28, 2020 December 31, 2019 Foreign Currency Translation Adjustments $ (9,346) $ (7,042) Retirement Liability Adjustment – Before Tax (10,596) (10,868) Tax Benefit of Retirement Liability Adjustment 2,225 2,282 Retirement Liability Adjustment – After Tax (8,371) (8,586) Accumulated Other Comprehensive Loss $ (17,717) $ (15,628) The components of other comprehensive (loss) income are as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Foreign Currency Translation Adjustments $ (2,304) $ (270) Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of Prior Service Cost 101 101 Amortization of Net Actuarial Losses 171 85 Tax Benefit (57) (36) Retirement Liability Adjustment 215 150 Other Comprehensive Loss $ (2,089) $ (120) |
Supplemental Retirement Plan an
Supplemental Retirement Plan and Related Post Retirement Benefits | 3 Months Ended |
Mar. 28, 2020 | |
Retirement Benefits [Abstract] | |
Supplemental Retirement Plan and Related Post Retirement Benefits | Supplemental Retirement Plan and Related Post Retirement Benefits The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain executive officers. The following table sets forth information regarding the net periodic pension cost for the plans. Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Service Cost $ 55 $ 45 Interest Cost 209 229 Amortization of Prior Service Cost 97 97 Amortization of Net Actuarial Losses 162 75 Net Periodic Cost $ 523 $ 446 Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The following table sets forth information regarding the net periodic cost recognized for those benefits: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Service Cost $ 4 $ 3 Interest Cost 9 12 Amortization of Prior Service Cost 4 4 Amortization of Net Actuarial Losses 9 10 Net Periodic Cost $ 26 $ 29 |
Sales to Major Customers
Sales to Major Customers | 3 Months Ended |
Mar. 28, 2020 | |
Risks and Uncertainties [Abstract] | |
Sales to Major Customers | Sales to Major Customers The Company has a significant concentration of business with two major customers, each in excess of 10% of consolidated sales. The loss of either of these customers would significantly, negatively impact our sales and earnings. Sales to these two customers represented 17% and 9% of consolidated sales for the three months ended March 28, 2020. Sales to these customers were primarily in the Aerospace segment. Accounts receivable from these customers at March 28, 2020 was approximately $30.1 million. Sales to these two customers represented 13% and 14% of consolidated sales for the three months ended March 30, 2019. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings On December 29, 2010, Lufthansa Technik AG (“Lufthansa”) filed a Statement of Claim in the Regional State Court of Mannheim, Germany. Lufthansa’s claim asserted that a subsidiary of the Company, AES, sold, marketed, and brought into use in Germany a power supply system that infringes upon a German patent held by Lufthansa. Lufthansa sought an order requiring AES to stop selling and marketing the allegedly infringing power supply system, a recall of allegedly infringing products sold to commercial customers in Germany since November 26, 2003, and compensation for damages related to direct sales of the allegedly infringing power supply system in Germany (referred to as “direct sales”). The claim did not specify an estimate of damages and a related damages claim is being pursued by Lufthansa in separate court proceedings in an action filed in July 2017, as further discussed below. In February 2015, the Regional State Court of Mannheim, Germany rendered its decision that the patent was infringed. The judgment did not require AES to recall products that are already installed in aircraft or had been sold to other end users. On July 15, 2015, Lufthansa advised AES of their intention to enforce the accounting provisions of the decision, which required AES to provide certain financial information regarding direct sales of the infringing product in Germany to enable Lufthansa to make an estimate of requested damages. The Company appealed to the Higher Regional Court of Karlsruhe. On November 15, 2016, the Higher Regional Court of Karlsruhe issued its ruling and upheld the lower court’s decision. The Company submitted a petition to grant AES leave for appeal to the German Federal Supreme Court. On April 18, 2018, the German Federal Supreme Court granted Astronics’ petition in part, namely with respect to the part concerning the amount of damages. On January 8, 2019, the German Federal Supreme Court held the hearing on the appeal. By judgment of March 26, 2019, the German Federal Supreme Court dismissed AES's appeal. With this decision, the above-mentioned proceedings are complete. In July 2017, Lufthansa filed an action in the Regional State Court of Mannheim for payment of damages caused by the court’s decision that AES infringed the patent, specifically related to direct sales of the product into Germany (associated with the original December 2010 action discussed above). In this action, which was served to AES on April 11, 2018, Lufthansa claimed payment of approximately $6.2 million plus interest. An oral hearing was held on September 13, 2019. A first instance decision in this matter was handed down on December 6, 2019. According to this ruling, Lufthansa was awarded damages in the amount of approximately $3.2 million plus interest. Inclusive of interest, this equates to approximately $4.5 million through December 31, 2019. Interest will continue to accrue at a statutory rate until final payment to Lufthansa. In February 2020, and again in April 2020, we received notice that Lufthansa’s intention is to provide a security and to enforce payment on the first instance judgment. If Lufthansa provides a security deposit or a bank guarantee in a sufficient amount, as they have stated is their intention, the Company will be required to remit the payment. Based on this information, we believe payment for damages and interest on the direct sales claim will be required in 2020. AES has appealed this decision and the appeal is currently pending before the Higher Regional Court of Karlsruhe. If the first instance judgment is later reversed on appeal, the Company could reclaim any amounts that were previously paid to Lufthansa as far as the payments exceed the amount awarded by the appellate court, but there can be no assurances that we will be successful on such appeal. Prior to 2019, the Company had accrued $1.0 million related to this matter. As a result of the judgment on direct sales into Germany, the Company has reflected an incremental reserve of $3.5 million in its December 31, 2019 financial statements related to this matter, for a total reserve of $4.5 million. Interest accrues at a rate of 5% above the European Central Bank rate until final payment to Lufthansa. Inclusive of accrued interest, the reserve for the direct claim is $4.7 million at March 28, 2020. On December 29, 2017, Lufthansa filed another infringement action against AES in the Regional State Court of Mannheim claiming that sales by AES to its international customers have infringed Lufthansa's patent if AES's customers later shipped the products to Germany (referred to as “indirect sales”). This action, therefore, addresses sales other than those covered by the action filed on December 29, 2010, discussed above. In this action, served on April 11, 2018, Lufthansa sought an order obliging AES to provide information and accounting and a finding that AES owes damages for the attacked indirect sales. Moreover, Lufthansa sought accounting and a finding that the sale of individual components of the EmPower system – either directly to Germany or to international customers if these customers later shipped these products to Germany – constitutes an indirect patent infringement of Lufthansa's patent in Germany. In addition, Lufthansa sought an order obliging AES to confirm by an affidavit that the accounting provided in September 2015 was accurate and a finding that AES is also liable for damages for the sale of modified products if the modification of the products was not communicated to all subsequent buyers of the products. No amount of claimed damages has been specified by Lufthansa. An oral hearing in this matter was held on September 13, 2019, as part of the oral hearing for the direct sales damages claim discussed above. A first instance decision in this matter was handed down on December 6, 2019. According to this judgment, Lufthansa's claims were granted in part. The court granted Lufthansa's claims for a finding that indirect sales (as defined above) by AES to international customers constitute a patent infringement under the conditions specified in the judgment and that the sale of components of the EmPower system to Germany constitutes an indirect patent infringement. Moreover, the Court granted Lufthansa's request for an affidavit confirming that the accounting provided in September 2015 was accurate. The Court rejected Lufthansa's request for a finding that AES is also liable for damages for the sale of modified products as inadmissible. This is relevant, as it provides that once AES modified the system to remove the infringing feature, any subsequent outlets are deemed not to be infringing outlets for purposes of calculating damages. AES and Lufthansa both appealed this decision and the appeal is currently pending before the Higher Regional Court of Karlsruhe. In its appeal, Lufthansa extended its action by requesting an additional finding that AES shall be held liable for all damages that Lufthansa incurred due to an alleged incorrect accounting of its past sales. No amount was quantified in Lufthansa's additional motion. The appeal is not likely to be settled in 2020. If the decision is confirmed on appeal, AES would be responsible for payment of damages for indirect sales of patent-infringing EmPower in-seat power supply systems in the period from December 29, 2007 to May 22, 2018. AES modified the outlet units at the end of 2014 and substantially all of the modified outlet units sold from 2015 do not infringe the patent of Lufthansa. Since only sales of systems comprising patent-infringing outlet units trigger damages claims, the period for which AES is liable for damages in connection with indirect sales substantially finished at the end of 2014. After the accounting, Lufthansa is expected to enforce its claim for damages in separate court proceedings. These proceedings would probably be tried before the Mannheim Court again, which makes it probable that the Mannheim court will determine the damages for the indirect sales on the basis of the same principles as in the direct sales proceedings (unless the latter ruling of the Mannheim court is reversed on appeal). Based on the information available currently, we estimate that the resulting damages would be approximately $11.6 million plus approximately $4.5 million of accrued interest at the end of 2019, for a total of approximately $16.1 million at December 31, 2019. Similar to the direct sales claim, interest will accrue at a rate of 5% above the European Central Bank rate until final payment to Lufthansa. Inclusive of accrued interest, the reserve for the indirect claim is approximately $16.2 million at March 28, 2020. Based upon the determination of the damages in the direct sales claim discussed above, in the March 28, 2020 consolidated financial statements, we have reflected a total accrual (inclusive of interest through December 31, 2019) of $4.7 million related to the direct sales claim, and $16.2 million related to the indirect sales claim as management’s best estimate of the total exposure related to these matters that is probable and that can be reasonably estimated at this time. Interest accrued for the three months ended March 28, 2020 was approximately $0.3 million and is recorded within Selling, General and Administrative Expense in the Company’s Consolidated Statement of Operations. We estimate that payment for the damages and related interest of the direct sales claim will be paid before December 31, 2020, therefore the liability related to this matter, totaling $4.7 million, is classified within Other Accrued Expenses (current) in the Consolidated Balance Sheet at December 31, 2019. In connection with the indirect sales claims, we currently believe it is unlikely that the appeals process will be completed and the damages and related interest will be paid before December 31, 2020. Therefore the liability related to this matter, totaling $16.2 million, is classified within Other Liabilities (non-current) in the Consolidated Balance Sheet at March 28, 2020. In December 2017, Lufthansa filed patent infringement cases in the United Kingdom (“UK”) and in France against AES. The Lufthansa patent expired in May 2018. In those cases, Lufthansa accuses AES of having manufactured, used, sold and offered for sale a power supply system, and offered and supplied parts for a power supply system that infringed upon a Lufthansa patent in those respective countries. In the UK matter, LHT has also brought proceeding against two of AES’s customers in relation to acts done by them with AES supplied parts and a combined trial has been scheduled for June 2020 to address the issues of infringement and validity. The France and UK claims are separate and apart from the claims in Germany and validity and infringement of the Lufthansa patent will first need to be determined by the courts in these countries, whose laws differ from those in Germany. Also the principles of calculating damages in German patent infringement proceedings differ substantially from the calculation methods in the UK and France. Therefore the Company has assessed this separate from the German claims. However, it is reasonably possible that additional damages and interest could be incurred if the courts in France and the UK were to rule in favor of Lufthansa, but at this time we cannot reasonably estimate the range of loss. As loss exposure is neither probable nor estimable at this time, the Company has not recorded any liability with respect to these matters as of March 28, 2020. On November 26, 2014, Lufthansa filed a complaint in the United States District for the Western District of Washington. Lufthansa’s complaint in that action alleges that AES manufactures, uses, sells and offers for sale a power supply system that infringes upon a U.S. patent held by Lufthansa. The patent at issue in the U.S. action is based on technology similar to that involved in the German action. On April 25, 2016, the Court issued its ruling on claim construction, holding that the sole independent claim in the patent is indefinite, rendering all claims in the patent indefinite. Based on this ruling, AES filed a motion for summary judgment on the grounds that the Court’s ruling that the patent is indefinite renders the patent invalid and unenforceable. On July 20, 2016, the U.S. District Court granted the motion for summary judgment and issued an order dismissing all claims against AES with prejudice. Lufthansa appealed the District Court's decision to the United States Court of Appeals for the Federal Circuit. On October 19, 2017, the Federal Circuit affirmed the district court’s decision, holding that the sole independent claim of the patent is indefinite, rending all claims on the patent indefinite. Lufthansa did not file a petition for en banc rehearing or petition the U.S. Supreme Court for a writ of certiorari. Therefore, there is no longer a risk of exposure from that lawsuit. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Below are the sales and operating profit by segment for the three months ended March 28, 2020 and March 30, 2019 and a reconciliation of segment operating profit to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Sales Aerospace $ 141,137 $ 188,501 Less Intersegment Sales (67) — Total Aerospace Sales 141,070 188,501 Test Systems 16,553 19,724 Less Intersegment Sales (39) (51) Total Test Systems Sales 16,514 19,673 Total Consolidated Sales $ 157,584 $ 208,174 Operating (Loss) Profit and Margins Aerospace $ (63,145) $ 25,768 (44.8) % 13.7 % Test Systems 722 2,185 4.4 % 11.1 % Total Operating (Loss) Profit (62,423) 27,953 (39.6) % 13.4 % Additions/Deductions from Operating (Loss) Profit Gain on Sale of Business — 80,133 Interest Expense, Net of Interest Income 1,333 1,804 Corporate Expenses and Other 5,521 5,287 (Loss) Income Before Income Taxes $ (69,277) $ 100,995 Total Assets: (In thousands) March 28, 2020 December 31, 2019 Aerospace $ 545,378 $ 629,371 Test Systems 104,866 110,994 Corporate 199,782 42,351 Total Assets $ 850,026 $ 782,716 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 28, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability. The Company follows a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. On a Recurring Basis: A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The terms of the Diagnosys acquisition allow for a potential earn-out of up to an additional $13.0 million over the three years post-acquisition based on achievement of new order levels of over $72.0 million during that period. The fair value assigned to the earn-out is determined using the real options method, which requires Level 3 inputs such as new order forecasts, discount rate, volatility factors, and other market variables to assess the probability of Diagnosys achieving certain order levels over the period. There were no other financial assets or liabilities carried at fair value measured on a recurring basis at December 31, 2019 or March 28, 2020. On a Non-recurring Basis: The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In accordance with the provisions of ASC Topic 350, I ntangibles – Goodwill and Other , the Company estimates the fair value of reporting units, utilizing unobservable Level 3 inputs. Level 3 inputs require significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature. The inputs underlying the fair value measurement of the reporting unit under the step-one analysis of the quantitative goodwill impairment test are classified as Level 3 inputs. As further discussed in Note 6, on March 28, 2020, we performed interim quantitative assessments for the reporting units which had goodwill. Based on our quantitative assessment, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $73.7 million in the March 28, 2020 within the Impairment Loss line in the Consolidated Condensed Statement of Operations. The impairment loss was calculated as the difference between the fair value of the goodwill reporting unit (which was calculated using level 3 inputs) and the carrying value of the unit. Long-lived assets are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows of the asset or asset group (which are Level 3 inputs) with the asset of asset group’s carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to ROU assets of approximately $0.7 million incurred in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020. The Freedom and Diagnosys intangible assets were valued using a discounted cash flow methodology, as of their respective acquisitions dates, and are classified as Level 3 inputs. |
Acquisition and Divestiture Act
Acquisition and Divestiture Activities | 3 Months Ended |
Mar. 28, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Acquisitions and Divestiture Activities | Acquisition and Divestiture Activities Acquisitions Diagnosys Inc. and its affiliates On October 4, 2019, the Company acquired the stock of the primary operating subsidiaries as well as certain other assets from mass transit and defense market test solution provider, Diagnosys Test Systems Limited for $7.0 million in cash, plus an earn-out estimated at a fair value of $2.5 million. The terms of the acquisition allow for a potential earn-out of up to an additional $13.0 million over the three years post-acquisition based on achievement of new order levels of over $72.0 million during that period. The acquired business has operations in Westford, Massachusetts as well as Ferndown, England, and an engineering center of excellence in Bangalore, India. Diagnosys is included in our Test Systems segment. Diagnosys is a developer and manufacturer of comprehensive automated test equipment providing test, support, and repair of high value electronics, electro-mechanical, pneumatic and printed circuit boards focused on the global mass transit and defense markets. The purchase price allocation for this acquisition has not yet been finalized. Purchased intangible assets and goodwill are not expected to be deductible for tax purposes. This transaction was not considered material to the Company’s financial position or results of operations. Freedom Communication Technologies, Inc. On July 1, 2019, the Company acquired all of the issued and outstanding capital stock of Freedom. Freedom, located in Kilgore, Texas, is a leader in wireless communication testing, primarily for the civil land mobile radio market. Freedom is included in our Test Systems segment. The total consideration for the transaction was $21.8 million, net of $0.6 million in cash acquired. The purchase price allocation for this acquisition has not yet been finalized. Purchased intangible assets and goodwill are not expected to be deductible for tax purpose. This transaction was not considered material to the Company’s financial position or results of operations. Divestitures Semiconductor Test Business On February 13, 2019, the Company completed a divestiture of its semiconductor business within the Test Systems segment. The business was not core to the future of the Test Systems segment. The total proceeds of the divestiture amounted to $103.8 million. The Company recorded a pre-tax gain on the sale of $80.1 million in the first quarter of 2019. The income tax expense relating to the gain was $19.7 million. The transaction also included two elements of contingent earnouts. The First Earnout is calculated based on a multiple of all future sales of existing and certain future derivative products to existing and future customers in each annual period from 2019 through 2022. The First Earnout may not exceed $35.0 million in total. The Second Earnout is calculated based on a multiple of future sales related to an existing product and program with an existing customer exceeding an annual threshold for each annual period from 2019 through 2022. The Second Earnout is not capped. For the Second Earnout, if the applicable sales in an annual period do not exceed the annual threshold, no amounts will be paid relative to such annual period; the sales in such annual period do not carry over to the next annual period. Due to the degree of uncertainty associated with estimating the future sales levels of the divested business and its underlying programs, and the lack of reliable predictive market information, the Company will recognize such earnout proceeds, if received, as additional gain on sale when such proceeds are realized or realizable. No amounts were payable to the Company under the First Earnout for the year ending December 31, 2019. Airfield Lighting Product Line On July 12, 2019, the Company sold intellectual property and certain assets with its Airfield Lighting product line for $1.0 million in cash. The Airfield Lighting product line, part of the Aerospace segment, was not core to the business and represented less than 1% of revenue. The Company recorded a pre-tax loss on the sale of approximately $1.3 million during the third quarter of 2019. Other Disposal Activity As of December 31, 2019, the Company had agreed to sell certain facilities within the Aerospace segment. Accordingly, the property, plant and equipment assets associated with these facilities of $1.5 million was classified as held for sale in the Consolidated Condensed Balance Sheet at December 31, 2019. The sale was completed in the first quarter of 2020. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 28, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges In the fourth quarter of 2019, in an effort to reduce the significant operating losses at our AeroSat business, we initiated a restructuring plan to reduce costs and minimize losses of our AeroSat antenna business. The plan narrows the initiatives for the AeroSat business to focus primarily on near-term opportunities pertaining to business jet connectivity. The plan has a downsized manufacturing operation remaining in New Hampshire, with significantly reduced personnel and operating expenses. Impairments and restructuring charges were recorded in 2019 as a result of the restructuring plan. The Company incurred $0.3 million in additional restructuring charges associated with severance during the three months ended March 28, 2020. The following table reconciles the beginning and ending liability for restructuring charges relating to the Company’s restructuring plan described above: Restructuring Charges in the three months ended March 28, 2020 (In thousands) Accrual as of December 31, 2019 Cost of Products Sold Selling, General and Administrative Cash Paid Accrual as of March 28, 2020 Accrued Expenses and Other Current Liabilities $ 613 $ 60 $ 255 $ (298) $ 630 Other Liabilities 4,577 — — — 4,577 $ 5,190 $ 60 $ 255 $ (298) $ 5,207 The charge to Accrued Expenses and Other Current Liabilities is comprised of employee termination benefits expected to be paid in 2020 as well as the current portions of payments to be made under non-cancelable inventory purchase commitments. The charge to Other Liabilities represents the non-current portions of payments to be made under non-cancelable inventory purchase commitments. The non-cancelable purchase commitments are for inventory in the future which is not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 28, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn response to the global COVID-19 pandemic, we have implemented actions to maintain our financial health and liquidity, as discussed in detail in our Form 8-K’s filed on March 31, 2020 and May 6, 2020. In addition to these measures, we amended our revolving credit facility on May 4, 2020, as further described in Note 7. We are also monitoring the impacts of COVID-19 on the fair value of assets. We do not currently anticipate any material impairments on assets as a result of COVID-19 beyond the goodwill impairment charges previously discussed in Note 6. However, should future changes in sales, earnings and cash flows differ significantly from our expectations, long-lived assets to be held and used and goodwill could become impaired in the future. As a result of the COVID-19 pandemic, the Company received order cancellations from customers subsequent to the period ending March 28, 2020. Of the Company’s backlog at March 28, 2020 of $369.4 million, $3.0 million is no longer expected to be recognized as revenue as a result of order cancellations received subsequent to quarter end in the Aerospace segment. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 28, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. |
Operating Results | Operating Results The results of operations for any interim period are not necessarily indicative of results for the full year. In addition, the COVID-19 pandemic could increase the volatility we experience in our financial results in future interim and annual periods. Operating results for the three months ended March 28, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. |
Trade Accounts Receivable and Contract Assets | Trade Accounts Receivable and Contract AssetsThe allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as the age of the receivable balances, historical experience, credit quality, current economic conditions, and reasonable and supportable forecasts of future economic conditions that may affect a customer’s ability to pay. |
Cost of Products Sold, Engineering and Development, Interest, and Selling, General and Administrative Expenses | Cost of Products Sold, Engineering and Development, Interest, and Selling, General and Administrative ExpensesCost of products sold includes the costs to manufacture products such as direct materials and labor and manufacturing overhead as well as all engineering and development costs. The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. These costs are expensed when incurred and included in cost of products sold. |
Selling, General and Administrative Expenses | Selling, general and administrative expenses include costs primarily related to our sales and marketing departments and administrative departments. |
Goodwill Impairment | Goodwill Impairment The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. |
Valuation of Long-Lived Assets | Valuation of Long-Lived AssetsLong-lived assets are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. |
Newly Adopted and Recent Accounting Pronouncements | Newly Adopted and Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Standard Description Financial Statement Effect or Other Significant Matters ASU No. 2016-13 The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires a Company to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the standard are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The amendment requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance as of January 1, 2020. The standard changed the way entities recognize impairment of most financial assets. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. The adoption of this standard had an immaterial impact on our condensed consolidated financial statements. Date of adoption: Q1 2020 ASU No. 2018-13 The standard removes the disclosure requirements for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The provisions of this ASU are effective for years beginning after December 15, 2019, with early adoption permitted. This ASU did not have a significant impact on our consolidated financial statements, as it only includes changes to disclosure requirements. Date of adoption: Q1 2020 Recent Accounting Pronouncements Not Yet Adopted Standard Description Financial Statement Effect or Other Significant Matters ASU No. 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) The standard includes updates to the disclosure requirements for defined benefit plans including several additions, deletions and modifications to the disclosure requirements. The provisions of this ASU are effective for years beginning after December 15, 2020, with early adoption permitted. This ASU does not have a significant impact on our consolidated financial statements, as it only includes changes to disclosure requirements. Planned date of adoption: Q1 2021 ASU No. 2019-12 Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance. The amendments of this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued, with the amendments to be applied on a respective, modified retrospective or prospective basis, depending on the specific amendment. The Company is currently evaluating the requirements of this standard. The standard is not expected to have a material impact on the Company's financial statements. Planned date of adoption: Q1 2021 ASU No. 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides the following optional expedients: simplify accounting analyses under current U.S. GAAP for contract modifications, simplify the assessment of hedge effectiveness, allow hedging relationships affected by reference rate reform to continue and allow a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. After 2021, it is unclear whether banks will continue to provide LIBOR submissions to the administrator of LIBOR, and no consensus currently exists as to what benchmark rate or rates may become accepted alternatives to LIBOR. The Company is currently evaluating the impact of adopting this guidance. |
Fair Value | Fair Value A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability. The Company follows a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Assets and Liabilities | The following table presents the beginning and ending balances of contract assets and contract liabilities during the three months ended March 28, 2020: (In thousands) Contract Assets Contract Liabilities Beginning Balance, January 1, 2020 $ 19,567 $ 38,758 Ending Balance, March 28, 2020 $ 17,127 $ 37,750 |
Disaggregation of Revenue | The following table presents our revenue disaggregated by Market Segments as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Aerospace Segment Commercial Transport $ 102,775 $ 141,778 Military 18,113 20,953 Business Jet 15,006 19,837 Other 5,176 5,933 Aerospace Total 141,070 188,501 Test Systems Segment Semiconductor 1,634 3,354 Aerospace & Defense 14,880 16,319 Test Systems Total 16,514 19,673 Total $ 157,584 $ 208,174 The following table presents our revenue disaggregated by Product Lines as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Aerospace Segment Electrical Power & Motion $ 69,456 $ 92,537 Lighting & Safety 37,922 48,605 Avionics 22,143 33,861 Systems Certification 3,331 1,618 Structures 3,042 5,947 Other 5,176 5,933 Aerospace Total 141,070 188,501 Test Systems 16,514 19,673 Total $ 157,584 $ 208,174 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following: ( In thousands ) March 28, 2020 December 31, 2019 Finished Goods $ 33,452 $ 33,434 Work in Progress 29,742 25,594 Raw Material 88,604 86,759 $ 151,798 $ 145,787 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, Plant and Equipment consisted of the following: (In thousands) March 28, 2020 December 31, 2019 Land $ 9,795 $ 9,802 Buildings and Improvements 74,817 74,723 Machinery and Equipment 116,906 115,202 Construction in Progress 5,752 5,453 207,270 205,180 Less Accumulated Depreciation 95,748 92,681 $ 111,522 $ 112,499 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Acquired Intangible Assets | The following table summarizes acquired intangible assets as follows: March 28, 2020 December 31, 2019 (In thousands) Weighted Average Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 11 years $ 2,146 $ 1,826 $ 2,146 $ 1,804 Non-compete Agreement 4 years 11,318 8,363 11,318 7,696 Trade Names 10 years 11,433 6,797 11,438 6,550 Completed and Unpatented Technology 9 years 48,192 22,268 48,201 21,196 Customer Relationships 15 years 142,194 53,021 142,212 50,776 Total Intangible Assets 12 years $ 215,283 $ 92,275 $ 215,315 $ 88,022 |
Summary of Amortization Expense for Acquired Intangibles | All acquired intangible assets other than goodwill and one trade name are being amortized. Amortization expense for acquired intangibles is summarized as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Amortization Expense $ 4,265 $ 4,224 |
Summary of Amortization Expense for Intangible Assets for Each of Next Five Years | Amortization expense for acquired intangible assets expected for 2020 and for each of the next five years is summarized as follows: (In thousands) 2020 $ 17,198 2021 $ 15,404 2022 $ 14,973 2023 $ 13,938 2024 $ 12,917 2025 $ 10,994 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the three months ended March 28, 2020: (In thousands) December 31, 2019 Impairment Charges Foreign Currency Translation March 28, 2020 Aerospace $ 123,038 $ (73,704) $ (269) $ 49,065 Test Systems 21,932 — — 21,932 $ 144,970 $ (73,704) $ (269) $ 70,997 |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Product Warranties Disclosures [Abstract] | |
Summary of Activity in Warranty Accrual | The Company determines warranty reserves needed by product line based on experience and current facts and circumstances. Activity in the warranty accrual is summarized as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Balance at Beginning of Period $ 7,660 $ 5,027 Warranties Divested or Acquired — (123) Warranties Issued 877 529 Warranties Settled (691) (588) Reassessed Warranty Exposure (724) (16) Balance at End of Period $ 7,122 $ 4,829 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Summary of ROU Assets and Liabilities | The following is a summary of the Company's ROU assets and liabilities: (In thousands) March 28, 2020 December 31, 2019 Operating Leases: Operating Right-of-Use Assets, Gross $ 28,988 $ 28,788 Less Accumulated Right-of-Use Asset Impairment 1,710 1,019 Less Accumulated Amortization 5,260 4,167 Operating Right-of-Use Assets, Net $ 22,018 $ 23,602 Short-term Operating Lease Liabilities $ 4,687 $ 4,517 Long-term Operating Lease Liabilities 19,992 21,039 Operating Lease Liabilities $ 24,679 $ 25,556 Finance Leases: Finance Right-of-Use Assets, Gross $ 3,484 $ 3,484 Less Accumulated Amortization 1,275 1,020 Finance Right-of-Use Assets, Net — Included in Other Assets $ 2,209 $ 2,464 Short-term Finance Lease Liabilities — Included in Accrued Expenses and Other Current Liabilities $ 1,962 $ 1,922 Long-term Finance Lease Liabilities — Included in Other Liabilities 2,314 2,815 Finance Lease Liabilities $ 4,276 $ 4,737 |
Summary of Lease Costs and Cash Paid | The following is a summary of the Company's total lease costs: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Finance Lease Cost: Amortization of ROU Assets $ 255 $ 255 Interest on Lease Liabilities 63 86 Total Finance Lease Cost $ 318 $ 341 Operating Lease Cost $ 1,448 $ 1,205 Right-of-Use Asset Impairment 691 — Variable Lease Cost 272 370 Short-term Lease Cost (excluding month-to-month) 67 47 Less Sublease and Rental (Income) Expense (331) (212) Total Operating Lease Cost $ 2,147 $ 1,410 Total Net Lease Cost $ 2,465 $ 1,751 |
Summary of Maturity of Lease Liabilities, Operating Leases | The following is a summary of the Company's maturity of lease liabilities: (In thousands) Operating Leases Finance Leases 2020 $ 3,933 $ 1,605 2021 5,470 2,181 2022 5,278 743 2023 3,904 — 2024 2,837 — Thereafter 5,941 — Total Lease Payments $ 27,363 $ 4,529 Less: Interest 2,684 253 Total Lease Liability $ 24,679 $ 4,276 |
Summary of Maturity of Lease Liabilities, Financing Leases | The following is a summary of the Company's maturity of lease liabilities: (In thousands) Operating Leases Finance Leases 2020 $ 3,933 $ 1,605 2021 5,470 2,181 2022 5,278 743 2023 3,904 — 2024 2,837 — Thereafter 5,941 — Total Lease Payments $ 27,363 $ 4,529 Less: Interest 2,684 253 Total Lease Liability $ 24,679 $ 4,276 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Weighted-Average Shares Outstanding | Basic and diluted weighted-average shares outstanding are as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Weighted Average Shares - Basic 30,814 32,619 Net Effect of Dilutive Stock Options — 595 Weighted Average Shares - Diluted 30,814 33,214 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: (In thousands) March 28, 2020 December 31, 2019 Foreign Currency Translation Adjustments $ (9,346) $ (7,042) Retirement Liability Adjustment – Before Tax (10,596) (10,868) Tax Benefit of Retirement Liability Adjustment 2,225 2,282 Retirement Liability Adjustment – After Tax (8,371) (8,586) Accumulated Other Comprehensive Loss $ (17,717) $ (15,628) |
Components of Other Comprehensive Income | The components of other comprehensive (loss) income are as follows: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Foreign Currency Translation Adjustments $ (2,304) $ (270) Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of Prior Service Cost 101 101 Amortization of Net Actuarial Losses 171 85 Tax Benefit (57) (36) Retirement Liability Adjustment 215 150 Other Comprehensive Loss $ (2,089) $ (120) |
Supplemental Retirement Plan _2
Supplemental Retirement Plan and Related Post Retirement Benefits (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Retirement Benefits [Abstract] | |
Summary of the Components of Net Periodic Cost | The following table sets forth information regarding the net periodic pension cost for the plans. Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Service Cost $ 55 $ 45 Interest Cost 209 229 Amortization of Prior Service Cost 97 97 Amortization of Net Actuarial Losses 162 75 Net Periodic Cost $ 523 $ 446 Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The following table sets forth information regarding the net periodic cost recognized for those benefits: Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Service Cost $ 4 $ 3 Interest Cost 9 12 Amortization of Prior Service Cost 4 4 Amortization of Net Actuarial Losses 9 10 Net Periodic Cost $ 26 $ 29 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting Information | Below are the sales and operating profit by segment for the three months ended March 28, 2020 and March 30, 2019 and a reconciliation of segment operating profit to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Three Months Ended (In thousands) March 28, 2020 March 30, 2019 Sales Aerospace $ 141,137 $ 188,501 Less Intersegment Sales (67) — Total Aerospace Sales 141,070 188,501 Test Systems 16,553 19,724 Less Intersegment Sales (39) (51) Total Test Systems Sales 16,514 19,673 Total Consolidated Sales $ 157,584 $ 208,174 Operating (Loss) Profit and Margins Aerospace $ (63,145) $ 25,768 (44.8) % 13.7 % Test Systems 722 2,185 4.4 % 11.1 % Total Operating (Loss) Profit (62,423) 27,953 (39.6) % 13.4 % Additions/Deductions from Operating (Loss) Profit Gain on Sale of Business — 80,133 Interest Expense, Net of Interest Income 1,333 1,804 Corporate Expenses and Other 5,521 5,287 (Loss) Income Before Income Taxes $ (69,277) $ 100,995 Total Assets: (In thousands) March 28, 2020 December 31, 2019 Aerospace $ 545,378 $ 629,371 Test Systems 104,866 110,994 Corporate 199,782 42,351 Total Assets $ 850,026 $ 782,716 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Oct. 04, 2019USD ($) | Jul. 01, 2019USD ($) | Feb. 13, 2019USD ($) | Mar. 28, 2020USD ($)reporting_unit | Mar. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Allowance for doubtful accounts | $ 3,700,000 | $ 3,600,000 | ||||
Research and development, design and related engineering | $ 26,200,000 | $ 26,700,000 | ||||
Number of reporting units impaired | reporting_unit | 4 | |||||
Impairment Loss | $ 73,704,000 | |||||
Right-of-Use Asset Impairment | 691,000 | 0 | ||||
Operating right-of-use asset | 22,018,000 | 23,602,000 | ||||
Lease liability | 24,679,000 | 25,556,000 | ||||
Property, plant and equipment, net | 111,522,000 | 112,499,000 | ||||
Financing lease, liability | 4,276,000 | $ 4,737,000 | ||||
Freedom Communication Technologies, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition of business, net of cash acquired | $ 21,800,000 | |||||
Cash acquired | $ 600,000 | |||||
Diagnosys | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid to acquire stock | $ 7,000,000 | |||||
Fair value of contingent purchase consideration | 2,500,000 | |||||
Potential additional earn-out | $ 13,000,000 | |||||
Achievement period | 3 years | |||||
Earn-out achievement benchmark | $ 72,000,000 | |||||
Aerospace Segment | ||||||
Business Acquisition [Line Items] | ||||||
Impairment Loss | $ 73,700,000 | |||||
Divestiture by Sale | Test Systems Segment | ||||||
Business Acquisition [Line Items] | ||||||
Total cash proceeds of divesture | $ 103,800,000 | |||||
Gain on sale, net of tax | 80,100,000 | |||||
Income taxes from divesture | $ 19,700,000 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 29, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 369.4 | ||
Revenue recognized included in contract liability balance | 8.7 | $ 8.2 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-29 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 268.1 | ||
Period of recognition | 9 months | ||
Aerospace Segment | Subsequent Event | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, provision for loss | $ 3 | ||
Revenue, remaining performance obligation, provision for loss | $ 3 |
Revenue - Summary of Contract A
Revenue - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Jan. 01, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract Assets | $ 17,127 | $ 19,567 |
Contract Liabilities | $ 37,750 | $ 38,758 |
Revenue - Revenue Disaggregated
Revenue - Revenue Disaggregated by Market (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Sales | $ 157,584 | $ 208,174 |
Commercial Transport | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 102,775 | 141,778 |
Military | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 18,113 | 20,953 |
Business Jet | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 15,006 | 19,837 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 5,176 | 5,933 |
Aerospace Segment | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 141,070 | 188,501 |
Semiconductor | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 1,634 | 3,354 |
Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 14,880 | 16,319 |
Test Systems Segment | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 16,514 | $ 19,673 |
Revenue - Disaggregated by Prod
Revenue - Disaggregated by Product Lines (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Sales | $ 157,584 | $ 208,174 |
Aerospace Segment | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 141,070 | 188,501 |
Test Systems Segment | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 16,514 | 19,673 |
Electrical Power & Motion | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 69,456 | 92,537 |
Lighting & Safety | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 37,922 | 48,605 |
Avionics | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 22,143 | 33,861 |
Systems Certification | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 3,331 | 1,618 |
Structures | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 3,042 | 5,947 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 5,176 | $ 5,933 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 33,452 | $ 33,434 |
Work in Progress | 29,742 | 25,594 |
Raw Material | 88,604 | 86,759 |
Inventory, net | $ 151,798 | $ 145,787 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 207,270 | $ 205,180 |
Less Accumulated Depreciation | 95,748 | 92,681 |
Property, plant and equipment, net | 111,522 | 112,499 |
Held for Sale | Test Systems Segment | ||
Property, Plant and Equipment | ||
Net property, plant and equipment, held for sale | 1,500 | |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 9,795 | 9,802 |
Buildings and Improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 74,817 | 74,723 |
Machinery and Equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 116,906 | 115,202 |
Construction in Progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 5,752 | $ 5,453 |
Intangible Assets - Summary of
Intangible Assets - Summary of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 12 years | |
Gross CarryingAmount | $ 215,283 | $ 215,315 |
AccumulatedAmortization | $ 92,275 | 88,022 |
Patents | ||
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 11 years | |
Gross CarryingAmount | $ 2,146 | 2,146 |
AccumulatedAmortization | $ 1,826 | 1,804 |
Non-compete Agreement | ||
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 4 years | |
Gross CarryingAmount | $ 11,318 | 11,318 |
AccumulatedAmortization | $ 8,363 | 7,696 |
Trade Names | ||
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 10 years | |
Gross CarryingAmount | $ 11,433 | 11,438 |
AccumulatedAmortization | $ 6,797 | 6,550 |
Completed and Unpatented Technology | ||
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 9 years | |
Gross CarryingAmount | $ 48,192 | 48,201 |
AccumulatedAmortization | $ 22,268 | 21,196 |
Customer Relationships | ||
Finite-Lived Intangible Assets | ||
WeightedAverage Life | 15 years | |
Gross CarryingAmount | $ 142,194 | 142,212 |
AccumulatedAmortization | $ 53,021 | $ 50,776 |
Intangible Assets - Summary o_2
Intangible Assets - Summary of Amortization Expense for Acquired Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization Expense | $ 4,265 | $ 4,224 |
Intangible Assets - Summary o_3
Intangible Assets - Summary of Future Amortization Expense for Intangible Assets (Details) $ in Thousands | Mar. 28, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 17,198 |
2021 | 15,404 |
2022 | 14,973 |
2023 | 13,938 |
2024 | 12,917 |
2025 | $ 10,994 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 28, 2020USD ($)reporting_unit | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 144,970 |
Impairment Charges | (73,704) |
ForeignCurrencyTranslation | (269) |
Balance at end of period | $ 70,997 |
Number of reporting units not impaired | reporting_unit | 4 |
Number of reporting units | reporting_unit | 8 |
Number of reporting units impaired | reporting_unit | 4 |
Sensitivity analysis, impact of 1% increase of discount rate to goodwill fair value | $ 9,300 |
Sensitivity analysis, impact of 1% decrease of revenue growth rate to goodwill fair value | 4,400 |
PECO | |
Goodwill [Roll Forward] | |
Balance at end of period | 32,800 |
Aerospace Segment | |
Goodwill [Roll Forward] | |
Impairment Charges | (73,700) |
Operating Segments | Aerospace Segment | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 123,038 |
Impairment Charges | (73,704) |
ForeignCurrencyTranslation | (269) |
Balance at end of period | 49,065 |
Operating Segments | Test Systems Segment | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 21,932 |
Impairment Charges | 0 |
ForeignCurrencyTranslation | 0 |
Balance at end of period | $ 21,932 |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable - Narrative (Details) | 3 Months Ended | |||||||
Jun. 27, 2020USD ($) | Mar. 28, 2020USD ($)fiscal_quarter | Jul. 02, 2022 | Apr. 02, 2022 | Dec. 31, 2021 | Oct. 02, 2021 | Apr. 03, 2021 | May 04, 2020USD ($) | |
Subsequent Event | ||||||||
Debt Instrument | ||||||||
Minimum liquidity | $ 100,000,000 | |||||||
Amended and Restated Credit Agreement | ||||||||
Debt Instrument | ||||||||
Ratio of funded debt to Adjusted EBITDA | 3.75 | |||||||
Duration of permitted leverage ratio following acquisition, number of fiscal quarters | fiscal_quarter | 4 | |||||||
Amended and Restated Credit Agreement | Maximum | ||||||||
Debt Instrument | ||||||||
Ratio of funded debt to Adjusted EBITDA | 4.50 | |||||||
Line of Credit | Forecast | ||||||||
Debt Instrument | ||||||||
Covenant, leverage ratio, maximum | 3.75 | 4.50 | 5.50 | 6 | ||||
Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument | ||||||||
Minimum liquidity | $ 180,000,000 | |||||||
Commitment fee percentage | 0.35% | |||||||
Minimum interest coverage ratio on a quarterly basis | 1.75 | |||||||
Line of Credit Facility, Consent Fee Percentage | 0.15% | |||||||
Line of Credit | Revolving Credit Facility | Forecast | ||||||||
Debt Instrument | ||||||||
Minimum interest coverage ratio on a quarterly basis | 1.50 | |||||||
Line of Credit | Revolving Credit Facility | Minimum | ||||||||
Debt Instrument | ||||||||
Commitment fee percentage | 0.10% | |||||||
Line of Credit | Revolving Credit Facility | Maximum | ||||||||
Debt Instrument | ||||||||
Commitment fee percentage | 0.35% | |||||||
Line of Credit | Revolving Credit Facility | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis points for variable interest rate | 1.00% | |||||||
Line of Credit | Revolving Credit Facility | LIBOR | Minimum | ||||||||
Debt Instrument | ||||||||
Basis points for variable interest rate | 1.00% | |||||||
Line of Credit | Revolving Credit Facility | LIBOR | Maximum | ||||||||
Debt Instrument | ||||||||
Basis points for variable interest rate | 2.25% | |||||||
Line of Credit | Fourth Amended And Restated Credit Agreement | Revolving Credit Facility | Minimum | ||||||||
Debt Instrument | ||||||||
Basis points for commitment fee | 0.10% | |||||||
Line of Credit | Fourth Amended And Restated Credit Agreement | Revolving Credit Facility | Maximum | ||||||||
Debt Instrument | ||||||||
Basis points for commitment fee | 0.20% | |||||||
Line of Credit | Fourth Amended And Restated Credit Agreement | Revolving Credit Facility | LIBOR | Minimum | ||||||||
Debt Instrument | ||||||||
Basis points for variable interest rate | 1.00% | |||||||
Line of Credit | Fourth Amended And Restated Credit Agreement | Revolving Credit Facility | LIBOR | Maximum | ||||||||
Debt Instrument | ||||||||
Basis points for variable interest rate | 1.50% | |||||||
Line of Credit | Fifth Amended and Restated Credit Agreement | Letter of Credit | ||||||||
Debt Instrument | ||||||||
Credit facility allocated (up to) | $ 20,000,000 | |||||||
Outstanding letters of credit | 1,500,000 | |||||||
Line of Credit | Fifth Amended and Restated Credit Agreement | Revolving Credit Facility | ||||||||
Debt Instrument | ||||||||
Maximum borrowing capacity | 500,000,000 | |||||||
Line of credit facility increase amount | 150,000,000 | |||||||
Credit facility outstanding | 333,000,000 | |||||||
Revolving line of credit | $ 165,500,000 | |||||||
Line of Credit | Fifth Amended and Restated Credit Agreement | Revolving Credit Facility | Subsequent Event | ||||||||
Debt Instrument | ||||||||
Maximum borrowing capacity | $ 375,000,000 |
Product Warranties - Summary of
Product Warranties - Summary of Activity in Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at Beginning of Period | $ 7,660 | $ 5,027 |
Warranties Divested or Acquired | 0 | (123) |
Warranties Issued | 877 | 529 |
Warranties Settled | (691) | (588) |
Reassessed Warranty Exposure | (724) | (16) |
Balance at End of Period | $ 7,122 | $ 4,829 |
Minimum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 12 months | |
Maximum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 60 months |
Leases - Summary of ROU Assets
Leases - Summary of ROU Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Operating Leases: | ||
Operating Right-of-Use Assets, Gross | $ 28,988 | $ 28,788 |
Less Accumulated Right-of-Use Asset Impairment | 1,710 | 1,019 |
Less Accumulated Amortization | 5,260 | 4,167 |
Operating Right-of-Use Assets, Net | 22,018 | 23,602 |
Current Operating Lease Liabilities | 4,687 | 4,517 |
Long-term Operating Lease Liabilities | 19,992 | 21,039 |
Total Lease Liability | 24,679 | 25,556 |
Finance Leases: | ||
Finance Right-of-Use Assets, Gross | 3,484 | 3,484 |
Less Accumulated Amortization | 1,275 | 1,020 |
Finance Right-of-Use Assets, Net — Included in Other Assets | 2,209 | 2,464 |
Short-term Finance Lease Liabilities — Included in Accrued Expenses and Other Current Liabilities | 1,962 | 1,922 |
Long-term Finance Lease Liabilities — Included in Other Liabilities | 2,314 | 2,815 |
Finance Lease Liabilities | $ 4,276 | $ 4,737 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 28, 2020 |
Leases [Abstract] | |
Operating leases, weighted-average remaining term | 7 years |
Financing leases, weighted-average remaining term | 2 years |
Operating leases, weighted-average discount rate | 3.30% |
Finance leases, weighted average discount rate | 5.30% |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost and Cash Paid (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Leases [Abstract] | ||
Amortization of ROU Assets | $ 255 | $ 255 |
Interest on Lease Liabilities | 63 | 86 |
Total Finance Lease Cost | 318 | 341 |
Operating Lease Cost | 1,448 | 1,205 |
Variable Lease Cost | 272 | 370 |
Right-of-Use Asset Impairment | 691 | 0 |
Short-term Lease Cost (excluding month-to-month) | 67 | 47 |
Less Sublease and Rental (Income) Expense | (331) | (212) |
Total Operating Lease Cost | 2,147 | 1,410 |
Total Net Lease Cost | $ 2,465 | $ 1,751 |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 | $ 3,933 | |
2021 | 5,470 | |
2022 | 5,278 | |
2023 | 3,904 | |
2024 | 2,837 | |
Thereafter | 5,941 | |
Total Lease Payments | 27,363 | |
Less: Interest | 2,684 | |
Lease liability | 24,679 | $ 25,556 |
Finance Leases | ||
2020 | 1,605 | |
2021 | 2,181 | |
2022 | 743 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total Lease Payments | 4,529 | |
Less: Interest | 253 | |
Financing lease, liability | $ 4,276 | $ 4,737 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 3.30% | 22.60% |
Other tax expense (benefit) | $ (700) | |
Federal | ||
Income Tax Contingency [Line Items] | ||
Valuation allowance, deferred tax asset, increase (decrease) | $ 7,000 |
Earnings Per Share - Earnings P
Earnings Per Share - Earnings Per Share Computations (Details) - shares | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted Average Shares - Basic (in shares) | 30,814,000 | 32,619,000 |
Net Effect of Dilutive Stock Options (in shares) | 0 | 595,000 |
Weighted Average Shares - Diluted (in shares) | 30,814,000 | 33,214,000 |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common shares excluded from computation | 785,000 | 154,000 |
Share-based Payment Arrangement [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common shares excluded from computation | 440,211 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Sep. 17, 2019 | |
Stockholders Equity | ||
Authorized repurchase of common stock, amount | $ 50,000,000 | |
Treasury Stock | ||
Stockholders Equity | ||
Purchase (in shares) | 282,000 | |
Value of shares repurchased | $ 7,732,000 |
Shareholders' Equity - Componen
Shareholders' Equity - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 | Mar. 30, 2019 | Dec. 31, 2018 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total Shareholders’ Equity | $ 313,809 | $ 388,857 | $ 466,003 | |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total Shareholders’ Equity | (9,346) | (7,042) | ||
Retirement Liability Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Retirement Liability Adjustment – Before Tax | (10,596) | (10,868) | ||
Tax Benefit of Retirement Liability Adjustment | 2,225 | 2,282 | ||
Total Shareholders’ Equity | (8,371) | (8,586) | ||
Accumulated Comprehensive Loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total Shareholders’ Equity | $ (17,717) | $ (15,628) | $ (13,449) | $ (13,329) |
Shareholders' Equity - Compon_2
Shareholders' Equity - Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income | $ (2,089) | $ (120) |
Total Other Comprehensive Loss | (2,089) | (120) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income | (2,304) | (270) |
Total Other Comprehensive Loss | (2,304) | (270) |
Amortization of Prior Service Cost | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification to General and Administrative Expense | 101 | 101 |
Amortization of Net Actuarial Losses | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification to General and Administrative Expense | 171 | 85 |
Retirement Liability Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income | 215 | 150 |
Tax Benefit | (57) | (36) |
Total Other Comprehensive Loss | $ 215 | $ 150 |
Supplemental Retirement Plan _3
Supplemental Retirement Plan and Related Post Retirement Benefits - Summary of the Components of Net Periodic Cost (Details) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020USD ($)retirement_plan | Mar. 30, 2019USD ($) | |
Retirement Benefits [Abstract] | ||
Number of non-qualified supplemental retirement defined benefit plans | retirement_plan | 2 | |
SERP | ||
Defined Benefit Plan Disclosure | ||
Service Cost | $ 55 | $ 45 |
Interest Cost | 209 | 229 |
Amortization of Prior Service Cost | 97 | 97 |
Amortization of Net Actuarial Losses | 162 | 75 |
Net Periodic Cost | 523 | 446 |
SERP | SERP Medical | ||
Defined Benefit Plan Disclosure | ||
Service Cost | 4 | 3 |
Interest Cost | 9 | 12 |
Amortization of Prior Service Cost | 4 | 4 |
Amortization of Net Actuarial Losses | 9 | 10 |
Net Periodic Cost | $ 26 | $ 29 |
Sales to Major Customers (Detai
Sales to Major Customers (Details) $ in Millions | 3 Months Ended | |
Mar. 28, 2020USD ($)customer | Mar. 30, 2019customer | |
Segment Reporting, Asset Reconciling Item | ||
Number of major customers | customer | 2 | 2 |
Sales Revenue, Net | Customer Concentration Risk | Major Customer One | ||
Segment Reporting, Asset Reconciling Item | ||
Percent of consolidated revenue | 17.00% | 13.00% |
Sales Revenue, Net | Customer Concentration Risk | Major Customer Two | ||
Segment Reporting, Asset Reconciling Item | ||
Percent of consolidated revenue | 9.00% | 14.00% |
Sales Revenue, Net | Customer Concentration Risk | Two Major Customers | ||
Segment Reporting, Asset Reconciling Item | ||
Accounts receivable from major customers | $ | $ 30.1 |
Legal Proceedings (Details)
Legal Proceedings (Details) - Germany - Patent Infringement - AES $ in Thousands | Apr. 11, 2018USD ($) | Mar. 28, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Lufthansa Technik AG | ||||
Loss Contingencies [Line Items] | ||||
Damages sought | $ 6,200 | |||
Recorded reserve | $ 1,000 | |||
Litigation settlement, amount awarded to other party, excluding interest | $ 3,200 | |||
Litigation settlement, amount awarded to other party | 4,500 | |||
Loss contingency accrual | 3,500 | |||
Indirect Sales | ||||
Loss Contingencies [Line Items] | ||||
Recorded reserve | $ 4,700 | |||
Interest rate accrued above bank rate until final payment | 0.05 | |||
Estimate of possible loss, excluding interest | 11,600 | |||
Gain (loss) related to litigation settlement | $ 16,200 | $ 16,100 | ||
Indirect Sales | Selling, General and Administrative Expenses | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement interest | $ 300 |
Segment Information - Summary o
Segment Information - Summary of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information | |||
Sales | $ 157,584 | $ 208,174 | |
Operating (Loss) Profit and Margins | |||
Total Operating Profit | (67,556) | 22,881 | |
Additions/Deductions from Operating (Loss) Profit | |||
Gain on Sale of Business | 0 | (80,133) | |
Interest Expense, Net of Interest Income | 1,333 | 1,804 | |
(Loss) Income Before Income Taxes | (69,277) | 100,995 | |
Total Assets | 850,026 | $ 782,716 | |
Aerospace Segment | |||
Segment Reporting Information | |||
Sales | 141,070 | 188,501 | |
Test Systems Segment | |||
Segment Reporting Information | |||
Sales | 16,514 | 19,673 | |
Operating Segments | |||
Operating (Loss) Profit and Margins | |||
Total Operating Profit | $ (62,423) | $ 27,953 | |
Operating margins, percentage | (39.60%) | 13.40% | |
Operating Segments | Aerospace Segment | |||
Segment Reporting Information | |||
Sales | $ 141,137 | $ 188,501 | |
Operating (Loss) Profit and Margins | |||
Total Operating Profit | $ (63,145) | $ 25,768 | |
Operating margins, percentage | (44.80%) | 13.70% | |
Additions/Deductions from Operating (Loss) Profit | |||
Total Assets | $ 545,378 | 629,371 | |
Operating Segments | Test Systems Segment | |||
Segment Reporting Information | |||
Sales | 16,553 | $ 19,724 | |
Operating (Loss) Profit and Margins | |||
Total Operating Profit | $ 722 | $ 2,185 | |
Operating margins, percentage | 4.40% | 11.10% | |
Additions/Deductions from Operating (Loss) Profit | |||
Total Assets | $ 104,866 | 110,994 | |
Less Intersegment Sales | Aerospace Segment | |||
Segment Reporting Information | |||
Sales | (67) | $ 0 | |
Less Intersegment Sales | Test Systems Segment | |||
Segment Reporting Information | |||
Sales | (39) | (51) | |
Corporate Expenses and Other | |||
Additions/Deductions from Operating (Loss) Profit | |||
Corporate Expenses and Other | 5,521 | $ 5,287 | |
Total Assets | $ 199,782 | $ 42,351 |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Details) $ in Thousands | Oct. 04, 2019 | Mar. 28, 2020USD ($)reporting_unit | Mar. 30, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Number of reporting units impaired | reporting_unit | 4 | ||
Impairment Loss | $ 73,704 | ||
Right-of-Use Asset Impairment | 691 | $ 0 | |
AeroSat | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Right-of-Use Asset Impairment | $ 700 | ||
Diagnosys | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Achievement period | 3 years |
Acquisition and Divestiture A_2
Acquisition and Divestiture Activities - Narrative (Details) | Oct. 04, 2019USD ($) | Jul. 12, 2019USD ($) | Jul. 01, 2019USD ($) | Feb. 13, 2019USD ($) | Mar. 28, 2020USD ($)element | Sep. 28, 2019USD ($) | Mar. 30, 2019USD ($) | Dec. 31, 2018 | Dec. 31, 2019USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of elements for contingent earnouts | element | 2 | ||||||||
Freedom Communication Technologies, Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Acquisition of business, net of cash acquired | $ 21,800,000 | ||||||||
Cash acquired | $ 600,000 | ||||||||
Diagnosys | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Cash paid to acquire stock | $ 7,000,000 | ||||||||
Fair value of contingent purchase consideration | 2,500,000 | ||||||||
Potential additional earn-out | $ 13,000,000 | ||||||||
Achievement period | 3 years | ||||||||
Earn-out achievement benchmark | $ 72,000,000 | ||||||||
Disposed by Sale | Airfield Lighting Product Line Assets | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from sale | $ 1,000,000 | ||||||||
Percentage of revenue (as a percentage) | 1.00% | ||||||||
Loss on sale | $ 1,300,000 | ||||||||
Held for Sale | First Earnout | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Maximum total earnout proceeds | $ 35,000,000 | ||||||||
Held for Sale | Second Earnout | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Maximum total earnout proceeds | $ 0 | ||||||||
Held for Sale | Test Systems Segment | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Property, plant and equipment classified as held for sale | $ 1,500,000 | ||||||||
Divestiture by Sale | Test Systems Segment | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Total cash proceeds of divesture | $ 103,800,000 | ||||||||
Gain on sale, net of tax | $ 80,100,000 | ||||||||
Income taxes from divesture | $ 19,700,000 |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Thousands | 3 Months Ended |
Mar. 28, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 5,190 |
Cash Paid | (298) |
Ending Balance | 5,207 |
Accrued Expenses and Other Current Liabilities | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 613 |
Cash Paid | (298) |
Ending Balance | 630 |
Other Liabilities | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 4,577 |
Cash Paid | 0 |
Ending Balance | 4,577 |
Cost of Products Sold | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | 60 |
Cost of Products Sold | Accrued Expenses and Other Current Liabilities | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | 60 |
Cost of Products Sold | Other Liabilities | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | 0 |
Selling, General and Administrative Expenses | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | 255 |
Selling, General and Administrative Expenses | Accrued Expenses and Other Current Liabilities | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | 255 |
Selling, General and Administrative Expenses | Other Liabilities | |
Restructuring Reserve [Roll Forward] | |
Restructuring Charges | $ 0 |
Restructuring Charges Narrative
Restructuring Charges Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 28, 2020USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Impairment Loss | $ 73,704 |
Aerospace Segment | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring, Settlement and Impairment Provisions | 300 |
Impairment Loss | $ 73,700 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 04, 2019 | Mar. 29, 2020 | Mar. 28, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||
Goodwill | $ 70,997,000 | $ 144,970,000 | ||
Diagnosys | ||||
Subsequent Event [Line Items] | ||||
Cash paid to acquire stock | $ 7,000,000 | |||
Potential additional earn-out | $ 13,000,000 | |||
Achievement period | 3 years | |||
Earn-out achievement benchmark | $ 72,000,000 | |||
Subsequent Event | Aerospace Segment | ||||
Subsequent Event [Line Items] | ||||
Revenue, remaining performance obligation, provision for loss | $ 3,000,000 |