Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 23, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SLI | |
Entity Registrant Name | SL INDUSTRIES INC | |
Entity Central Index Key | 89,270 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,961,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 5,659,000 | $ 31,950,000 |
Receivables, net | 34,581,000 | 33,966,000 |
Inventories, net | 24,701,000 | 23,597,000 |
Other current assets | 6,056,000 | 4,751,000 |
Deferred income taxes, net | 4,493,000 | 6,105,000 |
Total current assets | 75,490,000 | 100,369,000 |
Property, plant and equipment, net | 17,463,000 | 8,070,000 |
Deferred income taxes, net | 5,830,000 | 5,496,000 |
Goodwill | 17,209,000 | 13,072,000 |
Other intangible assets, net | 17,664,000 | 3,788,000 |
Other assets and deferred charges, net | 1,018,000 | 981,000 |
Total assets | 134,674,000 | 131,776,000 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt | 13,500,000 | 0 |
Accounts payable | 17,950,000 | 19,285,000 |
Accrued income taxes | 153,000 | 3,618,000 |
Accrued liabilities: | ||
Payroll and related costs | 5,395,000 | 4,880,000 |
Other | 16,503,000 | 16,466,000 |
Total current liabilities | 53,501,000 | 44,249,000 |
Deferred compensation and supplemental retirement benefits | 1,137,000 | 1,427,000 |
Other long-term liabilities | 5,134,000 | 8,779,000 |
Total liabilities | $ 59,772,000 | $ 54,455,000 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, no par value; authorized, 6,000,000 shares; none issued | ||
Common stock, $.20 par value; authorized, 25,000,000 shares; issued, 6,496,000 and 6,656,000 shares, respectively | $ 1,299,000 | $ 1,331,000 |
Capital in excess of par value | 17,078,000 | 22,747,000 |
Retained earnings | 86,665,000 | 79,415,000 |
Accumulated other comprehensive (loss), net of tax | (1,422,000) | (638,000) |
Treasury stock at cost, 2,535,000 and 2,512,000 shares, respectively | (28,718,000) | (25,534,000) |
Total shareholders' equity | 74,902,000 | 77,321,000 |
Total liabilities and shareholders' equity | $ 134,674,000 | $ 131,776,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | ||
Preferred stock, shares authorized | 6,000,000 | 6,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.20 | $ 0.20 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 6,496,000 | 6,656,000 |
Treasury stock, shares | 2,535,000 | 2,512,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 49,675,000 | $ 50,725,000 | $ 147,078,000 | $ 151,140,000 |
Cost and expenses: | ||||
Cost of products sold | 33,340,000 | 34,326,000 | 98,526,000 | 101,696,000 |
Engineering and product development | 2,339,000 | 2,908,000 | 7,509,000 | 8,442,000 |
Selling, general and administrative | 9,244,000 | 8,730,000 | 25,897,000 | 24,005,000 |
Depreciation and amortization | 847,000 | 579,000 | 2,065,000 | 1,608,000 |
Restructuring charges | 223,000 | 223,000 | 463,000 | |
Total cost and expenses | 45,993,000 | 46,543,000 | 134,220,000 | 136,214,000 |
Income from operations | 3,682,000 | 4,182,000 | 12,858,000 | 14,926,000 |
Other income (expense): | ||||
Amortization of deferred financing costs | (59,000) | (22,000) | (119,000) | (65,000) |
Interest income | 2,000 | 2,000 | 23,000 | 5,000 |
Interest expense | (52,000) | (7,000) | (63,000) | (21,000) |
Other gain (loss), net | (669,000) | 56,000 | (23,000) | 1,535,000 |
Income from continuing operations before income taxes | 2,904,000 | 4,211,000 | 12,676,000 | 16,380,000 |
Income tax provision | 1,067,000 | 1,716,000 | 4,421,000 | 5,832,000 |
Income from continuing operations | 1,837,000 | 2,495,000 | 8,255,000 | 10,548,000 |
(Loss) income from discontinued operations, net of tax | (700,000) | 400,000 | (1,005,000) | 402,000 |
Net income | $ 1,137,000 | $ 2,895,000 | $ 7,250,000 | $ 10,950,000 |
Basic net income (loss) per common share | ||||
Income from continuing operations | $ 0.46 | $ 0.60 | $ 2.06 | $ 2.55 |
(Loss) income from discontinued operations, net of tax | (0.17) | 0.10 | (0.25) | 0.10 |
Net income | 0.29 | 0.70 | 1.81 | 2.65 |
Diluted net income (loss) per common share | ||||
Income from continuing operations | 0.46 | 0.59 | 2.03 | 2.52 |
(Loss) income from discontinued operations, net of tax | (0.17) | 0.10 | (0.24) | 0.10 |
Net income | $ 0.29 | $ 0.69 | $ 1.79 | $ 2.62 |
Shares used in computing basic net income (loss) per common share | 3,960,000 | 4,145,000 | 4,015,000 | 4,137,000 |
Shares used in computing diluted net income (loss) per common share | 3,989,000 | 4,204,000 | 4,059,000 | 4,178,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,137,000 | $ 2,895,000 | $ 7,250,000 | $ 10,950,000 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation | (427,000) | (314,000) | (784,000) | (196,000) |
Net unrealized gain reclassified into income on sale of available-for-sale securities | (1,094,000) | |||
Comprehensive income | $ 710,000 | $ 2,581,000 | $ 6,466,000 | $ 9,660,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
OPERATING ACTIVITIES: | ||
Net income | $ 7,250,000 | $ 10,950,000 |
Adjustment for loss (income) from discontinued operations | 1,005,000 | (402,000) |
Income from continuing operations | 8,255,000 | 10,548,000 |
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities: | ||
Depreciation | 1,500,000 | 1,138,000 |
Amortization | 565,000 | 470,000 |
Amortization of deferred financing costs | 119,000 | 65,000 |
Stock-based compensation | 741,000 | 525,000 |
Excess tax benefit on stock compensation | (574,000) | |
Loss on foreign exchange contracts | 88,000 | 167,000 |
Losses on (recoveries of) accounts receivable | 77,000 | (71,000) |
Deferred compensation and supplemental retirement benefits | 18,000 | 239,000 |
Deferred compensation and supplemental retirement benefit payments | (308,000) | (335,000) |
Deferred income taxes | 1,176,000 | 577,000 |
(Gain) on sale of available-for-sale securities | (1,691,000) | |
Loss on sale of equipment | 79,000 | |
Changes in operating assets and liabilities, excluding the effect of business combinations and dispositions: | ||
Accounts receivable | 3,018,000 | (4,194,000) |
Inventories | 1,140,000 | (1,442,000) |
Other assets | (1,445,000) | 1,245,000 |
Accounts payable | (2,464,000) | 1,308,000 |
Other accrued liabilities | (139,000) | 2,000 |
Accrued income taxes | (2,317,000) | 2,888,000 |
Net cash provided by operating activities from continuing operations | 9,450,000 | 11,518,000 |
Net cash (used in) operating activities from discontinued operations | (7,619,000) | (3,862,000) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,831,000 | 7,656,000 |
INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (2,243,000) | (1,647,000) |
Proceeds from sale of available-for-sale securities | 4,054,000 | |
Acquisition of businesses | (29,207,000) | (3,973,000) |
Purchases of other assets | (240,000) | (294,000) |
Net cash (used in) investing activities from continuing operations | (31,690,000) | (1,860,000) |
Net cash (used in) investing activities from discontinued operations | 0 | (182,000) |
NET CASH (USED IN) INVESTING ACTIVITIES | (31,690,000) | (2,042,000) |
FINANCING ACTIVITIES: | ||
Proceeds from Senior Revolving Credit Facility | 21,900,000 | |
Payments of Senior Revolving Credit Facility | (8,400,000) | (1,000,000) |
Payments of deferred financing costs | (182,000) | (45,000) |
Repurchase and retirement of common stock | (6,796,000) | |
Treasury stock purchases | (3,511,000) | (106,000) |
Proceeds from stock options exercised | 140,000 | |
Excess tax benefit on stock compensation | 574,000 | |
Net cash provided by (used in) financing activities from continuing operations | 3,725,000 | (1,151,000) |
Net cash (used in) financing activities from discontinued operations | (36,000) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 3,725,000 | (1,187,000) |
Effect of exchange rate changes on cash | (157,000) | (17,000) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (26,291,000) | 4,410,000 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 31,950,000 | 7,163,000 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 5,659,000 | 11,573,000 |
Cash paid during the period for: | ||
Interest | 62,000 | 54,000 |
Income taxes | $ 5,431,000 | $ 3,418,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis Of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereon included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Unless the context requires otherwise, the terms the “Company,” “SL Industries,” “we,” “us” and “our” mean SL Industries, Inc., a Delaware Corporation, and its consolidated subsidiaries. On November 17, 2014, SL Delaware Holdings, Inc. (“SL Delaware Holdings”), a wholly-owned subsidiary of the Company, entered into a definitive Stock Purchase Agreement (the “Purchase Agreement”) with Hubbell Power Systems, Inc. (“Hubbell”), a subsidiary of Hubbell Incorporated, pursuant to which SL Delaware Holdings sold all of the issued and outstanding capital stock of RFL Electronics Inc. (“RFL”). The Company concluded that the accounting requirements for reporting the results of operations and cash flows of the divested business as discontinued operations were met at November 17, 2014. As a result, the accompanying consolidated statements of income for 2014, the consolidated statements of cash flows for 2014, and certain amounts in these notes to the consolidated financial statements related to 2014 have been recast to reflect the presentation of the results of operations and cash flows of the formerly owned RFL businesses as discontinued operations. Refer to Note 18, “Discontinued Operations”, for additional information regarding this transaction. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Receivables | 2. Receivables Receivables consist of the following: September 30, December 31, (in thousands) Trade receivables $ 34,547 $ 34,025 Less: allowance for doubtful accounts (348 ) (281 ) Trade receivables, net 34,199 33,744 Recoverable income taxes 21 81 Other 361 141 Receivables, net $ 34,581 $ 33,966 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consist of the following: September 30, December 31, (in thousands) Raw materials $ 18,972 $ 16,865 Work in process 4,781 4,584 Finished goods 3,320 4,232 Gross inventory 27,073 25,681 Less: allowances (2,372 ) (2,084 ) Inventories, net $ 24,701 $ 23,597 During the third quarter of 2015, the Company elected to change its method of valuing inventory held at two of its manufacturing facility’s reporting within our SL Montevideo Technology, Inc. (“SL-MTI”) subsidiary from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. The Company believes that the FIFO method is preferable as it better reflects the current value of inventory reported in the Company’s consolidated balance sheet, provides a better matching of cost of goods sold with revenue, provides consistency across all of our operations, and FIFO is the method used by the Company’s management to monitor the financial results of SL-MTI. The cumulative effect of the change was a $160,000 increase to gross margin and a $107,000 increase to net income from continuing operations, which was recorded in the third quarter of 2015. The change was not applied retrospectively to prior periods, as the effect of the change was immaterial to the consolidated financial statements of all prior periods, including interim periods. |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 4. Other Current Assets Other current assets consist of the following: September 30, December 31, (in thousands) Prepaid insurance $ 969 $ 228 Taxes receivable (1) 2,281 299 RFL escrow (2) 1,000 2,000 Other 1,806 2,224 Other current assets $ 6,056 $ 4,751 (1) The increase in taxes receivable in 2015 was primarily due to an increase in TEAL Electronics Corp.’s (“TEAL”) value-added tax receivable related to activities in Mexico. (2) See Note 18 – Discontinued Operations for further information concerning the RFL escrow. |
Income Per Share
Income Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Share | 5. Income Per Share The Company has presented net income (loss) per common share pursuant to Accounting Standards Codification (“ASC”) 260 “Earnings Per Share.” Basic net income per common share is computed by dividing reported net income available to common shareholders by the weighted-average number of shares outstanding for the period. Diluted net income per common share is computed by dividing reported net income available to common shareholders by the weighted-average shares outstanding for the period, adjusted for the dilutive effect of common stock equivalents, which consist of stock options, using the treasury stock method. There were no anti-dilutive options for the three and nine months ended September 30, 2015. There were no anti-dilutive options for the three months ended September 30, 2014. For the nine months ended September 30, 2014, 3,000 stock options were excluded from the dilutive computation as the assumed shares repurchased under the treasury method would have been anti-dilutive. The table below sets forth the computation of basic and diluted net income per share: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands, except per share amounts) Net income (loss) available to common shareholders: Basic net income available to common shareholders from continuing operations $ 1,837 $ 2,495 $ 8,255 $ 10,548 Basic net (loss) income available to common shareholders from discontinued operations $ (700 ) $ 400 $ (1,005 ) $ 402 Diluted net income available to common shareholders from continuing operations $ 1,837 $ 2,495 $ 8,255 $ 10,548 Diluted net (loss) income available to common shareholders from discontinued operations $ (700 ) $ 400 $ (1,005 ) $ 402 Shares: Basic weighted average number of common shares outstanding 3,960 4,145 4,015 4,137 Common shares assumed upon exercise of stock options 29 59 44 41 Diluted weighted average number of common shares outstanding 3,989 4,204 4,059 4,178 Basic net income (loss) per common share: Income from continuing operations $ 0.46 $ 0.60 $ 2.06 $ 2.55 (Loss) income from discontinued operations, net of tax (0.17 ) 0.10 (0.25 ) 0.10 Net income $ 0.29 $ 0.70 $ 1.81 $ 2.65 Diluted net income (loss) per common share: Income from continuing operations $ 0.46 $ 0.59 $ 2.03 $ 2.52 (Loss) income from discontinued operations, net of tax (0.17 ) 0.10 (0.24 ) 0.10 Net income $ 0.29 $ 0.69 $ 1.79 $ 2.62 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation At September 30, 2015, the Company had stock-based employee compensation plans as described below. For the three and nine months ended September 30, 2015, the total compensation expense (included in selling, general and administrative expense) related to these plans was $251,000 and $741,000 ($160,000 and $482,000 net of tax), respectively. For the three and nine months ended September 30, 2014, the total compensation expense was $191,000 and $525,000 ($116,000 and $337,000, net of tax), respectively. During the first quarter of 2015, the Company implemented a Long-Term Incentive Plan (the “2015 LTIP”) pursuant to the 2008 Incentive Stock Plan (the “2008 Plan”) which awarded restricted stock units (“RSUs”) to eligible executives. Under the terms of the 2015 LTIP, the number of RSUs that may vest, if any, will be based on, among other things, the Company achieving certain sales and return on invested capital (“ROIC”), as defined, targets during the January 2015 to December 2017 performance period. Earned RSUs, if any, cliff vest at the end of fiscal 2017 (100% of earned RSUs vest at December 31, 2017). The final value of these RSUs will be determined by the number of shares earned. The value of these RSUs is charged to compensation expense on a straight-line basis over the three year vesting period with periodic adjustments to account for changes in anticipated award amounts. The weighted-average price for these RSUs was $39.17 per share based on the grant date of February 13, 2015. During the three and nine months ended September 30, 2015, $20,000 and $54,000 was charged to compensation expense. As of September 30, 2015, total unamortized compensation expense for this grant was $198,000. As of September 30, 2015, the maximum number of achievable RSUs under the 2015 LTIP was 11,000 RSUs. During the first quarter of 2012, the Company implemented a Long-Term Incentive Plan (the “2012 LTIP”) pursuant to the 2008 Plan which awarded RSUs to eligible executives. The weighted-average price for these RSUs was $18.00 per share based on the grant date of February 17, 2012. Under the terms of the 2012 LTIP, 6,000 RSUs were earned and issued on February 27, 2015. On May 12, 2014, the Company granted each Director 3,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the first anniversary of the grant date. All shares vested and were granted under this award on May 12, 2015. On May 28, 2015, the Company granted each Director 3,000 restricted shares pursuant to the 2008 Plan. The shares vest upon the first anniversary of the grant date. Based on the terms of the awards the value of these restricted shares is charged to compensation expense on a straight-line basis over the one year vesting period. As a result, the Company recognized $141,000 and $191,000 of stock compensation expense during the three and nine months ended September 30, 2015. As of September 30, 2015, total unamortized compensation expense for this grant was $379,000. The weighted-average price of these restricted stock grants was $38.00 per share based on the grant date of May 28, 2015. As of September 30, 2015, no shares were granted under this award. Stock Options Option activity under the principal option plans as of September 30, 2015 and changes during the nine months ended September 30, 2015 were as follows: Outstanding Weighted Average Weighted Average Aggregate Intrinsic (in thousands) (in years) (in thousands) Outstanding as of December 31, 2014 184 $ 19.71 3.59 $ 3,540 Granted — — Exercised (58 ) 12.02 Forfeited — — Expired — — Outstanding as of September 30, 2015 126 $ 23.23 3.50 $ 1,388 Exercisable as of September 30, 2015 28 $ 13.36 2.57 $ 590 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of fiscal 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2015. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the nine months ended September 30, 2015 was $1,731,000. No options were exercised during the nine months ended September 30, 2014. As of September 30, 2015, $432,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.4 years. During 2015, 58,000 stock options were exercised at a gross exercise value of $692,000, of which 13,000 shares of common stock were delivered by the option holders as payment for the exercise price of stock options exercised. As a result, net cash received from option exercises for the nine months ended September 30, 2015 was $140,000. No options were exercised during the nine months ended September 30, 2014. Tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options are classified as financing cash flows. The actual tax benefit realized for the tax deduction from option exercises of share-based payment arrangements totaled $616,000 for the nine months ended September 30, 2015. The Company has applied the “Short-cut” method in calculating the historical windfall tax benefits. All tax shortfalls will be applied against this windfall before being charged to earnings. |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 7. Income Tax The Company calculates its interim tax provision in accordance with the provisions of ASC 740-270 “Income Taxes – Interim Reporting.” For each interim period the Company estimates its annual effective income tax rate and applies the estimated rate to its year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items separately reported, such as discontinued operations, and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur. For the nine months ended September 30, 2015 and September 30, 2014, the estimated income tax rate from continuing operations was 35% and 36%, respectively. During the three and nine months ended September 30, 2015, the Company recorded additional benefits from state research and development tax credits of $47,000 and $141,000, respectively. In addition, a $69,000 benefit was recognized during the third quarter of 2015 due to a change in estimate of the 2014 federal tax credits. During the three and nine months ended September 30, 2014, the Company recorded additional benefits from state research and development tax credits of $61,000 and $183,000, respectively. As of September 30, 2015, the Company’s gross research and development tax credit carryforwards totaled approximately $1,822,000. Of these credits, approximately $743,000 can be carried forward for 15 years and will expire between 2015 and 2030, and approximately $1,079,000 of state credits can be carried forward indefinitely. The Company has recorded gross unrecognized tax benefits, excluding interest and penalties, as of September 30, 2015 and December 31, 2014 of $915,000 and $865,000, respectively. Tax benefits are recorded pursuant to the provisions of ASC 740 “Income Taxes.” If such unrecognized tax benefits are ultimately recorded in any period, the Company’s effective tax rate would be reduced accordingly for such period. The Company adopted FASB Accounting Standard 2013-11 during the first quarter of 2014. The pronouncement requires the Company to offset its uncertain tax positions against certain deferred tax assets in the same jurisdiction. As of September 30, 2015, the Company reclassified $430,000 of its uncertain tax positions against its related deferred tax assets. The Company has been examined by the Internal Revenue Service (the “IRS”) through the calendar year 2010. The federal and state income tax statutes are generally open for periods back to and including the calendar years 2011 and 2010, respectively. During the first quarter of 2015 the Company was contacted by the IRS to examine the calendar year 2013. The examination began in May 2015 and is expected to conclude during the second half of 2016. In addition, the Company reached a settlement with the IRS regarding the Company’s transfer pricing policies. As a result of the settlement, the Company is expected to receive a refund of $394,000, excluding interest. The financial statement impact was recorded in a prior year. It is reasonably possible that the Company’s gross unrecognized tax benefits, including interest, may change within the next twelve months due to the expiration of the statutes of limitation of the federal government and various state governments by a range of zero to $348,000. The Company records such unrecognized tax benefits upon the expiration of the applicable statute of limitations or the settlement with tax authorities. As of September 30, 2015, the Company has a liability for unrecognized benefits of $281,000, $203,000, and $431,000 for federal, international, and state taxes, respectively. Such benefits relate primarily to expenses incurred in those jurisdictions. The Company classifies interest and penalties related to unrecognized tax benefits as income tax expense. At September 30, 2015, and December 31, 2014, the Company has accrued approximately $113,000 and $81,000 for the payment of interest and penalties, respectively. |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Issued Accounting Pronouncements | 8. Recently Adopted and Issued Accounting Pronouncements In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of an Entity,” which amends the guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. ASU 2014-08 is effective prospectively for fiscal periods beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which provides guidance that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal periods beginning after December 15, 2017 and may be applied either (i) retrospectively to each prior reporting period presented with an election for certain specified practical expedients, or (ii) retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application, with additional disclosure requirements. Early application is not permitted. The Company is currently evaluating the impact of the implementation of this guidance on the Company’s consolidated financial statements. The Company’s management has not yet determined the method by which it will adopt the standard in 2018. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which removes the concept of extraordinary items from U.S. GAAP. Companies are no longer required to assess whether an event or transaction is both unusual in nature and infrequent in occurrence and to separately present any such items on the statement of operations after income from continuing operations. Such items will either be presented as a separate component of income from continuing operations or disclosed in the notes to the financial statements. ASU 2015-01 is effective for fiscal periods beginning after December 15, 2015. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. ASU 2014-15 is effective on for fiscal years beginning after December 15, 2015. Early adoption is permitted. Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements, and must provide certain disclosures about the change in accounting principle, including the nature of and reason for the change, the transition method, a description of the prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line items (that is, debt issuance cost asset and the debt liability). The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license in a manner consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 is effective for fiscal years beginning after December 15, 2015. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In June 2015, the FASB issued ASU No. 2015-10, “Technical Corrections and Improvements, which amends a number of Topics in the FASB Accounting Standards Codification,” which updates the Codification for non-substantive technical corrections, clarifications, and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost to most entities. The amendments that require transition guidance are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2015. All other amendments were effective immediately. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires entities to measure inventory, excluding inventory measured using last-in, first out or the retail inventory method, at the lower of cost and net realizable value. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of the implementation of this guidance on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Acquirers must now recognize measurement-period adjustments during the period in which they determine the amount of the adjustment. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and should be applied prospectively to adjustments for provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | 9. Acquisitions Acquisitions in Fiscal 2015 On May 22, 2015, the Company acquired certain assets and assumed certain liabilities of ITT Torque Systems, Inc. (“Torque Systems”), pursuant to an Asset Purchase Agreement for an initial purchase price of $9,000,000, plus a working capital adjustment of $169,000 (the “Torque Systems Acquisition”). The transaction was paid in cash on May 22, 2015 while the working capital adjustment was paid during the fourth quarter of 2015. Torque Systems designs and manufactures engineered motion control products, including brush servo motors, brushless servo motors, incremental encoders, and linear actuators. In connection with the Torque Systems Acquisition, SL-MTI recorded direct acquisition costs of approximately $186,000 during the first nine months of 2015, which are recorded within selling, general and administrative expenses in the Consolidated Statements of Income. SLMTI DS LLC (“SLMTI DS”), a subsidiary of SL-MTI, holds the assets acquired in the Torque Systems Acquisition. At September 30, 2015, the financial statements reflect the preliminary purchase price allocation based on estimated fair values at the date of acquisition. The acquisition resulted in intangible assets of $3,343,000 and goodwill of $1,176,000, which is deductible for tax purposes (see Note 10 for additional information). The Company continues to evaluate certain assets and liabilities related to the Torque Systems Acquisition. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill. The determination of the estimated fair values of all assets and liabilities acquired is expected to be completed during the fourth quarter of 2015. For the three and nine months ended September 30, 2015, $2,102,000 and $2,783,000 of net revenue was included in the Company’s consolidated statement of income due to Torque Systems. For the three and nine months ended September 30, 2015, $249,000 and $153,000 of income from operations was included in the Company’s consolidated statement of income due to Torque Systems. Income from operations for the nine months ended September 30, 2015 was negatively impacted by direct acquisition costs previously mentioned. The results from the acquisition date through September 30, 2015 are included in the SL-MTI segment. On July 27, 2015, the Company acquired all of the issued and outstanding stock of Davall Gears, LTD. (“Davall”) pursuant to a Share Purchase Agreement (“SPA”) for a purchase price of £13,035,000, which was approximately $20,207,000 at the exchange rates then in effect, subject to certain adjustments, principally the Completion Statement adjustment, as defined in the SPA (the “Davall Acquisition”). The transaction was paid for primarily from borrowings under the Company’s 2012 Credit Facility with the remainder in cash. Davall, headquartered in Welham Green, Hatfield, Hertfordshire, United Kingdom, is a manufacturer of custom gears, gearboxes, and assemblies primarily for the military and aerospace markets. Davall specializes in the design and manufacture of high precision, “special form” geometry gearing, and Spiradrive™ gear systems. In connection with the Davall Acquisition, SL-MTI recorded $1,028,000 of direct acquisition costs, of which $913,000 is recorded within selling, general and administrative expenses and $115,000 is recorded in other gain (loss), net in the Consolidated Statements of Income, and a $325,000 non-cash inventory purchase accounting adjustment, which is recorded within costs of products sold in the Consolidated Statements of Income. SL-MTI holds the assets acquired and liabilities assumed in the Davall Acquisition. At September 30, 2015, the financial statements reflect the preliminary purchase price allocation based on estimated fair values at the date of acquisition. As of the acquisition date, the acquisition resulted in intangible assets of $11,044,000 and goodwill of $2,982,000, which consists largely of new product offerings and new sales channels expected from combining the operations of SL-MTI and Davall. None of the goodwill recognized is expected to be deductible for income tax purposes (see Note 10 for additional information). The following table summarizes the amounts of the assets acquired and liabilities assumed as of the acquisition date: July 27, Receivables $ 2,726,000 Inventories 1,354,000 Other assets 267,000 Property, plant and equipment 5,796,000 Identifiable intangible assets 11,044,000 Accounts payable (834,000 ) Warranty (165,000 ) Accrued liabilities (2,963,000 ) Goodwill 2,982,000 Total consideration transferred $ 20,207,000 The Company continues to evaluate certain assets and liabilities related to the Davall Acquisition. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill. The determination of the estimated fair values of all assets and liabilities acquired is expected to be completed during fiscal year 2015. For the three and nine months ended September 30, 2015, $2,416,000 of net revenue was included in the Company’s consolidated statement of income due to Davall. For the three and nine months ended September 30, 2015, a $676,000 loss from operations was included in the Company’s consolidated statement of income due to Davall. The loss from operations was primarily due to the direct acquisition costs previously mentioned. The results from the acquisition date through September 30, 2015 are included in the SL-MTI segment. Acquisition in Fiscal 2014 On July 25, 2014, the Company acquired certain assets and assumed certain liabilities of Dynetic Systems, Inc. (“Dynetic”), pursuant to an Asset Purchase Agreement for an initial purchase price of $4,000,000 less a working capital adjustment of $27,000 (the “Dynetic Acquisition”). The transaction was paid in cash. The Asset Purchase Agreement also includes a possible earn-out, initially estimated at $310,000, which is comprised of annual payments based on sales of Dynetic products and sales to Dynetic customers over the period immediately following the date of the Dynetic Acquisition through December 31, 2017. Dynetic designed, developed and manufactured precision quality, instrument grade motion control products, and provided custom motor and motion control solutions to the aerospace, defense, medical, commercial and industrial markets. SLMTI DS holds the assets acquired in the Dynetic Acquisition. As of September 30, 2015, the total liability for the estimated earn-out was $216,000. During the first nine months of 2015, the Company reversed $72,000 of previously recorded expense associated with the fiscal 2015 earn-out provision since it was deemed that the annual target would not be achieved. The Company has an accrual established for the annual 2016 and 2017 earn-out targets. The Dynetic results from the date of acquisition through September 30, 2015 are included in the SL-MTI segment. Unaudited proforma financial information has not been presented for any of these acquisitions since the effects of the acquisitions were not material individually or in the aggregate in 2015 and 2014. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Intangible Assets | 10. Goodwill And Intangible Assets Intangible assets consist of the following: September 30, 2015 December 31, 2014 Amortizable Gross Value Accumulated Net Value Gross Value Accumulated Net Value (in thousands) Finite-lived intangible assets: Customer relationships (1) (2) 5 to 10 $ 11,817 $ 4,100 $ 7,717 $ 5,378 $ 3,858 $ 1,520 Patents (3) 5 to 20 1,523 1,236 287 1,501 1,223 278 Developed technology (1) (2) 5 to 10 6,630 1,801 4,829 1,980 1,719 261 License (2) 10 421 — 421 — — — Trademarks 2 60 35 25 60 13 47 Backlog (1) (2) 1 to 2 530 35 495 — — — Non-compete agreements 5 11 3 8 11 1 10 Total amortized finite-lived intangible assets 20,992 7,210 13,782 8,930 6,814 2,116 Indefinite-lived intangible assets: Trademarks (1) (2) 3,882 — 3,882 1,672 — 1,672 Other intangible assets, net $ 24,874 $ 7,210 $ 17,664 $ 10,602 $ 6,814 $ 3,788 (1) On May 22, 2015, the Company acquired certain assets and assumed certain liabilities of Torque Systems. Included in the purchase price allocation are customer relationships valued at $1,535,000 with an estimated useful life of 5 years, developed technology valued at $1,124,000 with an estimated useful of 8 years, backlog valued at $211,000 with an estimated life of 2 years, and an indefinite-lived trademark valued at $473,000. The total weighted-average amortization period of the Torque Systems intangible assets, excluding the indefinite-lived trademark, is approximately 6 years. (2) On July 27, 2015, the Company acquired all of the issued and outstanding stock of Davall. As of the acquisition date, included in the purchase price allocation are customer relationships valued at $4,966,000 with an estimated useful life of 10 years, developed technology valued at $3,570,000 with an estimated useful of 10 years, a royalty-free, perpetual license valued at $426,000 with an estimated useful life of 10 years, backlog valued at $323,000 with an estimated life of 1 year, and an indefinite-lived trademark valued at $1,759,000. The total weighted-average amortization period of the Davall intangible assets, excluding the indefinite-lived trademark, is approximately 10 years. (3) During 2015, MTE Corporation (“MTE”) capitalized $22,000 of legal fees related to a new patent application. The estimated useful life of the asset is 20 years. In accordance with ASC 350 “Intangibles – Goodwill and Other,” goodwill and other indefinite-lived intangible assets are not amortized, but are tested for impairment. Such impairment testing is undertaken annually, or more frequently upon the occurrence of some indication that an impairment has taken place. The Company conducted an annual impairment test as of December 31, 2014. A two-step process is utilized to determine if goodwill has been impaired. In the first step, the fair value of each reporting unit is compared to the net asset value recorded for such unit. If the fair value exceeds the net asset value, the goodwill of the reporting unit is not adjusted. However, if the recorded net asset value exceeds the fair value, the Company performs a second step to measure the amount of impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the goodwill recorded for such unit. If the recorded amount of goodwill exceeds the implied fair value, an impairment loss is recognized in the amount of the excess. Going forward there can be no assurance that economic conditions or other events may not have a negative material impact on the long-term business prospects of any of the Company’s reporting units. In such case, the Company may need to record an impairment loss, as stated above. The next annual impairment test will be conducted as of December 31, 2015, unless management identifies a triggering event in the interim. Management has not identified any triggering events, as defined by ASC 350, during the nine months ended September 30, 2015. Accordingly, no interim impairment test has been performed. Estimated future amortization expense for intangible assets subject to amortization in each of the next five fiscal years is as follows: Amortization (in thousands) 2015 $ 1,112 2016 $ 1,954 2017 $ 1,611 2018 $ 1,561 2019 $ 1,560 Total amortization expense, excluding the amortization of deferred financing costs, consists of amortization expense related to intangible assets and software. Amortization expense related to intangible assets for the three months ended September 30, 2015 and September 30, 2014 was $291,000 and $136,000 respectively. Amortization expense related to intangible assets for the nine months ended September 30, 2015 and September 30, 2014 was $396,000 and $319,000, respectively. Amortization expense related to software for the three months ended September 30, 2015 and September 30, 2014 was $51,000. Amortization expense related to software for the nine months ended September 30, 2015 and September 30, 2014 was $169,000 and $151,000, respectively. Changes in goodwill balances by segment (which are defined below) are as follows: Balance Acquisitions Foreign Balance (in thousands) SL Power Electronics Corp. $ 4,230 $ — $ 17 $ 4,247 High Power Group: MTE Corporation 8,189 — — 8,189 SL-MTI 653 4,158 (38 ) 4,773 Goodwill $ 13,072 $ 4,158 $ (21 ) $ 17,209 The following table reflects the components of goodwill as of September 30, 2015, and December 31, 2014: September 30, 2015 December 31, 2014 Gross Accumulated Goodwill, Gross Accumulated Goodwill, (in thousands) SL Power Electronics Corp. $ 4,247 $ — $ 4,247 $ 4,230 $ — $ 4,230 High Power Group: MTE Corporation 8,189 — 8,189 8,189 — 8,189 TEAL Electronics Corp. 5,055 5,055 — 5,055 5,055 — SL-MTI 4,773 — 4,773 653 — 653 Goodwill $ 22,264 $ 5,055 $ 17,209 $ 18,127 $ 5,055 $ 13,072 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 11. Investments Investments in publicly traded equity securities (which include equity interests of less than 20%) are classified as available-for-sale securities. These investments are carried at fair value using quoted market prices and are included in other current assets in the Company’s Consolidated Balance Sheets. Unrealized gains and losses, net of tax, are included in the determination of comprehensive income and reported in shareholders’ equity. During the six months ended June 30, 2014, the Company sold all of its available-for-sale securities for total proceeds of $4,054,000. The gross realized gains on these sales totaled $1,691,000 ($1,063,000 net of tax) for the nine months ended September 30, 2014. For the purpose of determining gross realized gains, the cost of securities sold was based on the first in, first out (FIFO) method. The Company had no available-for-sale securities as of September 30, 2015 and December 31, 2014. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt Debt as of September 30, 2015 consisted of the following: September 30, (in thousands) 2012 Credit Facility: $40 million variable interest rate senior revolving credit facility maturing in 2016 $ 13,500 Total debt 13,500 Less current portion (13,500 ) Total long-term portion $ — The Company had no debt as of December 31, 2014. On August 9, 2012, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and lender (“PNC Bank”), and the lenders from time to time party thereto, as amended (the “2012 Credit Facility). The 2012 Credit Facility provides for borrowings up to $40,000,000 and under certain conditions maximum borrowings up to $70,000,000. The 2012 Credit Facility includes a sublimit for letters of credit and provides for a separate $10,700,000 letter of credit which expires one year from the date of closing, with annual extensions. The sublimit for letters of credit equals the lesser of (i) an amount equal to $5,000,000 plus the aggregate amount of Designated Usage LC issued and outstanding under the Designated Usage LC sublimit or (ii) $25,000,000. The 2012 Credit Facility expires on August 9, 2016. Borrowings under the 2012 Credit Facility bear interest, at the Company’s option, at the London interbank offering rate (“LIBOR”) plus a margin rate ranging from 1.25% to 2.0%, or the higher of a Base Rate plus a margin rate ranging from 0.25% to 1.0%. The Base Rate is equal to the highest of (i) the Federal Funds Open Rate plus 0.5% and (ii) the Prime Rate and (iii) the Daily Libor Rate plus 1%. The margin rates are based on certain leverage ratios, as defined. As of September 30, 2015, the interest rate under the 2012 Credit Facility equaled 1.47%. The Company is subject to compliance with certain financial covenants set forth in the 2012 Credit Facility, including, but not limited to, indebtedness to EBITDA, as defined, minimum levels of fixed charges and limitations on capital expenditures, as defined. Availability under the 2012 Credit Facility is based upon the Company’s trailing twelve month EBITDA, as defined. The Company’s obligations under the 2012 Credit Facility are secured by the grant of security interests in substantially all of its assets. On May 28, 2013 a letter of credit in the amount of $8,564,000 was issued in favor of the Environmental Protection Agency (“EPA”) to provide financial assurance related to the Company’s annual environmental payments in accordance with the terms of the Consent Decree reached with the United States Department of Justice (“DOJ”) and EPA related to its liability for both the first operable unit (“OU-1”) and the second operable unit (“OU-2”) (see Note 15 for additional information). The letter of credit requires an annual commitment fee of 0.125% and standby commission of 1%, and does not reduce amounts available under the 2012 Credit Facility. On June 1, 2015, the Company made the third payment related to its obligation under the Consent Decree in the amount of $2,141,000, excluding interest. As of September 30, 2015, the total liability under the letter of credit equaled $4,282,000. The letter of credit expires on June 10, 2016, and is renewed annually. On March 25, 2015, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the 2012 Credit Facility. The Fourth Amendment amends the Credit Agreement in order to, among other things: (a) allow for permitted recapitalization distributions, and (b) provide greater flexibility with certain bank covenants, including with regard to EBITDA (as defined) and fixed charges. On May 5, 2015, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the 2012 Credit Facility. The Fifth Amendment amends the Credit Agreement in order to, among other things: (a) provide greater flexibility for acquisitions outside of the U.S., and (b) permit one of the Company’s subsidiaries to participate in a quick pay discount program with a major customer. In connection with the Davall Acquisition, on July 24, 2015, the Company entered into a Sixth Amendment (the “Sixth Amendment”) to the 2012 Credit Facility. The Sixth Amendment amends the Credit Agreement in order to, among other things: (a) join Davall as a borrower under the 2012 Credit Facility, and (b) establish a $4,000,000 subline for loans funded in USD to be made available to Davall (see Note 9 for additional information). The Company had an outstanding balance of $13,500,000 under the 2012 Credit Facility as of September 30, 2015. The Company had no outstanding balance under the 2012 Credit Facility as of December 31, 2014. At September 30, 2015, and December 31, 2014, the Company had total availability under the 2012 Credit Facility of $26,044,000 and $39,527,000, respectively. |
Accrued Liabilities - Other
Accrued Liabilities - Other | 9 Months Ended |
Sep. 30, 2015 | |
Text Block [Abstract] | |
Accrued Liabilities - Other | 13. Accrued Liabilities – Other Accrued liabilities – other consist of the following: September 30, December 31, (in thousands) Environmental $ 7,074 $ 9,475 Warranty 1,076 1,176 Taxes (other than income) and insurance 927 879 Commissions 482 551 Foreign currency forward contracts 761 673 Other professional fees 754 496 Accrued customer incentive plans 402 414 Deferred compensation – current 265 265 Litigation and legal fees 135 91 Acquisition earn-out, current — 32 Deferred revenue 38 44 Other 4,589 2,370 Accrued liabilities – other $ 16,503 $ 16,466 Included in the environmental accrual are estimates for all known costs believed to be probable and reasonably estimable for sites that the Company currently operates or operated at one time (see Note 15 for additional information). A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors including evaluating specific product warranty issues. The following is a summary of activity in accrued warranty and service liabilities: September 30, (in thousands) Liability, beginning of year $ 1,176 Expense for new warranties issued 226 Accruals assumed in acquisition (1) 165 Accruals related to preexisting warranties (2) (216 ) Warranty claims paid (275 ) Liability, end of period $ 1,076 (1) On July 27, 2015, the Company acquired all of the issued and outstanding stock of Davall. As of the acquisition date, included in the purchase price allocation is a warranty reserve valued at $165,000. (2) During 2015, the Company reversed $216,000 of specific warranty reserves which were recognized in previous years. The specific warranty reserves were reversed primarily due to lower than anticipated customer warranty claims or due to the expiration of warranty periods. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | 14. Other Long-Term Liabilities Other long-term liabilities consist of the following: September 30, December 31, (in thousands) Environmental $ 3,724 $ 7,384 Unrecognized tax benefits, interest and penalties 598 549 Long-term incentive plan 596 558 Acquisition earn-out, long-term 216 288 Other long-term liabilities $ 5,134 $ 8,779 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies The Company is involved in certain legal and regulatory actions. Management believes that the ultimate resolution of such matters is unlikely to have a material adverse effect on the Company’s financial condition or results of operations, except as described below. Letters Of Credit: As of September 30, 2015 and December 31, 2014, the Company was contingently liable for $4,282,000 and $6,423,000, respectively, under an outstanding letter of credit issued to provide financial assurance related to the Company’s environmental payments in accordance with the terms of the Consent Decree reached with the DOJ and EPA related to its liability for both OU-1 and OU-2. Litigation: In 2006 the EPA named the Company as a potential responsible party (a “PRP”) in connection with the remediation of the Puchack Well Field, which has been designated as a Superfund Site. The EPA is remediating the Puchack Well Field Superfund Site in two separate operable units. The first operable unit (“OU-1”) consists of an area of chromium groundwater contamination in three aquifers that exceeds the selected cleanup standard. The second operable unit (“OU-2”) pertains to sites that are allegedly the sources of contamination for the first operable unit. The Company has reached an agreement with both the DOJ and EPA effective April 30, 2013 related to its liability for both OU-1 and OU-2 pursuant to the terms of a Consent Decree which governs the agreement. Specifically, the Company has agreed to perform the remediation for OU-2 and pay a fixed sum for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost for OU-1. The payments are to be made in five equal payments of $2,141,000, for a total $10,705,000, plus interest. The Company has also agreed to pay the EPA’s costs for oversight of the OU-2 remediation. The United States District Court judge signed the Consent Decree effective April 30, 2013, thereby triggering the Company’s obligation under the Consent Decree. The Company has made three payments totaling $6,569,000 which includes interest, related to its obligation under the Consent Decree with the most recent payment being made on June 1, 2015. The fourth and fifth payments will be made on the anniversary of the prior year’s payment plus ten days in the amount of $2,141,000, plus interest. In 2013, the Company had obtained financial assurances for the OU-2 remediation and the fixed payments as required by the terms of the Consent Decree. The financial assurance is reduced annually as the fixed payments are made. Also, the financial instruments did not affect the Company’s availability under its Credit facility (see Note 12 Debt). The Company’s consultants performed a significant amount of work at the Pennsauken Site during 2015, which included demolition of the Company’s former facility and a building on an adjacent property, shoring, equipment mobilization and have been excavating and treating the impacted soils as required. Treatment of impacted soils at the site is approximately 70% complete. The Company’s consultants are also conducting remediation on an adjacent site. The location of the chromium impacted soils and geology has required additional characterization to complete the off-site remediation. After additional testing, remedial options will be presented to the EPA. An additional accrual was recorded during the quarter to provide a reserve for the cost arising from the work beyond the scope of the original project design. The Company’s consultants have been providing the EPA with progress reports on a monthly basis. The Company expects to incur significant remediation costs in the fourth quarter of 2015, which have been accrued. During the third quarter of 2012, the Company’s legal counsel was notified by the Assistant Attorney General of the State of New Jersey that they may file a claim for certain costs. On December 3, 2012, the Company received a demand letter from the State of New Jersey. The demand was for $1,300,000 for past and future cleanup costs and $500,000 for natural resource damages (“NRD”) for a total of $1,800,000. Although the Company and its counsel believe that it has meritorious defenses to any claim for reimbursement of past cost and NRD damages, the Company has offered to pay $250,000, which has been accrued, to fully resolve the claim presented by the State of New Jersey for past costs, future costs and NRD at the Puchack Well Field Superfund site. On June 29, 2015 the Company’s legal counsel received a letter from New Jersey’s Deputy Attorney General rejecting the Company’s counter offer, but stated that the matter was open for further negotiations. The Company is standing by its original defenses and has opened a dialogue with the New Jersey Deputy Attorney General. No further communication has been received from the New Jersey Deputy Attorney General regarding this matter. Other On March 10, 2015, Compass Directional Guidance, Inc. (“Compass”) filed a complaint (the “Complaint”) against SL-MTI in the District Court in Harris County, Texas. The Complaint seeks damages in excess of $18 million arising from the SL-MTI’s sale of certain brushless motors to Compass. Compass asserts that SL-MTI breached express and implied warranties, violated the Texas Deceptive Trade Practices Act, and negligently misrepresented the quality, specification and uses of its motors to Compass. SL-MTI intends to vigorously defend the claims asserted in the Complaint which it believes are limited by the contractual terms between the parties as well as the applicable statute of limitations, and are substantially without merit. The complaint is currently in the discovery phase. A trial date is currently set for April 2016. In the ordinary course of its business the Company is and may be subject to other loss contingencies pursuant to foreign and domestic federal, state and local governmental laws and regulations and may be party to certain legal actions, frequently involving complaints by terminated employees and disputes with customers, suppliers and others. In the opinion of management, any such other loss contingencies are not expected to have a material adverse effect on the financial condition or results of operations of the Company. Environmental Matters: There are three sites on which the Company may incur material environmental costs in the future as a result of past activities of its former subsidiary, SurfTech. There are two Company owned sites related to its former subsidiary, SurfTech. These sites are located in Pennsauken, New Jersey (the “Pennsauken Site”) and in Camden, New Jersey (the “Camden Site”). There is also a third site, which is not owned by the Company, referred to as the “Puchack Well Field Site.” The Puchack Well Field Site and the Pennsauken Site are part of the Puchack Well Field Superfund Site. With respect to the Camden Site, the Company has reported soil contamination and a groundwater contamination plume emanating from the site. The New Jersey Department of Environmental Protection (“NJDEP”) approved, and the Company implemented in 2010, an interim remedial action pilot study to inject neutralizing chemicals into the unsaturated soil. Based on an assessment of post-injection data, our consultants believe the pilot study can be implemented as a full scale soil remedy to treat unsaturated contaminated soil. A Remedial Action Workplan (“RAWP”) for soils is being developed. The RAWP will select the injection remedy as the site wide remedy for unsaturated soils, along with demolition and proper disposal of the former concrete building slab and targeted excavation and disposal of impacted soil immediately underlying the slab. Additionally, the RAWP will address a small area of impacted soil off the property. The RAWP for soils is expected to be submitted to the NJDEP in the fourth quarter of 2015, by the Licensed Site Remediation Professional (“LSRP”) for the site. The RAWP for treatment of unsaturated soils is scheduled to be implemented in the fourth quarter of 2015. The Company’s environmental consultants also implemented an interim remedial action pilot study to treat on-site contaminated groundwater, which consisted of injecting food-grade product, into the groundwater at the down gradient property boundary, to create a “bio-barrier.” Post-injection groundwater monitoring to assess the bio-barrier’s effectiveness was completed. Consistent decreases in target contaminants concentrations in groundwater were observed. In December 2014, a report was submitted to the NJDEP stating sufficient information was obtained from the pilot study to complete the full scale groundwater remedy design. A full scale groundwater bioremediation will be implemented in 2016 following the soil remediation mentioned above. As previously reported, the Company is currently participating in environmental assessments and cleanups at a number of sites. One of these sites is a commercial facility, located in Wayne, New Jersey. Contaminated soil and groundwater has undergone remediation with NJDEP and LSRP oversight, but contaminants of concern (“COCs”) in groundwater and surface water, which extend off-site, still remain above applicable NJDEP remediation standards. A soil remedial action plan has been developed to remove the new soil source contamination that continues to impact groundwater. Our LSRP completed a supplemental groundwater remedial action, pursuant to a RAWP filed with, and permit approved by, the NJDEP. The remedial action consisted of additional in-situ injections of food grade product into on-site groundwater and post-performance groundwater monitoring. The in-situ injections are completed, and remedial action performance monitoring for groundwater is scheduled to occur through 2015. Enhancements to the existing vapor intrusion system were completed in the fourth quarter 2014. No site constituents of concern were detected at concentrations exceeding applicable NJDEP indoor air screening levels. A report was filed with the NJDEP on March 23, 2015. The Company’s consultants have developed cost estimates for supplemental remedial injections, soil excavation and additional tests and remedial activities. Costs related to this site are recorded as part of discontinued operations, net of tax. The “Remedial Investigation” deadline for this site has been extended to May 7, 2016. The Company’s sale of RFL triggered certain requirements of the Industrial Site Recovery Act (“ISRA”), which applies to New Jersey statutorily, defined transactions involving industrial establishments. Under the stock purchase agreement pursuant to which RFL was sold (the “RFL-SPA”), the Company agreed to undertake, or cause to undertake, all actions necessary to comply with ISRA arising from the RFL-SPA. The Company hired an LSRP to complete a Preliminary Assessment. Based on the Preliminary Assessment, the LSRP recommended the completion of a site investigation (the “Site Investigation”) for certain areas of concern, including the sampling of on-site soils and installation and sampling of temporary groundwater wells, which will continue through the first quarter of 2016. Also, the Company’s LSRP anticipates that an ecological evaluation of the pond and installation of permanent groundwater monitoring wells will be conducted by the end of second quarter 2016. A Preliminary Assessment Report and Site Investigation Report are scheduled to be filed with the NJDEP by November 17, 2016 under a one-year filing extension with the NJDEP. Based on the outcome of the Preliminary assessment and Site Investigation, the Company may be obligated to perform additional investigation or remediation. The Company has reported soil and groundwater contamination at the facility of SL-MTI located on its property in Montevideo, Minnesota. An analysis of the contamination has been completed and a remediation plan has been implemented at the site pursuant to the remedial action plan approved by the Minnesota Pollution Control Agency (“MPCA”). A soil vapor extraction system has been operating at the site since October 2008. In 2013 the regulatory and screening levels for soil vapor and groundwater were lowered for some of the contaminants at the site. In response to this regulatory change, SL-MTI’s consultants are conducting additional testing to delineate site impacts and update the site conceptual model. A work plan was submitted to MPCA and approved on September 22, 2014. An Investigation Report and Monitoring Well Work Plan (“WP”) was submitted to the MPCA during the third quarter of 2015. No site work has been completed to date in 2015 as the MPCA has yet to respond the WP. Pending the approval of the WP, additional investigations, monitoring wells or remedial actions may be required in the future. Costs related to this site are recorded as a component of continuing operations. As of September 30, 2015 and December 31, 2014, environmental accruals of $10,798,000 and $16,859,000, respectively, have been recorded by the Company in accrued liabilities – other and in other long-term liabilities, as appropriate (see Notes 13 and 14 for additional information). |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information The Company has historically operated under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL. On November 17, 2014, the Company completed the sale of all the issued and outstanding capital stock of RFL and classified the results of operations of its RFL segment as discontinued operations. As a result, the Company currently operates under three business segments from continuing operations: SLPE, the High Power Group, and SL-MTI. TEAL Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas: • nature of products and services • nature of production process • type or class of customer • methods of distribution SLPE designs, manufactures and markets high-reliability power conversion products in internal and external footprints. The Company’s power supplies provide a reliable and safe power source for the customer’s specific equipment needs. SLPE, which sells products under three brand names (SL Power Electronics, Condor and Ault), is a major supplier to the original equipment manufacturers (“OEMs”) of medical, industrial/instrumentation, military, information technology equipment, and LED lighting and audio visual systems. The High Power Group sells products under two brand names (TEAL and MTE). TEAL designs and manufactures custom power conditioning and distribution units for OEMs of medical imaging, medical treatment, military aerospace, semiconductor, solar and advanced simulation systems. MTE designs and manufactures power quality products used to protect equipment from power surges, bring harmonics into compliance and improve the efficiency of variable speed motor drive systems. SL-MTI designs and manufactures high power density precision motors that are used in numerous applications, including military and commercial aerospace, oil and gas, and medical and industrial products. With the acquisition of Torque Systems, SL-MTI’s product portfolio has expanded to include engineered motion control products, including brush servo motors, brushless servo motors, incremental encoders, and linear actuators. SL-MTI’s product portfolio was further expanded by the Davall acquisition, which includes custom gears, gearboxes, and assemblies primarily for the military and aerospace markets. The Unallocated Corporate Expenses segment includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain treasury, risk management, legal, litigation and public reporting charges and certain legacy costs. The accounting policies for the business units are the same as those described in the summary of significant accounting policies. For additional information, see Note 1 of the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Business segment operations are conducted through domestic subsidiaries. For all periods presented, sales between business segments were not material. Each of the segments has certain major customers, the loss of any of which would have a material adverse effect on such segment. The unaudited comparative results for the three and nine month periods ended September 30, 2015 and September 30, 2014 are as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) Net sales SLPE $ 17,243 $ 17,821 $ 51,687 $ 54,504 High Power Group 15,224 21,699 53,366 64,461 SL-MTI 17,208 11,205 42,025 32,175 Net sales $ 49,675 $ 50,725 $ 147,078 $ 151,140 Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) Income from operations SLPE $ 2,416 $ 1,971 $ 6,140 $ 5,203 High Power Group 1,028 2,838 5,914 9,676 SL-MTI 1,791 1,243 6,200 5,146 Unallocated Corporate Expenses (1) (1,553 ) (1,870 ) (5,396 ) (5,099 ) Income from operations $ 3,682 $ 4,182 $ 12,858 $ 14,926 (1) Unallocated Corporate Expenses includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain legal, litigation and public reporting charges and certain legacy costs. Total assets as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, (in thousands) Total assets SLPE $ 33,128 $ 34,989 High Power Group 33,267 33,306 SL-MTI 58,236 22,752 Unallocated Corporate Assets 10,043 40,729 Total assets $ 134,674 $ 131,776 Goodwill and other intangible assets, net, as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, (in thousands) Goodwill and other intangible assets, net SLPE $ 4,547 $ 4,530 High Power Group 9,848 9,839 SL-MTI 20,478 2,491 Goodwill and other intangible assets, net $ 34,873 $ 16,860 |
Retirement Plans and Deferred C
Retirement Plans and Deferred Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans and Deferred Compensation | 17. Retirement Plans and Deferred Compensation During the nine months ended September 30, 2015 and September 30, 2014, the Company maintained a defined contribution pension plan covering all full-time, U.S. employees of SLPE, the High Power Group, including TEAL and MTE, SL-MTI, and the corporate office. The Company’s contributions to this plan are based on a percentage of employee contributions and/or plan year gross wages, as defined. Costs incurred under these plans amounted to $126,000 and $397,000 during the three and nine months ended September 30, 2015 compared to $114,000 and $430,000 during the three and nine months ended September 30, 2014. The decrease in 2015 was primarily due to the utilization of forfeitures within the plan to offset the Company’s cost. The Company has agreements with certain retired directors, officers and key employees providing for supplemental retirement benefits. The liability for supplemental retirement benefits is based on the most recent mortality tables available and discount rates ranging from 8% to 12%. The amount charged to expense in connection with these agreements amounted to $102,000 and $18,000 for the three month and nine month periods ended September 30, 2015. During the first nine months of 2015, the Company reversed a deferred compensation accrual due to the death of a pensioner. The amount charged to expense in connection with these agreements amounted to $88,000 and $239,000 for the three month and nine month periods ended September 30, 2014. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 18. Discontinued Operations The results of total income from discontinued operations for the three and nine months ended September 30, 2015 and September 30, 2014 were as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) (Loss) income from discontinued operations before income taxes: Divested operations – RFL $ — $ 808 $ — $ 1,219 Environmental costs (1,150 ) (205 ) (1,652 ) (641 ) Total (loss) income from discontinued operations before income taxes $ (1,150 ) $ 603 $ (1,652 ) $ 578 (Loss) income from discontinued operations, net of tax: Divested operations – RFL $ — $ 525 $ — $ 792 Environmental costs (700 ) (125 ) (1,005 ) (390 ) Total (loss) income from discontinued operations, net of tax $ (700 ) $ 400 $ (1,005 ) $ 402 The loss from discontinued operations due to environmental costs in 2015 and 2014 is related to remediation costs, consulting fees, and legal expenses associated with the past operations of the Company’s five environmental sites (See Note 15 – Commitments and Contingencies for further information concerning the environmental sites). On November 17, 2014, SL Delaware Holdings, a wholly-owned subsidiary of the Company, entered into the Purchase Agreement with Hubbell pursuant to which SL Delaware Holdings sold all of the issued and outstanding capital stock of RFL to Hubbell for aggregate cash consideration of $20,000,000, subject to a post-closing working capital adjustment which amounted to $299,000 and was received in February 2015. As a result, the Company recognized a pre-tax gain of $6,650,000 ($4,322,000 net of tax) as of December 31, 2014. A portion of the cash consideration was held in escrow to secure the indemnification obligations of SL Delaware Holdings. The Company was eligible to receive 50% of the total $2,000,000 escrow, or $1,000,000, subject to certain adjustments, after the first nine months from the date of sale, and the remainder after eighteen months from the date of sale. During the third quarter of 2015, the Company collected $835,000 of the escrow, which was net of a $165,000 payment related to a service agreement for a former executive. This amount had been accrued in 2014. The Company concluded that the accounting requirements for reporting the results of operations and cash flows of the divested business as discontinued operations were met at November 17, 2014. As a result, the consolidated statements of income for 2014 and the consolidated statements of cash flows for 2014 have been recast to reflect the formerly owned RFL businesses as discontinued operations. The results of the discontinued operations for RFL for the three and nine months ended September 30, 2014 were as follows: Three Months Ended Nine Months Ended Net sales $ 5,449 $ 14,368 Costs and expenses: Cost of products sold 2,624 7,117 Engineering and product development 502 1,363 Selling, general and administrative 1,415 4,319 Depreciation and amortization 98 319 Total cost and expenses 4,639 13,118 Income from operations 810 1,250 Other income (expense): Interest expense (2 ) (31 ) Income from discontinued operations before income taxes 808 1,219 Income tax provision 283 427 Income from discontinued operations, net of tax $ 525 $ 792 In the Consolidated Statements of Cash Flows for the nine months ended September 30, 2014, environmental costs and the financial results of the RFL segment were included in net cash (used in) operating activities from discontinued operations. The financial results of the RFL segment were included in net cash (used in) investing activities from discontinued operations and net cash (used in) financing activities from discontinued operations. |
Fair Value Measurement and Fina
Fair Value Measurement and Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement and Financial Instruments | 19. Fair Value Measurement and Financial Instruments ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Currently, the Company uses foreign currency forward contracts to hedge its foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates and market forward points. The fair value of the foreign currency forward contracts is based on interest differentials between the currencies being traded, spot rates and market forward points. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, where applicable. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of September 30, 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. In conjunction with its implementation of updates to the fair value measurements guidance, the Company made an accounting policy election to measure derivative financial instruments subject to master netting agreements on a net basis. The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall: Quoted Prices in Active Significant Other Significant Unobservable Balance at (in thousands) Liabilities Derivative financial instruments $ — $ 761 $ — $ 761 Quoted Prices in Active Significant Other Significant Unobservable Balance at (in thousands) Liabilities Derivative financial instruments $ — $ 673 $ — $ 673 The Company believes that the fair values of its current assets and current liabilities (cash and cash equivalents, receivables, net, short-term borrowings and current portion of long-term debt, accounts payable, and accrued liabilities) approximate their reported carrying amounts. The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of September 30, 2015 and December 31, 2014. Credit Risk Contingent Features The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 20. Derivative Instruments and Hedging Activities ASC Topic 815, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows related to forecasted foreign exchange-based risk are considered economic hedges of the Company’s forecasted cash flows. Risk Management Objective of Using Derivatives The Company is a U.S. dollars (USD) functional currency entity that manufactures products in the USA, Mexico and China. The Company’s sales are priced in USD and its costs and expenses are priced in USD, Mexican pesos (MXN) and Chinese Yuan (CNH). As a result, the Company has exposure to changes in exchange rates between the time when expenses in the non-functional currencies are initially incurred and the time when the expenses are ultimately paid. The Company’s objective in using derivatives is to add stability and to manage its exposure to foreign exchange risks. To accomplish this objective, the Company uses foreign currency forward contracts to manage its exposure to fluctuations in the exchange rates. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date. During 2014 and 2015, the Company entered into a series of foreign currency forward contracts to hedge its exposure to foreign exchange rate movements in its forecasted expenses in China and Mexico. The foreign currency forwards are not speculative and are being used to manage the Company’s exposure to foreign exchange rate movements. Foreign currency forward contracts involve fixing the USD-MXN and USD-CNH exchange rates for delivery of a specified amount of foreign currency on a specified date. The Company has elected not to apply hedge accounting to these derivatives and they are marked to market through earnings. Therefore, gains and losses resulting from changes in the fair value of these contracts are recognized at the end of each reporting period directly in earnings. The gains and losses associated with the foreign currency forward contracts are included in other gain (loss), net on the Consolidated Statements of Income. As of September 30, 2015, the fair value of the foreign currency forward contracts was recorded as a $761,000 liability in other current liabilities on the Consolidated Balance Sheets. As of December 31, 2014, the fair value of the foreign currency forward contracts was recorded as a $673,000 liability in other current liabilities on the Consolidated Balance Sheets. Non-designated Hedges of Foreign Exchange Risk The notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. The following table summarizes the notional values of the Company’s derivative financial instruments as of September 30, 2015. Product Number of Instruments Notional (in thousands) Mexican Peso (MXN) Forward Contracts 16 MXN 95,741 Chinese Yuan (CNH) Forward Contracts 14 CNH 59,176 The following table details the location in the financial statements of the gain or loss recognized on foreign currency forward contracts that are marked to market for the three and nine months ended September 30, 2015 and September 30, 2014: Amount of Gain (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Income (Loss) Three Months Ended Three Months Ended (in thousands) (in thousands) Foreign Exchange Contracts Other gain (loss), net $ (564 ) $ 54 Amount of Gain (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Income (Loss) Nine Months Ended Nine Months Ended (in thousands) (in thousands) Foreign Exchange Contracts Other gain (loss), net $ (88 ) $ (167 ) |
Other Gain (Loss), net
Other Gain (Loss), net | 9 Months Ended |
Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Other Gain (Loss), net | 21. Other Gain (Loss), net Other gain (loss), net for the nine months ended September 30, 2015 includes a $88,000 unrealized loss on foreign currency forward contracts (see Note 20 – Derivative Instruments and Hedging Activities for further information) and $65,000 of net foreign currency transaction gains. The primary driver of the net foreign currency transaction gains were the fluctuations in the value of the USD to CNH and fluctuations in the value of the USD to British Pound (GBP). Other gain (loss), net for the nine months ended September 30, 2014 includes a $1,691,000 gain recognized from the sale of available-for-sale securities (see Note 11 – Investments for further information) and $11,000 of dividend income received from investments in available-for-sale securities, which were partially offset by a $167,000 unrealized loss on foreign currency forward contracts. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 22. Supplemental Cash Flow Information For the nine months ended September 30, 2015 and September 30, 2014, net cash used in operating activities from discontinued operations was $7,619,000 and $3,862,000, respectively. In 2015, net cash used in operating activities from discontinued operations was primarily related to environmental payments. In 2014, net cash used in operating activities from discontinued operations was primarily related to environmental payments previously mentioned, which was partially offset by an add back of depreciation and amortization expense associated with the formerly owned RFL segment (see Note 18 for additional information). For the nine months ended September 30, 2014, net cash used in investing activities from discontinued operations was $182,000. In 2014, net cash used in investing activities from discontinued operations was related to purchases of property, plant and equipment by the Company’s formerly owned RFL segment. Net cash used in investing activities from discontinued operations was zero in 2015. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | 23. Shareholders’ Equity On March 27, 2015, the Company announced a modified “Dutch Auction” Tender Offer to purchase up to $20 million of its common shares (the “Tender Offer”). The Tender Offer expired at the end of the day on April 23, 2015. Under the terms of the Tender Offer, the Company’s shareholders had the option of tendering all or a portion of the Company’s common stock that they owned (1) at a price of not less than $39.00 and not greater than $42.00, in increments of $0.25 per share, or (2) without specifying a purchase price, in which case the common stock that they owned would have been purchased at the purchase price determined in accordance with the Tender Offer. All common stock purchased by the Company in the Tender Offer were purchased at the same price. The Company accepted for purchase approximately 160,000 shares of its common stock at a purchase price of $42.00 per share. These shares represented approximately 3.9% of the total common stock outstanding as of April 24, 2015 prior to the purchase of shares pursuant to the Tender Offer. Upon completion of the Tender Offer, the Company had approximately 3,934,000 shares of common stock outstanding at that time. The aggregate purchase price paid by the Company in connection with the Tender Offer was $6,734,000 excluding transaction costs. On April 27, 2015, the Company paid for the Tender Offer with available cash on hand. On December 24, 2014, the Board of Directors authorized a plan that allows for the repurchase up to an aggregate of 420,000 shares of the Company’s outstanding common stock (the “2014 Repurchase Plan”). Any repurchases pursuant to the 2014 Repurchase Plan would be made in the open market or in negotiated transactions. During the first nine months of 2015, the Company purchased approximately 89,000 shares of Company stock at an average price of $39.37 a share. As a result, as of September 30, 2015, approximately 331,000 shares remained available for purchase under the 2014 Repurchase Plan. Currently, the 2014 Repurchase Plan has no expiration date. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 24. Related Party Transactions On May 1, 2014, the Company renewed the Management Services Agreement (“Management Services Agreement”) with SP Corporate Services LLC (“SP Corporate”). SP Corporate is an affiliate of SPH Group Holdings LLC (“SPHG”). A member of the Company’s Board of Directors, Warren G. Lichtenstein, is affiliated with SPHG. Also, the Company’s Chairman of the Board of Directors, Glen M. Kassan is affiliated with SPHG. Pursuant to the Management Services Agreement, SP Corporate agreed to provide, at the direction of the Company’s Chief Executive Officer (“CEO”), non-exclusive services to support the Company’s growth strategy, business development, planning, execution assistance and related support services. The monthly fee for these services is $10,400 paid in advance. The Management Services Agreement has a term of one year and has been approved by the Audit Committee of the Board of Directors and a majority of the disinterested directors of the Company. On March 25, 2015, the Company and SP Corporate entered into an amendment to the Management Services Agreement (the “Amendment”) in order to, among other things, extend the term of the Management Services Agreement until May 1, 2016, and to provide, at the direction of the Company’s CEO, non-exclusive services to support the Company’s talent and organizational development, including transformative change management, talent recruitment, talent development (both domestic and international), organizational review services, and other related support services (the “Talent Services”). The services provided under the Amendment are in addition to the services provided under the Management Services Agreement prior to such amendment. The Amendment is effective May 1, 2015. Upon effectiveness of the Amendment, the monthly fee for services under the Management Services Agreement was set at $27,400 paid in advance. During the third quarter of 2015 it was determined that the Talent Services portion of the Amendment will not be utilized. Accordingly, the Amendment will be modified to exclude the Talent Services component of the Amendment and related service fee. The monthly service fee will revert back to the original amount of $10,400 to be paid in advance. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | 25. Restructuring Costs Restructuring activity for the period ended September 30, 2015 was as follows: Accrual at Charged to Cash Accrual at (in thousands) 2015 Plan Severance and other employee-related charges $ — $ 223 $ 186 $ 37 2015 Restructuring Plan During the third quarter of 2015, the Company announced to its employees a restructuring plan (“2015 Restructuring Plan”) to align its costs with current and projected sales activity. The costs reductions were primarily production, engineering, selling and administration employees at MTE and TEAL, which comprise the High Power Group. As of September 30, 2015, there was a consolidated charge to earnings of $223,000, which was composed of severance and other employee related charges. The total number of employees affected by the restructuring plan was 28, of which 26 had been terminated during the third quarter of 2015. 2014 Restructuring Plan During the first quarter of 2014, the Company announced to its employees a restructuring plan (“2014 Restructuring Plan”) to align its costs with current and projected sales activity. The costs reductions were primarily production, engineering, selling and administration employees at TEAL, which is part of the High Power Group. As of September 30, 2014, there was a consolidated charge to earnings of $463,000, which was composed of severance and other employee related charges. The total number of employees affected by the restructuring plan was 11, all of which had been terminated during the first quarter of 2014. |
Non-Binding Proposal to Acquire
Non-Binding Proposal to Acquire SL Industries | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Non-Binding Proposal to Acquire SL Industries | 26. Non-Binding Proposal to Acquire SL Industries On June 18, 2015, the independent members of the Company’s Board of Directors received a non-binding proposal from Handy & Harman Ltd. (“H&H”), a publicly-traded NASDAQ company and an affiliate of Steel Partners Holdings L.P. (“Steel”), to acquire all the outstanding shares of common stock of the Company, through an appropriate acquisition entity, for a price of $43.00 to $45.00 per share (subject to limited confirmatory due diligence). The proposal contemplates that the Company’s stockholders other than Steel would be able to elect to receive cash or stock of H&H (with Steel electing to receive all stock), subject to proration so that the aggregate consideration consists of 55% cash and 45% H&H stock. The Company’s Board of Directors has established a Special Committee of the Board (the “Special Committee”) comprising independent directors, which has been authorized, among other things, to evaluate the proposal. The Special Committee is reviewing and considering the proposal carefully in due course, as well as other proposals from unaffiliated third parties that have been or may be received, consistent with its fiduciary duties to act in the best interest of stockholders. There is no assurance that the Special Committee will recommend any transaction, or that any such transaction will be consummated. The Company undertakes no obligation to update this disclosure. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis Of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereon included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Unless the context requires otherwise, the terms the “Company,” “SL Industries,” “we,” “us” and “our” mean SL Industries, Inc., a Delaware Corporation, and its consolidated subsidiaries. On November 17, 2014, SL Delaware Holdings, Inc. (“SL Delaware Holdings”), a wholly-owned subsidiary of the Company, entered into a definitive Stock Purchase Agreement (the “Purchase Agreement”) with Hubbell Power Systems, Inc. (“Hubbell”), a subsidiary of Hubbell Incorporated, pursuant to which SL Delaware Holdings sold all of the issued and outstanding capital stock of RFL Electronics Inc. (“RFL”). The Company concluded that the accounting requirements for reporting the results of operations and cash flows of the divested business as discontinued operations were met at November 17, 2014. As a result, the accompanying consolidated statements of income for 2014, the consolidated statements of cash flows for 2014, and certain amounts in these notes to the consolidated financial statements related to 2014 have been recast to reflect the presentation of the results of operations and cash flows of the formerly owned RFL businesses as discontinued operations. Refer to Note 18, “Discontinued Operations”, for additional information regarding this transaction. |
Income Per Share | Income Per Share The Company has presented net income (loss) per common share pursuant to Accounting Standards Codification (“ASC”) 260 “Earnings Per Share.” Basic net income per common share is computed by dividing reported net income available to common shareholders by the weighted-average number of shares outstanding for the period. Diluted net income per common share is computed by dividing reported net income available to common shareholders by the weighted-average shares outstanding for the period, adjusted for the dilutive effect of common stock equivalents, which consist of stock options, using the treasury stock method. There were no anti-dilutive options for the three and nine months ended September 30, 2015. There were no anti-dilutive options for the three months ended September 30, 2014. For the nine months ended September 30, 2014, 3,000 stock options were excluded from the dilutive computation as the assumed shares repurchased under the treasury method would have been anti-dilutive. |
Income Tax | Income Tax The Company calculates its interim tax provision in accordance with the provisions of ASC 740-270 “Income Taxes – Interim Reporting.” For each interim period the Company estimates its annual effective income tax rate and applies the estimated rate to its year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items separately reported, such as discontinued operations, and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted and Issued Accounting Pronouncements In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of an Entity,” which amends the guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. ASU 2014-08 is effective prospectively for fiscal periods beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). The implementation of this guidance did not have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which provides guidance that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal periods beginning after December 15, 2017 and may be applied either (i) retrospectively to each prior reporting period presented with an election for certain specified practical expedients, or (ii) retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application, with additional disclosure requirements. Early application is not permitted. The Company is currently evaluating the impact of the implementation of this guidance on the Company’s consolidated financial statements. The Company’s management has not yet determined the method by which it will adopt the standard in 2018. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which removes the concept of extraordinary items from U.S. GAAP. Companies are no longer required to assess whether an event or transaction is both unusual in nature and infrequent in occurrence and to separately present any such items on the statement of operations after income from continuing operations. Such items will either be presented as a separate component of income from continuing operations or disclosed in the notes to the financial statements. ASU 2015-01 is effective for fiscal periods beginning after December 15, 2015. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. ASU 2014-15 is effective on for fiscal years beginning after December 15, 2015. Early adoption is permitted. Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements, and must provide certain disclosures about the change in accounting principle, including the nature of and reason for the change, the transition method, a description of the prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line items (that is, debt issuance cost asset and the debt liability). The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license in a manner consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 is effective for fiscal years beginning after December 15, 2015. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In June 2015, the FASB issued ASU No. 2015-10, “Technical Corrections and Improvements, which amends a number of Topics in the FASB Accounting Standards Codification,” which updates the Codification for non-substantive technical corrections, clarifications, and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost to most entities. The amendments that require transition guidance are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2015. All other amendments were effective immediately. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires entities to measure inventory, excluding inventory measured using last-in, first out or the retail inventory method, at the lower of cost and net realizable value. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of the implementation of this guidance on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Acquirers must now recognize measurement-period adjustments during the period in which they determine the amount of the adjustment. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and should be applied prospectively to adjustments for provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. The implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. |
Segment Information | The Company has historically operated under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL. On November 17, 2014, the Company completed the sale of all the issued and outstanding capital stock of RFL and classified the results of operations of its RFL segment as discontinued operations. As a result, the Company currently operates under three business segments from continuing operations: SLPE, the High Power Group, and SL-MTI. TEAL Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas: • nature of products and services • nature of production process • type or class of customer • methods of distribution |
Fair Value Measurement and Financial Instruments | Fair Value Measurement and Financial Instruments ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Currently, the Company uses foreign currency forward contracts to hedge its foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates and market forward points. The fair value of the foreign currency forward contracts is based on interest differentials between the currencies being traded, spot rates and market forward points. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees, where applicable. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of September 30, 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. In conjunction with its implementation of updates to the fair value measurements guidance, the Company made an accounting policy election to measure derivative financial instruments subject to master netting agreements on a net basis. |
Derivatives as hedging activities | ASC Topic 815, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC Topic 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows related to forecasted foreign exchange-based risk are considered economic hedges of the Company’s forecasted cash flows. |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Receivables | Receivables consist of the following: September 30, December 31, (in thousands) Trade receivables $ 34,547 $ 34,025 Less: allowance for doubtful accounts (348 ) (281 ) Trade receivables, net 34,199 33,744 Recoverable income taxes 21 81 Other 361 141 Receivables, net $ 34,581 $ 33,966 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following: September 30, December 31, (in thousands) Raw materials $ 18,972 $ 16,865 Work in process 4,781 4,584 Finished goods 3,320 4,232 Gross inventory 27,073 25,681 Less: allowances (2,372 ) (2,084 ) Inventories, net $ 24,701 $ 23,597 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Other Current Assets | Other current assets consist of the following: September 30, December 31, (in thousands) Prepaid insurance $ 969 $ 228 Taxes receivable (1) 2,281 299 RFL escrow (2) 1,000 2,000 Other 1,806 2,224 Other current assets $ 6,056 $ 4,751 (1) The increase in taxes receivable in 2015 was primarily due to an increase in TEAL Electronics Corp.’s (“TEAL”) value-added tax receivable related to activities in Mexico. (2) See Note 18 – Discontinued Operations for further information concerning the RFL escrow. |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The table below sets forth the computation of basic and diluted net income per share: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands, except per share amounts) Net income (loss) available to common shareholders: Basic net income available to common shareholders from continuing operations $ 1,837 $ 2,495 $ 8,255 $ 10,548 Basic net (loss) income available to common shareholders from discontinued operations $ (700 ) $ 400 $ (1,005 ) $ 402 Diluted net income available to common shareholders from continuing operations $ 1,837 $ 2,495 $ 8,255 $ 10,548 Diluted net (loss) income available to common shareholders from discontinued operations $ (700 ) $ 400 $ (1,005 ) $ 402 Shares: Basic weighted average number of common shares outstanding 3,960 4,145 4,015 4,137 Common shares assumed upon exercise of stock options 29 59 44 41 Diluted weighted average number of common shares outstanding 3,989 4,204 4,059 4,178 Basic net income (loss) per common share: Income from continuing operations $ 0.46 $ 0.60 $ 2.06 $ 2.55 (Loss) income from discontinued operations, net of tax (0.17 ) 0.10 (0.25 ) 0.10 Net income $ 0.29 $ 0.70 $ 1.81 $ 2.65 Diluted net income (loss) per common share: Income from continuing operations $ 0.46 $ 0.59 $ 2.03 $ 2.52 (Loss) income from discontinued operations, net of tax (0.17 ) 0.10 (0.24 ) 0.10 Net income $ 0.29 $ 0.69 $ 1.79 $ 2.62 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option Activity under Principal Option Plans | Option activity under the principal option plans as of September 30, 2015 and changes during the nine months ended September 30, 2015 were as follows: Outstanding Weighted Average Weighted Average Aggregate Intrinsic (in thousands) (in years) (in thousands) Outstanding as of December 31, 2014 184 $ 19.71 3.59 $ 3,540 Granted — — Exercised (58 ) 12.02 Forfeited — — Expired — — Outstanding as of September 30, 2015 126 $ 23.23 3.50 $ 1,388 Exercisable as of September 30, 2015 28 $ 13.36 2.57 $ 590 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Davall [Member] | |
Summary of Amounts of Assets Acquired and Liabilities Assumed | The following table summarizes the amounts of the assets acquired and liabilities assumed as of the acquisition date: July 27, Receivables $ 2,726,000 Inventories 1,354,000 Other assets 267,000 Property, plant and equipment 5,796,000 Identifiable intangible assets 11,044,000 Accounts payable (834,000 ) Warranty (165,000 ) Accrued liabilities (2,963,000 ) Goodwill 2,982,000 Total consideration transferred $ 20,207,000 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: September 30, 2015 December 31, 2014 Amortizable Gross Value Accumulated Net Value Gross Value Accumulated Net Value (in thousands) Finite-lived intangible assets: Customer relationships (1) (2) 5 to 10 $ 11,817 $ 4,100 $ 7,717 $ 5,378 $ 3,858 $ 1,520 Patents (3) 5 to 20 1,523 1,236 287 1,501 1,223 278 Developed technology (1) (2) 5 to 10 6,630 1,801 4,829 1,980 1,719 261 License (2) 10 421 — 421 — — — Trademarks 2 60 35 25 60 13 47 Backlog (1) (2) 1 to 2 530 35 495 — — — Non-compete agreements 5 11 3 8 11 1 10 Total amortized finite-lived intangible assets 20,992 7,210 13,782 8,930 6,814 2,116 Indefinite-lived intangible assets: Trademarks (1) (2) 3,882 — 3,882 1,672 — 1,672 Other intangible assets, net $ 24,874 $ 7,210 $ 17,664 $ 10,602 $ 6,814 $ 3,788 (1) On May 22, 2015, the Company acquired certain assets and assumed certain liabilities of Torque Systems. Included in the purchase price allocation are customer relationships valued at $1,535,000 with an estimated useful life of 5 years, developed technology valued at $1,124,000 with an estimated useful of 8 years, backlog valued at $211,000 with an estimated life of 2 years, and an indefinite-lived trademark valued at $473,000. The total weighted-average amortization period of the Torque Systems intangible assets, excluding the indefinite-lived trademark, is approximately 6 years. (2) On July 27, 2015, the Company acquired all of the issued and outstanding stock of Davall. As of the acquisition date, included in the purchase price allocation are customer relationships valued at $4,966,000 with an estimated useful life of 10 years, developed technology valued at $3,570,000 with an estimated useful of 10 years, a royalty-free, perpetual license valued at $426,000 with an estimated useful life of 10 years, backlog valued at $323,000 with an estimated life of 1 year, and an indefinite-lived trademark valued at $1,759,000. The total weighted-average amortization period of the Davall intangible assets, excluding the indefinite-lived trademark, is approximately 10 years. (3) During 2015, MTE Corporation (“MTE”) capitalized $22,000 of legal fees related to a new patent application. The estimated useful life of the asset is 20 years. |
Estimated Future Amortization Expense for Intangible Assets Subject to Amortization | Estimated future amortization expense for intangible assets subject to amortization in each of the next five fiscal years is as follows: Amortization (in thousands) 2015 $ 1,112 2016 $ 1,954 2017 $ 1,611 2018 $ 1,561 2019 $ 1,560 |
Changes in Goodwill Balances by Segment | Changes in goodwill balances by segment (which are defined below) are as follows: Balance Acquisitions Foreign Balance (in thousands) SL Power Electronics Corp. $ 4,230 $ — $ 17 $ 4,247 High Power Group: MTE Corporation 8,189 — — 8,189 SL-MTI 653 4,158 (38 ) 4,773 Goodwill $ 13,072 $ 4,158 $ (21 ) $ 17,209 |
Components of Goodwill | The following table reflects the components of goodwill as of September 30, 2015, and December 31, 2014: September 30, 2015 December 31, 2014 Gross Accumulated Goodwill, Gross Accumulated Goodwill, (in thousands) SL Power Electronics Corp. $ 4,247 $ — $ 4,247 $ 4,230 $ — $ 4,230 High Power Group: MTE Corporation 8,189 — 8,189 8,189 — 8,189 TEAL Electronics Corp. 5,055 5,055 — 5,055 5,055 — SL-MTI 4,773 — 4,773 653 — 653 Goodwill $ 22,264 $ 5,055 $ 17,209 $ 18,127 $ 5,055 $ 13,072 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt as of September 30, 2015 consisted of the following: September 30, (in thousands) 2012 Credit Facility: $40 million variable interest rate senior revolving credit facility maturing in 2016 $ 13,500 Total debt 13,500 Less current portion (13,500 ) Total long-term portion $ — |
Accrued Liabilities - Other (Ta
Accrued Liabilities - Other (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Text Block [Abstract] | |
Accrued Liabilities - Other | Accrued liabilities – other consist of the following: September 30, December 31, (in thousands) Environmental $ 7,074 $ 9,475 Warranty 1,076 1,176 Taxes (other than income) and insurance 927 879 Commissions 482 551 Foreign currency forward contracts 761 673 Other professional fees 754 496 Accrued customer incentive plans 402 414 Deferred compensation – current 265 265 Litigation and legal fees 135 91 Acquisition earn-out, current — 32 Deferred revenue 38 44 Other 4,589 2,370 Accrued liabilities – other $ 16,503 $ 16,466 |
Summary of Activity in Accrued Warranty and Service Liabilities | The following is a summary of activity in accrued warranty and service liabilities: September 30, (in thousands) Liability, beginning of year $ 1,176 Expense for new warranties issued 226 Accruals assumed in acquisition (1) 165 Accruals related to preexisting warranties (2) (216 ) Warranty claims paid (275 ) Liability, end of period $ 1,076 (1) On July 27, 2015, the Company acquired all of the issued and outstanding stock of Davall. As of the acquisition date, included in the purchase price allocation is a warranty reserve valued at $165,000. (2) During 2015, the Company reversed $216,000 of specific warranty reserves which were recognized in previous years. The specific warranty reserves were reversed primarily due to lower than anticipated customer warranty claims or due to the expiration of warranty periods. |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other long-term liabilities consist of the following: September 30, December 31, (in thousands) Environmental $ 3,724 $ 7,384 Unrecognized tax benefits, interest and penalties 598 549 Long-term incentive plan 596 558 Acquisition earn-out, long-term 216 288 Other long-term liabilities $ 5,134 $ 8,779 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Comparative Results of Segment Information | The unaudited comparative results for the three and nine month periods ended September 30, 2015 and September 30, 2014 are as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) Net sales SLPE $ 17,243 $ 17,821 $ 51,687 $ 54,504 High Power Group 15,224 21,699 53,366 64,461 SL-MTI 17,208 11,205 42,025 32,175 Net sales $ 49,675 $ 50,725 $ 147,078 $ 151,140 Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) Income from operations SLPE $ 2,416 $ 1,971 $ 6,140 $ 5,203 High Power Group 1,028 2,838 5,914 9,676 SL-MTI 1,791 1,243 6,200 5,146 Unallocated Corporate Expenses (1) (1,553 ) (1,870 ) (5,396 ) (5,099 ) Income from operations $ 3,682 $ 4,182 $ 12,858 $ 14,926 (1) Unallocated Corporate Expenses includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain legal, litigation and public reporting charges and certain legacy costs. |
Total Assets by Segment | Total assets as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, (in thousands) Total assets SLPE $ 33,128 $ 34,989 High Power Group 33,267 33,306 SL-MTI 58,236 22,752 Unallocated Corporate Assets 10,043 40,729 Total assets $ 134,674 $ 131,776 |
Goodwill and Other Intangible Assets, Net by Segment | Goodwill and other intangible assets, net, as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, (in thousands) Goodwill and other intangible assets, net SLPE $ 4,547 $ 4,530 High Power Group 9,848 9,839 SL-MTI 20,478 2,491 Goodwill and other intangible assets, net $ 34,873 $ 16,860 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Income from Discontinued Operations | The results of total income from discontinued operations for the three and nine months ended September 30, 2015 and September 30, 2014 were as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (in thousands) (in thousands) (Loss) income from discontinued operations before income taxes: Divested operations – RFL $ — $ 808 $ — $ 1,219 Environmental costs (1,150 ) (205 ) (1,652 ) (641 ) Total (loss) income from discontinued operations before income taxes $ (1,150 ) $ 603 $ (1,652 ) $ 578 (Loss) income from discontinued operations, net of tax: Divested operations – RFL $ — $ 525 $ — $ 792 Environmental costs (700 ) (125 ) (1,005 ) (390 ) Total (loss) income from discontinued operations, net of tax $ (700 ) $ 400 $ (1,005 ) $ 402 |
RFL [Member] | |
Schedule of Income from Discontinued Operations | The results of the discontinued operations for RFL for the three and nine months ended September 30, 2014 were as follows: Three Months Ended Nine Months Ended Net sales $ 5,449 $ 14,368 Costs and expenses: Cost of products sold 2,624 7,117 Engineering and product development 502 1,363 Selling, general and administrative 1,415 4,319 Depreciation and amortization 98 319 Total cost and expenses 4,639 13,118 Income from operations 810 1,250 Other income (expense): Interest expense (2 ) (31 ) Income from discontinued operations before income taxes 808 1,219 Income tax provision 283 427 Income from discontinued operations, net of tax $ 525 $ 792 |
Fair Value Measurement and Fi46
Fair Value Measurement and Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall: Quoted Prices in Active Significant Other Significant Unobservable Balance at (in thousands) Liabilities Derivative financial instruments $ — $ 761 $ — $ 761 Quoted Prices in Active Significant Other Significant Unobservable Balance at (in thousands) Liabilities Derivative financial instruments $ — $ 673 $ — $ 673 |
Derivative Instruments and He47
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Values of Company's Derivative Financial Instruments | The following table summarizes the notional values of the Company’s derivative financial instruments as of September 30, 2015. Product Number of Instruments Notional (in thousands) Mexican Peso (MXN) Forward Contracts 16 MXN 95,741 Chinese Yuan (CNH) Forward Contracts 14 CNH 59,176 |
Gain or Loss Recognized on Foreign Currency Forward Contracts | The following table details the location in the financial statements of the gain or loss recognized on foreign currency forward contracts that are marked to market for the three and nine months ended September 30, 2015 and September 30, 2014: Amount of Gain (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Income (Loss) Three Months Ended Three Months Ended (in thousands) (in thousands) Foreign Exchange Contracts Other gain (loss), net $ (564 ) $ 54 Amount of Gain (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Income (Loss) Nine Months Ended Nine Months Ended (in thousands) (in thousands) Foreign Exchange Contracts Other gain (loss), net $ (88 ) $ (167 ) |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs | Restructuring activity for the period ended September 30, 2015 was as follows: Accrual at Charged to Cash Accrual at (in thousands) 2015 Plan Severance and other employee-related charges $ — $ 223 $ 186 $ 37 |
Receivables - Receivables (Deta
Receivables - Receivables (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Trade receivables | $ 34,547,000 | $ 34,025,000 |
Less: allowance for doubtful accounts | (348,000) | (281,000) |
Trade receivables, net | 34,199,000 | 33,744,000 |
Recoverable income taxes | 21,000 | 81,000 |
Other | 361,000 | 141,000 |
Receivables, net | $ 34,581,000 | $ 33,966,000 |
Inventories - Inventories (Deta
Inventories - Inventories (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 18,972,000 | $ 16,865,000 |
Work in process | 4,781,000 | 4,584,000 |
Finished goods | 3,320,000 | 4,232,000 |
Gross inventory | 27,073,000 | 25,681,000 |
Less: allowances | (2,372,000) | (2,084,000) |
Inventories, net | $ 24,701,000 | $ 23,597,000 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Inventory Disclosure [Abstract] | |
Cumulative effect of change in inventory cost | $ 160,000 |
Effect of change in inventory cost on income from continuing operations | $ 107,000 |
Other Current Assets - Summary
Other Current Assets - Summary of Other Current Assets (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 969,000 | $ 228,000 |
Taxes receivable | 2,281,000 | 299,000 |
RFL escrow | 1,000,000 | 2,000,000 |
Other | 1,806,000 | 2,224,000 |
Other current assets | $ 6,056,000 | $ 4,751,000 |
Income Per Share - Additional I
Income Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive common share equivalents | 0 | 0 | 0 | 3,000 |
Income Per Share - Computation
Income Per Share - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income (loss) available to common shareholders: | ||||
Basic net income available to common shareholders from continuing operations | $ 1,837,000 | $ 2,495,000 | $ 8,255,000 | $ 10,548,000 |
Basic net (loss) income available to common shareholders from discontinued operations | (700,000) | 400,000 | (1,005,000) | 402,000 |
Diluted net income available to common shareholders from continuing operations | 1,837,000 | 2,495,000 | 8,255,000 | 10,548,000 |
Diluted net (loss) income available to common shareholders from discontinued operations | $ (700,000) | $ 400,000 | $ (1,005,000) | $ 402,000 |
Shares: | ||||
Basic weighted average number of common shares outstanding | 3,960,000 | 4,145,000 | 4,015,000 | 4,137,000 |
Common shares assumed upon exercise of stock options | 29,000 | 59,000 | 44,000 | 41,000 |
Diluted weighted average number of common shares outstanding | 3,989,000 | 4,204,000 | 4,059,000 | 4,178,000 |
Basic net income (loss) per common share | ||||
Income from continuing operations | $ 0.46 | $ 0.60 | $ 2.06 | $ 2.55 |
(Loss) income from discontinued operations, net of tax | (0.17) | 0.10 | (0.25) | 0.10 |
Net income | 0.29 | 0.70 | 1.81 | 2.65 |
Diluted net income (loss) per common share | ||||
Income from continuing operations | 0.46 | 0.59 | 2.03 | 2.52 |
(Loss) income from discontinued operations, net of tax | (0.17) | 0.10 | (0.24) | 0.10 |
Net income | $ 0.29 | $ 0.69 | $ 1.79 | $ 2.62 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | Dec. 31, 2017 | May. 28, 2015 | Feb. 27, 2015 | May. 12, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 251,000 | $ 191,000 | $ 741,000 | $ 525,000 | ||||
Stock-based compensation cost, net of tax | 160,000 | $ 116,000 | 482,000 | $ 337,000 | ||||
Total intrinsic value of options exercised | $ 1,731,000 | |||||||
Option exercised | 58,000 | 0 | ||||||
Total unrecognized compensation cost related to stock options | 432,000 | $ 432,000 | ||||||
Weighted-average period of total unrecognized compensation cost related to stock options | 1 year 4 months 24 days | |||||||
Stock options exercised, gross exercise value | $ 692,000 | |||||||
Cash received from option exercises | 140,000 | |||||||
Tax benefit realized for tax deduction from option exercises of the share-based payment | 616,000 | |||||||
Common Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares of common stock delivered as payment for stock options exercised | 13,000 | |||||||
RSUs [Member] | 2015 Long Term Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | 20,000 | $ 54,000 | ||||||
Share based award vesting period | 3 years | |||||||
Grant date of award | Feb. 13, 2015 | |||||||
Weighted average price of restricted stock | $ 39.17 | |||||||
Total unrecognized compensation cost related to restricted stock units | $ 198,000 | $ 198,000 | ||||||
Maximum number of achievable RSUs | 11,000 | 11,000 | ||||||
RSUs [Member] | 2012 Long Term Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant date of award | Feb. 17, 2012 | |||||||
Weighted average price of restricted stock | $ 18 | |||||||
RSUs earned | 6,000 | |||||||
Issue date of earned RSUs | Feb. 27, 2015 | |||||||
May 12, 2014 Director Restricted Stock [Member] | Incentive Stock Plan (2008 Plan) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant date of award | May 12, 2014 | |||||||
Number of restricted shares awarded to each Director | 3,000 | |||||||
Grant date of fully vested shares | May 12, 2015 | |||||||
May 28, 2015 Director Restricted Stock [Member] | Incentive Stock Plan (2008 Plan) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 141,000 | $ 191,000 | ||||||
Share based award vesting period | 1 year | |||||||
Grant date of award | May 28, 2015 | |||||||
Weighted average price of restricted stock | $ 38 | |||||||
Total unrecognized compensation cost related to restricted stock units | $ 379,000 | $ 379,000 | ||||||
Number of restricted shares awarded to each Director | 3,000 | |||||||
Shares granted | 0 | |||||||
Scenario, Forecast [Member] | RSUs [Member] | Share-based Compensation Award, Tranche One [Member] | 2015 Long Term Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Earned RSUs vesting percentage | 100.00% |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity under Principal Option Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options outstanding, Beginning Balance | 184,000 | ||
Options outstanding, Granted | 0 | ||
Options outstanding, Exercised | (58,000) | 0 | |
Options outstanding, Forfeited | 0 | ||
Options outstanding, Expired | 0 | ||
Options outstanding, Ending Balance | 126,000 | 184,000 | |
Options outstanding, Exercisable | 28,000 | ||
Weighted Average Exercise Price, Beginning Balance | $ 19.71 | ||
Weighted Average Exercise Price, Granted | 0 | ||
Weighted Average Exercise Price, Exercised | 12.02 | ||
Weighted Average Exercise Price, Forfeited | 0 | ||
Weighted Average Exercise Price, Expired | 0 | ||
Weighted Average Exercise Price, Ending Balance | 23.23 | $ 19.71 | |
Weighted Average Exercise Price, Exercisable | $ 13.36 | ||
Weighted Average Remaining Life, Outstanding | 3 years 6 months | 3 years 7 months 2 days | |
Weighted Average Remaining Life, Exercisable | 2 years 6 months 26 days | ||
Aggregate Intrinsic Value, Beginning Balance | $ 3,540 | ||
Aggregate Intrinsic Value, Ending Balance | 1,388 | $ 3,540 | |
Aggregate Intrinsic Value, Exercisable | $ 590 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Estimated income tax rate from continuing operations | 35.00% | 36.00% | |||
Additional benefits from state research and development | $ 47,000 | $ 61,000 | $ 141,000 | $ 183,000 | |
Additional benefits from federal research and development | 69,000 | ||||
Company's gross research and development tax credit carry forwards | 1,822,000 | 1,822,000 | |||
Company's research and development tax credit carry forwards | 743,000 | $ 743,000 | |||
Period of company's gross research and development tax credit carry forward | 15 years | ||||
Expiration of company's gross research and development tax credit carry forward, Minimum | 2,015 | ||||
Expiration of company's gross research and development tax credit carry forward, Maximum | 2,030 | ||||
Gross research and development tax credit indefinite carry forward | 1,079,000 | $ 1,079,000 | |||
Gross unrecognized tax benefits, excluding interest and penalties | 915,000 | 915,000 | $ 865,000 | ||
Uncertain tax positions reclassified against related deferred tax assets | 430,000 | $ 430,000 | |||
Examination by IRS | The Company has been examined by the Internal Revenue Service (the "IRS") through the calendar year 2010. The federal and state income tax statutes are generally open for periods back to and including the calendar years 2011 and 2010, respectively. During the first quarter of 2015 the Company was contacted by the IRS to examine the calendar year 2013. The examination began in May 2015 and is expected to conclude during the second half of 2016. | ||||
Liability for interest and penalties related to unrecognized tax benefits | 113,000 | $ 113,000 | $ 81,000 | ||
Internal Revenue Service (IRS) [Member] | |||||
Income Taxes [Line Items] | |||||
Refund on settlement with IRS | 394,000 | 394,000 | |||
Minimum [Member] | |||||
Income Taxes [Line Items] | |||||
Gross unrecognized tax benefits balance | 0 | 0 | |||
Maximum [Member] | |||||
Income Taxes [Line Items] | |||||
Gross unrecognized tax benefits balance | 348,000 | 348,000 | |||
Federal Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Gross unrecognized tax benefits, excluding interest and penalties | 281,000 | 281,000 | |||
International Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Gross unrecognized tax benefits, excluding interest and penalties | 203,000 | 203,000 | |||
State Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Gross unrecognized tax benefits, excluding interest and penalties | $ 431,000 | $ 431,000 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) | Jul. 27, 2015USD ($) | Jul. 27, 2015GBP (£) | May. 22, 2015USD ($) | Jul. 25, 2014USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | ||||||||||
Purchase price allocated to goodwill | $ 17,209,000 | $ 17,209,000 | $ 13,072,000 | |||||||
Net revenue | 49,675,000 | $ 50,725,000 | 147,078,000 | $ 151,140,000 | ||||||
Income (loss) from operations | 3,682,000 | 4,182,000 | 12,858,000 | 14,926,000 | ||||||
SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price allocated to goodwill | 4,773,000 | 4,773,000 | $ 653,000 | |||||||
Net revenue | 17,208,000 | $ 11,205,000 | $ 42,025,000 | $ 32,175,000 | ||||||
Torque Systems [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price of assets acquired and liabilities assumed | $ 9,000,000 | |||||||||
Business acquisition, date of agreement | May 22, 2015 | |||||||||
Working capital adjustment | 169,000 | |||||||||
Business acquisition, purchase price paid in cash | $ 9,000,000 | |||||||||
Purchase price allocated to other intangible assets | 3,343,000 | $ 3,343,000 | ||||||||
Purchase price allocated to goodwill | 1,176,000 | 1,176,000 | ||||||||
Net revenue | 2,102,000 | 2,783,000 | ||||||||
Income (loss) from operations | 249,000 | $ 153,000 | ||||||||
Torque Systems [Member] | Scenario, Forecast [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, working capital adjustment paid in cash | $ 169,000 | |||||||||
Dynetic [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price of assets acquired and liabilities assumed | $ 4,000,000 | |||||||||
Business acquisition, date of agreement | Jul. 25, 2014 | |||||||||
Working capital adjustment | 27,000 | |||||||||
Business acquisition, purchase price paid in cash | 4,000,000 | |||||||||
Business acquisition, working capital adjustment paid in cash | 27,000 | |||||||||
Initial estimate of earn-out liabilities | $ 310,000 | |||||||||
Earn-out liability | 216,000 | $ 216,000 | ||||||||
Reversal of previously recorded expense | 72,000 | $ 72,000 | ||||||||
Davall [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, date of agreement | Jul. 27, 2015 | |||||||||
Purchase price allocated to other intangible assets | $ 11,044,000 | |||||||||
Purchase price allocated to goodwill | 2,982,000 | |||||||||
Net revenue | 2,416,000 | $ 2,416,000 | ||||||||
Income (loss) from operations | $ (676,000) | (676,000) | ||||||||
Business acquisition, purchase price | 20,207,000 | £ 13,035,000 | ||||||||
Goodwill expected to be deductible for income tax purposes | 0 | |||||||||
Davall [Member] | SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Direct acquisition costs | 1,028,000 | |||||||||
Selling, General and Administrative [Member] | Torque Systems [Member] | SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Direct acquisition costs | $ 186,000 | |||||||||
Selling, General and Administrative [Member] | Davall [Member] | SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Direct acquisition costs | 913,000 | |||||||||
Other Gain (Loss), Net [Member] | Davall [Member] | SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Direct acquisition costs | 115,000 | |||||||||
Cost of Products Sold [Member] | Davall [Member] | SL-MTI [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Non-cash inventory purchase accounting adjustment | $ 325,000 |
Acquisitions - Summary of Amoun
Acquisitions - Summary of Amounts of Assets Acquired and Liabilities Assumed (Detail) - USD ($) | Sep. 30, 2015 | Jul. 27, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 17,209,000 | $ 13,072,000 | |
Davall [Member] | |||
Business Acquisition [Line Items] | |||
Receivables | $ 2,726,000 | ||
Inventories | 1,354,000 | ||
Other assets | 267,000 | ||
Property, plant and equipment | 5,796,000 | ||
Identifiable intangible assets | 11,044,000 | ||
Accounts payable | (834,000) | ||
Warranty | (165,000) | ||
Accrued liabilities | (2,963,000) | ||
Goodwill | 2,982,000 | ||
Total consideration transferred | $ 20,207,000 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 20,992,000 | $ 8,930,000 |
Finite-lived intangible assets, Accumulated Amortization | 7,210,000 | 6,814,000 |
Finite-lived intangible assets, Net Value | 13,782,000 | 2,116,000 |
Other intangible assets, Gross | 24,874,000 | 10,602,000 |
Other intangible assets, net | 17,664,000 | 3,788,000 |
Trademarks [Member] | ||
Other Intangibles [Line Items] | ||
Indefinite-lived intangible assets, Net Value | 3,882,000 | 1,672,000 |
Customer Relationships [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | 11,817,000 | 5,378,000 |
Finite-lived intangible assets, Accumulated Amortization | 4,100,000 | 3,858,000 |
Finite-lived intangible assets, Net Value | $ 7,717,000 | 1,520,000 |
Customer Relationships [Member] | Minimum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 5 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 10 years | |
Patents [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 1,523,000 | 1,501,000 |
Finite-lived intangible assets, Accumulated Amortization | 1,236,000 | 1,223,000 |
Finite-lived intangible assets, Net Value | $ 287,000 | 278,000 |
Patents [Member] | Minimum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 5 years | |
Patents [Member] | Maximum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 20 years | |
Developed Technology [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 6,630,000 | 1,980,000 |
Finite-lived intangible assets, Accumulated Amortization | 1,801,000 | 1,719,000 |
Finite-lived intangible assets, Net Value | $ 4,829,000 | 261,000 |
Developed Technology [Member] | Minimum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 5 years | |
Developed Technology [Member] | Maximum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 10 years | |
License [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 421,000 | |
Finite-lived intangible assets, Net Value | $ 421,000 | |
Amortizable Life (years) | 10 years | |
Trademarks [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 60,000 | 60,000 |
Finite-lived intangible assets, Accumulated Amortization | 35,000 | 13,000 |
Finite-lived intangible assets, Net Value | $ 25,000 | 47,000 |
Amortizable Life (years) | 2 years | |
Backlog [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 530,000 | |
Finite-lived intangible assets, Accumulated Amortization | 35,000 | |
Finite-lived intangible assets, Net Value | $ 495,000 | |
Backlog [Member] | Minimum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 1 year | |
Backlog [Member] | Maximum [Member] | ||
Other Intangibles [Line Items] | ||
Amortizable Life (years) | 2 years | |
Non-compete Agreements [Member] | ||
Other Intangibles [Line Items] | ||
Finite-lived intangible assets, Gross Value | $ 11,000 | 11,000 |
Finite-lived intangible assets, Accumulated Amortization | 3,000 | 1,000 |
Finite-lived intangible assets, Net Value | $ 8,000 | $ 10,000 |
Amortizable Life (years) | 5 years |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets - Schedule of Intangible Assets (Parenthetical) (Detail) - USD ($) | Jul. 27, 2015 | May. 22, 2015 | Sep. 30, 2015 |
Torque Systems [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 3,343,000 | ||
Weighted -average amortization period, excluding the indefinite-lived trademark | 6 years | ||
Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 11,044,000 | ||
Weighted -average amortization period, excluding the indefinite-lived trademark | 10 years | ||
Trademarks [Member] | Torque Systems [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 473,000 | ||
Trademarks [Member] | Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 1,759,000 | ||
Customer Relationships [Member] | Torque Systems [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 1,535,000 | ||
Intangible assets acquired, estimated useful life | 5 years | ||
Customer Relationships [Member] | Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 4,966,000 | ||
Intangible assets acquired, estimated useful life | 10 years | ||
Patents [Member] | MTE Corporation [Member] | High Power Group [Member] | |||
Other Intangibles [Line Items] | |||
Capitalized legal fees | $ 22,000 | ||
Intangible assets acquired, estimated useful life | 20 years | ||
Developed Technology [Member] | Torque Systems [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 1,124,000 | ||
Intangible assets acquired, estimated useful life | 8 years | ||
Developed Technology [Member] | Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 3,570,000 | ||
Intangible assets acquired, estimated useful life | 10 years | ||
License [Member] | |||
Other Intangibles [Line Items] | |||
Intangible assets acquired, estimated useful life | 10 years | ||
License [Member] | Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 426,000 | ||
Intangible assets acquired, estimated useful life | 10 years | ||
Backlog [Member] | Torque Systems [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 211,000 | ||
Intangible assets acquired, estimated useful life | 2 years | ||
Backlog [Member] | Davall [Member] | |||
Other Intangibles [Line Items] | |||
Purchase price allocated to other intangible assets | $ 323,000 | ||
Intangible assets acquired, estimated useful life | 1 year |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets - Estimated Future Amortization Expense for Intangible Assets Subject to Amortization (Detail) $ in Thousands | Sep. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,015 | $ 1,112 |
2,016 | 1,954 |
2,017 | 1,611 |
2,018 | 1,561 |
2,019 | $ 1,560 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for intangible assets | $ 291,000 | $ 136,000 | $ 396,000 | $ 319,000 |
Amortization expense for software | $ 51,000 | $ 51,000 | $ 169,000 | $ 151,000 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets - Changes in Goodwill Balances by Segment (Detail) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Line Items] | |
Goodwill, beginning balance | $ 13,072,000 |
Acquisitions | 4,158,000 |
Foreign Exchange | (21,000) |
Goodwill, ending balance | 17,209,000 |
SLPE [Member] | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 4,230,000 |
Foreign Exchange | 17,000 |
Goodwill, ending balance | 4,247,000 |
High Power Group [Member] | MTE Corporation [Member] | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 8,189,000 |
Goodwill, ending balance | 8,189,000 |
SL-MTI [Member] | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 653,000 |
Acquisitions | 4,158,000 |
Foreign Exchange | (38,000) |
Goodwill, ending balance | $ 4,773,000 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets - Components of Goodwill (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill, Gross Amount | $ 22,264,000 | $ 18,127,000 |
Goodwill, Accumulated Impairment Losses | 5,055,000 | 5,055,000 |
Goodwill, Net | 17,209,000 | 13,072,000 |
SLPE [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross Amount | 4,247,000 | 4,230,000 |
Goodwill, Net | 4,247,000 | 4,230,000 |
High Power Group [Member] | MTE Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross Amount | 8,189,000 | 8,189,000 |
Goodwill, Net | 8,189,000 | 8,189,000 |
High Power Group [Member] | TEAL Electronics Corp. [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross Amount | 5,055,000 | 5,055,000 |
Goodwill, Accumulated Impairment Losses | 5,055,000 | 5,055,000 |
SL-MTI [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross Amount | 4,773,000 | 653,000 |
Goodwill, Net | $ 4,773,000 | $ 653,000 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Proceeds from sale of available-for-sale securities | $ 4,054,000 | $ 4,054,000 | ||
Gross realized gains on available-for-sale securities | 1,691,000 | |||
Net realized gains on available-for-sale securities | $ 1,063,000 | |||
Available-for-sale securities | $ 0 | $ 0 | ||
Maximum [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Percentage of equity interests on investments in publicly traded equity securities | 20.00% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total debt | $ 13,500,000 | |
Less current portion | (13,500,000) | $ 0 |
Total long-term portion | 0 | |
2012 Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
$40 million variable interest rate senior revolving credit facility maturing in 2016 | $ 13,500,000 | $ 0 |
Debt - Schedule of Debt (Parent
Debt - Schedule of Debt (Parenthetical) (Detail) - 2012 Credit Facility [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Debt Instrument [Line Items] | |
Revolving credit facility, borrowing capacity | $ 40 |
Revolving credit facility, maturity date | Aug. 9, 2016 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Aug. 09, 2012 | Sep. 30, 2015 | Jul. 24, 2015 | Jun. 01, 2015 | Dec. 31, 2014 | May. 28, 2013 |
Line of Credit Facility [Line Items] | ||||||
Debt outstanding | $ 13,500,000 | $ 0 | ||||
2012 Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowings | $ 40,000,000 | |||||
Maturity date of expiration | Aug. 9, 2016 | |||||
Credit availability under Credit Facility | $ 26,044,000 | 39,527,000 | ||||
Balance under the Credit Facility | $ 13,500,000 | $ 0 | ||||
2012 Credit Facility [Member] | PNC Bank, National Association (PNC Bank) [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowings | $ 40,000,000 | |||||
Maximum borrowings under certain conditions | 70,000,000 | |||||
Standby and commercial letter of credit sublimit | $ 10,700,000 | |||||
Maturity date of expiration | Aug. 9, 2016 | |||||
Letter of credit, expiration period from the date of closing | 1 year | |||||
Interest rate | 1.47% | |||||
2012 Credit Facility [Member] | PNC Bank, National Association (PNC Bank) [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Standby and commercial letter of credit sublimit | $ 5,000,000 | |||||
2012 Credit Facility [Member] | PNC Bank, National Association (PNC Bank) [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Standby and commercial letter of credit sublimit | $ 25,000,000 | |||||
2012 Credit Facility [Member] | Standby Letters of Credit Due June 10, 2016 [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maturity date of expiration | Jun. 10, 2016 | |||||
Balance of letter of credit under Credit Facility | $ 4,282,000 | $ 8,564,000 | ||||
Annual commitment fee | 0.125% | |||||
Standby commission | 1.00% | |||||
Payment related to obligation excluding interest | $ 2,141,000 | |||||
2012 Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | PNC Bank, National Association (PNC Bank) [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 1.25% | |||||
2012 Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | PNC Bank, National Association (PNC Bank) [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 2.00% | |||||
2012 Credit Facility [Member] | Base Rate [Member] | PNC Bank, National Association (PNC Bank) [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 0.25% | |||||
2012 Credit Facility [Member] | Base Rate [Member] | PNC Bank, National Association (PNC Bank) [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 1.00% | |||||
2012 Credit Facility [Member] | Federal Funds Open Rate [Member] | PNC Bank, National Association (PNC Bank) [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 0.50% | |||||
2012 Credit Facility [Member] | Daily Libor Rate [Member] | PNC Bank, National Association (PNC Bank) [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Margin rate range | 1.00% | |||||
Sixth Amendment to 2012 Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Subline for loans funded for acquired entity | $ 4,000,000 |
Accrued Liabilities - Other - A
Accrued Liabilities - Other - Accrued Liabilities - Other (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Environmental | $ 7,074,000 | $ 9,475,000 |
Warranty | 1,076,000 | 1,176,000 |
Taxes (other than income) and insurance | 927,000 | 879,000 |
Commissions | 482,000 | 551,000 |
Foreign currency forward contracts | 761,000 | 673,000 |
Other professional fees | 754,000 | 496,000 |
Accrued customer incentive plans | 402,000 | 414,000 |
Deferred compensation - current | 265,000 | 265,000 |
Litigation and legal fees | 135,000 | 91,000 |
Acquisition earn-out, current | 32,000 | |
Deferred revenue | 38,000 | 44,000 |
Other | 4,589,000 | 2,370,000 |
Accrued liabilities - other | $ 16,503,000 | $ 16,466,000 |
Accrued Liabilities - Other - S
Accrued Liabilities - Other - Summary of Activity in Accrued Warranty and Service Liabilities (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Payables and Accruals [Abstract] | |
Liability, beginning of year | $ 1,176 |
Expense for new warranties issued | 226 |
Accruals assumed in acquisition | 165 |
Accruals related to preexisting warranties | (216) |
Warranty claims paid | (275) |
Liability, end of period | $ 1,076 |
Accrued Liabilities - Other -72
Accrued Liabilities - Other - Summary of Activity in Accrued Warranty and Service Liabilities (Parenthetical) (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Jul. 27, 2015 | |
Product Warranty Liability [Line Items] | ||
Reversal of specific warranty reserves | $ (216,000) | |
Davall [Member] | ||
Product Warranty Liability [Line Items] | ||
Business acquisition, warranty reserve | $ 165,000 |
Other Long-Term Liabilities - O
Other Long-Term Liabilities - Other Long-Term Liabilities (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | ||
Environmental | $ 3,724,000 | $ 7,384,000 |
Unrecognized tax benefits, interest and penalties | 598,000 | 549,000 |
Long-term incentive plan | 596,000 | 558,000 |
Acquisition earn-out, long-term | 216,000 | 288,000 |
Other long-term liabilities | $ 5,134,000 | $ 8,779,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 10, 2015USD ($) | Sep. 30, 2015USD ($)siteOperable_UnitPayments | Jun. 01, 2015USD ($) | Dec. 31, 2014USD ($) |
Commitments And Contingencies [Line Items] | ||||
Letters of credit contingently liable | $ 456,000 | $ 473,000 | ||
Number of operable units | Operable_Unit | 2 | |||
Treatment of impacted soils completed, percentage | 70.00% | |||
State of NJ total claim for past and future cleanup costs | $ 1,300,000 | |||
State of NJ total claim for natural resource damages | 500,000 | |||
State of NJ total claim for certain costs | 1,800,000 | |||
Company offer to resolve State of NJ claim accrued | 250,000 | |||
Total environmental accruals | 10,798,000 | 16,859,000 | ||
Environmental accrual, long-term portion | 3,724,000 | 7,384,000 | ||
Pennsauken Site (OU-1 and OU-2) [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Payment for past cost as per agreement installment amount | 2,141,000 | |||
Payment for past cost as per agreement aggregate amount | $ 10,705,000 | |||
Number of equal payments | Payments | 5 | |||
Payment related to obligation including interest | $ 6,569,000 | |||
Description of payment period | The fourth and fifth payments will be made on the anniversary of the prior year's payment plus ten days | |||
Compass Directional Guidance Inc [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Damages sought, value | $ 18,000,000 | |||
Filed complaint, trial date | 2016-04 | |||
Financial Assurance [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Letters of credit contingently liable | $ 4,282,000 | $ 6,423,000 | ||
SurfTech [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Number of sites | site | 3 | |||
Number of sites owned by the Company | site | 2 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 3 |
Segment Information - Comparati
Segment Information - Comparative Results of Segment Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net sales | ||||
Net sales | $ 49,675,000 | $ 50,725,000 | $ 147,078,000 | $ 151,140,000 |
Income from operations | ||||
Income from operations | 3,682,000 | 4,182,000 | 12,858,000 | 14,926,000 |
Unallocated Corporate [Member] | ||||
Income from operations | ||||
Income from operations | (1,553,000) | (1,870,000) | (5,396,000) | (5,099,000) |
SLPE [Member] | ||||
Net sales | ||||
Net sales | 17,243,000 | 17,821,000 | 51,687,000 | 54,504,000 |
SLPE [Member] | Operating Segments [Member] | ||||
Income from operations | ||||
Income from operations | 2,416,000 | 1,971,000 | 6,140,000 | 5,203,000 |
High Power Group [Member] | ||||
Net sales | ||||
Net sales | 15,224,000 | 21,699,000 | 53,366,000 | 64,461,000 |
High Power Group [Member] | Operating Segments [Member] | ||||
Income from operations | ||||
Income from operations | 1,028,000 | 2,838,000 | 5,914,000 | 9,676,000 |
SL-MTI [Member] | ||||
Net sales | ||||
Net sales | 17,208,000 | 11,205,000 | 42,025,000 | 32,175,000 |
SL-MTI [Member] | Operating Segments [Member] | ||||
Income from operations | ||||
Income from operations | $ 1,791,000 | $ 1,243,000 | $ 6,200,000 | $ 5,146,000 |
Segment Information - Total Ass
Segment Information - Total Assets by Segment (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Total assets | ||
Total assets | $ 134,674,000 | $ 131,776,000 |
Operating Segments [Member] | SLPE [Member] | ||
Total assets | ||
Total assets | 33,128,000 | 34,989,000 |
Operating Segments [Member] | High Power Group [Member] | ||
Total assets | ||
Total assets | 33,267,000 | 33,306,000 |
Operating Segments [Member] | SL-MTI [Member] | ||
Total assets | ||
Total assets | 58,236,000 | 22,752,000 |
Unallocated Corporate [Member] | ||
Total assets | ||
Total assets | $ 10,043,000 | $ 40,729,000 |
Segment Information - Goodwill
Segment Information - Goodwill and Other Intangible Assets, Net by Segment (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill and other intangible assets, net | ||
Goodwill and other intangible assets, net | $ 34,873 | $ 16,860 |
SLPE [Member] | ||
Goodwill and other intangible assets, net | ||
Goodwill and other intangible assets, net | 4,547 | 4,530 |
High Power Group [Member] | ||
Goodwill and other intangible assets, net | ||
Goodwill and other intangible assets, net | 9,848 | 9,839 |
SL-MTI [Member] | ||
Goodwill and other intangible assets, net | ||
Goodwill and other intangible assets, net | $ 20,478 | $ 2,491 |
Retirement Plans and Deferred79
Retirement Plans and Deferred Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Costs incurred under defined contribution pension plan | $ 126,000 | $ 114,000 | $ 397,000 | $ 430,000 |
Amount charged to expense in connection with agreements for supplemental retirement benefits | $ 102,000 | $ 88,000 | $ 18,000 | $ 239,000 |
Minimum [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Discount rates for supplemental retirement benefits plans | 8.00% | |||
Maximum [Member] | ||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||
Discount rates for supplemental retirement benefits plans | 12.00% |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Income from Discontinued Operations (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other income (expense): | ||||
(Loss) income from discontinued operations before income taxes | $ (1,150,000) | $ 603,000 | $ (1,652,000) | $ 578,000 |
(Loss) income from discontinued operations, net of tax | (700,000) | 400,000 | (1,005,000) | 402,000 |
Discontinued Operations, Disposed of by Sale [Member] | RFL [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | 5,449,000 | 14,368,000 | ||
Costs and expenses: | ||||
Cost of products sold | 2,624,000 | 7,117,000 | ||
Engineering and product development | 502,000 | 1,363,000 | ||
Selling, general and administrative | 1,415,000 | 4,319,000 | ||
Depreciation and amortization | 98,000 | 319,000 | ||
Total cost and expenses | 4,639,000 | 13,118,000 | ||
Income from operations | 810,000 | 1,250,000 | ||
Other income (expense): | ||||
Interest expense | (2,000) | (31,000) | ||
(Loss) income from discontinued operations before income taxes | 808,000 | 1,219,000 | ||
Income tax provision | 283,000 | 427,000 | ||
(Loss) income from discontinued operations, net of tax | 525,000 | 792,000 | ||
Discontinued Operations Not Yet Disposed [Member] | Environmental costs [Member] | ||||
Other income (expense): | ||||
(Loss) income from discontinued operations before income taxes | (1,150,000) | (205,000) | (1,652,000) | (641,000) |
(Loss) income from discontinued operations, net of tax | $ (700,000) | $ (125,000) | $ (1,005,000) | $ (390,000) |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) | Dec. 31, 2014USD ($) | Feb. 28, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($)site | Nov. 17, 2014USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of environmental sites | site | 5 | ||||
Percentage of escrow receivable | 50.00% | ||||
Cash consideration held as escrow deposits | $ 2,000,000 | $ 1,000,000 | $ 1,000,000 | ||
Escrow deposit receivable | 1,000,000 | $ 1,000,000 | |||
Escrow deposit collected | 835,000 | ||||
Former Executives [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Payment related to service agreement | $ 165,000 | ||||
Discontinued Operations, Disposed of by Sale [Member] | SL Delaware Holdings [Member] | RFL [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Purchase Agreement, Transaction Date of Sale | Nov. 17, 2014 | ||||
Aggregate cash consideration for sale of divested business | $ 20,000,000 | ||||
Post-closing working capital adjustment received | $ 299,000 | ||||
Pre-tax gain on sale of business | 6,650,000 | ||||
Gain (loss) on sale of business, net of tax | $ 4,322,000 |
Fair Value Measurement and Fi82
Fair Value Measurement and Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Liabilities | ||
Derivative financial instruments | $ 761 | $ 673 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Liabilities | ||
Derivative financial instruments | $ 761 | $ 673 |
Derivative Instruments and He83
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign currency forward contracts, liability | $ 761,000 | $ 673,000 |
Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | Foreign Exchange Forward [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign currency forward contracts, liability | $ 761,000 | $ 673,000 |
Derivative Instruments and He84
Derivative Instruments and Hedging Activities - Notional Values of Company's Derivative Financial Instruments (Detail) - Not Designated as Hedging Instrument [Member] | Sep. 30, 2015CNY (¥)Instruments | Sep. 30, 2015MXNInstruments |
Mexican Peso (MXN) Forward Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Number of Foreign Currency Forward Contracts Held | 16 | 16 |
Notional Amount of Foreign Currency Forward Contracts | MXN | MXN 95,741,000 | |
Chinese Yuan (CNH) Forward Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Number of Foreign Currency Forward Contracts Held | 14 | 14 |
Notional Amount of Foreign Currency Forward Contracts | ¥ | ¥ 59,176,000 |
Derivative Instruments and He85
Derivative Instruments and Hedging Activities - Gain or Loss Recognized on Foreign Currency Forward Contracts (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Income on Derivative | $ (88,000) | $ (167,000) | ||
Other Gain (Loss), Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Income on Derivative | (88,000) | (167,000) | ||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts [Member] | Other Gain (Loss), Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Income on Derivative | $ (564,000) | $ 54,000 | $ (88,000) | $ (167,000) |
Other Gain (Loss), Net - Additi
Other Gain (Loss), Net - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized loss on foreign currency forward contracts | $ (88,000) | $ (167,000) |
Gain recognized from the sale of available-for-sale securities | 1,691,000 | |
Other Gain (Loss), Net [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized loss on foreign currency forward contracts | (88,000) | (167,000) |
Net foreign currency transaction gains | $ 65,000 | |
Gain recognized from the sale of available-for-sale securities | 1,691,000 | |
Dividend received from investments in available-for-sale securities | $ 11,000 |
Supplemental Cash Flow Inform87
Supplemental Cash Flow Information - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule Of Supplemental Cash Flow [Line Items] | ||
Net cash (used in) operating activities from discontinued operations | $ 7,619,000 | $ 3,862,000 |
Net cash (used in) investing activities from discontinued operations | $ 0 | 182,000 |
RFL [Member] | ||
Schedule Of Supplemental Cash Flow [Line Items] | ||
Net cash (used in) investing activities from discontinued operations | $ 182,000 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Mar. 27, 2015 | Sep. 30, 2015 | Dec. 24, 2014 |
Dutch Auction Tender Offer [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Repurchase program maturity date | Apr. 23, 2015 | ||
Purchase price company accepts in accordance with terms of offer to purchase | $ 42 | ||
Tender price increments | $ 0.25 | ||
Number of shares properly tendered | 160,000 | ||
Approximate percentage of common stock outstanding | 3.90% | ||
Shares outstanding with completion of tender offer | 3,934,000 | ||
Purchase price paid by company in connection to tender offer excluding transaction costs | $ 6,734,000 | ||
Dutch Auction Tender Offer [Member] | Minimum [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase price company accepts in accordance with terms of offer to purchase | $ 39 | ||
Dutch Auction Tender Offer [Member] | Maximum [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Maximum limit of stock repurchase | $ 20,000,000 | ||
Purchase price company accepts in accordance with terms of offer to purchase | $ 42 | ||
2014 Repurchase Plan [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, number of shares authorized to be repurchased | 420,000 | ||
Repurchase plan, effective date | Dec. 24, 2014 | ||
Repurchase of common stock number of shares purchased | 89,000 | ||
Treasury stock acquired, average cost per share | $ 39.37 | ||
Stock Repurchase Program, remaining number of shares authorized to be repurchased | 331,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - SP Corporate [Member] - USD ($) | May. 01, 2015 | May. 01, 2014 | Sep. 30, 2015 | Sep. 30, 2015 |
Related Party Transaction [Line Items] | ||||
Management Services Agreement, effective date | May 1, 2014 | |||
Management Services Agreement, monthly fee | $ 10,400 | $ 10,400 | ||
Management Services Agreement, term | 1 year | |||
Management Services Agreement, monthly fee | $ 27,400 | |||
Amendment effective date | May 1, 2015 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of Restructuring Costs (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||
Charged to Earnings | $ 223,000 | $ 223,000 | $ 463,000 |
Restructuring Plan 2015 [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charged to Earnings | 223,000 | ||
Cash Payments | 186,000 | ||
Accrual ending balance | $ 37,000 | $ 37,000 |
Restructuring Costs - Additiona
Restructuring Costs - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)Employees | Mar. 31, 2014Employees | Sep. 30, 2015USD ($)Employees | Sep. 30, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Consolidated charge to earnings | $ | $ 223,000 | $ 223,000 | $ 463,000 | |
Restructuring Plan 2015 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Consolidated charge to earnings | $ | $ 223,000 | |||
The total number of employees affected by the restructuring plan | 28 | |||
Number of employees terminated by the restructuring plan | 26 | 26 | ||
Restructuring Plan 2014 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Consolidated charge to earnings | $ | $ 463,000 | |||
The total number of employees affected by the restructuring plan | 11 | |||
Number of employees terminated by the restructuring plan | 11 |
Non-Binding Proposal to Acqui92
Non-Binding Proposal to Acquire SL Industries - Additional Information (Detail) - Handy & Harman Ltd. [Member] - Non-Binding Proposal [Member] | Sep. 30, 2015$ / shares |
Business Acquisition [Line Items] | |
Aggregate consideration percentage, cash | 55.00% |
Aggregate consideration percentage, stock | 45.00% |
Minimum [Member] | |
Business Acquisition [Line Items] | |
Common stock outstanding, price per share | $ 43 |
Maximum [Member] | |
Business Acquisition [Line Items] | |
Common stock outstanding, price per share | $ 45 |