Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 03, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | UFP TECHNOLOGIES INC | |
Entity Central Index Key | 914,156 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,124,850 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 29,173 | $ 34,052 |
Receivables, less allowance for doubtful accounts of $602 at June 30, 2015 and $502 at December 31, 2014 | 19,518 | 16,470 |
Inventories | 12,832 | 12,893 |
Prepaid expenses | 1,664 | 664 |
Refundable income taxes | 479 | 3,192 |
Deferred income taxes | 1,155 | 1,142 |
Total current assets | 64,821 | 68,413 |
Property, plant and equipment | 86,088 | 75,823 |
Less accumulated depreciation and amortization | (42,966) | (40,980) |
Net property, plant and equipment | 43,122 | 34,843 |
Goodwill | 7,322 | 7,322 |
Intangible assets, net | 794 | 953 |
Other assets | 2,203 | 2,159 |
Total assets | 118,262 | 113,690 |
Current liabilities: | ||
Accounts payable | 4,473 | 5,398 |
Accrued expenses | 6,146 | 5,222 |
Current installments of long-term debt | 1,002 | 993 |
Total current liabilities | 11,621 | 11,613 |
Long-term debt, excluding current installments | 1,368 | 1,873 |
Deferred income taxes | 3,795 | 3,588 |
Retirement and other liabilities | 1,553 | 1,624 |
Total liabilities | $ 18,337 | $ 18,698 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value. Authorized 1,000,000 shares; zero shares issued or outstanding | ||
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 7,124,850 at June 30, 2015 and 7,068,815 at December 31, 2014 | $ 71 | $ 71 |
Additional paid-in capital | 23,139 | 22,132 |
Retained earnings | 76,715 | 72,789 |
Total stockholders' equity | 99,925 | 94,992 |
Total liabilities and stockholders' equity | $ 118,262 | $ 113,690 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts receivable (in dollars) | $ 602 | $ 502 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 7,124,850 | 7,068,815 |
Common stock, outstanding shares | 7,124,850 | 7,068,815 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Consolidated Statements of Income | ||||
Net sales | $ 36,499 | $ 34,025 | $ 70,476 | $ 68,634 |
Cost of sales | 26,206 | 24,480 | 51,544 | 49,912 |
Gross profit | 10,293 | 9,545 | 18,932 | 18,722 |
Selling, general and administrative expenses | 6,776 | 6,535 | 12,800 | 12,428 |
Restructuring costs | 30 | 234 | 108 | 324 |
Gain on sale of fixed assets | (12) | (31) | (12) | |
Operating income | 3,487 | 2,788 | 6,055 | 5,982 |
Other expenses | ||||
Interest income (expense), net | 8 | (27) | (15) | (48) |
Other income | 100 | 100 | ||
Income before income tax expense | 3,495 | 2,861 | 6,040 | 6,034 |
Income tax expense | 1,223 | 1,001 | 2,114 | 2,112 |
Net income | $ 2,272 | $ 1,860 | $ 3,926 | $ 3,922 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.32 | $ 0.27 | $ 0.55 | $ 0.56 |
Diluted (in dollars per share) | $ 0.32 | $ 0.26 | $ 0.55 | $ 0.55 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 7,116 | 7,025 | 7,096 | 6,999 |
Diluted (in shares) | 7,210 | 7,168 | 7,203 | 7,160 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 3,926 | $ 3,922 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,341 | 2,247 |
Gain on sale of fixed assets | (31) | (12) |
Share-based compensation | 647 | 730 |
Excess tax benefit on share-based compensation | (219) | (834) |
Deferred income taxes | 194 | (225) |
Changes in operating assets and liabilities: | ||
Receivables, net | (3,048) | (590) |
Inventories | 61 | (2,381) |
Prepaid expenses | (1,000) | (991) |
Refundable income taxes | 2,932 | 746 |
Other assets | (44) | (103) |
Accounts payable | (925) | 1,080 |
Accrued expenses | 924 | (1,431) |
Retirement and other liabilities | (71) | (216) |
Net cash provided by operating activities | 5,687 | 1,942 |
Cash flows from investing activities: | ||
Additions to property, plant, and equipment | (10,461) | (4,309) |
Escrow deposit for Texas building purchase | (2,968) | |
Proceeds from sale of fixed assets | 31 | 22 |
Net cash used in investing activities | (10,430) | (7,255) |
Cash flows from financing activities: | ||
Principal repayments of long-term debt | (496) | (486) |
Proceeds from the exercise of stock options, net of attestation | 220 | 323 |
Excess tax benefit on share-based compensation | 219 | 834 |
Payment of statutory withholdings for stock options exercised and restricted stock units vested | (79) | (701) |
Net cash used in financing activities | (136) | (30) |
Net decrease in cash and cash equivalents | (4,879) | (5,343) |
Cash and cash equivalents at beginning of period | 34,052 | 37,303 |
Cash and cash equivalents at end of period | $ 29,173 | $ 31,960 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2014, included in the Company’s 2014 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. The condensed consolidated balance sheet as of June 30, 2015, the condensed consolidated statements of income for the three and six- month periods ended June 30, 2015 and 2014, and the condensed consolidated statements of cash flows for the six- month periods ended June 30, 2015 and 2014 are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and six- month periods ended June 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2015. Revisions Certain revisions have been made to the Condensed Consolidated Statement of Income for the three and six- month periods ended June 30, 2014 to conform to the current year presentation. These revisions relate to the classification of certain rent and indirect labor items. The impact on the Condensed Consolidated Statement of Income for the three month period ended June 30, 2014 was a decrease to costs of sales and an increase to selling, general and administrative expenses in the amount of approximately $69,000. The impact on the Condensed Consolidated Statement of Income for the six- month period ended June 30, 2014 was a decrease to costs of sales and an increase to selling, general and administrative expenses in the amount of $138,000. These revisions had no impact on previously reported operating income, net income or cash flows and are deemed immaterial to the previously issued financial statements. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | (2) Supplemental Cash Flow Information Cash paid for interest and income taxes is as follows (in thousands): Six Months Ended June 30, 2015 2014 Interest, net $ $ Income taxes, net of refunds $ ) $ During the six—month period ended June 30, 2014, the Company permitted the exercise of stock options with exercise proceeds paid with the Company’s stock (“cashless” exercises) totaling approximately $352,000. No cashless exercises occurred during the six—month period ended June 30, 2015. |
Fair Value Accounting
Fair Value Accounting | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Accounting | |
Fair Value Accounting | (3) Fair Value Accounting The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, which are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Share-Based Compensation | |
Share Based Compensation | (4) Share-Based Compensation Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2014. The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Total share-based compensation expense $ $ $ $ Share-based compensation for the three-month periods ended June 30, 2015 and 2014 includes approximately $105,000 and $122,000, respectively, representing the fair value of the Company’s common stock granted during the periods to the Board of Directors. Share-based compensation for the six-month periods ended June 30, 2015 and 2014 includes approximately $105,000 and $127,000, respectively, representing the fair value of the Company’s common stock granted during the periods to the Board of Directors. The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $135,000 and $145,000, respectively, for the three-month periods ended June 30, 2015 and 2014, and $193,000 and $215,000, respectively, for the six-month periods ended June 30, 2015 and 2014. The following is a summary of stock option activity under all plans for the six-month period ended June 30, 2015: Shares Under Options Weighted Average Exercise Price (per share) Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 $ Granted Exercised ) Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Vested and expected to vest at June 30, 2015 $ $ On June 10, 2015, the Company granted options to its directors for the purchase of 17,526 shares of common stock at that day’s closing price of $19.97. The compensation expense related to these grants was determined as the fair value of the options using the Black Scholes option pricing model based on the following assumptions: Expected volatility % Expected dividends None Risk free interest rate % Expected term 5.0 years The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The weighted average grant date fair value of options granted during the six- month period ended June 30, 2015 was $5.99. During the six-month periods ended June 30, 2015 and 2014, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was approximately $696,000 and $3.4 million, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $223,000 and $675,000, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the six—months ended June 30, 2015, there were no shares surrendered for this purpose. During the six—months ended June 30, 2014, 31,310 shares were surrendered at an average market price of $25.47. During the three-month periods ended June 30, 2015 and 2014, the Company recognized compensation expense related to stock options granted to directors and employees of approximately $149,000 and $172,000, respectively. During the six-month periods ended June 30, 2015 and 2014, the Company recognized compensation expenses related to stock options granted to directors and employees of approximately $193,000 and $267,000, respectively. On February 24, 2015, the Company’s Compensation Committee approved the award of $400,000, payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan. The shares will be issued on or before December 31, 2015. The Company recorded compensation expense associated with the award of $100,000 and $200,000, respectively, during the three- and six-month periods ended June 30, 2015 and 2014. The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the six-month period ended June 30, 2015: Restricted Stock Units Weighted Average Award Date Fair Value Unvested at December 31, 2014 $ Awarded Shares vested ) Unvested at June 30, 2015 $ During each of the three- and six-month periods ended June 30, 2015, the Company recorded compensation expense related to RSUs of approximately $82,000 and $149,000. The Company recorded compensation expense of approximately $70,000 and $136,000, respectively, for the same periods in 2014. At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the six-month periods ended June 30, 2015 and 2014, 3,405 and 9,878 shares were surrendered at an average market price of $23.15 and $25.88, respectively. As of June 30, 2015, the Company had approximately $1.2 million of unrecognized compensation expense, which is expected to be recognized over a period of 3.8 years. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventories | |
Inventories | (5) Inventories Inventories are stated at the lower of cost (first-in, first-out) or market, and consist of the following at the stated dates (in thousands): June 30, 2015 December 31, 2014 Raw materials $ $ Work in process Finished goods Total inventory $ $ |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2015 | |
Preferred Stock | |
Preferred Stock | (6) Preferred Stock On March 18, 2009, the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, to the stockholders of record on March 20, 2009. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Share”) of the Company, at a price of $25 per one one-thousandth of a Preferred Share subject to adjustment and the terms of the Rights Agreement. The Rights expire on March 19, 2019. |
Income Per Share
Income Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Income Per Share | |
Income Per Share | (7) Income Per Share Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period. The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Weighted average common shares outstanding, basic Weighted average common equivalent shares due to stock options and RSUs Weighted average common shares outstanding, diluted The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would be antidilutive. For both the three- and six-month periods ended June 30, 2015, the number of stock awards excluded from the computation of diluted earnings per share was 82,719. For both the three- and six-month periods ended June 30, 2014, the number of stock awards excluded from the computation of diluted earnings per share was 30,193. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting | |
Segment Reporting | (8) Segment Reporting The Company consists of a single operating and reportable segment. Revenues from customers outside of the United States are not material. No customer comprised more than 10% of the Company’s consolidated revenues for the three-month period ended June 30, 2015. All of the Company’s assets are located in the United States. The Company’s products are primarily sold to customers within the Medical, Automotive, Industrial, Consumer, Aerospace and Defense, and Electronics, markets. Net sales by market for the three- and six-month periods ended June 30, 2015 and 2014 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Market Net Sales % Net Sales % Net Sales % Net Sales % Medical $ % $ % $ % $ % Automotive % % % % Industrial % % % % Aerospace & Defense % % % % Consumer % % % % Electronics % % % % Net Sales $ % $ % $ % $ % |
Other Intangible Assets
Other Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Other Intangible Assets | |
Other Intangible Assets | (9) Other Intangible Assets The carrying values of the Company’s definite lived intangible assets as of June 30, 2015 and December 31, 2014, are as follows (in thousands): Patents Non- Compete Customer List Total Estimated useful life 14 years 5 years 5 years Gross amount at June 30, 2015 $ $ $ $ Accumulated amortization at June 30, 2015 ) ) ) ) Net balance at June 30, 2015 $ — $ $ $ Gross amount at December 31, 2014 $ $ $ $ Accumulated amortization at December 31, 2014 ) ) ) ) Net balance at December 31, 2014 $ — $ $ $ Amortization expense related to intangible assets was approximately $79,000 and $113,000 for the three-month periods ended June 30, 2015 and 2014, respectively, and $159,000 and $232,000 for the six-month periods ended June 30, 2015 and 2014, respectively. The estimated remaining amortization expense as of June 30, 2015 is as follows (in thousands): Remainder of: 2015 $ 2016 2017 Total $ |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The income tax expense included in the accompanying unaudited consolidated statements of income principally relates to the Company’s proportionate share of the pre-tax income of its wholly-owned subsidiaries. The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur. The Company recorded a tax expense of approximately 35.0% of income before income tax expense for each of the three-month periods ended June 30, 2015 and 2014. The Company recorded a tax expense of approximately 35.0% of income before income tax expense for each of the six-month periods ended June 30, 2015 and 2014. |
Plant Consolidations
Plant Consolidations | 6 Months Ended |
Jun. 30, 2015 | |
Plant Consolidation | |
Plant Consolidation | (11) Plant Consolidations Restructuring Costs On March 18, 2015, the Company committed to move forward with a plan to cease operations at its Raritan, New Jersey plant and consolidate operations into its Newburyport, Massachusetts facility and other UFP facilities. The Company’s decision was in response to a continued decline in business at the facility and the recent purchase of the 137,000 square foot facility in Newburyport. The Company expects the activities related to this consolidation to be completed on or before October 31, 2015. The Company expects to incur approximately $1.1 million in one-time expenses in connection with the consolidation. Included in this amount are approximately $360,000 of expenses the Company expects to incur relating to employee severance payments and training costs, approximately $600,000 in moving expenses and expenses associated with vacating the Raritan property, and approximately $100,000 in lease termination costs. Total cash charges are estimated at $1.0 million. The Company expects annual cost savings of approximately $400,000 as a result of the plant consolidation. The company recorded the following restructuring costs associated with the Massachusetts plant consolidation for the three- and six-month periods ended June 30, 2015 (in thousands): Massachusetts Restructuring Costs Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Relocation costs $ $ Total $ $ On July 16, 2014, the Company committed to move forward with a plan to cease operations at its Costa Mesa, California, plant and consolidate operations into its Rancho Dominguez, California, facility and other UFP facilities. The Company’s decision was in response to the December 31, 2014, expiration of the lease on the Costa Mesa facility as well as the close proximity of the two properties. This consolidation was completed during the first quarter of 2015. The company recorded the following restructuring costs associated with the California plant consolidation for the three- and six-month periods ended June 30, 2015 (in thousands): California Restructuring Costs Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Employee severance payments $ — $ Relocation costs Total $ $ On January 7, 2014, the Company committed to move forward with a plan to cease operations at its Glendale Heights, Illinois plant and consolidate operations into its Grand Rapids, Michigan, facility. The Company’s decision was in response to a pending significant increase in lease cost, declining sales at the Illinois facility, and significant anticipated savings as a result of the consolidation. The consolidation into the Michigan facility was completed during the third quarter of 2014. The company recorded the following restructuring costs associated with the Michigan plant consolidation for the three- and six-month periods ended June 30, 2014 (in thousands): Michigan Restructuring Costs Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Employee severance payments $ $ Relocation costs Workforce training costs Grand Rapids plant infrastructure costs Total $ $ |
Supplemental Cash Flow Inform17
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information | |
Schedule of cash paid for interest and income taxes | Cash paid for interest and income taxes is as follows (in thousands): Six Months Ended June 30, 2015 2014 Interest, net $ $ Income taxes, net of refunds $ ) $ |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share-Based Compensation | |
Schedule of the compensation cost charged against income for plans included in selling, general & administrative expenses | The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Total share-based compensation expense $ $ $ $ |
Schedule of stock option activity under all plans | Shares Under Options Weighted Average Exercise Price (per share) Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 $ Granted Exercised ) Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Vested and expected to vest at June 30, 2015 $ $ |
Schedule of assumptions used to determine the fair value of options using Black Scholes option pricing model | Expected volatility % Expected dividends None Risk free interest rate % Expected term 5.0 years |
Summary of Restricted Stock Units ( RSUs ) activity | Restricted Stock Units Weighted Average Award Date Fair Value Unvested at December 31, 2014 $ Awarded Shares vested ) Unvested at June 30, 2015 $ |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventories | |
Schedule of inventories | Inventories are stated at the lower of cost (first-in, first-out) or market, and consist of the following at the stated dates (in thousands): June 30, 2015 December 31, 2014 Raw materials $ $ Work in process Finished goods Total inventory $ $ |
Income Per Share (Tables)
Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Per Share | |
Schedule of the weighted average number of shares used to compute basic and diluted net income per share | The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Weighted average common shares outstanding, basic Weighted average common equivalent shares due to stock options and RSUs Weighted average common shares outstanding, diluted |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting | |
Schedule of sales by market | Net sales by market for the three- and six-month periods ended June 30, 2015 and 2014 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Market Net Sales % Net Sales % Net Sales % Net Sales % Medical $ % $ % $ % $ % Automotive % % % % Industrial % % % % Aerospace & Defense % % % % Consumer % % % % Electronics % % % % Net Sales $ % $ % $ % $ % |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Other Intangible Assets | |
Schedule of carrying values of definite-lived intangible assets | The carrying values of the Company’s definite lived intangible assets as of June 30, 2015 and December 31, 2014, are as follows (in thousands): Patents Non- Compete Customer List Total Estimated useful life 14 years 5 years 5 years Gross amount at June 30, 2015 $ $ $ $ Accumulated amortization at June 30, 2015 ) ) ) ) Net balance at June 30, 2015 $ — $ $ $ Gross amount at December 31, 2014 $ $ $ $ Accumulated amortization at December 31, 2014 ) ) ) ) Net balance at December 31, 2014 $ — $ $ $ |
Schedule of future amortization expense related to intangible assets | The estimated remaining amortization expense as of June 30, 2015 is as follows (in thousands): Remainder of: 2015 $ 2016 2017 Total $ |
Plant Consolidation (Tables)
Plant Consolidation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Newburyport Massachusetts facility Member | |
Schedule of restructuring costs associated with the plant consolidation | The company recorded the following restructuring costs associated with the Massachusetts plant consolidation for the three- and six-month periods ended June 30, 2015 (in thousands): Massachusetts Restructuring Costs Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Relocation costs $ $ Total $ $ |
Rancho Dominguez California Facility Member | |
Schedule of restructuring costs associated with the plant consolidation | The company recorded the following restructuring costs associated with the California plant consolidation for the three- and six-month periods ended June 30, 2015 (in thousands): California Restructuring Costs Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Employee severance payments $ — $ Relocation costs Total $ $ |
Grand Rapids Michigan Facility Member | |
Schedule of restructuring costs associated with the plant consolidation | The company recorded the following restructuring costs associated with the Michigan plant consolidation for the three- and six-month periods ended June 30, 2014 (in thousands): Michigan Restructuring Costs Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Employee severance payments $ $ Relocation costs Workforce training costs Grand Rapids plant infrastructure costs Total $ $ |
Basis of Presentation (Detail)
Basis of Presentation (Detail) - Jun. 30, 2014 - USD ($) | Total | Total |
Basis of Presentation | ||
Decrease in cost of sales | $ 69,000 | $ 138,000 |
Increase in selling, general and administrative expenses | $ 69,000 | $ 138,000 |
Supplemental Cash Flow Inform25
Supplemental Cash Flow Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Information | ||
Interest, net | $ 15,000 | $ 47,000 |
Income taxes, net of refunds | (1,013,000) | 1,589,000 |
Cashless exercises | $ 0 | $ 352,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-Based Compensation | ||||
Total share-based compensation expense | $ 436,000 | $ 465,000 | $ 647,000 | $ 730,000 |
Total income tax benefit recognized | 135,000 | 145,000 | 193,000 | 215,000 |
Non-employee members of Board of Directors | ||||
Share-Based Compensation | ||||
Fair value of stock granted to a member of the Board of Directors as a part of annual retainer | $ 105,000 | $ 122,000 | $ 105,000 | $ 127,000 |
Share-Based Compensation (Det27
Share-Based Compensation (Details 2) - USD ($) | Jun. 10, 2015 | Feb. 24, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Additional share-based compensation disclosures | ||||||
Compensation expense | $ 436,000 | $ 465,000 | $ 647,000 | $ 730,000 | ||
Options | ||||||
Shares Under Options | ||||||
Outstanding at the beginning of the period (in shares) | 340,107 | |||||
Granted (in shares) | 17,526 | |||||
Exercised (in shares) | (43,758) | |||||
Outstanding at the end of the period (in shares) | 313,875 | 313,875 | ||||
Exercisable at the end of the period (in shares) | 250,126 | 250,126 | ||||
Vested and expected to vest at the end of the period (in shares) | 313,875 | 313,875 | ||||
Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 12.84 | |||||
Granted (in dollars per share) | 19.97 | |||||
Exercised (in dollars per share) | 5.09 | |||||
Outstanding at the end of the period (in dollars per share) | $ 14.32 | 14.32 | ||||
Exercisable at the end of the period (in dollars per share) | 12.67 | 12.67 | ||||
Vested and expected to vest at the end of the period (in dollars per share) | $ 14.32 | $ 14.32 | ||||
Weighted Average Remaining Contractual Life | ||||||
Outstanding at the end of the period | 3 years 11 months 27 days | |||||
Exercisable at the end of the period | 4 years 2 months 19 days | |||||
Vested and expected to vest at the end of the period | 3 years 11 months 27 days | |||||
Aggregate Intrinsic Value | ||||||
Outstanding at the end of the period | $ 2,227,000 | $ 2,227,000 | ||||
Exercisable at the end of the period | 2,153,000 | 2,153,000 | ||||
Vested and expected to vest at the end of the period | $ 2,227,000 | 2,227,000 | ||||
Assumptions used to determine the intrinsic fair market value of options using Black Scholes option pricing model | ||||||
The total intrinsic value of all options exercised | 696,000 | 3,400,000 | ||||
Additional share-based compensation disclosures | ||||||
Total amount of consideration received from the exercised options | $ 223,000 | $ 675,000 | ||||
Shares surrendered in lieu of payment of exercise price and withholding taxes | 0 | 31,310 | ||||
Average market price of shares surrendered in lieu of payment of exercise price and withholding taxes (in dollars per share) | $ 25.47 | |||||
Restricted Stock Units | ||||||
Restricted Stock Units | ||||||
Unvested at the beginning of the period (in shares) | 35,088 | |||||
Awarded (in shares) | 23,975 | |||||
Shares vested (in shares) | (10,426) | |||||
Unvested at the end of the period (in shares) | 48,637 | 48,637 | ||||
Weighted Average Award Date Fair Value | ||||||
Unvested at the beginning of the period (in dollars per share) | $ 17.87 | |||||
Awarded (in dollars per share) | 23.46 | |||||
Shares vested (in dollars per share) | 18.35 | |||||
Unvested at the end of the period (in dollars per share) | $ 19.89 | $ 19.89 | ||||
Additional share-based compensation disclosures | ||||||
Compensation expense | $ 82,000 | 70,000 | $ 149,000 | $ 136,000 | ||
Net-share settlement (in shares) | 3,405 | 9,878 | ||||
Net-share settlement, market price per share | $ 23.15 | $ 25.88 | ||||
Unrecognized compensation expense | 1,200,000 | $ 1,200,000 | ||||
Weighted average period of recognition of unrecognized compensation expense | 3 years 9 months 18 days | |||||
Director Stock Option | ||||||
Shares Under Options | ||||||
Granted (in shares) | 17,526 | |||||
Weighted Average Exercise Price | ||||||
Granted (in dollars per share) | $ 19.97 | |||||
Assumptions used to determine the intrinsic fair market value of options using Black Scholes option pricing model | ||||||
Expected volatility (as a percent) | 32.30% | |||||
Expected dividends (as a percent) | 0.00% | |||||
Risk free interest rate (as a percent) | 1.00% | |||||
Expected term | 5 years | |||||
Weighted average grant date fair value of options granted (in dollars per share) | $ 5.99 | |||||
Director and employees | Options | ||||||
Additional share-based compensation disclosures | ||||||
Compensation expense | 149,000 | 172,000 | $ 193,000 | $ 267,000 | ||
Incentive Plan | Chief Executive Officer | Common Stock | ||||||
Restricted Stock Units | ||||||
Awards | $ 400,000 | |||||
Additional share-based compensation disclosures | ||||||
Compensation expense | $ 100,000 | $ 100,000 | $ 200,000 | $ 200,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 7,223 | $ 7,145 |
Work in process | 1,265 | 1,142 |
Finished goods | 4,344 | 4,606 |
Total inventory | $ 12,832 | $ 12,893 |
Preferred Stock (Details)
Preferred Stock (Details) | Mar. 18, 2009item$ / sharesshares | Jun. 30, 2015$ / shares | Dec. 31, 2014$ / shares |
Preferred Stock | |||
Number of preferred share purchase rights declared as dividend for each outstanding share of common stock | item | 1 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Number of shares of Series A Junior Participating Preferred Stock that each right entitles the registered holder to purchase | shares | 0.001 | ||
Par value of Series A Junior Participating Preferred Stock (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Purchase price of Series A Junior Participating Preferred Stock (in dollars per one one-thousandth of a share) | $ 25 |
Income Per Share (Details)
Income Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Per Share | ||||
Weighted average common shares outstanding, basic | 7,116,000 | 7,025,000 | 7,096,000 | 6,999,000 |
Weighted average common equivalent shares due to stock options and RSUs | 94,000 | 143,000 | 107,000 | 161,000 |
Weighted average common shares outstanding, diluted | 7,210,000 | 7,168,000 | 7,203,000 | 7,160,000 |
Number of stock awards excluded from the computation of diluted income per share | 82,719 | 30,193 | 82,719 | 30,193 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | |
Concentration of risk | ||||
Number of segments historically reported | segment | 1 | |||
Net Sales by Market | $ 36,499 | $ 34,025 | $ 70,476 | $ 68,634 |
Percentage of concentration risk | 100.00% | 100.00% | 100.00% | 100.00% |
Medical | ||||
Concentration of risk | ||||
Net Sales by Market | $ 14,935 | $ 12,840 | $ 28,732 | $ 25,075 |
Percentage of concentration risk | 40.90% | 37.70% | 40.80% | 36.50% |
Automotive | ||||
Concentration of risk | ||||
Net Sales by Market | $ 7,007 | $ 6,010 | $ 13,772 | $ 13,074 |
Percentage of concentration risk | 19.20% | 17.70% | 19.50% | 19.00% |
Industrial | ||||
Concentration of risk | ||||
Net Sales by Market | $ 4,839 | $ 5,012 | $ 9,641 | $ 10,307 |
Percentage of concentration risk | 13.30% | 14.70% | 13.70% | 15.00% |
Aerospace & Defense | ||||
Concentration of risk | ||||
Net Sales by Market | $ 3,508 | $ 2,732 | $ 6,454 | $ 6,089 |
Percentage of concentration risk | 9.60% | 8.00% | 9.20% | 8.90% |
Consumer | ||||
Concentration of risk | ||||
Net Sales by Market | $ 3,201 | $ 3,660 | $ 6,324 | $ 7,245 |
Percentage of concentration risk | 8.80% | 10.80% | 9.00% | 10.60% |
Electronics | ||||
Concentration of risk | ||||
Net Sales by Market | $ 3,009 | $ 3,771 | $ 5,553 | $ 6,844 |
Percentage of concentration risk | 8.20% | 11.10% | 7.90% | 10.00% |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Other Intangible Assets | |||||
Gross amount | $ 2,987,000 | $ 2,987,000 | $ 2,987,000 | ||
Accumulated amortization | (2,193,000) | (2,193,000) | (2,034,000) | ||
Net balance | 794,000 | 794,000 | 953,000 | ||
Amortization expense related to intangible assets | 79,000 | $ 113,000 | 159,000 | $ 232,000 | |
Future amortization | |||||
2,015 | 158,000 | 158,000 | |||
2,016 | 318,000 | 318,000 | |||
2,017 | 318,000 | 318,000 | |||
Total | 794,000 | $ 794,000 | |||
Patents | |||||
Other Intangible Assets | |||||
Estimated useful life | 14 years | ||||
Gross amount | 429,000 | $ 429,000 | 429,000 | ||
Accumulated amortization | (429,000) | $ (429,000) | (429,000) | ||
Non-compete | |||||
Other Intangible Assets | |||||
Estimated useful life | 5 years | ||||
Gross amount | 512,000 | $ 512,000 | 512,000 | ||
Accumulated amortization | (356,000) | (356,000) | (325,000) | ||
Net balance | 156,000 | $ 156,000 | 187,000 | ||
Customer list | |||||
Other Intangible Assets | |||||
Estimated useful life | 5 years | ||||
Gross amount | 2,046,000 | $ 2,046,000 | 2,046,000 | ||
Accumulated amortization | (1,408,000) | (1,408,000) | (1,280,000) | ||
Net balance | $ 638,000 | $ 638,000 | $ 766,000 |
Income Taxes (Details )
Income Taxes (Details ) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
Plant Consolidations (Details)
Plant Consolidations (Details) | Mar. 18, 2015USD ($)ft² | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) |
Grand Rapids Michigan Facility Member | |||||
Restructuring Costs | |||||
Total restructuring costs | $ 234,000 | $ 324,000 | |||
Employee severance payments | 14,000 | 25,000 | |||
Relocation costs | 106,000 | 115,000 | |||
Workforce training costs | 65,000 | 113,000 | |||
Plant infrastructure costs | $ 49,000 | $ 71,000 | |||
Rancho Dominguez California Facility Member | |||||
Restructuring Costs | |||||
Total restructuring costs | $ 6,000 | $ 84,000 | |||
Employee severance payments | 18,000 | ||||
Relocation costs | 6,000 | 66,000 | |||
Newburyport Massachusetts facility Member | |||||
Plant Consolidation | |||||
Area of Real Estate Property | ft² | 137,000 | ||||
Restructuring charges | $ 1,100,000 | ||||
Cash charges | 1,000,000 | ||||
Annual cost savings | 400,000 | ||||
Restructuring Costs | |||||
Total restructuring costs | 24,000 | 24,000 | |||
Relocation costs | $ 24,000 | $ 24,000 | |||
Employee severance payments | Newburyport Massachusetts facility Member | |||||
Plant Consolidation | |||||
Restructuring charges | 360,000 | ||||
Moving and vacating expenses | Newburyport Massachusetts facility Member | |||||
Plant Consolidation | |||||
Restructuring charges | 600,000 | ||||
Lease Termination | Newburyport Massachusetts facility Member | |||||
Plant Consolidation | |||||
Restructuring charges | $ 100,000 |