10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For The Quarterly Period Ended June 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______________ to _______________

Commission File Number: 1-4639

 

CTS CORPORATION

(Exact name of registrant as specified in its charter)

Indiana	35-0225010
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

4925 Indiana Avenue
Lisle,	IL	60532
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 630 577-8800

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common stock, without par value	CTS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No    ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  x Accelerated filer  o Non-accelerated filer  o Smaller reporting company  o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐ No   x 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of July 22, 2019: 32,668,801.

CTS CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Statements of Earnings (Unaudited) For the Three and Six Months Ended June 30, 2019 and June 30, 2018	3
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) For the Three and Six Months Ended June 30, 2019 and June 30, 2018	4
	Condensed Consolidated Balance Sheets As of June 30, 2019 (Unaudited) and December 31, 2018	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2019 and June 30, 2018	6
	Condensed Consolidated Statements of Shareholder's Equity (Unaudited) For the Three and Six Months Ended June 30, 2019 and June 30, 2018	7
	Notes to Condensed Consolidated Financial Statements ‑ (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	36
SIGNATURES		36

2

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

(In thousands, except per share amounts) 

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Net sales	$	120,684		$	118,021		$	238,308		$	231,551
Cost of goods sold	79,480			76,208			156,490			151,305
Gross Margin	41,204			41,813			81,818			80,246
Selling, general and administrative expenses	17,036			19,621			34,597			36,993
Research and development expenses	6,257			6,476			13,048			12,983
Restructuring charges	911			1,172			2,995			2,367
Gain on sale of assets	(83		)	—			(122		)	—
Operating earnings	17,083			14,544			31,300			27,903
Other income (expense):
Interest expense	(467		)	(571		)	(933		)	(1,112		)
Interest income	440			472			872			954
Other expense, net	(1,107		)	(2,874		)	(1,010		)	(870		)
Total other expense, net	(1,134		)	(2,973		)	(1,071		)	(1,028		)
Earnings before income taxes	15,949			11,571			30,229			26,875
Income tax expense	4,006			4,362			6,867			8,118
Net earnings	$	11,943		$	7,209		$	23,362		$	18,757
Earnings per share:
Basic	$	0.36		$	0.22		$	0.71		$	0.57
Diluted	$	0.36		$	0.21		$	0.70		$	0.56
Basic weighted – average common shares outstanding:	32,799			33,051			32,803			33,014
Effect of dilutive securities	406			513			422			513
Diluted weighted – average common shares outstanding:	33,205			33,564			33,225			33,527
Cash dividends declared per share	$	0.04		$	0.04		$	0.08		$	0.08

See notes to unaudited condensed consolidated financial statements.

3

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ‑ UNAUDITED

(In thousands of dollars) 

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Net earnings	$	11,943		$	7,209		$	23,362		$	18,757
Other comprehensive income:
Changes in fair market value of derivatives, net of tax	(294		)	67			(216		)	874
Changes in unrealized pension cost, net of tax	1,026			1,249			2,048			2,356
Cumulative translation adjustment, net of tax	(87		)	(375		)	4			(132		)
Other comprehensive income	$	645		$	941		$	1,836		$	3,098
Comprehensive income	$	12,588		$	8,150		$	25,198		$	21,855

 See notes to unaudited condensed consolidated financial statements.

4

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

	(Unaudited)
	June 30,			December 31,
	2019			2018
ASSETS
Current Assets
Cash and cash equivalents	$	105,578		$	100,933
Accounts receivable, net	84,876			79,518
Inventories, net	43,154			43,486
Other current assets	16,811			15,422
Total current assets	250,419			239,359
Property, plant and equipment, net	99,878			99,401
Operating lease assets, net	23,846			—
Other Assets
Prepaid pension asset	56,331			54,100
Goodwill	71,057			71,057
Other intangible assets, net	56,805			60,180
Deferred income taxes	19,596			22,201
Other	2,769			2,043
Total other assets	206,558			209,581
Total Assets	$	580,701		$	548,341
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	50,942		$	51,975
Operating lease obligations	2,076			—
Accrued payroll and benefits	9,901			14,671
Accrued liabilities	33,396			37,347
Total current liabilities	96,315			103,993
Long-term debt	50,000			50,000
Long-term operating lease obligations	24,702			—
Long-term pension and other post-retirement obligations	6,363			6,510
Deferred income taxes	3,823			3,990
Other long-term obligations	3,953			5,919
Total Liabilities	185,156			170,412
Commitments and Contingencies (Note 10)
Shareholders’ Equity
Common stock	307,775			306,697
Additional contributed capital	41,786			42,820
Retained earnings	499,585			478,847
Accumulated other comprehensive loss	(95,903		)	(97,739		)
Total shareholders’ equity before treasury stock	753,243			730,625
Treasury stock	(357,698		)	(352,696		)
Total shareholders’ equity	395,545			377,929
Total Liabilities and Shareholders’ Equity	$	580,701		$	548,341

See notes to unaudited condensed consolidated financial statements.

5

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ‑ UNAUDITED

(In thousands of dollars)

	Six Months Ended
	June 30,			June 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	23,362		$	18,757
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	11,919			10,961
Pension and other post-retirement plan expense	502			213
Stock-based compensation	2,793			2,186
Restructuring impairment charges	892			—
Deferred income taxes	1,937			(648		)
(Gain) loss on sales of fixed assets	(122		)	2
Loss (gain) on foreign currency hedges, net of cash	88			(76		)
Changes in assets and liabilities:
Accounts receivable	(5,394		)	(5,452		)
Inventories	360			(5,275		)
Other assets	(4,126		)	1,280
Accounts payable	(1,582		)	4,779
Accrued payroll and benefits	(4,713		)	(2,028		)
Accrued liabilities	(3,622		)	247
Income taxes payable	(588		)	3,034
Other liabilities	2,622			(101		)
Pension and other post-retirement plans	(144		)	(158		)
Net cash provided by operating activities	24,184			27,721
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(9,430		)	(14,910		)
Proceeds from sale of assets	122			1
Net cash used in investing activities	(9,308		)	(14,909		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt	(309,100		)	(749,200		)
Proceeds from borrowings of long-term debt	309,100			729,900
Purchase of treasury stock	(5,002		)	—
Dividends paid	(2,625		)	(2,638		)
Taxes paid on behalf of equity award participants	(2,637		)	(1,429		)
Net cash used in financing activities	(10,264		)	(23,367		)
Effect of exchange rate changes on cash and cash equivalents	33			(156		)
Net increase (decrease) in cash and cash equivalents	4,645			(10,711		)
Cash and cash equivalents at beginning of period	100,933			113,572
Cash and cash equivalents at end of period	$	105,578		$	102,861
Supplemental cash flow information:
Cash paid for interest	$	574		$	995
Cash paid for income taxes, net	$	5,448		$	3,724
Non-cash financing and investing activities:
Capital expenditures incurred but not paid	$	4,807		$	3,944

See notes to unaudited condensed consolidated financial statements.

6

CTS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders' Equity - Unaudited

(in thousands of dollars)

The following summarizes the changes in total equity for the three and six months ended June 30, 2018:

	Common Stock		Additional Contributed Capital			Retained Earnings			Accumulated Other Comprehensive Earnings/(Loss)			Treasury Stock			Total
Balances at December 31, 2017	$	304,777	$	41,084		$	420,160		$	(78,960	)	$	(343,256	)	$	343,805
Net earnings	—		—			11,548			—			—			11,548
Changes in fair market value of hedges, net of tax	—		—			—			807			—			807
Changes in unrealized pension cost, net of tax	—		—			—			1,107			—			1,107
Cumulative translation adjustment, net of tax	—		—			—			243			—			243
Cash dividends of $0.04 per share	—		—			(1,320		)	—			—			(1,320		)
Issued shares on vesting of restricted stock units	945		(2,368		)	—			—			—			(1,423		)
Stock compensation	—		965			—			—			—			965
Balances at March 31, 2018	$	305,722	$	39,681		$	430,388		$	(76,803	)	$	(343,256	)	$	355,732
Net earnings	—		—			7,209			—			—			7,209
Changes in fair market value of hedges, net of tax	—		—			—			67			—			67
Changes in unrealized pension cost, net of tax	—		—			—			1,249			—			1,249
Cumulative translation adjustment, net of tax	—		—			—			(375		)	—			(375		)
Cash dividends of $0.04 per share	—		—			(1,323		)	—			—			(1,323		)
Issued shares on vesting of restricted stock units	848		(853		)	—			—			—			(5		)
Stock compensation	—		1,206			—			—			—			1,206
Balances at June 30, 2018	$	306,570	$	40,034		$	436,274		$	(75,862	)	$	(343,256	)	$	363,760

See notes to unaudited condensed consolidated financial statements.

7

CTS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders' Equity - Unaudited (continued)

(in thousands of dollars)

The following summarizes the changes in total equity for the three and six months ended June 30, 2019:

	Common Stock		Additional Contributed Capital			Retained Earnings			Accumulated Other Comprehensive Earnings/(Loss)			Treasury Stock			Total
Balances at December 31, 2018	$	306,697	$	42,820		$	478,847		$	(97,739	)	$	(352,696	)	$	377,929
Net earnings	—		—			11,419			—			—			11,419
Changes in fair market value of derivatives, net of tax	—		—			—			78			—			78
Changes in unrealized pension cost, net of tax	—		—			—			1,022			—			1,022
Cumulative translation adjustment, net of tax	—		—			—			91			—			91
Cash dividends of $0.04 per share	—		—			(1,315		)	—			—			(1,315		)
Acquired 31,500 shares for treasury stock	—		—			—			—			(849		)	(849		)
Issued shares on vesting of restricted stock units	967		(3,603		)	—			—			—			(2,636		)
Stock compensation	—		1,154			—			—			—			1,154
Balances at March 31, 2019	$	307,664	$	40,371		$	488,951		$	(96,548	)	$	(353,545	)	$	386,893
Net earnings	—		—			11,943			—			—			11,943
Changes in fair market value of derivatives, net of tax	—		—			—			(294		)	—			(294		)
Changes in unrealized pension cost, net of tax	—		—			—			1,026			—			1,026
Cumulative translation adjustment, net of tax	—		—			—			(87		)	—			(87		)
Cash dividends of $0.04 per share	—		—			(1,309		)	—			—			(1,309		)
Acquired 148,466 shares for treasury stock	—		—			—			—			(4,153		)	(4,153		)
Issued shares on vesting of restricted stock units	111		(111		)	—			—			—			—
Stock compensation	—		1,526			—			—			—			1,526
Balance at June 30, 2019	$	307,775	$	41,786		$	499,585		$	(95,903	)	$	(357,698	)	$	395,545

See notes to unaudited condensed consolidated financial statements.

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

(in thousands except for share and per share data)

June 30, 2019

NOTE 1—Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by CTS Corporation (“CTS” "we", "our", "us" or the "Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, notes thereto, and other information included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring items) necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year.

Changes in Accounting Principles

Beginning in January 2019, CTS adopted the provisions of Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" under the optional transition method, which requires, if necessary, a cumulative effect adjustment to the opening balance of retained earnings. The lease liability is based on the present value of minimum lease payments discounted using our secured incremental borrowing rate at the date of adoption. Existing deferred rent liabilities, resulting from our historical practice of using the straight line method for recognizing lease expense, were reclassified upon adoption to reduce the measurement of the lease assets. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases at adoption. Our leases are classified as operating leases and expense is recorded in a manner similar to historical accounting guidance. We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet. Upon adoption we recorded a lease liability of $24,792 and a right of use asset of $22,066. No adjustment to the opening balance of retained earnings was required.

Subsequent Events

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date the condensed consolidated financial statements are issued.

NOTE 2 – Revenue Recognition

The core principle of Topic 606 is that an entity should recognize revenue 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. The guidance provides a five-step process to achieve that core principle:

• Identify the contract(s) with a customer

• Identify the performance obligations

• Determine the transaction price

• Allocate the transaction price

• Recognize revenue when the performance obligations are met

We recognize revenue when the performance obligations specified in our contracts have been satisfied, after considering the impact of variable consideration and other factors that may affect the transaction price. Our contracts normally contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. We usually expect payment within 30 to 90 days from the shipping date, depending on our terms with the customer. None of our contracts as of June 30, 2019, contained a significant financing component. Differences between the amount of revenue recognized and the amount invoiced, collected from, or paid to our customers are recognized as contract assets or liabilities. Contract assets will be reviewed for impairment when events or circumstances indicate that they may not be recoverable.

9

To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method based on an analysis of historical experience and current facts and circumstances, which requires significant judgment. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

Contract Assets and Liabilities

Contract assets and liabilities included in our Condensed Consolidated Balance Sheets are as follows:

	As of
	June 30,			December 31,
	2019			2018
Contract Assets
Prepaid rebates included in Other current assets	$	65		$	65
Prepaid rebates included in Other assets	1,501			999
Total Contract Assets	$	1,566		$	1,064
Contract Liabilities
Customer discounts and price concessions included in Accrued liabilities	$	(1,799	)	$	(1,656	)
Customer rights of return included in Accrued liabilities	(464		)	(325		)
Total Contract Liabilities	$	(2,263	)	$	(1,981	)

During the three and six months ended June 30, 2019, we recognized revenues of $37 and $106, respectively, for amounts that were included in contract liabilities at the beginning of the period.

Disaggregated Revenue

The following table presents revenues disaggregated by the major markets we serve:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Aero & Defense	$	6,988	$	6,024	$	14,511	$	11,127
Industrial	19,500		22,773		37,656		43,129
Medical	8,973		9,793		18,639		19,034
Telecom & IT	4,880		5,525		8,318		10,050
Transportation	80,343		73,906		159,184		148,211
Total	$	120,684	$	118,021	$	238,308	$	231,551

NOTE 3 – Accounts Receivable 

The components of accounts receivable are as follows:

	As of
	June 30,			December 31,
	2019			2018
Accounts receivable, gross	$	85,002		$	79,902
Less: Allowance for doubtful accounts	(126		)	(384		)
Accounts receivable, net	$	84,876		$	79,518

10

NOTE 4 – Inventories 

Inventories consist of the following:

	As of
	June 30,			December 31,
	2019			2018
Finished goods	$	7,247		$	10,995
Work-in-process	14,835			12,129
Raw materials	26,197			25,746
Less: Inventory reserves	(5,125		)	(5,384		)
Inventories, net	$	43,154		$	43,486

NOTE 5 – Property, Plant and Equipment

Property, plant and equipment is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Land	$	1,136		$	1,136
Buildings and improvements	73,735			70,522
Machinery and equipment	225,513			231,619
Less: Accumulated depreciation	(200,506		)	(203,876		)
Property, plant and equipment, net	$	99,878		$	99,401
Depreciation expense for the six months ended June 30, 2019				$	8,537
Depreciation expense for the six months ended June 30, 2018				$	7,537

 

NOTE 6 – Retirement Plans

Pension Plans

Net pension expense for our domestic and foreign plans included in other income (expense) in the condensed consolidated statement of earnings is as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Net pension expense	$	249	$	78	$	499	$	157

The components of net pension expense for our domestic and foreign plans include the following: 

	Domestic Pension Plans						Foreign Pension Plans
	Three Months Ended						Three Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	9		$	11
Interest cost	1,931			1,781			7			11
Expected return on plan assets(1)	(3,047		)	(3,225		)	(4		)	(6		)
Amortization of loss	1,311			1,466			42			40
Total expense, net	$	195		$	22		$	54		$	56

 

(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

11

	Domestic Pension Plans						Foreign Pension Plans
	Six Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	18		$	22
Interest cost	3,862			3,562			15			22
Expected return on plan assets(1)	(6,094		)	(6,450		)	(9		)	(13		)
Amortization of loss	2,623			2,932			84			82
Total expense, net	$	391		$	44		$	108		$	113

 (1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

Other Post-retirement Benefit Plan

Net post-retirement expense for our other post-retirement plan includes the following components:

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	1		$	—		$	1		$	1
Interest cost	43			39			85			78
Amortization of gain	(42		)	(11		)	(83		)	(23		)
Total expense, net	$	2		$	28		$	3		$	56

NOTE 7 – Other Intangible Assets

Intangible assets consist of the following components:

	As of
	June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(38,787	)	$	25,536
Technology and other intangibles	44,460		(15,391		)	29,069
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(54,178	)	$	56,805
Amortization expense for the three months ended June 30, 2019			$	1,692
Amortization expense for the six months ended June 30, 2019			$	3,382

	As of
	December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(37,088	)	$	27,235
Technology and other intangibles	44,460		(13,715		)	30,745
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(50,803	)	$	60,180
Amortization expense for the three months ended June 30, 2018			$	1,704
Amortization expense for the six months ended June 30, 2018			$	3,424

12

Remaining amortization expense for other intangible assets as of June 30, 2019 is as follows: 

	Amortization expense
2019	$	3,377
2020	6,624
2021	6,467
2022	6,230
2023	4,224
Thereafter	29,883
Total amortization expense	$	56,805

 

NOTE 8 – Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as a separate component of Operating earnings. 

Total restructuring charges is as follows:

	Three Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	911	$	1,172

 

 

	Six Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	2,995	$	2,367

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. During the third quarter of 2017, we revised the June 2016 Plan. The amendment added an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. The total restructuring liability related to severance and other one-time benefit arrangements under the June 2016 Plan was $501 at June 30, 2019, and $668 at December 31, 2018. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through June 30, 2019:

			Actual costs
	Planned		incurred through
June 2016 Plan	Costs		June 30, 2019
Workforce reduction	$	3,075	$	3,162
Building and equipment relocation	9,025		9,952
Other charges	1,300		1,875
Total restructuring charges	$	13,400	$	14,989

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

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The following table displays the restructuring liability activity for all plans for the six months ended June 30, 2019: 

Restructuring liability at January 1, 2019	$	1,586
Restructuring charges	2,995
Cost paid	(2,216		)
Other activity (1)	(1,163		)
Restructuring liability at June 30, 2019	$	1,202

(1) Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.

NOTE 9 – Accrued Liabilities

The components of accrued liabilities are as follows: 

	As of
	June 30,		December 31,
	2019		2018
Accrued product related costs	$	4,036	$	4,377
Accrued income taxes	6,315		6,914
Accrued property and other taxes	1,810		1,976
Accrued professional fees	2,474		3,350
Contract liabilities	2,263		1,981
Dividends payable	1,309		1,310
Remediation reserves	10,564		11,274
Other accrued liabilities	4,625		6,165
Total accrued liabilities	$	33,396	$	37,347

NOTE 10 – Commitments and Contingencies

Certain processes in the manufacture of our current and past products create by-products classified as hazardous waste. We have been notified by the U.S. Environmental Protection Agency, state environmental agencies, and in some cases, groups of potentially responsible parties, that we may be potentially liable for environmental contamination at several sites currently and formerly owned or operated by us. Some sites, such as Asheville, North Carolina and Mountain View, California, are designated National Priorities List sites under the U.S. Environmental Protection Agency’s Superfund program. We accrue a liability for probable remediation activities, claims and proceedings against us with respect to environmental matters if the amount can be reasonably estimated, and provide disclosures including the nature of a loss whenever it is probable or reasonably possible that a potentially material loss may have occurred but cannot be estimated. We record contingent loss accruals on an undiscounted basis.

In the opinion of management, based upon presently available information relating to such matters, adequate provision for probable and estimable losses have been recorded. Due to the inherent nature of environmental obligations, we cannot provide assurance that our ultimate environmental liability will not materially exceed the amount of our accrued losses.

A roll-forward of remediation reserves included in accrued liabilities on the balance sheet is comprised of the following:

	As of
	June 30, 2019			December 31, 2018
Balance at beginning of period	$	11,274		$	17,067
Remediation expense	276			1,182
Net remediation payments	(979		)	(6,967		)
Other activity (1)	(7		)	(8		)
Balance at end of the period	$	10,564		$	11,274

⁽¹⁾ Other activity includes currency translation adjustments not recorded through remediation expense.

Unrelated to the environmental claims described above, certain other claims are pending against us with respect to matters arising in the ordinary conduct of our business. Although the ultimate outcome of any potential litigation resulting from these claims cannot be predicted with certainty, and some may be disposed of unfavorably to us, we believe that adequate provision for probable and estimable costs have been established based upon all presently available information.

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Except as noted herein, we do not believe we have any pending loss contingencies that are probable or reasonably possible of having a material impact on our consolidated financial position, results of operations, or cash flows. Our accrued liabilities and disclosures will be adjusted accordingly if additional information becomes available in the future.

NOTE 11 - Debt

Long-term debt is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Total credit facility	$	300,000		$	300,000
Balance outstanding	$	50,000		$	50,000
Standby letters of credit	$	1,800		$	1,940
Amount available	$	248,200		$	248,060
Weighted-average interest rate	3.54		%	3.10		%
Commitment fee percentage per annum	0.20		%	0.20		%

On February 12, 2019, we entered into an amended and restated five-year Credit Agreement with a group of banks (the "Credit Agreement") to extend the term of the facility. The Credit Agreement provides for a revolving credit facility of $300,000, which may be increased by $150,000 at the request of the Company, subject to the administrative agent's approval. This new unsecured credit facility replaces the prior $300,000 unsecured credit facility, which would have expired August 10, 2020. Borrowings of $50,000 under the prior credit agreement were refinanced into the Credit Agreement. The prior agreement was terminated as of February 12, 2019.

The Revolving Credit Facility includes a swing line sublimit of $15,000 and a letter of credit sublimit of $10,000. Borrowings under the Revolving Credit Facility bear interest, at our option, at the base rate plus the applicable margin for base rate loans or London Interbank Offered Rate ("LIBOR") plus the applicable margin for LIBOR loans. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.20% to 0.30% based on the our total leverage ratio. 

The Revolving Credit Facility requires, among other things, that we comply with a maximum total leverage ratio and a minimum fixed charge coverage ratio. Failure to comply with these covenants could reduce the borrowing availability under the Revolving Credit Facility. We were in compliance with all debt covenants at June 30, 2019. The Revolving Credit Facility requires that we deliver quarterly financial statements, annual financial statements, auditor certifications, and compliance certificates within a specified number of days after the end of a quarter and year. Additionally, the Revolving Credit Facility contains restrictions limiting our ability to: dispose of assets; incur certain additional debt; repay other debt or amend subordinated debt instruments; create liens on assets; make investments, loans or advances; make acquisitions or engage in mergers or consolidations; engage in certain transactions with our subsidiaries and affiliates; and make stock repurchases and dividend payments. Interest rates on the Revolving Credit Facility fluctuate based upon the LIBOR and the Company’s quarterly total leverage ratio.  

We have debt issuance costs related to our long-term debt that are being amortized using the straight-line method over the life of the debt. Amortization expense was approximately $41 and $46 for the three months ended June 30, 2019 and 2018, respectively and approximately $77 and $93 for the six months ended June 30, 2019 and 2018, respectively. These costs are included in interest expense in our Condensed Consolidated Statement of Earnings.

Note 12 - Derivative Financial Instruments

Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. We selectively use derivative financial instruments including foreign currency forward contracts and interest rate swaps to manage our exposure to these risks.

The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts. We manage our credit risk by entering into derivative contracts with only highly rated financial institutions and by using netting agreements.

The effective portion of derivative gains and losses are recorded in accumulated other comprehensive (loss) income until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales. If it is

15

probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive (loss) income to other income (expense).

We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default. No recognition of ineffectiveness was recorded in our Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2019.

Foreign Currency Hedges

We use forward contracts to mitigate currency risk related to a portion of our forecasted foreign currency revenues and costs. The currency forward contracts are designed as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheets at fair value.

We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future. At June 30, 2019, we had a net unrealized gain of $784 in accumulated other comprehensive (loss) income, of which $784 is expected to be reclassified to income within the next 12 months. At June 30, 2018 we had a net unrealized gain of $59 in accumulated other comprehensive (loss) income. The notional amount of foreign currency forward contracts outstanding was $8,625 at June 30, 2019.

Interest Rate Swaps

We use interest rate swaps to convert our revolving credit facility’s variable rate of interest into a fixed rate. As of June 30, 2019, we have agreements to fix interest rates on $50,000 of long-term debt through August 2020. The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.

These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive (loss) income. The estimated net amount of the existing gains that are reported in accumulated other comprehensive (loss) income that are expected to be reclassified into earnings within the next twelve months is approximately $235. 

The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of June 30, 2019, are shown in the following table:

	As of
	June 30,		December 31,
	2019		2018
Interest rate swaps reported in Other current assets	$	235	$	576
Interest rate swaps reported in Other assets	$	17	$	369
Foreign currency hedges reported in Other current assets	$	718	$	393

The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20 (Balance Sheet, Offsetting). On a gross basis, there were foreign currency derivative assets of $718 and foreign currency derivative liabilities of $0.

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The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:

	Three Months Ended					Six Months Ended
	June 30,		June 30,			June 30,		June 30,
	2019		2018			2019		2018
Foreign Exchange Contracts:
Amounts reclassified from AOCI to earnings:
Net sales	$	—	$	21		$	—	$	(37	)
Cost of goods sold	233		32			276		140
Selling, general and administrative expense	23		(4		)	39		(5		)
Total amounts reclassified from AOCI to earnings	256		49			315		98
Loss recognized in other expense for hedge ineffectiveness	—		—			—		(1		)
Total derivative gain on foreign exchange contracts recognized in earnings	$	256	$	49		$	315	$	97
Interest Rate Swaps:
Benefit recorded in Interest expense	$	156	$	105		$	313	$	170
Total gain	$	412	$	154		$	628	$	267

NOTE 13 – Accumulated Other Comprehensive (Loss) Income

Shareholders’ equity includes certain items classified as accumulated other comprehensive (loss) income (“AOCI”) in the Condensed Consolidated Balance Sheets, including:

Unrealized gains (losses) on hedges relate to interest rate swaps to convert our revolving credit facility's variable rate of interest into a fixed rate and foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transactions occur, at which time amounts are reclassified into earnings.  Further information related to our derivative financial instruments is included in Note 12 - Derivative Financial Instruments and Note 16 – Fair Value Measurements.

Unrealized gains (losses) on pension obligations are deferred from income statement recognition until the gains or losses are realized. Amounts reclassified to income from AOCI are included in net periodic pension income (expense). Further information related to our pension obligations is included in Note 6 – Retirement Plans.

Cumulative translation adjustments relate to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.  

Changes in exchange rates between the functional currency and the currency in which a transaction is denominated are foreign exchange transaction gains or losses. Transaction losses for the three months and six months ended June 30, 2019 were $829 and $355, respectively and transaction losses for the three and six months ended June 30, 2018 were $2,194 and $918, respectively, which have been included in other income (expense) in the Condensed Consolidated Statement of Earnings.

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The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2019, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2019			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,416		$	32		$	(412	)	$	1,036
Income tax (expense) benefit	(320		)	(7		)	93			(234		)
Net	1,096			25			(319		)	802
Changes in unrealized pension cost:
Gross	(131,135		)	—			1,325			(129,810		)
Income tax benefit (expense)	35,596			—			(299		)	35,297
Net	(95,539		)	—			1,026			(94,513		)
Cumulative translation adjustment:
Gross	(2,203		)	(84		)	—			(2,287		)
Income tax benefit (expense)	98			(3		)	—			95
Net	(2,105		)	(87		)	—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(96,548	)	$	(62	)	$	707		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2018, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	1,332		$	240		$	(154	)	$	1,418
Income tax (expense) benefit	(341		)	(54		)	35			(360		)
Net	991			186			(119		)	1,058
Changes in unrealized pension cost:
Gross	(128,672		)	—			1,617			(127,055		)
Income tax benefit (expense)	52,520			—			(368		)	52,152
Net	(76,152		)	—			1,249			(74,903		)
Cumulative translation adjustment:
Gross	(1,747		)	(368		)	—			(2,115		)
Income tax benefit (expense)	105			(7		)	—			98
Net	(1,642		)	(375		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(76,803	)	$	(189	)	$	1,130		$	(75,862	)

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The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2019 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,316		$	348		$	(628	)	$	1,036
Income tax (expense) benefit	(298		)	(78		)	142			(234		)
Net	1,018			270			(486		)	802
Changes in unrealized pension cost:
Gross	(132,454		)	—			2,644			(129,810		)
Income tax benefit (expense)	35,893			—			(596		)	35,297
Net	(96,561		)	—			2,048			(94,513		)
Cumulative translation adjustment:
Gross	(2,291		)	4			—			(2,287		)
Income tax benefit	95			—			—			95
Net	(2,196		)	4			—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(97,739	)	$	274		$	1,562		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2018 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2017			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	289		$	1,397		$	(268	)	$	1,418
Income tax (expense) benefit	(105		)	(315		)	60			(360		)
Net	184			1,082			(208		)	1,058
Changes in unrealized pension cost:
Gross	(130,096		)	—			3,041			(127,055		)
Income tax benefit (expense)	52,837			—			(685		)	52,152
Net	(77,259		)	—			2,356			(74,903		)
Cumulative translation adjustment:
Gross	(1,985		)	(130		)	—			(2,115		)
Income tax benefit (expense)	100			(2		)	—			98
Net	(1,885		)	(132		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(78,960	)	$	950		$	2,148		$	(75,862	)

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NOTE 14 – Shareholders’ Equity

Share count and par value data related to shareholders’ equity are as follows:

	As of
	June 30,	December 31,
	2019	2018
Preferred Stock
Par value per share	No par value	No par value
Shares authorized	25,000,000	25,000,000
Shares outstanding	—	—
Common Stock
Par value per share	No par value	No par value
Shares authorized	75,000,000	75,000,000
Shares issued	56,923,369	56,786,849
Shares outstanding	32,707,281	32,750,727
Treasury stock
Shares held	24,216,088	24,036,122

On February 7, 2019, the Board of Directors authorized a new stock repurchase program with a maximum dollar limit of $25,000 in stock repurchases, which replaced the previous program. During the six months ended June 30, 2019, 179,966 shares of common stock were repurchased for approximately $5,002, of which $567 was repurchased under the previous program and $4,435 was repurchased under the most recent board-authorized share repurchase plan. Approximately $20,565 is available for future purchases.

A roll-forward of common shares outstanding is as follows:

	Six Months Ended
	June 30,		June 30,
	2019		2018
Balance at the beginning of the year	32,750,727		32,938,466
Repurchases	(179,966	)	—
Restricted share issuances	136,520		148,577
Balance at the end of the period	32,707,281		33,087,043

Certain potentially dilutive restricted stock units are excluded from diluted earning per share because they are anti-dilutive. The number of awards that were anti-dilutive for the six month periods ended June 30, 2019 and June 30, 2018 were 108,894 and 72,658, respectively. There were no outstanding anti-dilutive awards impacting the three month periods ended June 30, 2019 and June 30, 2018.

NOTE 15 - Stock-Based Compensation

At June 30, 2019, we had five active stock-based compensation plans: the Nonemployee Directors’ Stock Retirement Plan (“Directors’ Plan”), the 2004 Omnibus Long-Term Incentive Plan (“2004 Plan”), the 2009 Omnibus Equity and Performance Incentive Plan (“2009 Plan”), the 2014 Performance & Incentive Plan (“2014 Plan”), and the 2018 Equity and Incentive Compensation Plan ("2018 Plan"). Future grants can only be made under the 2018 Plan.

20

The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings related to stock-based compensation plans:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Service-based RSUs	$	488	$	563	$	1,094	$	1,018
Performance-based RSUs	1,038		643		1,586		1,153
Cash-settled RSUs	53		57		113		15
Total	$	1,579	$	1,263	$	2,793	$	2,186
Income tax benefit	357		285		631		494
Net	$	1,222	$	978	$	2,162	$	1,692

The following table summarizes the unrecognized compensation expense related to non-vested RSUs by type and the weighted-average period in which the expense is to be recognized:

	Unrecognized
	Compensation		Weighted-
	Expense at		Average
	June 30, 2019		Period
Service-based RSUs	$	2,168	1.44
Performance-based RSUs	4,039		1.85
Total	$	6,207	1.71

We recognize expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.

The following table summarizes the status of these plans as of June 30, 2019:

	2018 Plan	2014 Plan	2009 Plan	2004 Plan	Directors' Plan
Awards originally available	2,500,000	1,500,000	3,400,000	6,500,000	N/A
Performance-based options outstanding	—	250,000	—	—	—
Maximum potential RSU and cash settled awards outstanding	243,943	419,793	92,600	35,952	5,522
Maximum potential awards outstanding	243,943	669,793	92,600	35,952	5,522
RSUs and cash settled awards vested and released	—	—	—	—	—
Awards available for grant	2,256,057	—	—	—	—

Performance-Based Stock Options

During 2015 and 2016, the Compensation Committee of the Board of Directors of the Company (the “Committee”) granted a total of 350,000 performance-based stock option awards (“Performance-Based Option Awards”) for certain employees under the 2014 Plan, of which 250,000 remain outstanding after considering forfeitures. The Performance-Based Option Awards have an exercise price of $18.37, a term of five years, and generally will become exercisable (provided the optionee remains employed by the Company or an affiliate) upon our attainment of at least $600,000 in revenues during any of our trailing four quarterly periods (as determined by the Committee) during the term. We have not recognized any expense on these Performance-Based Option Awards for the six-month periods ended June 30, 2019 and 2018, since the revenue target was not deemed likely to be attained based on our current forecast.

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Service-Based Restricted Stock Units

The following table summarizes the service-based RSU activity as of and for the six months ended June 30, 2019: 

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	355,590		$	17.91
Granted	72,591		28.79
Vested and released	(65,623	)	19.91
Forfeited	(15,918	)	26.95
Outstanding at June 30, 2019	346,640		$	19.39
Releasable at June 30, 2019	207,140		$	13.79

Performance and Market-Based Restricted Stock Units

The following table summarizes the performance and market-based RSU activity as of and for the six months ended June 30, 2019:

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	267,792		$	21.44
Granted	82,103		30.98
Attained by performance	60,779		13.54
Released	(160,889	)	14.34
Forfeited	(26,156	)	23.81
Outstanding at June 30, 2019	223,629		$	27.70
Releasable at June 30, 2019	—		$	—

The following table summarizes each grant of performance awards outstanding at June 30, 2019.

Description	Grant Date	Vesting Year	Vesting Dependency	Target Units Outstanding	Maximum Number of Units to be Granted
2017 - 2019 Performance RSUs	February 9, 2017	2019	35% RTSR, 35% sales growth, 30% operating cash flow	71,188	142,376
2017 - 2019 Performance RSUs	February 9, 2017	2018 - 2020	Operating Income	13,556	13,556
2018 - 2020 Performance RSUs	February 8, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	34,478	68,956
2018 - 2020 Performance RSUs	February 16, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	31,820	63,640
2019 - 2021 Performance RSUs	February 7, 2019	2021	35% RTSR, 35% sales growth, 30% operating cash flow	65,642	131,285
2019 Supplemental Performance RSUs	February 7, 2019	2021	Succession Planning Targets	6,945	13,890

Cash-Settled Restricted Stock Units

Cash-Settled RSUs entitle the holder to receive the cash equivalent of one share of common stock for each unit when the unit vests. These RSUs are issued to key employees residing in foreign locations as direct compensation. Generally, these RSUs vest over a three-year period. Cash-Settled RSUs are classified as liabilities and are remeasured at each reporting date until settled. At June 30, 2019 and December 31, 2018 we had 17,468 and 17,248 cash-settled RSUs outstanding, respectively. At June 30, 2019 and December 31, 2018, liabilities of $211 and $300, respectively were included in Accrued liabilities on our Condensed Consolidated Balance Sheets.

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NOTE 16 — Fair Value Measurements

We use interest rate swaps to convert our Revolving Credit Facility’s variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies. These derivative financial instruments are measured at fair value on a recurring basis. 

The table below summarizes our financial assets that are measured at fair value on a recurring basis at June 30, 2019:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	June 30,		Instruments		Inputs		Inputs
	2019		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	252	$	—	$	252	$	—
Foreign currency hedges	$	718	$	—	$	718	$	—

The table below summarizes the financial assets (liabilities) that are measured at fair value on a recurring basis as of December 31, 2018:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	December 31,		Instruments		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	945	$	—	$	945	$	—
Foreign currency hedges	$	393	$	—	$	393	$	—

The fair value of our interest rate swaps and foreign currency hedges were measured using standard valuation models using market-based observable inputs over the contractual terms, including forward yield curves, among others. There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within Level 2 of the fair value hierarchy.

The table below provides a reconciliation of the recurring financial assets (liabilities) for our derivative instruments:

				Foreign
	Interest			Currency
	Rate Swaps			Hedges
Balance at January 1, 2018	$	971		$	(742	)
Cash settlements paid (received)	421			(402		)
Total gains (losses) for the period:
Included in earnings	(421		)	484
Included in other comprehensive income	(26		)	1,053
Balance at December 31, 2018	$	945		$	393
Cash settlements received	(313		)	(403		)
Total gains (losses) for the period:
Included in earnings	313			315
Included in other comprehensive income	(693		)	413
Balance at June 30, 2019	$	252		$	718

 

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Our long-term debt consists of the Revolving Credit Facility which is recorded at its carrying value. There is a readily determinable market for our long-term debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt approximates carrying value and was determined by valuing a similar hypothetical coupon bond and attributing that value to our long-term debt under the Revolving Credit Facility.

NOTE 17 — Income Taxes

The effective tax rates for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Effective tax rate	25.1	%	37.7	%	22.7	%	30.2	%

Our effective income tax rate was 25.1% and 37.7% in the second quarters of 2019 and 2018, respectively. This decrease was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan. The tax rate in the second quarter of 2019 was higher than the U.S. statutory federal tax rate primarily due to state taxes and foreign earnings that are taxed at higher rates. The tax rate in the second quarter of 2018 was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes, state taxes and foreign earnings that are taxed at higher rates.

Our effective income tax rate was 22.7% and 30.2% for the six months ended June 30, 2019 and 2018, respectively. This decrease was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan. The tax rate in the second quarter of 2019 was higher than the U.S. statutory federal tax rate primarily due to higher foreign tax rates applicable on foreign earnings offset by tax benefits recorded upon vesting of restricted stock units. The tax rate in the second quarter of 2018 was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes, state taxes and higher foreign tax rates applicable on foreign earnings.

We have elected to recognize the tax on the global intangible low-taxed income (GILTI) as a period expense in the period the tax is incurred, and we have included a provisional estimate for GILTI in our estimated annual effective tax rate.

NOTE 18 — Leases

We lease certain land, buildings and equipment under non-cancelable operating leases used in our operations. Operating lease assets represent our right to use an underlying asset for the lease term. Operating lease liabilities represent the present value of lease payments over the lease term, discounted using an estimate of our secured incremental borrowing rate because none of our leases contain a rate implicit in the lease arrangement.

The operating lease assets and liabilities are adjusted to include the impact of any lease incentives and non-lease components. We have elected not to separate lease and non-lease components, which include taxes and common area maintenance in some of our leases. Variable lease payments that depend on an index or a rate are included in lease payments using the prevailing index or rate in effect at lease commencement.

Options to extend or terminate a lease are included in the lease term when it is reasonably likely that we will exercise that option. We have elected not to record leases with an initial term of 12 months or less on the balance sheet and instead recognize those lease payments on a straight-line basis over the lease term.

We determine if an arrangement is a lease or contains a lease at its inception, which normally does not require significant estimates or judgments. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants and we currently have no material sublease agreements.

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Total lease expense for the three and six months ended June 30, 2019 is as follows:

	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	1,075	$	2,069
Short-term lease cost	176		249
Total lease cost	$	1,251	$	2,318

Remaining maturity of our existing lease liabilities as of June 30, 2019 is as follows:

	Operating Leases (1)
2019	$	2,014
2020	4,106
2021	4,021
2022	3,819
2023	3,573
Thereafter	20,084
Total	$	37,617
Less: interest	(10,839		)
Present value of lease liabilities	$	26,778

⁽¹⁾ Operating lease payments include $4,615 of payments related to options to extend lease terms that are reasonably expected to be exercised.

Balance Sheet Classification:
Operating lease obligations	$	2,076
Long-term operating lease obligations	24,702
Total lease liabilities	$	26,778
Weighted-average remaining lease terms (years)	9.71
Weighted-average discount rate	6.91		%
Supplemental cash flow information related to leases:
Cash paid for amounts included in the measurement of lease liabilities	$	1,862
Leased assets obtained in exchange for new operating lease liabilities	$	2,961

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NOTE 19 — Recent Accounting Pronouncements

ASU 2018-14 "Compensation - Retirement Benefits - Defined Benefit Plans - General"

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General." This ASU modifies the disclosure requirements for defined benefit and other postretirement plans. This ASU eliminates certain disclosures associated with accumulated other comprehensive income, plan assets, related parties, and the effects of interest rate basis point changes on assumed health care costs; while other disclosures have been added to address significant gains and losses related to changes in benefit obligations. This ASU also clarifies disclosure requirements for projected benefit and accumulated benefit obligations. The amendments in this ASU are effective for fiscal years ending after December 15, 2020 and for interim periods therein with early adoption permitted. Adoption on a retrospective basis for all periods presented is required. This ASU will impact our financial statement disclosures but will not have an impact on our consolidated financial position, results of operations, or cash flows.

ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement"

In August 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement". This ASU modified the disclosures related to recurring and nonrecurring fair value measurements. Disclosures related to the transfer of assets between Level 1 and Level 2 hierarchies have been eliminated and various additional disclosures related to Level 3 fair value measurements have been added, modified or removed. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted upon issuance of the standard for disclosures modified or removed with a delay of adoption of the additional disclosures until their effective date. This ASU is not expected to have an impact on our financial statements.

ASU 2016-16 "Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory"

In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory". This ASU is meant to improve the accounting for the income tax effect of intra-entity transfers of assets other than inventory. Currently, U.S. GAAP prohibits the recognition of current and deferred income taxes for intra-entity asset transfers until the asset is sold to a third party. This ASU will now require companies to recognize the income tax effect of an intra-entity asset transfer (other than inventory) when the transaction occurs. This ASU is effective for public companies, for fiscal years beginning after December 15, 2019 and interim periods within those annual reporting periods. Early adoption is permitted and is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This guidance is not expected to have a material impact on our financial statements.

ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments"

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The standard will become effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We plan to adopt this standard on the effective date and are currently evaluating the impact of this new standard on our financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

(in thousands, except percentages and per share amounts)

The following discussion should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and notes included under Item 1, as well as our Consolidated Financial Statements and notes and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Overview

CTS Corporation (“CTS”, “we”, “our” or “us”) is a leading designer and manufacturer of products that Sense, Connect and Move. We manufacture sensors, actuators, and electronic components in North America, Europe, and Asia, and provide engineered products to customers in the aerospace/defense, industrial, medical, telecommunications/IT, and transportation markets.

Results of Operations: Second Quarter 2019 versus Second Quarter 2018

The following table highlights changes in significant components of the Unaudited Condensed Consolidated Statements of Earnings for the quarters ended June 30, 2019, and June 30, 2018:

	Three Months Ended								Percent of		Percent of
	June 30,			June 30,			Percent		Net Sales –		Net Sales –
	2019			2018			Change		2019		2018
Net sales	$	120,684		$	118,021		2.3	%	100.0	%	100.0	%
Cost of goods sold	79,480			76,208			4.3		65.9		64.6
Gross margin	41,204			41,813			(1.5	)	34.1		35.4
Selling, general and administrative expenses	17,036			19,621			(13.2	)	14.1		16.6
Research and development expenses	6,257			6,476			(3.4	)	5.2		5.5
Restructuring charges	911			1,172			(22.3	)	0.8		1.0
Gain on sale of assets	(83		)	—			(100.0	)	(0.1	)	—
Total operating expenses	24,121			27,269			(11.5	)	20.0		23.1
Operating earnings	17,083			14,544			17.5		14.2		12.3
Total other expense, net	(1,134		)	(2,973		)	(61.9	)	(0.9	)	(2.5	)
Earnings before income taxes	15,949			11,571			37.8		13.2		9.8
Income tax expense	4,006			4,362			(8.2	)	3.3		3.7
Net earnings	$	11,943		$	7,209		65.7	%	9.9	%	6.1	%
Earnings per share:
Diluted net earnings per share	$	0.36		$	0.21

Sales were $120,684 in the second quarter of 2019, an increase of $2,663 or 2.3% from the second quarter of 2018. Sales to transportation markets increased $6,437 or 8.7%.  Sales to other markets declined $3,774 or 8.6%. Changes in foreign exchange rates decreased sales by $1,861 year-over-year due to the U.S. Dollar appreciating compared to the Chinese Renminbi and Euro and relating mostly to sales of products to the transportation end market.

Gross margin as a percent of sales was 34.1% in the second quarter of 2019 compared to 35.4% in the second quarter of 2018. Execution challenges in our ceramic foundry operation as well as material cost and wage increases were the main drivers for the decline. These were partially offset by savings related to the manufacturing transition from Elkhart, Indiana and other cost improvements.

Selling, general and administrative ("SG&A") expenses were $17,036 or 14.1% of sales in the second quarter of 2019 versus $19,621 or 16.6% of sales in the second quarter of 2018. The 2018 SG&A costs included a $950 environmental charge and $525 for professional fees related to tax projects. The remaining reduction in SG&A expenses was related to lower spending and timing of certain expenses.

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Research and development expenses were $6,257 or 5.2% of sales in the second quarter of 2019 compared to $6,476 or 5.5% of sales in the comparable quarter of 2018. Research and development expenses are focused on expanded applications of existing products and new product development, as well as current product and process enhancements.

Restructuring charges were $911 or 0.8% of sales in the second quarter of 2019. The charges were mainly for building and equipment relocation, severance, and travel costs related to the restructuring of certain operations as part of the 2016 Restructuring Plan. Restructuring charges were $1,172 or 1.0% of sales in the second quarter of 2018.

Operating earnings were $17,083 or 14.2% of sales in the second quarter of 2019 compared to operating earnings of $14,544 or 12.3% of sales in the second quarter of 2018.

Other income and expense items are summarized in the following table:

	Three Months Ended
	June 30,			June 30,
	2019			2018
Interest expense	$	(467	)	$	(571	)
Interest income	440			472
Other expense, net	(1,107		)	(2,874		)
Total other expense, net	$	(1,134	)	$	(2,973	)

Interest expense decreased mainly as a result of the reduction in debt year-over-year and a reduction in interest related to interest rate swaps. Other expense in the second quarter of 2019 was principally driven by foreign currency translation losses, mainly due to the appreciation of the U.S. Dollar compared to the Chinese Renminbi during the quarter, as well as pension expense.

	Three Months Ended
	June 30,		June 30,
	2019		2018
Effective tax rate	25.1	%	37.7	%

Our effective income tax rate was 25.1% and 37.7% in the second quarters of 2019 and 2018, respectively. The decrease in the effective tax rate for the three months ended June 30, 2019, compared with the same period in 2018, was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan.

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Results of Operations: Six Months Ended June 30, 2019 versus Six Months Ended June 30, 2018

	Six Months Ended								Percent of		Percent of
	June 30,			June 30,			Percent		Net Sales		Net Sales
	2019			2018			Change		2019		2018
Net sales	$	238,308		$	231,551		2.9	%	100.0	%	100.0	%
Cost of goods sold	156,490			151,305			3.4		65.7		65.3
Gross margin	81,818			80,246			2.0		34.3		34.7
Selling, general and administrative expenses	34,597			36,993			(6.5	)	14.5		16.0
Research and development expenses	13,048			12,983			0.5		5.5		5.6
Restructuring charges	2,995			2,367			26.5		1.3		1.0
Gain on sale of assets	(122		)	—			(100.0	)	(0.1	)	—
Total operating expenses	50,518			52,343			(3.5	)	21.2		22.6
Operating earnings	31,300			27,903			12.2		13.1		12.1
Total other (expense) income, net	(1,071		)	(1,028		)	4.2		(0.4	)	(0.4	)
Earnings before income taxes	30,229			26,875			12.5		12.7		11.6
Income tax expense	6,867			8,118			(15.4	)	2.9		3.5
Net earnings	$	23,362		$	18,757		24.6	%	9.8	%	8.1	%
Earnings per share:
Diluted net earnings per share	$	0.70		$	0.56

Sales were $238,308 in the six months ended June 30, 2019, an increase of $6,757 or 2.9% from the six months ended June 30, 2018. Sales to transportation markets increased $10,973 or 7.4%. Sales to other markets declined $4,216 or 5.1%. Changes in foreign exchange rates decreased sales by $3,632 year-over-year due to the U.S. Dollar appreciating compared to the Chinese Renminbi and Euro and relating mostly to sales of products to the transportation end market.

Gross margin as a percent of sales was 34.3% in the six months ended June 30, 2019 compared to 34.7% for the six months ended June 30, 2018. Execution challenges in our ceramic foundry operation as well as material cost and wage increases were the main drivers for the decline. These were partially offset by savings related to the manufacturing transition from Elkhart, Indiana and other cost improvements.

Selling, general and administrative ("SG&A") expenses were $34,597 or 14.5% of sales in the six months ended June 30, 2019 versus $36,993 or 16.0% of sales in the six months ended June 30, 2018. The 2018 SG&A costs included a $950 environmental charge and $525 for professional fees related to tax projects. The remaining reduction in SG&A expenses was related to lower spending and timing of certain expenses.

Research and development expenses were $13,048 or 5.5% of sales in the six months ended June 30, 2019 compared to $12,983 or 5.6% of sales in the six months ended June 30, 2018. Research and development expenses are focused on expanded applications of existing products and new product development, as well as current product and process enhancements.

Restructuring charges were $2,995 or 1.3% of sales in the six months ended June 30, 2019. The charges were mainly for building and equipment relocation, severance, and travel costs related to the restructuring of certain operations as part of the 2016 Restructuring Plan. Restructuring charges were $2,367 or 1.0% of sales in the six months ended June 30, 2018.

Operating earnings were $31,300 or 13.1% of sales in the six months ended June 30, 2019 compared to operating earnings of $27,903 or 12.1% of sales in the six months ended June 30, 2018.

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Other income and expense items are summarized in the following table:

	Six Months Ended
	June 30,			June 30,
	2019			2018
Interest expense	$	(933	)	$	(1,112	)
Interest income	872			954
Other expense, net	(1,010		)	(870		)
Total other expense, net	$	(1,071	)	$	(1,028	)

Interest expense decreased mainly as a result of the reduction in debt year-over-year and a reduction in interest related to interest rate swaps. Other expense in the six months ended June 30, 2019 was principally driven by foreign currency translation losses, mainly due to the appreciation of the U.S. Dollar compared to the Chinese Renminbi during the first six months of the year, as well as pension expense.

	Six Months Ended
	June 30,		June 30,
	2019		2018
Effective tax rate	22.7	%	30.2	%

Our effective income tax rate was 22.7% and 30.2% in the six months ended June 30, 2019 and 2018, respectively. The decrease in the effective tax rate for the six months ended June 30, 2019, compared with the same period in 2018, was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan.

Liquidity and Capital Resources

Cash and cash equivalents were $105,578 at June 30, 2019, and $100,933 at December 31, 2018, of which $95,093 and $96,762, respectively, were held outside the United States. The increase in cash and cash equivalents of $4,645 was primarily driven by cash generated from operating activities of $24,184, which was partially offset by capital expenditures of $9,430, treasury stock purchases of $5,002, taxes paid on behalf of equity award participants of $2,637, and dividends paid of $2,625. Total long-term debt was $50,000 as of June 30, 2019 and December 31, 2018. Total debt as a percentage of total capitalization, defined as long-term debt as a percentage of total debt and shareholders' equity, was 11.2% at June 30, 2019, compared to 11.7% at December 31, 2018.

Working capital increased by $18,738 during the six months ended June 30, 2019, primarily due to the increase in cash and accounts receivable and the decrease of accrued payroll and benefits and accrued liabilities.

Cash Flows from Operating Activities

Net cash provided by operating activities was $24,184 during the first six months of 2019. Components of net cash provided by operating activities included net earnings of $23,362, depreciation and amortization expense of $11,919, other net non-cash items of $6,090, and a net cash outflow from changes in assets and liabilities of $17,187.

Cash Flows from Investing Activities

Net cash used in investing activities for the first six months of 2019 was $9,308, driven almost entirely by capital expenditures.

Cash Flows from Financing Activities

Net cash used in financing activities for the first six months of 2019 was $10,264. These cash outflows were the result of treasury stock purchases of $5,002, taxes paid on behalf of equity award participants in the amount of $2,637, and dividend payments of $2,625.

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Capital Resources

Long‑term debt is comprised of the following: 

	As of
	June 30,			December 31,
	2019			2018
Total credit facility	$	300,000		$	300,000
Balance outstanding	$	50,000		$	50,000
Standby letters of credit	$	1,800		$	1,940
Amount available	$	248,200		$	248,060
Weighted-average interest rate	3.54		%	3.10		%
Commitment fee percentage per annum	0.20		%	0.20		%

On February 12, 2019, we entered into an amended and restated five-year Credit Agreement with a group of banks (the "Credit Agreement") to extend the term of the facility. The Credit Agreement provides for a revolving credit facility of $300,000, which may be increased by $150,000 at the request of the Company, subject to the administrative agent's approval. This new unsecured credit facility replaces the prior $300,000 unsecured credit facility, which would have expired August 10, 2020. Borrowings of $50,000 under the prior credit agreement were refinanced into the Credit Agreement. The prior agreement was terminated as of February 12, 2019.

The Revolving Credit Facility requires, among other things, that CTS comply with a maximum total leverage ratio and a minimum fixed charge coverage ratio.  Failure to comply with these covenants could reduce the borrowing availability under the Revolving Credit Facility. We were in compliance with all debt covenants at June 30, 2019. 

In the third quarter of 2016, we entered into three forward-starting interest rate swap agreements to fix interest rates on $50,000 of long-term debt for the periods August 2017 to August 2020. The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.

We have historically funded our capital and operating needs primarily through cash flows from operating activities, supported by available credit under our Revolving Credit Facility. We believe that cash flows from operating activities and available borrowings under our Revolving Credit Facility will be adequate to fund our working capital needs, capital expenditures, and debt service requirements for at least the next twelve months. However, we may choose to pursue additional equity and debt financing to provide additional liquidity or to fund acquisitions.

Critical Accounting Policies and Estimates

Management prepared the consolidated financial statements of CTS under accounting principles generally accepted in the United States of America. These principles require the use of estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions we used are reasonable, based upon the information available.

Our estimates and assumptions affect the reported amounts in our financial statements. The following accounting policies comprise those that we believe are the most critical in understanding and evaluating our reported financial results.

Revenue Recognition

We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standard Codification ("ASC") Topic 606:

• Identify the contract(s) with a customer

• Identify the performance obligations

• Determine the transaction price

• Allocate the transaction price

• Recognize revenue when the performance obligations are met

Our contracts normally contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. We recognize revenue when (or as) the performance obligation has been satisfied after considering the impact of variable consideration and other factors that may affect the transaction price. Differences between the amount of revenue

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recognized and the amount invoiced, collected from, or paid to our customers are recognized as contract assets or liabilities. Contract assets will be reviewed for impairment when events or circumstances indicate that they may not be recoverable.

Product Warranties

Provisions for estimated warranty expenses primarily related to our automotive products are made at the time products are sold. These estimates are established using a quoted industry rate. We adjust our warranty reserve for any known or anticipated warranty claims as new information becomes available. We evaluate our warranty obligations at least quarterly and adjust our accruals if it is probable that future costs will be different than our current reserve. Over the last three years, product warranty reserves have ranged from 0.5% to 2.4% of total sales. We believe our reserve level is appropriate considering all facts and circumstances surrounding any outstanding quality claims and our historical experience selling our products to our customers.

Accounts Receivable

We have standardized credit granting and review policies and procedures for all customer accounts, including:

• Credit reviews of all new customer accounts,

• Ongoing credit evaluations of current customers,

• Credit limits and payment terms based on available credit information,

• Adjustments to credit limits based upon payment history and the customer's current credit worthiness,

• An active collection effort by regional credit functions, reporting directly to the corporate financial officers, and;

• Limited credit insurance on the majority of our international receivables.

We reserve for estimated credit losses based on historical experience and specific customer collection issues. Over the last three years, accounts receivable reserves have been approximately 0.1% to 0.7% of total accounts receivable. We believe our reserve level is appropriate considering the quality of the portfolio. While credit losses have historically been within expectations and the reserves established, we cannot guarantee that our credit loss experience will continue to be consistent with historical experience.

Inventories

We value our inventories at the lower of the actual cost to purchase or manufacture using the first-in, first-out ("FIFO") method, or net realizable value. We review inventory quantities on hand and record a provision for excess and obsolete inventory based on forecasts of product demand and production requirements.

Over the last three years, our reserves for excess and obsolete inventories have ranged from 10.6% to 18.4% of gross inventory. We believe our reserve level is appropriate considering the quantities and quality of the inventories.

Retirement Plans

Actuarial assumptions are used in determining pension income and expense and our pension benefit obligation. We utilize actuaries from consulting companies in each applicable country to develop our discount rates that match high-quality bonds currently available and expected to be available during the period to maturity of the pension benefit in order to provide the necessary future cash flows to pay the accumulated benefits when due. After considering the recommendations of our actuaries, we have assumed a discount rate, expected rate of return on plan assets and a rate of compensation increase in determining our annual pension income and expense and the projected benefit obligation. During the fourth quarter of each year, we review our actuarial assumptions in light of current economic factors to determine if the assumptions need to be adjusted. Changes in the actuarial assumptions could have a material effect on our results of operations.

Valuation of Goodwill

Goodwill of a reporting unit is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Examples of such events or circumstances include, but are not limited to, the following:

• Significant decline in market capitalization relative to net book value,

• Significant adverse change in legal factors or in the business climate,

• Adverse action or assessment by a regulator,

• Unanticipated competition,

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• More-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of,

• Testing for recoverability of a significant asset group within a reporting unit, and

• Allocation of a portion of goodwill to a business to be disposed.

If we believe that one or more of the above indicators of impairment have occurred, we perform an impairment test. We have the option to perform a qualitative assessment (commonly referred to as "step zero" test) to determine whether further quantitative analysis for impairment of goodwill and indefinite-lived intangible assets is necessary. The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors. If, after assessing the totality of events or circumstances we determine that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, we do not need to perform a quantitative analysis.

If a quantitative assessment is required, we estimate the fair value of each reporting unit using a combination of discounted cash flow analysis and market-based valuation methodologies. Determining fair value using a quantitative approach requires significant judgment, including judgments about projected revenues, operating expenses, working capital investment, capital expenditures, and cash flows over a multi-year period. The discount rate applied to our forecasts of future cash flows is based on our estimated weighted average cost of capital. In assessing the reasonableness of our determined fair values, we evaluate our results against our market capitalization. Changes in these estimates and assumptions could materially affect the determination of fair value and impact the goodwill impairment assessment.

Our latest assessment was performed using a qualitative approach as of October 1, 2018, and we determined that it was likely that the fair values of our reporting units were more than their carrying amounts, and therefore no impairment charges were recorded. We will monitor future results and will perform a test if indicators trigger an impairment review.

Impairment of Other Intangible and Long-Lived Assets

We evaluate the impairment of identifiable intangibles and other long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered that may trigger an impairment review consist of, but are not limited to, the following:

• Significant decline in market capitalization relative to net book value,

• Significant underperformance relative to expected historical or projected future operating results,

• Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

• Significant negative industry or economic trends.

If we believe that one or more indicators of impairment have occurred, we perform a recoverability test by comparing the carrying amount of an asset or asset group to the sum of the undiscounted cash flows expected to result from the use and the eventual disposition of the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value. During the six months ended June 30, 2019 quarter we recognized impairment charges of $892 related to the June 2016 Restructuring Plan. No other indicators of impairment were identified during the quarter ended June 30, 2019.

Income Taxes

Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid. We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in the determination of consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage our underlying businesses.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. Accounting Standards Codification (ASC) No. 740 states that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, on the basis of its technical merits. We record

33

unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

Our practice is to recognize interest and penalties related to income tax matters as part of income tax expense.

Generally, outside of Canada and the United Kingdom, it has been our historical practice to permanently reinvest the earnings of our non-U.S. subsidiaries in those operations. However, the 2017 Tax Cut and Jobs Act made significant changes to the taxation of undistributed foreign earnings, requiring that all previously untaxed earnings and profits of our controlled foreign corporation be subjected to a one-time mandatory deemed repatriation tax. This transition tax substantially eliminated the basis difference that existed prior to the Tax Act. However, there are limited other taxes that continue to apply such as foreign withholding and certain state taxes. We completed an evaluation of our indefinite reinvestment assertion as a result of the Tax Cut and Jobs Act during the fourth quarter of 2018 and decided not to reinvest the current year earnings of our primary operations, except for in the Czech Republic, Denmark, India, Mexico and Taiwan. We intend to continue to indefinitely reinvest the earnings in these non-U.S. subsidiaries.

Significant Customers

Our net sales to customers representing at least 10% of total net sales is as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Cummins Inc.	18.0	%	14.0	%	18.3	%	14.1	%
Toyota Motor Corporation	11.8	%	10.8	%	11.1	%	11.0	%
Honda Motor Co.	9.9	%	9.7	%	10.1	%	10.3	%

Forward‑Looking Statements

This document contains statements that are, or may be deemed to be, forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward‑looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward‑looking statements are based on management’s expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward‑looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward‑looking statements are made subject to certain risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from those presented in the forward‑looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: changes in the economy generally and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions; the results of actions to reposition our business; rapid technological change; general market conditions in the automotive, communications, and computer industries, as well as conditions in the industrial, defense and aerospace, and medical markets; reliance on key customers; unanticipated natural disasters or other events; the ability to protect our intellectual property; pricing pressures and demand for our products; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters as well as any product liability claims; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks. Many of these and other risks and uncertainties are discussed in further detail in Item 1A. of CTS' Annual Report on Form 10‑K for the fiscal year ended December 31, 2018. We undertake no obligation to publicly update our forward‑looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

34

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk since December 31, 2018.

Item 4.   Controls and Procedures

Pursuant to Rule 13a-15(e) of the Securities and Exchange Act of 1934, management, under the direction of our Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2019.

Changes in Internal Control Over Financial Reporting

Beginning January 1, 2019, we adopted ASC 842 "Leases". It is expected to have an immaterial impact on our ongoing net income; however, we implemented changes to our processes related to lease recognition and related internal controls. These changes included the development of new procedures related to the determination of lease classification, ongoing contract review requirements, and gathering of information to comply with disclosure requirements.  

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time we are involved in litigation with respect to matters arising from the ordinary conduct of our business, and currently certain claims are pending against us. In the opinion of management, based upon presently available information, either adequate provision for anticipated costs have been accrued or the ultimate anticipated costs will not materially affect our consolidated financial position, results of operations, or cash flows.

Item 1A.  Risk Factors

There have been no significant changes to our risk factors since December 31, 2018.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On February 7, 2019 the Board of Directors authorized a new stock repurchase program with a maximum dollar limit of $25 million. This program authorizes us to make repurchases of our common stock from time to time on the open market, but does not obligate us to make repurchases, and has no expiration date.

In thousands, except shares and price paid per share				Total Number	Maximum Dollar
				of Shares	Value of Shares
				Purchased as	That May Yet By
	Total Number of			Part of Publicly	Purchased Under
	Shares	Average Price		Announced	Publicly Announced
	Purchased	Paid per Share		Programs	Plans or Programs
April 1, 2019 through April 30, 2019	14,000	$	29.65	14,000	$	24,303
May 1, 2019 through May 31, 2019	68,966	$	28.03	68,966	$	22,370
June 1, 2019 through June 30, 2019	65,500	$	27.56	65,500	$	20,565
Total	148,466			148,466

35

Item 6.  Exhibits 

3(i)	Amended Bylaws (incorporated herein by reference to Exhibit 3 to the Form 8-K, filed with the SEC on April 30, 2019).
(31)(a)	Certification pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
(31)(b)	Certification pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
(32)(a)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
(32)(b)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
101.INS	XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CTS Corporation	CTS Corporation
/s/ William M. Cahill	/s/ Ashish Agrawal
William M. Cahill Chief Accounting Officer	Ashish Agrawal Vice President and Chief Financial Officer
(Principal Accounting Officer)	(Principal Financial Officer)
Dated: July 25, 2019	Dated: July 25, 2019

36

EX-31.1

EXHIBIT (31)(a)

CERTIFICATION

I, Kieran O’Sullivan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CTS Corporation:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles; and

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019	/s/ Kieran O’Sullivan
	Kieran O’Sullivan
	Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT (31)(b)

CERTIFICATION

I, Ashish Agrawal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CTS Corporation:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles; and

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019	/s/Ashish Agrawal
	Ashish Agrawal
	Vice President and Chief Financial Officer

EX-32.1

EXHIBIT (32)(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of CTS Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 25, 2019	/s/ Kieran O’Sullivan
	Kieran O’Sullivan
	Chairman, President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to CTS Corporation and will be retained by CTS Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT (32)(b)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of CTS Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 25, 2019	/s/Ashish Agrawal
	Ashish Agrawal
	Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to CTS Corporation and will be retained by CTS Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 22, 2019
Document and Entity Information
Document Transition Report	false
Document Quarterly Report	true
Entity Registrant Name	CTS CORPORATION
Title of 12(b) Security	Common stock, without par value
City Area Code	630
Entity Address, Address Line One	4925 Indiana Avenue
Entity Incorporation, State or Country Code	IN
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	CTS
Entity Registrant Name	1-4639
Entity Central Index Key	0000026058
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		32,668,801
Entity Tax Identification Number	35-0225010
Entity Address, City or Town	Lisle,
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60532
Local Phone Number	577-8800
Security Exchange Name	NYSE
Entity Small Business	false

XML

Consolidated Statements of Earnings - Unaudited - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Net sales	$ 120,684	$ 118,021	$ 238,308	$ 231,551
Cost of goods sold	79,480	76,208	156,490	151,305
Gross Margin	41,204	41,813	81,818	80,246
Selling, general and administrative expenses	17,036	19,621	34,597	36,993
Research and development expenses	6,257	6,476	13,048	12,983
Restructuring charges	911	1,172	2,995	2,367
Gain (Loss) on Disposition of Property Plant Equipment	83	0	122	0
Operating earnings	17,083	14,544	31,300	27,903
Other income (expense):
Interest expense	(467)	(571)	(933)	(1,112)
Interest income	440	472	872	954
Other expense, net	(1,107)	(2,874)	(1,010)	(870)
Total other expense, net	(1,134)	(2,973)	(1,071)	(1,028)
Earnings before income taxes	15,949	11,571	30,229	26,875
Income tax expense	4,006	4,362	6,867	8,118
Net earnings	$ 11,943	$ 7,209	$ 23,362	$ 18,757
Earnings per share:
Basic (in dollars per share)	$ 0.36	$ 0.22	$ 0.71	$ 0.57
Diluted (in dollars per share)	$ 0.36	$ 0.21	$ 0.70	$ 0.56
Basic weighted - average common shares outstanding (in shares):	32,799	33,051	32,803	33,014
Effect of dilutive securities (in shares)	406	513	422	513
Diluted weighted - average common shares outstanding (in shares)	33,205	33,564	33,225	33,527
Cash dividends declared per share (in dollars per share)	$ 0.04	$ 0.04	$ 0.08	$ 0.08

XML

Condensed Consolidated Statements of Comprehensive Earnings - Unaudited - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net earnings	$ 11,943	$ 7,209	$ 23,362	$ 18,757
Other comprehensive income:
Changes in fair market value of derivatives, net of tax	(294)	67	(216)	874
Changes in unrealized pension cost, net of tax	1,026	1,249	2,048	2,356
Cumulative translation adjustment, net of tax	(87)	(375)	4	(132)
Other comprehensive income	645	941	1,836	3,098
Comprehensive income	$ 12,588	$ 8,150	$ 25,198	$ 21,855

XML

Condensed Consolidated Balance Sheets - Unaudited - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 105,578	$ 100,933
Accounts receivable, net	84,876	79,518
Inventories, net	43,154	43,486
Other current assets	16,811	15,422
Total current assets	250,419	239,359
Property, plant and equipment, net	99,878	99,401
Operating Lease, Right-of-Use Asset	23,846	0
Other Assets
Prepaid pension asset	56,331	54,100
Goodwill	71,057	71,057
Other intangible assets, net	56,805	60,180
Deferred income taxes	19,596	22,201
Other	2,769	2,043
Total other assets	206,558	209,581
Total Assets	580,701	548,341
Current Liabilities
Accounts payable	50,942	51,975
Operating Lease, Liability, Current	2,076	0
Accrued payroll and benefits	9,901	14,671
Accrued liabilities	33,396	37,347
Total current liabilities	96,315	103,993
Long-term debt	50,000	50,000
Operating Lease, Liability, Noncurrent	24,702	0
Long-term pension and other post-retirement obligations	6,363	6,510
Deferred Tax Liabilities, Net, Noncurrent	3,823	3,990
Other long-term obligations	3,953	5,919
Total Liabilities	185,156	170,412
Shareholders’ Equity
Common stock	307,775	306,697
Additional contributed capital	41,786	42,820
Retained earnings	499,585	478,847
Accumulated other comprehensive loss	(95,903)	(97,739)
Total shareholders’ equity before treasury stock	753,243	730,625
Treasury stock	(357,698)	(352,696)
Total shareholders’ equity	395,545	377,929
Total Liabilities and Shareholders’ Equity	$ 580,701	$ 548,341

XML

Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 23,362	$ 18,757
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	11,919	10,961
Pension and Other Postretirement Expense (Income)	502	213
Stock-based compensation	2,793	2,186
Deferred income taxes	1,937	(648)
Restructuring impairment charges	892	0
Gain (Loss) on Disposition of Assets	122	(2)
Loss (gain) on foreign currency hedges, net of cash	88	(76)
Changes in assets and liabilities:
Accounts receivable	(5,394)	(5,452)
Inventories	360	(5,275)
Other assets	(4,126)	1,280
Accounts payable	(1,582)	4,779
Accrued payroll and benefits	(4,713)	(2,028)
Accrued liabilities	(3,622)	247
Income taxes payable	(588)	3,034
Other liabilities	2,622	(101)
Pension and other post-retirement plans	(144)	(158)
Net cash provided by operating activities	24,184	27,721
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(9,430)	(14,910)
Proceeds from sale of assets	122	1
Net cash used in investing activities	(9,308)	(14,909)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt	(309,100)	(749,200)
Proceeds from borrowings of long-term debt	309,100	729,900
Payments for Repurchase of Common Stock	(5,002)	0
Dividends paid	(2,625)	(2,638)
Payments Related to Tax Withholding for Share-based Compensation	(2,637)	(1,429)
Net cash used in financing activities	(10,264)	(23,367)
Effect of exchange rate changes on cash and cash equivalents	33	(156)
Net increase (decrease) in cash and cash equivalents	4,645	(10,711)
Cash and cash equivalents at beginning of period	100,933	113,572
Cash and cash equivalents at end of period	105,578	102,861
Supplemental cash flow information:
Cash paid for interest	574	995
Cash paid for income taxes, net	5,448	3,724
Capital expenditures incurred but not yet paid	$ 4,807	$ 3,944

XML

Condensed Consolidated Statement of Shareholders' Equity Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated other comprehensive (loss) income	Treasury Stock
Beginning Balance at Dec. 31, 2017	$ 343,805	$ 304,777	$ 41,084	$ 420,160	$ (78,960)	$ (343,256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	11,548			11,548
Changes in fair market value of derivatives, net of tax	807				807
Changes in unrealized pension cost, net of tax	1,107				1,107
Cumulative translation adjustment, net of tax	243				243
Cash Dividends	(1,320)			(1,320)
Issued shares on vesting of restricted stock units	(1,423)	945	(2,368)
Stock compensation	965		965
Ending Balance at Mar. 31, 2018	355,732	305,722	39,681	430,388	(76,803)	(343,256)
Beginning Balance at Dec. 31, 2017	343,805	304,777	41,084	420,160	(78,960)	(343,256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	18,757
Changes in fair market value of derivatives, net of tax	874
Changes in unrealized pension cost, net of tax	2,356
Cumulative translation adjustment, net of tax	(132)
Ending Balance at Jun. 30, 2018	363,760	306,570	40,034	436,274	(75,862)	(343,256)
Beginning Balance at Mar. 31, 2018	355,732	305,722	39,681	430,388	(76,803)	(343,256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	7,209			7,209
Changes in fair market value of derivatives, net of tax	67				67
Changes in unrealized pension cost, net of tax	1,249				1,249
Cumulative translation adjustment, net of tax	(375)				(375)
Cash Dividends	(1,323)			(1,323)
Issued shares on vesting of restricted stock units	(5)	848	(853)
Stock compensation	1,206		1,206
Ending Balance at Jun. 30, 2018	363,760	306,570	40,034	436,274	(75,862)	(343,256)
Beginning Balance at Dec. 31, 2018	377,929	306,697	42,820	478,847	(97,739)	(352,696)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	11,419			11,419
Changes in fair market value of derivatives, net of tax	78				78
Changes in unrealized pension cost, net of tax	1,022				1,022
Cumulative translation adjustment, net of tax	91				91
Cash Dividends	1,315			1,315
Treasury Stock, Value, Acquired, Cost Method	(849)					(849)
Issued shares on vesting of restricted stock units	(2,636)	967	(3,603)
Stock compensation	1,154		1,154
Ending Balance at Mar. 31, 2019	386,893	307,664	40,371	488,951	(96,548)	(353,545)
Beginning Balance at Dec. 31, 2018	377,929	306,697	42,820	478,847	(97,739)	(352,696)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	23,362
Changes in fair market value of derivatives, net of tax	(216)
Changes in unrealized pension cost, net of tax	2,048
Cumulative translation adjustment, net of tax	4
Ending Balance at Jun. 30, 2019	395,545	307,775	41,786	499,585	(95,903)	(357,698)
Beginning Balance at Mar. 31, 2019	386,893	307,664	40,371	488,951	(96,548)	(353,545)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	11,943			11,943
Changes in fair market value of derivatives, net of tax	(294)				(294)
Changes in unrealized pension cost, net of tax	1,026				1,026
Cumulative translation adjustment, net of tax	(87)				(87)
Cash Dividends	1,309			1,309
Treasury Stock, Value, Acquired, Cost Method	(4,153)					(4,153)
Issued shares on vesting of restricted stock units	0	111	(111)
Stock compensation	1,526		1,526
Ending Balance at Jun. 30, 2019	$ 395,545	$ 307,775	$ 41,786	$ 499,585	$ (95,903)	$ (357,698)

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Condensed Consolidated Statement of Shareholders' Equity Condensed Consolidated Statement of Shareholders Equity (parenthetical) - $ / shares	3 Months Ended		12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per share (in dollars per share)	$ 0.04	$ 0.04
Treasury Stock, Shares, Acquired	148,466	31,500	342,100

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Basis of Presentation

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

NOTE 1—Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by CTS Corporation (“CTS” "we", "our", "us" or the "Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, notes thereto, and other information included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring items) necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year.

Changes in Accounting Principles

Beginning in January 2019, CTS adopted the provisions of Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" under the optional transition method, which requires, if necessary, a cumulative effect adjustment to the opening balance of retained earnings. The lease liability is based on the present value of minimum lease payments discounted using our secured incremental borrowing rate at the date of adoption. Existing deferred rent liabilities, resulting from our historical practice of using the straight line method for recognizing lease expense, were reclassified upon adoption to reduce the measurement of the lease assets. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases at adoption. Our leases are classified as operating leases and expense is recorded in a manner similar to historical accounting guidance. We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet. Upon adoption we recorded a lease liability of $24,792 and a right of use asset of $22,066. No adjustment to the opening balance of retained earnings was required.

Subsequent Events

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date the condensed consolidated financial statements are issued.

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Revenue Recognition (Notes)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

NOTE 2 – Revenue Recognition

The core principle of Topic 606 is that an entity should recognize revenue 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. The guidance provides a five-step process to achieve that core principle:

• Identify the contract(s) with a customer

• Identify the performance obligations

• Determine the transaction price

• Allocate the transaction price

• Recognize revenue when the performance obligations are met

We recognize revenue when the performance obligations specified in our contracts have been satisfied, after considering the impact of variable consideration and other factors that may affect the transaction price. Our contracts normally contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. We usually expect payment within 30 to 90 days from the shipping date, depending on our terms with the customer. None of our contracts as of June 30, 2019, contained a significant financing component. Differences between the amount of revenue recognized and the amount invoiced, collected from, or paid to our customers are recognized as contract assets or liabilities. Contract assets will be reviewed for impairment when events or circumstances indicate that they may not be recoverable.

To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method based on an analysis of historical experience and current facts and circumstances, which requires significant judgment. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

Contract Assets and Liabilities

Contract assets and liabilities included in our Condensed Consolidated Balance Sheets are as follows:

	As of
	June 30,			December 31,
	2019			2018
Contract Assets
Prepaid rebates included in Other current assets	$	65		$	65
Prepaid rebates included in Other assets	1,501			999
Total Contract Assets	$	1,566		$	1,064
Contract Liabilities
Customer discounts and price concessions included in Accrued liabilities	$	(1,799	)	$	(1,656	)
Customer rights of return included in Accrued liabilities	(464		)	(325		)
Total Contract Liabilities	$	(2,263	)	$	(1,981	)

During the three and six months ended June 30, 2019, we recognized revenues of $37 and $106, respectively, for amounts that were included in contract liabilities at the beginning of the period.

Disaggregated Revenue

The following table presents revenues disaggregated by the major markets we serve:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Aero & Defense	$	6,988	$	6,024	$	14,511	$	11,127
Industrial	19,500		22,773		37,656		43,129
Medical	8,973		9,793		18,639		19,034
Telecom & IT	4,880		5,525		8,318		10,050
Transportation	80,343		73,906		159,184		148,211
Total	$	120,684	$	118,021	$	238,308	$	231,551

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Accounts Receivable

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Accounts Receivable

NOTE 3 – Accounts Receivable 

The components of accounts receivable are as follows:

	As of
	June 30,			December 31,
	2019			2018
Accounts receivable, gross	$	85,002		$	79,902
Less: Allowance for doubtful accounts	(126		)	(384		)
Accounts receivable, net	$	84,876		$	79,518

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Inventories

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventories

NOTE 4 – Inventories 

Inventories consist of the following:

	As of
	June 30,			December 31,
	2019			2018
Finished goods	$	7,247		$	10,995
Work-in-process	14,835			12,129
Raw materials	26,197			25,746
Less: Inventory reserves	(5,125		)	(5,384		)
Inventories, net	$	43,154		$	43,486

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

NOTE 5 – Property, Plant and Equipment

Property, plant and equipment is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Land	$	1,136		$	1,136
Buildings and improvements	73,735			70,522
Machinery and equipment	225,513			231,619
Less: Accumulated depreciation	(200,506		)	(203,876		)
Property, plant and equipment, net	$	99,878		$	99,401
Depreciation expense for the six months ended June 30, 2019				$	8,537
Depreciation expense for the six months ended June 30, 2018				$	7,537

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Retirement Plans

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Retirement Plans

Retirement Plans

Pension Plans

Net pension expense for our domestic and foreign plans included in other income (expense) in the condensed consolidated statement of earnings is as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Net pension expense	$	249	$	78	$	499	$	157

The components of net pension expense for our domestic and foreign plans include the following: 

	Domestic Pension Plans						Foreign Pension Plans
	Three Months Ended						Three Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	9		$	11
Interest cost	1,931			1,781			7			11
Expected return on plan assets(1)	(3,047		)	(3,225		)	(4		)	(6		)
Amortization of loss	1,311			1,466			42			40
Total expense, net	$	195		$	22		$	54		$	56

 

(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

	Domestic Pension Plans						Foreign Pension Plans
	Six Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	18		$	22
Interest cost	3,862			3,562			15			22
Expected return on plan assets(1)	(6,094		)	(6,450		)	(9		)	(13		)
Amortization of loss	2,623			2,932			84			82
Total expense, net	$	391		$	44		$	108		$	113

 (1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

Other Post-retirement Benefit Plan

Net post-retirement expense for our other post-retirement plan includes the following components:

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	1		$	—		$	1		$	1
Interest cost	43			39			85			78
Amortization of gain	(42		)	(11		)	(83		)	(23		)
Total expense, net	$	2		$	28		$	3		$	56

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Other Intangible Assets

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

NOTE 7 – Other Intangible Assets

Intangible assets consist of the following components:

	As of
	June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(38,787	)	$	25,536
Technology and other intangibles	44,460		(15,391		)	29,069
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(54,178	)	$	56,805
Amortization expense for the three months ended June 30, 2019			$	1,692
Amortization expense for the six months ended June 30, 2019			$	3,382

	As of
	December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(37,088	)	$	27,235
Technology and other intangibles	44,460		(13,715		)	30,745
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(50,803	)	$	60,180
Amortization expense for the three months ended June 30, 2018			$	1,704
Amortization expense for the six months ended June 30, 2018			$	3,424

Remaining amortization expense for other intangible assets as of June 30, 2019 is as follows: 

	Amortization expense
2019	$	3,377
2020	6,624
2021	6,467
2022	6,230
2023	4,224
Thereafter	29,883
Total amortization expense	$	56,805

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Costs Associated with Exit and Restructuring Activities

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Costs Associated with Exit and Restructuring Activities

NOTE 8 – Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as a separate component of Operating earnings. 

Total restructuring charges is as follows:

	Three Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	911	$	1,172

 

 

	Six Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	2,995	$	2,367

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. During the third quarter of 2017, we revised the June 2016 Plan. The amendment added an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. The total restructuring liability related to severance and other one-time benefit arrangements under the June 2016 Plan was $501 at June 30, 2019, and $668 at December 31, 2018. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through June 30, 2019:

			Actual costs
	Planned		incurred through
June 2016 Plan	Costs		June 30, 2019
Workforce reduction	$	3,075	$	3,162
Building and equipment relocation	9,025		9,952
Other charges	1,300		1,875
Total restructuring charges	$	13,400	$	14,989

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

The following table displays the restructuring liability activity for all plans for the six months ended June 30, 2019: 

Restructuring liability at January 1, 2019	$	1,586
Restructuring charges	2,995
Cost paid	(2,216		)
Other activity (1)	(1,163		)
Restructuring liability at June 30, 2019	$	1,202

(1) Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.

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Accrued Liabilities

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Accrued Liabilities

NOTE 9 – Accrued Liabilities

The components of accrued liabilities are as follows: 

	As of
	June 30,		December 31,
	2019		2018
Accrued product related costs	$	4,036	$	4,377
Accrued income taxes	6,315		6,914
Accrued property and other taxes	1,810		1,976
Accrued professional fees	2,474		3,350
Contract liabilities	2,263		1,981
Dividends payable	1,309		1,310
Remediation reserves	10,564		11,274
Other accrued liabilities	4,625		6,165
Total accrued liabilities	$	33,396	$	37,347

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Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingencies

NOTE 10 – Commitments and Contingencies

Certain processes in the manufacture of our current and past products create by-products classified as hazardous waste. We have been notified by the U.S. Environmental Protection Agency, state environmental agencies, and in some cases, groups of potentially responsible parties, that we may be potentially liable for environmental contamination at several sites currently and formerly owned or operated by us. Some sites, such as Asheville, North Carolina and Mountain View, California, are designated National Priorities List sites under the U.S. Environmental Protection Agency’s Superfund program. We accrue a liability for probable remediation activities, claims and proceedings against us with respect to environmental matters if the amount can be reasonably estimated, and provide disclosures including the nature of a loss whenever it is probable or reasonably possible that a potentially material loss may have occurred but cannot be estimated. We record contingent loss accruals on an undiscounted basis.

In the opinion of management, based upon presently available information relating to such matters, adequate provision for probable and estimable losses have been recorded. Due to the inherent nature of environmental obligations, we cannot provide assurance that our ultimate environmental liability will not materially exceed the amount of our accrued losses.

A roll-forward of remediation reserves included in accrued liabilities on the balance sheet is comprised of the following:

	As of
	June 30, 2019			December 31, 2018
Balance at beginning of period	$	11,274		$	17,067
Remediation expense	276			1,182
Net remediation payments	(979		)	(6,967		)
Other activity (1)	(7		)	(8		)
Balance at end of the period	$	10,564		$	11,274

⁽¹⁾ Other activity includes currency translation adjustments not recorded through remediation expense.

Unrelated to the environmental claims described above, certain other claims are pending against us with respect to matters arising in the ordinary conduct of our business. Although the ultimate outcome of any potential litigation resulting from these claims cannot be predicted with certainty, and some may be disposed of unfavorably to us, we believe that adequate provision for probable and estimable costs have been established based upon all presently available information.

Except as noted herein, we do not believe we have any pending loss contingencies that are probable or reasonably possible of having a material impact on our consolidated financial position, results of operations, or cash flows. Our accrued liabilities and disclosures will be adjusted accordingly if additional information becomes available in the future.

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Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt

NOTE 11 - Debt

Long-term debt is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Total credit facility	$	300,000		$	300,000
Balance outstanding	$	50,000		$	50,000
Standby letters of credit	$	1,800		$	1,940
Amount available	$	248,200		$	248,060
Weighted-average interest rate	3.54		%	3.10		%
Commitment fee percentage per annum	0.20		%	0.20		%

On February 12, 2019, we entered into an amended and restated five-year Credit Agreement with a group of banks (the "Credit Agreement") to extend the term of the facility. The Credit Agreement provides for a revolving credit facility of $300,000, which may be increased by $150,000 at the request of the Company, subject to the administrative agent's approval. This new unsecured credit facility replaces the prior $300,000 unsecured credit facility, which would have expired August 10, 2020. Borrowings of $50,000 under the prior credit agreement were refinanced into the Credit Agreement. The prior agreement was terminated as of February 12, 2019.

The Revolving Credit Facility includes a swing line sublimit of $15,000 and a letter of credit sublimit of $10,000. Borrowings under the Revolving Credit Facility bear interest, at our option, at the base rate plus the applicable margin for base rate loans or London Interbank Offered Rate ("LIBOR") plus the applicable margin for LIBOR loans. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.20% to 0.30% based on the our total leverage ratio. 

The Revolving Credit Facility requires, among other things, that we comply with a maximum total leverage ratio and a minimum fixed charge coverage ratio. Failure to comply with these covenants could reduce the borrowing availability under the Revolving Credit Facility. We were in compliance with all debt covenants at June 30, 2019. The Revolving Credit Facility requires that we deliver quarterly financial statements, annual financial statements, auditor certifications, and compliance certificates within a specified number of days after the end of a quarter and year. Additionally, the Revolving Credit Facility contains restrictions limiting our ability to: dispose of assets; incur certain additional debt; repay other debt or amend subordinated debt instruments; create liens on assets; make investments, loans or advances; make acquisitions or engage in mergers or consolidations; engage in certain transactions with our subsidiaries and affiliates; and make stock repurchases and dividend payments. Interest rates on the Revolving Credit Facility fluctuate based upon the LIBOR and the Company’s quarterly total leverage ratio.  

We have debt issuance costs related to our long-term debt that are being amortized using the straight-line method over the life of the debt. Amortization expense was approximately $41 and $46 for the three months ended June 30, 2019 and 2018, respectively and approximately $77 and $93 for the six months ended June 30, 2019 and 2018, respectively. These costs are included in interest expense in our Condensed Consolidated Statement of Earnings.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. We selectively use derivative financial instruments including foreign currency forward contracts and interest rate swaps to manage our exposure to these risks.

The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts. We manage our credit risk by entering into derivative contracts with only highly rated financial institutions and by using netting agreements.

The effective portion of derivative gains and losses are recorded in accumulated other comprehensive (loss) income until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales. If it is

probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive (loss) income to other income (expense).

We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default. No recognition of ineffectiveness was recorded in our Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2019.

Foreign Currency Hedges

We use forward contracts to mitigate currency risk related to a portion of our forecasted foreign currency revenues and costs. The currency forward contracts are designed as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheets at fair value.

We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future. At June 30, 2019, we had a net unrealized gain of $784 in accumulated other comprehensive (loss) income, of which $784 is expected to be reclassified to income within the next 12 months. At June 30, 2018 we had a net unrealized gain of $59 in accumulated other comprehensive (loss) income. The notional amount of foreign currency forward contracts outstanding was $8,625 at June 30, 2019.

Interest Rate Swaps

We use interest rate swaps to convert our revolving credit facility’s variable rate of interest into a fixed rate. As of June 30, 2019, we have agreements to fix interest rates on $50,000 of long-term debt through August 2020. The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.

These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive (loss) income. The estimated net amount of the existing gains that are reported in accumulated other comprehensive (loss) income that are expected to be reclassified into earnings within the next twelve months is approximately $235. 

The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of June 30, 2019, are shown in the following table:

	As of
	June 30,		December 31,
	2019		2018
Interest rate swaps reported in Other current assets	$	235	$	576
Interest rate swaps reported in Other assets	$	17	$	369
Foreign currency hedges reported in Other current assets	$	718	$	393

The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20 (Balance Sheet, Offsetting). On a gross basis, there were foreign currency derivative assets of $718 and foreign currency derivative liabilities of $0.

The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:

	Three Months Ended					Six Months Ended
	June 30,		June 30,			June 30,		June 30,
	2019		2018			2019		2018
Foreign Exchange Contracts:
Amounts reclassified from AOCI to earnings:
Net sales	$	—	$	21		$	—	$	(37	)
Cost of goods sold	233		32			276		140
Selling, general and administrative expense	23		(4		)	39		(5		)
Total amounts reclassified from AOCI to earnings	256		49			315		98
Loss recognized in other expense for hedge ineffectiveness	—		—			—		(1		)
Total derivative gain on foreign exchange contracts recognized in earnings	$	256	$	49		$	315	$	97
Interest Rate Swaps:
Benefit recorded in Interest expense	$	156	$	105		$	313	$	170
Total gain	$	412	$	154		$	628	$	267

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Accumulated Other Comprehensive (Loss) Income

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive (Loss) Income

NOTE 13 – Accumulated Other Comprehensive (Loss) Income

Shareholders’ equity includes certain items classified as accumulated other comprehensive (loss) income (“AOCI”) in the Condensed Consolidated Balance Sheets, including:

Unrealized gains (losses) on hedges relate to interest rate swaps to convert our revolving credit facility's variable rate of interest into a fixed rate and foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transactions occur, at which time amounts are reclassified into earnings.  Further information related to our derivative financial instruments is included in Note 12 - Derivative Financial Instruments and Note 16 – Fair Value Measurements.

Unrealized gains (losses) on pension obligations are deferred from income statement recognition until the gains or losses are realized. Amounts reclassified to income from AOCI are included in net periodic pension income (expense). Further information related to our pension obligations is included in Note 6 – Retirement Plans.

Cumulative translation adjustments relate to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.  

Changes in exchange rates between the functional currency and the currency in which a transaction is denominated are foreign exchange transaction gains or losses. Transaction losses for the three months and six months ended June 30, 2019 were $829 and $355, respectively and transaction losses for the three and six months ended June 30, 2018 were $2,194 and $918, respectively, which have been included in other income (expense) in the Condensed Consolidated Statement of Earnings.

The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2019, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2019			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,416		$	32		$	(412	)	$	1,036
Income tax (expense) benefit	(320		)	(7		)	93			(234		)
Net	1,096			25			(319		)	802
Changes in unrealized pension cost:
Gross	(131,135		)	—			1,325			(129,810		)
Income tax benefit (expense)	35,596			—			(299		)	35,297
Net	(95,539		)	—			1,026			(94,513		)
Cumulative translation adjustment:
Gross	(2,203		)	(84		)	—			(2,287		)
Income tax benefit (expense)	98			(3		)	—			95
Net	(2,105		)	(87		)	—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(96,548	)	$	(62	)	$	707		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2018, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	1,332		$	240		$	(154	)	$	1,418
Income tax (expense) benefit	(341		)	(54		)	35			(360		)
Net	991			186			(119		)	1,058
Changes in unrealized pension cost:
Gross	(128,672		)	—			1,617			(127,055		)
Income tax benefit (expense)	52,520			—			(368		)	52,152
Net	(76,152		)	—			1,249			(74,903		)
Cumulative translation adjustment:
Gross	(1,747		)	(368		)	—			(2,115		)
Income tax benefit (expense)	105			(7		)	—			98
Net	(1,642		)	(375		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(76,803	)	$	(189	)	$	1,130		$	(75,862	)

The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2019 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,316		$	348		$	(628	)	$	1,036
Income tax (expense) benefit	(298		)	(78		)	142			(234		)
Net	1,018			270			(486		)	802
Changes in unrealized pension cost:
Gross	(132,454		)	—			2,644			(129,810		)
Income tax benefit (expense)	35,893			—			(596		)	35,297
Net	(96,561		)	—			2,048			(94,513		)
Cumulative translation adjustment:
Gross	(2,291		)	4			—			(2,287		)
Income tax benefit	95			—			—			95
Net	(2,196		)	4			—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(97,739	)	$	274		$	1,562		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2018 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2017			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	289		$	1,397		$	(268	)	$	1,418
Income tax (expense) benefit	(105		)	(315		)	60			(360		)
Net	184			1,082			(208		)	1,058
Changes in unrealized pension cost:
Gross	(130,096		)	—			3,041			(127,055		)
Income tax benefit (expense)	52,837			—			(685		)	52,152
Net	(77,259		)	—			2,356			(74,903		)
Cumulative translation adjustment:
Gross	(1,985		)	(130		)	—			(2,115		)
Income tax benefit (expense)	100			(2		)	—			98
Net	(1,885		)	(132		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(78,960	)	$	950		$	2,148		$	(75,862	)

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Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Stockholders' Equity Note [Abstract]

Shareholders' Equity

NOTE 14 – Shareholders’ Equity

Share count and par value data related to shareholders’ equity are as follows:

	As of
	June 30,	December 31,
	2019	2018
Preferred Stock
Par value per share	No par value	No par value
Shares authorized	25,000,000	25,000,000
Shares outstanding	—	—
Common Stock
Par value per share	No par value	No par value
Shares authorized	75,000,000	75,000,000
Shares issued	56,923,369	56,786,849
Shares outstanding	32,707,281	32,750,727
Treasury stock
Shares held	24,216,088	24,036,122

On February 7, 2019, the Board of Directors authorized a new stock repurchase program with a maximum dollar limit of $25,000 in stock repurchases, which replaced the previous program. During the six months ended June 30, 2019, 179,966 shares of common stock were repurchased for approximately $5,002, of which $567 was repurchased under the previous program and $4,435 was repurchased under the most recent board-authorized share repurchase plan. Approximately $20,565 is available for future purchases.

A roll-forward of common shares outstanding is as follows:

	Six Months Ended
	June 30,		June 30,
	2019		2018
Balance at the beginning of the year	32,750,727		32,938,466
Repurchases	(179,966	)	—
Restricted share issuances	136,520		148,577
Balance at the end of the period	32,707,281		33,087,043

Certain potentially dilutive restricted stock units are excluded from diluted earning per share because they are anti-dilutive. The number of awards that were anti-dilutive for the six month periods ended June 30, 2019 and June 30, 2018 were 108,894 and 72,658, respectively. There were no outstanding anti-dilutive awards impacting the three month periods ended June 30, 2019 and June 30, 2018.

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Equity-Based Compensation

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

NOTE 15 - Stock-Based Compensation

At June 30, 2019, we had five active stock-based compensation plans: the Nonemployee Directors’ Stock Retirement Plan (“Directors’ Plan”), the 2004 Omnibus Long-Term Incentive Plan (“2004 Plan”), the 2009 Omnibus Equity and Performance Incentive Plan (“2009 Plan”), the 2014 Performance & Incentive Plan (“2014 Plan”), and the 2018 Equity and Incentive Compensation Plan ("2018 Plan"). Future grants can only be made under the 2018 Plan.

The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings related to stock-based compensation plans:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Service-based RSUs	$	488	$	563	$	1,094	$	1,018
Performance-based RSUs	1,038		643		1,586		1,153
Cash-settled RSUs	53		57		113		15
Total	$	1,579	$	1,263	$	2,793	$	2,186
Income tax benefit	357		285		631		494
Net	$	1,222	$	978	$	2,162	$	1,692

The following table summarizes the unrecognized compensation expense related to non-vested RSUs by type and the weighted-average period in which the expense is to be recognized:

	Unrecognized
	Compensation		Weighted-
	Expense at		Average
	June 30, 2019		Period
Service-based RSUs	$	2,168	1.44
Performance-based RSUs	4,039		1.85
Total	$	6,207	1.71

We recognize expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.

The following table summarizes the status of these plans as of June 30, 2019:

	2018 Plan	2014 Plan	2009 Plan	2004 Plan	Directors' Plan
Awards originally available	2,500,000	1,500,000	3,400,000	6,500,000	N/A
Performance-based options outstanding	—	250,000	—	—	—
Maximum potential RSU and cash settled awards outstanding	243,943	419,793	92,600	35,952	5,522
Maximum potential awards outstanding	243,943	669,793	92,600	35,952	5,522
RSUs and cash settled awards vested and released	—	—	—	—	—
Awards available for grant	2,256,057	—	—	—	—

Performance-Based Stock Options

During 2015 and 2016, the Compensation Committee of the Board of Directors of the Company (the “Committee”) granted a total of 350,000 performance-based stock option awards (“Performance-Based Option Awards”) for certain employees under the 2014 Plan, of which 250,000 remain outstanding after considering forfeitures. The Performance-Based Option Awards have an exercise price of $18.37, a term of five years, and generally will become exercisable (provided the optionee remains employed by the Company or an affiliate) upon our attainment of at least $600,000 in revenues during any of our trailing four quarterly periods (as determined by the Committee) during the term. We have not recognized any expense on these Performance-Based Option Awards for the six-month periods ended June 30, 2019 and 2018, since the revenue target was not deemed likely to be attained based on our current forecast.

Service-Based Restricted Stock Units

The following table summarizes the service-based RSU activity as of and for the six months ended June 30, 2019: 

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	355,590		$	17.91
Granted	72,591		28.79
Vested and released	(65,623	)	19.91
Forfeited	(15,918	)	26.95
Outstanding at June 30, 2019	346,640		$	19.39
Releasable at June 30, 2019	207,140		$	13.79

Performance and Market-Based Restricted Stock Units

The following table summarizes the performance and market-based RSU activity as of and for the six months ended June 30, 2019:

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	267,792		$	21.44
Granted	82,103		30.98
Attained by performance	60,779		13.54
Released	(160,889	)	14.34
Forfeited	(26,156	)	23.81
Outstanding at June 30, 2019	223,629		$	27.70
Releasable at June 30, 2019	—		$	—

The following table summarizes each grant of performance awards outstanding at June 30, 2019.

Description	Grant Date	Vesting Year	Vesting Dependency	Target Units Outstanding	Maximum Number of Units to be Granted
2017 - 2019 Performance RSUs	February 9, 2017	2019	35% RTSR, 35% sales growth, 30% operating cash flow	71,188	142,376
2017 - 2019 Performance RSUs	February 9, 2017	2018 - 2020	Operating Income	13,556	13,556
2018 - 2020 Performance RSUs	February 8, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	34,478	68,956
2018 - 2020 Performance RSUs	February 16, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	31,820	63,640
2019 - 2021 Performance RSUs	February 7, 2019	2021	35% RTSR, 35% sales growth, 30% operating cash flow	65,642	131,285
2019 Supplemental Performance RSUs	February 7, 2019	2021	Succession Planning Targets	6,945	13,890

Cash-Settled Restricted Stock Units

Cash-Settled RSUs entitle the holder to receive the cash equivalent of one share of common stock for each unit when the unit vests. These RSUs are issued to key employees residing in foreign locations as direct compensation. Generally, these RSUs vest over a three-year period. Cash-Settled RSUs are classified as liabilities and are remeasured at each reporting date until settled. At June 30, 2019 and December 31, 2018 we had 17,468 and 17,248 cash-settled RSUs outstanding, respectively. At June 30, 2019 and December 31, 2018, liabilities of $211 and $300, respectively were included in Accrued liabilities on our Condensed Consolidated Balance Sheets.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We use interest rate swaps to convert our Revolving Credit Facility’s variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies. These derivative financial instruments are measured at fair value on a recurring basis. 

The table below summarizes our financial assets that are measured at fair value on a recurring basis at June 30, 2019:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	June 30,		Instruments		Inputs		Inputs
	2019		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	252	$	—	$	252	$	—
Foreign currency hedges	$	718	$	—	$	718	$	—

The table below summarizes the financial assets (liabilities) that are measured at fair value on a recurring basis as of December 31, 2018:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	December 31,		Instruments		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	945	$	—	$	945	$	—
Foreign currency hedges	$	393	$	—	$	393	$	—

The fair value of our interest rate swaps and foreign currency hedges were measured using standard valuation models using market-based observable inputs over the contractual terms, including forward yield curves, among others. There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within Level 2 of the fair value hierarchy.

The table below provides a reconciliation of the recurring financial assets (liabilities) for our derivative instruments:

				Foreign
	Interest			Currency
	Rate Swaps			Hedges
Balance at January 1, 2018	$	971		$	(742	)
Cash settlements paid (received)	421			(402		)
Total gains (losses) for the period:
Included in earnings	(421		)	484
Included in other comprehensive income	(26		)	1,053
Balance at December 31, 2018	$	945		$	393
Cash settlements received	(313		)	(403		)
Total gains (losses) for the period:
Included in earnings	313			315
Included in other comprehensive income	(693		)	413
Balance at June 30, 2019	$	252		$	718

 

Our long-term debt consists of the Revolving Credit Facility which is recorded at its carrying value. There is a readily determinable market for our long-term debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt approximates carrying value and was determined by valuing a similar hypothetical coupon bond and attributing that value to our long-term debt under the Revolving Credit Facility.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rates for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Effective tax rate	25.1	%	37.7	%	22.7	%	30.2	%

Our effective income tax rate was 25.1% and 37.7% in the second quarters of 2019 and 2018, respectively. This decrease was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan. The tax rate in the second quarter of 2019 was higher than the U.S. statutory federal tax rate primarily due to state taxes and foreign earnings that are taxed at higher rates. The tax rate in the second quarter of 2018 was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes, state taxes and foreign earnings that are taxed at higher rates.

Our effective income tax rate was 22.7% and 30.2% for the six months ended June 30, 2019 and 2018, respectively. This decrease was primarily attributed to the 2018 withholding tax payment of $1,703 on a one-time distribution from Taiwan. The tax rate in the second quarter of 2019 was higher than the U.S. statutory federal tax rate primarily due to higher foreign tax rates applicable on foreign earnings offset by tax benefits recorded upon vesting of restricted stock units. The tax rate in the second quarter of 2018 was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes, state taxes and higher foreign tax rates applicable on foreign earnings.

We have elected to recognize the tax on the global intangible low-taxed income (GILTI) as a period expense in the period the tax is incurred, and we have included a provisional estimate for GILTI in our estimated annual effective tax rate.

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Leases Leases

6 Months Ended

Jun. 30, 2019

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

NOTE 18 — Leases

We lease certain land, buildings and equipment under non-cancelable operating leases used in our operations. Operating lease assets represent our right to use an underlying asset for the lease term. Operating lease liabilities represent the present value of lease payments over the lease term, discounted using an estimate of our secured incremental borrowing rate because none of our leases contain a rate implicit in the lease arrangement.

The operating lease assets and liabilities are adjusted to include the impact of any lease incentives and non-lease components. We have elected not to separate lease and non-lease components, which include taxes and common area maintenance in some of our leases. Variable lease payments that depend on an index or a rate are included in lease payments using the prevailing index or rate in effect at lease commencement.

Options to extend or terminate a lease are included in the lease term when it is reasonably likely that we will exercise that option. We have elected not to record leases with an initial term of 12 months or less on the balance sheet and instead recognize those lease payments on a straight-line basis over the lease term.

We determine if an arrangement is a lease or contains a lease at its inception, which normally does not require significant estimates or judgments. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants and we currently have no material sublease agreements.

Total lease expense for the three and six months ended June 30, 2019 is as follows:

	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	1,075	$	2,069
Short-term lease cost	176		249
Total lease cost	$	1,251	$	2,318

Remaining maturity of our existing lease liabilities as of June 30, 2019 is as follows:

	Operating Leases (1)
2019	$	2,014
2020	4,106
2021	4,021
2022	3,819
2023	3,573
Thereafter	20,084
Total	$	37,617
Less: interest	(10,839		)
Present value of lease liabilities	$	26,778

⁽¹⁾ Operating lease payments include $4,615 of payments related to options to extend lease terms that are reasonably expected to be exercised.

Balance Sheet Classification:
Operating lease obligations	$	2,076
Long-term operating lease obligations	24,702
Total lease liabilities	$	26,778
Weighted-average remaining lease terms (years)	9.71
Weighted-average discount rate	6.91		%
Supplemental cash flow information related to leases:
Cash paid for amounts included in the measurement of lease liabilities	$	1,862
Leased assets obtained in exchange for new operating lease liabilities	$	2,961

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Changes in Accounting Principles

Beginning in January 2019, CTS adopted the provisions of Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" under the optional transition method, which requires, if necessary, a cumulative effect adjustment to the opening balance of retained earnings. The lease liability is based on the present value of minimum lease payments discounted using our secured incremental borrowing rate at the date of adoption. Existing deferred rent liabilities, resulting from our historical practice of using the straight line method for recognizing lease expense, were reclassified upon adoption to reduce the measurement of the lease assets. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases at adoption. Our leases are classified as operating leases and expense is recorded in a manner similar to historical accounting guidance. We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet. Upon adoption we recorded a lease liability of $24,792 and a right of use asset of $22,066. No adjustment to the opening balance of retained earnings was required.

Basis of Presentation

NOTE 1—Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by CTS Corporation (“CTS” "we", "our", "us" or the "Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, notes thereto, and other information included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring items) necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year.

Recent Accounting Pronouncements

NOTE 19 — Recent Accounting Pronouncements

ASU 2018-14 "Compensation - Retirement Benefits - Defined Benefit Plans - General"

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General." This ASU modifies the disclosure requirements for defined benefit and other postretirement plans. This ASU eliminates certain disclosures associated with accumulated other comprehensive income, plan assets, related parties, and the effects of interest rate basis point changes on assumed health care costs; while other disclosures have been added to address significant gains and losses related to changes in benefit obligations. This ASU also clarifies disclosure requirements for projected benefit and accumulated benefit obligations. The amendments in this ASU are effective for fiscal years ending after December 15, 2020 and for interim periods therein with early adoption permitted. Adoption on a retrospective basis for all periods presented is required. This ASU will impact our financial statement disclosures but will not have an impact on our consolidated financial position, results of operations, or cash flows.

ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement"

In August 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement". This ASU modified the disclosures related to recurring and nonrecurring fair value measurements. Disclosures related to the transfer of assets between Level 1 and Level 2 hierarchies have been eliminated and various additional disclosures related to Level 3 fair value measurements have been added, modified or removed. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted upon issuance of the standard for disclosures modified or removed with a delay of adoption of the additional disclosures until their effective date. This ASU is not expected to have an impact on our financial statements.

ASU 2016-16 "Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory"

In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory". This ASU is meant to improve the accounting for the income tax effect of intra-entity transfers of assets other than inventory. Currently, U.S. GAAP prohibits the recognition of current and deferred income taxes for intra-entity asset transfers until the asset is sold to a third party. This ASU will now require companies to recognize the income tax effect of an intra-entity asset transfer (other than inventory) when the transaction occurs. This ASU is effective for public companies, for fiscal years beginning after December 15, 2019 and interim periods within those annual reporting periods. Early adoption is permitted and is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This guidance is not expected to have a material impact on our financial statements.

ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments"

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The standard will become effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We plan to adopt this standard on the effective date and are currently evaluating the impact of this new standard on our financial statements.

Subsequent Events [Text Block]

Subsequent Events

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date the condensed consolidated financial statements are issued.

Separation of Lease and Nonlease Components [Policy Text Block]

We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet.The operating lease assets and liabilities are adjusted to include the impact of any lease incentives and non-lease components. We have elected not to separate lease and non-lease components, which include taxes and common area maintenance in some of our leases.

Short-term Leases [Policy Text Block]

We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet.We have elected not to record leases with an initial term of 12 months or less on the balance sheet and instead recognize those lease payments on a straight-line basis over the lease term.

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Leases Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Separation of Lease and Nonlease Components [Policy Text Block]	We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet.The operating lease assets and liabilities are adjusted to include the impact of any lease incentives and non-lease components. We have elected not to separate lease and non-lease components, which include taxes and common area maintenance in some of our leases.
Short-term Leases [Policy Text Block]	We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet.We have elected not to record leases with an initial term of 12 months or less on the balance sheet and instead recognize those lease payments on a straight-line basis over the lease term.

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Revenue Recognition Contract Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Contract Assets and Liabilities [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Contract assets and liabilities included in our Condensed Consolidated Balance Sheets are as follows:

	As of
	June 30,			December 31,
	2019			2018
Contract Assets
Prepaid rebates included in Other current assets	$	65		$	65
Prepaid rebates included in Other assets	1,501			999
Total Contract Assets	$	1,566		$	1,064
Contract Liabilities
Customer discounts and price concessions included in Accrued liabilities	$	(1,799	)	$	(1,656	)
Customer rights of return included in Accrued liabilities	(464		)	(325		)
Total Contract Liabilities	$	(2,263	)	$	(1,981	)

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Revenue Recognition Disaggregated Revenue (Tables)

6 Months Ended

Jun. 30, 2019

Disaggregation of Revenue [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table presents revenues disaggregated by the major markets we serve:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Aero & Defense	$	6,988	$	6,024	$	14,511	$	11,127
Industrial	19,500		22,773		37,656		43,129
Medical	8,973		9,793		18,639		19,034
Telecom & IT	4,880		5,525		8,318		10,050
Transportation	80,343		73,906		159,184		148,211
Total	$	120,684	$	118,021	$	238,308	$	231,551

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Accounts Receivable (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Components of Accounts Receivable

The components of accounts receivable are as follows:

	As of
	June 30,			December 31,
	2019			2018
Accounts receivable, gross	$	85,002		$	79,902
Less: Allowance for doubtful accounts	(126		)	(384		)
Accounts receivable, net	$	84,876		$	79,518

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consist of the following:

	As of
	June 30,			December 31,
	2019			2018
Finished goods	$	7,247		$	10,995
Work-in-process	14,835			12,129
Raw materials	26,197			25,746
Less: Inventory reserves	(5,125		)	(5,384		)
Inventories, net	$	43,154		$	43,486

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Land	$	1,136		$	1,136
Buildings and improvements	73,735			70,522
Machinery and equipment	225,513			231,619
Less: Accumulated depreciation	(200,506		)	(203,876		)
Property, plant and equipment, net	$	99,878		$	99,401
Depreciation expense for the six months ended June 30, 2019				$	8,537
Depreciation expense for the six months ended June 30, 2018				$	7,537

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Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Net Pension Income or Postretirement Expense

Net post-retirement expense for our other post-retirement plan includes the following components:

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	1		$	—		$	1		$	1
Interest cost	43			39			85			78
Amortization of gain	(42		)	(11		)	(83		)	(23		)
Total expense, net	$	2		$	28		$	3		$	56

Net pension expense for our domestic and foreign plans included in other income (expense) in the condensed consolidated statement of earnings is as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Net pension expense	$	249	$	78	$	499	$	157

The components of net pension expense for our domestic and foreign plans include the following: 

	Domestic Pension Plans						Foreign Pension Plans
	Three Months Ended						Three Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	9		$	11
Interest cost	1,931			1,781			7			11
Expected return on plan assets(1)	(3,047		)	(3,225		)	(4		)	(6		)
Amortization of loss	1,311			1,466			42			40
Total expense, net	$	195		$	22		$	54		$	56

 

(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

	Domestic Pension Plans						Foreign Pension Plans
	Six Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	18		$	22
Interest cost	3,862			3,562			15			22
Expected return on plan assets(1)	(6,094		)	(6,450		)	(9		)	(13		)
Amortization of loss	2,623			2,932			84			82
Total expense, net	$	391		$	44		$	108		$	113

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Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of other intangible assets

Intangible assets consist of the following components:

	As of
	June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(38,787	)	$	25,536
Technology and other intangibles	44,460		(15,391		)	29,069
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(54,178	)	$	56,805
Amortization expense for the three months ended June 30, 2019			$	1,692
Amortization expense for the six months ended June 30, 2019			$	3,382

	As of
	December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer lists/relationships	$	64,323	$	(37,088	)	$	27,235
Technology and other intangibles	44,460		(13,715		)	30,745
In process research and development	2,200		—			2,200
Other intangible assets, net	$	110,983	$	(50,803	)	$	60,180
Amortization expense for the three months ended June 30, 2018			$	1,704
Amortization expense for the six months ended June 30, 2018			$	3,424

Summary of amortization expense remaining for other intangible assets

Remaining amortization expense for other intangible assets as of June 30, 2019 is as follows: 

	Amortization expense
2019	$	3,377
2020	6,624
2021	6,467
2022	6,230
2023	4,224
Thereafter	29,883
Total amortization expense	$	56,805

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Costs Associated with Exit and Restructuring Activities (Tables)

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities Disclosure [Text Block]

NOTE 8 – Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as a separate component of Operating earnings. 

Total restructuring charges is as follows:

	Three Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	911	$	1,172

 

 

	Six Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	2,995	$	2,367

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. During the third quarter of 2017, we revised the June 2016 Plan. The amendment added an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. The total restructuring liability related to severance and other one-time benefit arrangements under the June 2016 Plan was $501 at June 30, 2019, and $668 at December 31, 2018. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through June 30, 2019:

			Actual costs
	Planned		incurred through
June 2016 Plan	Costs		June 30, 2019
Workforce reduction	$	3,075	$	3,162
Building and equipment relocation	9,025		9,952
Other charges	1,300		1,875
Total restructuring charges	$	13,400	$	14,989

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

The following table displays the restructuring liability activity for all plans for the six months ended June 30, 2019: 

Restructuring liability at January 1, 2019	$	1,586
Restructuring charges	2,995
Cost paid	(2,216		)
Other activity (1)	(1,163		)
Restructuring liability at June 30, 2019	$	1,202

(1) Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.

Restructuring Reserve Activity

The following table displays the restructuring liability activity for all plans for the six months ended June 30, 2019: 

Restructuring liability at January 1, 2019	$	1,586
Restructuring charges	2,995
Cost paid	(2,216		)
Other activity (1)	(1,163		)
Restructuring liability at June 30, 2019	$	1,202

(1) Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.

June 2016 Plan

Restructuring and Related Activities Disclosure [Text Block]

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as a separate component of Operating earnings. 

Total restructuring charges is as follows:

	Three Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	911	$	1,172

 

 

	Six Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	2,995	$	2,367

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. During the third quarter of 2017, we revised the June 2016 Plan. The amendment added an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. The total restructuring liability related to severance and other one-time benefit arrangements under the June 2016 Plan was $501 at June 30, 2019, and $668 at December 31, 2018. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through June 30, 2019:

			Actual costs
	Planned		incurred through
June 2016 Plan	Costs		June 30, 2019
Workforce reduction	$	3,075	$	3,162
Building and equipment relocation	9,025		9,952
Other charges	1,300		1,875
Total restructuring charges	$	13,400	$	14,989

April 2014 Plan

Restructuring and Related Activities Disclosure [Text Block]

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Components of Accrued Liabilities

The components of accrued liabilities are as follows: 

	As of
	June 30,		December 31,
	2019		2018
Accrued product related costs	$	4,036	$	4,377
Accrued income taxes	6,315		6,914
Accrued property and other taxes	1,810		1,976
Accrued professional fees	2,474		3,350
Contract liabilities	2,263		1,981
Dividends payable	1,309		1,310
Remediation reserves	10,564		11,274
Other accrued liabilities	4,625		6,165
Total accrued liabilities	$	33,396	$	37,347

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Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Summary of Long-Term Debt

Long-term debt is comprised of the following:

	As of
	June 30,			December 31,
	2019			2018
Total credit facility	$	300,000		$	300,000
Balance outstanding	$	50,000		$	50,000
Standby letters of credit	$	1,800		$	1,940
Amount available	$	248,200		$	248,060
Weighted-average interest rate	3.54		%	3.10		%
Commitment fee percentage per annum	0.20		%	0.20		%

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of June 30, 2019, are shown in the following table:

	As of
	June 30,		December 31,
	2019		2018
Interest rate swaps reported in Other current assets	$	235	$	576
Interest rate swaps reported in Other assets	$	17	$	369
Foreign currency hedges reported in Other current assets	$	718	$	393

Derivative Instruments, Gain (Loss)

The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:

	Three Months Ended					Six Months Ended
	June 30,		June 30,			June 30,		June 30,
	2019		2018			2019		2018
Foreign Exchange Contracts:
Amounts reclassified from AOCI to earnings:
Net sales	$	—	$	21		$	—	$	(37	)
Cost of goods sold	233		32			276		140
Selling, general and administrative expense	23		(4		)	39		(5		)
Total amounts reclassified from AOCI to earnings	256		49			315		98
Loss recognized in other expense for hedge ineffectiveness	—		—			—		(1		)
Total derivative gain on foreign exchange contracts recognized in earnings	$	256	$	49		$	315	$	97
Interest Rate Swaps:
Benefit recorded in Interest expense	$	156	$	105		$	313	$	170
Total gain	$	412	$	154		$	628	$	267

The table below provides a reconciliation of the recurring financial assets (liabilities) for our derivative instruments:

				Foreign
	Interest			Currency
	Rate Swaps			Hedges
Balance at January 1, 2018	$	971		$	(742	)
Cash settlements paid (received)	421			(402		)
Total gains (losses) for the period:
Included in earnings	(421		)	484
Included in other comprehensive income	(26		)	1,053
Balance at December 31, 2018	$	945		$	393
Cash settlements received	(313		)	(403		)
Total gains (losses) for the period:
Included in earnings	313			315
Included in other comprehensive income	(693		)	413
Balance at June 30, 2019	$	252		$	718

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Accumulated Other Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2019, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2019			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,416		$	32		$	(412	)	$	1,036
Income tax (expense) benefit	(320		)	(7		)	93			(234		)
Net	1,096			25			(319		)	802
Changes in unrealized pension cost:
Gross	(131,135		)	—			1,325			(129,810		)
Income tax benefit (expense)	35,596			—			(299		)	35,297
Net	(95,539		)	—			1,026			(94,513		)
Cumulative translation adjustment:
Gross	(2,203		)	(84		)	—			(2,287		)
Income tax benefit (expense)	98			(3		)	—			95
Net	(2,105		)	(87		)	—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(96,548	)	$	(62	)	$	707		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2018, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	March 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	1,332		$	240		$	(154	)	$	1,418
Income tax (expense) benefit	(341		)	(54		)	35			(360		)
Net	991			186			(119		)	1,058
Changes in unrealized pension cost:
Gross	(128,672		)	—			1,617			(127,055		)
Income tax benefit (expense)	52,520			—			(368		)	52,152
Net	(76,152		)	—			1,249			(74,903		)
Cumulative translation adjustment:
Gross	(1,747		)	(368		)	—			(2,115		)
Income tax benefit (expense)	105			(7		)	—			98
Net	(1,642		)	(375		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(76,803	)	$	(189	)	$	1,130		$	(75,862	)

The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2019 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2018			in OCI			to Income			2019
Changes in fair market value of hedges:
Gross	$	1,316		$	348		$	(628	)	$	1,036
Income tax (expense) benefit	(298		)	(78		)	142			(234		)
Net	1,018			270			(486		)	802
Changes in unrealized pension cost:
Gross	(132,454		)	—			2,644			(129,810		)
Income tax benefit (expense)	35,893			—			(596		)	35,297
Net	(96,561		)	—			2,048			(94,513		)
Cumulative translation adjustment:
Gross	(2,291		)	4			—			(2,287		)
Income tax benefit	95			—			—			95
Net	(2,196		)	4			—			(2,192		)
Total accumulated other comprehensive (loss) income	$	(97,739	)	$	274		$	1,562		$	(95,903	)

The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2018 are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			June 30,
	2017			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	289		$	1,397		$	(268	)	$	1,418
Income tax (expense) benefit	(105		)	(315		)	60			(360		)
Net	184			1,082			(208		)	1,058
Changes in unrealized pension cost:
Gross	(130,096		)	—			3,041			(127,055		)
Income tax benefit (expense)	52,837			—			(685		)	52,152
Net	(77,259		)	—			2,356			(74,903		)
Cumulative translation adjustment:
Gross	(1,985		)	(130		)	—			(2,115		)
Income tax benefit (expense)	100			(2		)	—			98
Net	(1,885		)	(132		)	—			(2,017		)
Total accumulated other comprehensive (loss) income	$	(78,960	)	$	950		$	2,148		$	(75,862	)

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Stockholders' Equity Note [Abstract]

Treasury Stock [Text Block]

On February 7, 2019, the Board of Directors authorized a new stock repurchase program with a maximum dollar limit of $25,000 in stock repurchases, which replaced the previous program. During the six months ended June 30, 2019, 179,966 shares of common stock were repurchased for approximately $5,002, of which $567 was repurchased under the previous program and $4,435 was repurchased under the most recent board-authorized share repurchase plan. Approximately $20,565 is available for future purchases.

Summary of Share Count and Par Value Data Related to Shareholders' Equity

Share count and par value data related to shareholders’ equity are as follows:

	As of
	June 30,	December 31,
	2019	2018
Preferred Stock
Par value per share	No par value	No par value
Shares authorized	25,000,000	25,000,000
Shares outstanding	—	—
Common Stock
Par value per share	No par value	No par value
Shares authorized	75,000,000	75,000,000
Shares issued	56,923,369	56,786,849
Shares outstanding	32,707,281	32,750,727
Treasury stock
Shares held	24,216,088	24,036,122

Summary of Common Shares Outstanding

A roll-forward of common shares outstanding is as follows:

	Six Months Ended
	June 30,		June 30,
	2019		2018
Balance at the beginning of the year	32,750,727		32,938,466
Repurchases	(179,966	)	—
Restricted share issuances	136,520		148,577
Balance at the end of the period	32,707,281		33,087,043

Certain potentially dilutive restricted stock units are excluded from diluted earning per share because they are anti-dilutive. The number of awards that were anti-dilutive for the six month periods ended June 30, 2019 and June 30, 2018 were 108,894 and 72,658, respectively. There were no outstanding anti-dilutive awards impacting the three month periods ended June 30, 2019 and June 30, 2018.

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Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Equity-Based Compensation Expense

The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings related to stock-based compensation plans:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Service-based RSUs	$	488	$	563	$	1,094	$	1,018
Performance-based RSUs	1,038		643		1,586		1,153
Cash-settled RSUs	53		57		113		15
Total	$	1,579	$	1,263	$	2,793	$	2,186
Income tax benefit	357		285		631		494
Net	$	1,222	$	978	$	2,162	$	1,692

Schedule of Unrecognized Equity-Based Compensation Expense

The following table summarizes the unrecognized compensation expense related to non-vested RSUs by type and the weighted-average period in which the expense is to be recognized:

	Unrecognized
	Compensation		Weighted-
	Expense at		Average
	June 30, 2019		Period
Service-based RSUs	$	2,168	1.44
Performance-based RSUs	4,039		1.85
Total	$	6,207	1.71

Summary of Status of Equity-Based Compensation Plans

The following table summarizes the status of these plans as of June 30, 2019:

	2018 Plan	2014 Plan	2009 Plan	2004 Plan	Directors' Plan
Awards originally available	2,500,000	1,500,000	3,400,000	6,500,000	N/A
Performance-based options outstanding	—	250,000	—	—	—
Maximum potential RSU and cash settled awards outstanding	243,943	419,793	92,600	35,952	5,522
Maximum potential awards outstanding	243,943	669,793	92,600	35,952	5,522
RSUs and cash settled awards vested and released	—	—	—	—	—
Awards available for grant	2,256,057	—	—	—	—

Summary of Service-Based Restricted Stock Units

The following table summarizes the service-based RSU activity as of and for the six months ended June 30, 2019: 

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	355,590		$	17.91
Granted	72,591		28.79
Vested and released	(65,623	)	19.91
Forfeited	(15,918	)	26.95
Outstanding at June 30, 2019	346,640		$	19.39
Releasable at June 30, 2019	207,140		$	13.79

Schedule of Components of Performance-Based RSU's

The following table summarizes the performance and market-based RSU activity as of and for the six months ended June 30, 2019:

	Units		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	267,792		$	21.44
Granted	82,103		30.98
Attained by performance	60,779		13.54
Released	(160,889	)	14.34
Forfeited	(26,156	)	23.81
Outstanding at June 30, 2019	223,629		$	27.70
Releasable at June 30, 2019	—		$	—

The following table summarizes each grant of performance awards outstanding at June 30, 2019.

Description	Grant Date	Vesting Year	Vesting Dependency	Target Units Outstanding	Maximum Number of Units to be Granted
2017 - 2019 Performance RSUs	February 9, 2017	2019	35% RTSR, 35% sales growth, 30% operating cash flow	71,188	142,376
2017 - 2019 Performance RSUs	February 9, 2017	2018 - 2020	Operating Income	13,556	13,556
2018 - 2020 Performance RSUs	February 8, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	34,478	68,956
2018 - 2020 Performance RSUs	February 16, 2018	2020	35% RTSR, 35% sales growth, 30% operating cash flow	31,820	63,640
2019 - 2021 Performance RSUs	February 7, 2019	2021	35% RTSR, 35% sales growth, 30% operating cash flow	65,642	131,285
2019 Supplemental Performance RSUs	February 7, 2019	2021	Succession Planning Targets	6,945	13,890

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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Summary of Financial Liability Measured at Fair Value on a Recurring Basis

The table below summarizes our financial assets that are measured at fair value on a recurring basis at June 30, 2019:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	June 30,		Instruments		Inputs		Inputs
	2019		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	252	$	—	$	252	$	—
Foreign currency hedges	$	718	$	—	$	718	$	—

The table below summarizes the financial assets (liabilities) that are measured at fair value on a recurring basis as of December 31, 2018:

			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	December 31,		Instruments		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	945	$	—	$	945	$	—
Foreign currency hedges	$	393	$	—	$	393	$	—

Reconciliation of Recurring Financial Liability Related to Interest Rate Swaps

The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:

	Three Months Ended					Six Months Ended
	June 30,		June 30,			June 30,		June 30,
	2019		2018			2019		2018
Foreign Exchange Contracts:
Amounts reclassified from AOCI to earnings:
Net sales	$	—	$	21		$	—	$	(37	)
Cost of goods sold	233		32			276		140
Selling, general and administrative expense	23		(4		)	39		(5		)
Total amounts reclassified from AOCI to earnings	256		49			315		98
Loss recognized in other expense for hedge ineffectiveness	—		—			—		(1		)
Total derivative gain on foreign exchange contracts recognized in earnings	$	256	$	49		$	315	$	97
Interest Rate Swaps:
Benefit recorded in Interest expense	$	156	$	105		$	313	$	170
Total gain	$	412	$	154		$	628	$	267

The table below provides a reconciliation of the recurring financial assets (liabilities) for our derivative instruments:

				Foreign
	Interest			Currency
	Rate Swaps			Hedges
Balance at January 1, 2018	$	971		$	(742	)
Cash settlements paid (received)	421			(402		)
Total gains (losses) for the period:
Included in earnings	(421		)	484
Included in other comprehensive income	(26		)	1,053
Balance at December 31, 2018	$	945		$	393
Cash settlements received	(313		)	(403		)
Total gains (losses) for the period:
Included in earnings	313			315
Included in other comprehensive income	(693		)	413
Balance at June 30, 2019	$	252		$	718

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Reconciliation of Effective Income Taxes Rate

The effective tax rates for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2019		2018		2019		2018
Effective tax rate	25.1	%	37.7	%	22.7	%	30.2	%

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Leases Lease Cost (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lease, Cost [Table Text Block]

Total lease expense for the three and six months ended June 30, 2019 is as follows:

	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	1,075	$	2,069
Short-term lease cost	176		249
Total lease cost	$	1,251	$	2,318

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Leases Schedule of Future Minimum Rental Payments for Operating Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Remaining maturity of our existing lease liabilities as of June 30, 2019 is as follows:

	Operating Leases (1)
2019	$	2,014
2020	4,106
2021	4,021
2022	3,819
2023	3,573
Thereafter	20,084
Total	$	37,617
Less: interest	(10,839		)
Present value of lease liabilities	$	26,778

⁽¹⁾ Operating lease payments include $4,615 of payments related to options to extend lease terms that are reasonably expected to be exercised.

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Basis of Presentation (Details) - USD ($) $ in Thousands		6 Months Ended
	Jan. 01, 2019	Jun. 30, 2019	Dec. 31, 2018
ASC 842 Implementation [Abstract]
Lease, Practical Expedients, Package [true false]	true
Operating Lease, Liability	$ 24,792	$ 26,778
Separation of Lease and Nonlease Components [Policy Text Block]		We have also elected the practical expedient to not separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of 12 months or less off of the balance sheet.The operating lease assets and liabilities are adjusted to include the impact of any lease incentives and non-lease components. We have elected not to separate lease and non-lease components, which include taxes and common area maintenance in some of our leases.
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	0
Operating Lease, Right-of-Use Asset	$ 22,066	$ 23,846	$ 0

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Revenue Recognition Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Contract Assets and Liabilities [Abstract]
Contract with Customer, Liability, Revenue Recognized	$ 37	$ 106
Contract with Customer, Asset, Net, Current	65	65	$ 65
Contract with Customer, Asset, Net, Noncurrent	1,501	1,501	999
Contract with Customer, Asset, Net	1,566	1,566	1,064
Customer Contract Liability Discounts	(1,799)	(1,799)	(1,656)
Customer Contract Liability Rights of Return	(464)	(464)	(325)
Contract with Customer, Liability, Current	$ (2,263)	$ (2,263)	$ (1,981)

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Revenue Recognition Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenues	$ 120,684	$ 118,021	$ 238,308	$ 231,551
Aerospace and Defense [Member]
Disaggregation of Revenue [Line Items]
Revenues	6,988	6,024	14,511	11,127
Industrial [Member]
Disaggregation of Revenue [Line Items]
Revenues	19,500	22,773	37,656	43,129
Medical [Member]
Disaggregation of Revenue [Line Items]
Revenues	8,973	9,793	18,639	19,034
Telecommunications & IT [Member]
Disaggregation of Revenue [Line Items]
Revenues	4,880	5,525	8,318	10,050
Transportation [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 80,343	$ 73,906	$ 159,184	$ 148,211

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Accounts Receivable - Components of Accounts Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Accounts Receivable
Accounts receivable, gross	$ 85,002	$ 79,902
Less: Allowance for doubtful accounts	(126)	(384)
Accounts receivable, net	$ 84,876	$ 79,518

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Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventories
Finished goods	$ 7,247	$ 10,995
Work-in-process	14,835	12,129
Raw materials	26,197	25,746
Less: Inventory reserves	(5,125)	(5,384)
Inventories, net	$ 43,154	$ 43,486

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Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property, plant and equipment
Less: Accumulated depreciation	$ (200,506)		$ (203,876)
Property, plant and equipment, net	99,878		99,401
Depreciation	8,537	$ 7,537
Land
Property, plant and equipment
Property, plant and equipment gross	1,136		1,136
Buildings and improvements
Property, plant and equipment
Property, plant and equipment gross	73,735		70,522
Machinery and equipment
Property, plant and equipment
Property, plant and equipment gross	$ 225,513		$ 231,619

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Retirement Plans - Net Pension Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Pension Plans
Defined Benefit Plan Disclosure
Net pension expense	$ 249	$ 78	$ 499	$ 157

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Retirement Plans - Net Pension Income Domestic and Foreign (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Pension Plans
Net pension expense (income)
(Income) expense, net	$ 249	$ 78	$ 499	$ 157
Foreign Plan [Member]
Net pension expense (income)
Service cost	9	11	18	22
Interest cost	7	11	15	22
Defined Benefit Plan, Expected Return on Plan Assets, Net of Expenses	(4)	(6)	(9)	(13)
Amortization of loss	42	40	84	82
(Income) expense, net	54	56	108	113
Domestic Plan [Member]
Net pension expense (income)
Service cost			0	0
Interest cost	1,931	1,781	3,862	3,562
Defined Benefit Plan, Expected Return on Plan Assets, Net of Expenses	(3,047)	(3,225)	(6,094)	(6,450)
Amortization of loss	1,311	1,466	2,623	2,932
(Income) expense, net	$ 195	$ 22	$ 391	$ 44

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Retirement Plans - Other Postretirement Benefit Plan (Details) - Other Postretirement Benefits Plan [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Defined Benefit Plan Disclosure
Service cost	$ 1	$ 0	$ 1	$ 1
Interest cost	43	39	85	78
Amortization of gain	(42)	(11)	(83)	(23)
(Income) expense, net	$ 2	$ 28	$ 3	$ 56

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Other Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Other Intangible Assets
Gross Carrying Amount	$ 110,983		$ 110,983		$ 110,983
Accumulated Amortization	(54,178)		(54,178)		(50,803)
Total amortization expense	56,805		56,805		60,180
Amortization expense	1,692	$ 1,704	3,382	$ 3,424
Customer lists/relationships
Other Intangible Assets
Gross Carrying Amount	64,323		64,323		64,323
Accumulated Amortization	(38,787)		(38,787)		(37,088)
Total amortization expense	25,536		25,536		27,235
Technology and other intangibles
Other Intangible Assets
Gross Carrying Amount	44,460		44,460		44,460
Accumulated Amortization	(15,391)		(15,391)		(13,715)
Total amortization expense	29,069		29,069		30,745
In process research and development
Other Intangible Assets
Gross Carrying Amount					2,200
Total amortization expense	2,200		2,200		$ 2,200
Indefinite-lived Intangible Assets (Excluding Goodwill)	$ 2,200		$ 2,200

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Other Intangible Assets - Summary of Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule
2016	$ 3,377
2017	6,624
2018	6,467
2019	6,230
2020	4,224
Thereafter	29,883
Total amortization expense	$ 56,805	$ 60,180

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Costs Associated with Exit and Restructuring Activities - Summary (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating Earnings | April 2014 Plan and June 2016 Plan [Member]
Total restructuring, impairment and restructuring related charges
Restructuring and impairment charges	$ 911	$ 1,172	$ 2,995	$ 2,367

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Costs Associated with Exit and Restructuring Activities Costs Associated with Exit and Restructuring Activities - June 2016 Plan (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Jun. 03, 2016
Restructuring Cost and Reserve [Line Items]
Document Period End Date	Jun. 30, 2019
June 2016 Plan
Restructuring Cost and Reserve [Line Items]
Actual costs incurred	$ 9,952
Total restructuring, impairment and restructuring related charges
Restructuring Reserve	501	$ 668
June 2016 Plan | Operating Earnings
Restructuring Cost and Reserve [Line Items]
Planned Costs			$ 13,400
Actual costs incurred	14,989
Equipment relocation | June 2016 Plan
Restructuring Cost and Reserve [Line Items]
Planned Costs			9,025
Other charges | June 2016 Plan
Restructuring Cost and Reserve [Line Items]
Planned Costs			1,300
Other charges | June 2016 Plan | Operating Earnings
Restructuring Cost and Reserve [Line Items]
Actual costs incurred	1,875
Workforce reduction | June 2016 Plan
Restructuring Cost and Reserve [Line Items]
Planned Costs			$ 3,075
Workforce reduction | June 2016 Plan | Operating Earnings
Restructuring Cost and Reserve [Line Items]
Actual costs incurred	$ 3,162

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Costs Associated with Exit and Restructuring Activities - April 2014 Plan (Details) - USD ($)
$ in Thousands

6 Months Ended

Jun. 30, 2019

Dec. 31, 2018

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Activities Disclosure [Text Block]

NOTE 8 – Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as a separate component of Operating earnings. 

Total restructuring charges is as follows:

	Three Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	911	$	1,172

 

 

	Six Months Ended
	June 30, 2019		June 30, 2018
Restructuring charges	$	2,995	$	2,367

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. During the third quarter of 2017, we revised the June 2016 Plan. The amendment added an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. The total restructuring liability related to severance and other one-time benefit arrangements under the June 2016 Plan was $501 at June 30, 2019, and $668 at December 31, 2018. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through June 30, 2019:

			Actual costs
	Planned		incurred through
June 2016 Plan	Costs		June 30, 2019
Workforce reduction	$	3,075	$	3,162
Building and equipment relocation	9,025		9,952
Other charges	1,300		1,875
Total restructuring charges	$	13,400	$	14,989

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

The following table displays the restructuring liability activity for all plans for the six months ended June 30, 2019: 

Restructuring liability at January 1, 2019	$	1,586
Restructuring charges	2,995
Cost paid	(2,216		)
Other activity (1)	(1,163		)
Restructuring liability at June 30, 2019	$	1,202

(1) Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.

April 2014 Plan

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Activities Disclosure [Text Block]

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. The remaining restructuring liability related to the April 2014 Plan was $701 at June 30, 2019, and $918 at December 31, 2018.

Restructuring Reserve

$ 701

$ 918

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Costs Associated with Exit and Restructuring Activities - Restructuring Reserve Activity (Details) - April 2014 Plan and June 2016 Plan [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Restructuring reserve activity
Restructuring liability at beginning	$ 1,586
Restructuring and restructuring-related charges	2,995
Cost paid	(2,216)
Restructuring liability at ending	1,202
Restructuring Reserve, Translation and Other Adjustment	$ (1,163)

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Accrued Liabilities - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Accrued Liabilities
Accrued product related costs	$ 4,036	$ 4,377
Accrued income taxes	6,315	6,914
Accrued property and other taxes	1,810	1,976
Accrued professional fees	2,474	3,350
Contract with Customer, Liability	2,263	1,981
Dividends payable	1,309	1,310
Remediation reserves	10,564	11,274	$ 17,067
Other accrued liabilities	4,625	6,165
Total accrued liabilities	$ 33,396	$ 37,347

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Contingencies Remediation Liability (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Loss Contingencies [Line Items]
Accrued Environmental Loss Contingencies, Current	$ 10,564	$ 11,274	$ 17,067
Accrual for Environmental Loss Contingencies, Charges to Expense for New Losses	276	1,182
Accrual for Environmental Loss Contingencies Payments, Net of Reimbursements	(979)	(6,967)
Accrual for Environmental Loss Contingencies, Foreign Currency Translation Gain (Loss)	$ (7)	$ (8)

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Debt - Long-Term Debt (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Feb. 12, 2019	May 23, 2016
Long-term debt
Total credit facility	$ 300,000		$ 300,000
Amount available	248,200		248,200		$ 248,060
Long-term Line of Credit, Noncurrent	50,000		50,000		50,000
Letters of Credit Outstanding, Amount	1,800		1,800		1,940
Amortization of Debt Issuance Costs	41	$ 46	77	$ 93
Line of Credit | Revolving Credit Facility Due 2024
Long-term debt
Total credit facility					$ 300,000	$ 300,000	$ 300,000
Line of Credit Facility Contingent Increase to Maximum Borrowing Capacity						$ 150,000
Long-term Line of Credit, Noncurrent	$ 50,000		$ 50,000
Weighted-average interest rate	3.54%		3.54%		3.10%
Commitment fee percentage per annum			0.20%		0.20%
Line of Credit | Revolving Credit Facility [Member]
Long-term debt
Long-term Line of Credit, Noncurrent					$ 50,000

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Debt - Narratives (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 12, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	May 23, 2016
Line of Credit Facility
Line of credit maximum borrowing amount		$ 300,000		$ 300,000
Document Period End Date				Jun. 30, 2019
Debt amortization expense		41	$ 46	$ 77	$ 93
Long-term Line of Credit, Noncurrent		50,000		$ 50,000		$ 50,000
Line of Credit | Revolving Credit Facility Due 2024
Line of Credit Facility
Debt instrument, term	5 years
Line of credit maximum borrowing amount	$ 300,000					$ 300,000	$ 300,000
Line of credit facility contingent increase to maximum borrowing capacity	150,000
Commitment fee percentage per annum				0.20%		0.20%
Long-term Line of Credit, Noncurrent		$ 50,000		$ 50,000
Line of Credit | Revolving Credit Facility Due 2024 Swingline Sublimit
Line of Credit Facility
Line of credit maximum borrowing amount	15,000
Line of Credit | Revolving Credit Facility Due 2024 Letter Of Credit Sublimit
Line of Credit Facility
Line of credit maximum borrowing amount	$ 10,000
Minimum | Line of Credit | Revolving Credit Facility Due 2024
Line of Credit Facility
Commitment fee percentage per annum	0.20%
Maximum | Line of Credit | Revolving Credit Facility Due 2024
Line of Credit Facility
Commitment fee percentage per annum	0.30%

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Derivative Financial Instruments - Narratives (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Sep. 21, 2016
Derivative
Unrealized Gain (Loss) on Foreign Currency Derivatives, Net, before Tax	$ 784	$ 59
Foreign exchange derivative
Derivative
Derivative Asset	718
Derivative Liability	0
Cash Flow Hedge | Designated As Hedging | Foreign currency forward contracts
Derivative
Foreign currency cash flow hedge gain to be reclassified during next 12 months	784
Derivative, notional amount	8,625
Derivative Asset	718
Derivative Liability			$ 393	$ (742)
Cash Flow Hedge | Designated As Hedging | Interest rate swap
Derivative
Derivative, notional amount					$ 50,000
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months	235
Derivative Asset	$ 252		$ 945	$ 971

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Derivative Financial Instruments - Fair Value of Derivative Instruments (Details) - Cash Flow Hedge - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest rate swap | Other Current Assets [Member]
Derivative Liability
Derivative Asset	$ 235	$ 576
Interest rate swap | Other Noncurrent Assets [Member]
Derivative Liability
Derivative Asset	17	369
Foreign currency hedges | Other Current Assets [Member]
Derivative Liability
Derivative Asset	718	393
Designated as Hedging Instrument [Member] | Interest rate swap
Derivative Liability
Derivative Asset	252	945	$ 971
Designated as Hedging Instrument [Member] | Foreign currency hedges
Derivatives, Fair Value [Line Items]
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months	784
Derivative Liability
Derivative Liability		$ 393	$ (742)
Derivative Asset	$ 718

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Derivative Financial Instruments - Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net	$ 412	$ 154	$ 628	$ 267
Foreign exchange derivative | Designated As Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	256	49	315	98
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net	256	49	315	97
Foreign exchange derivative | Net sales | Designated As Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	0	21
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net			0	(37)
Foreign exchange derivative | Cost of goods sold | Designated As Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	233	32
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net			276	140
Foreign exchange derivative | Selling, general and administrative expenses | Designated As Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	23	(4)
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net			39	(5)
Foreign exchange derivative | Other income and expenses | Designated As Hedging
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net			0	(1)
Derivative, Net Hedge Ineffectiveness Gain (Loss)	0	0
Interest rate swap | Interest expense | Designated As Hedging
Derivative, Gain (Loss) on Derivative, Net
Derivative, Gain (Loss) on Derivative, Net	$ 156	$ 105	$ 313	$ 170

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Accumulated Other Comprehensive (Loss) Income - Summary of Components of Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Foreign currency transaction loss
Foreign currency transaction gain (loss)	$ 829	$ 2,194	$ 355	$ (918)
AOCI Attributable to Parent, Net of Tax
Total accumulated other comprehensive (loss) income, beginning of period			(97,739)
Total accumulated other comprehensive (loss) income, end of period	(95,903)		(95,903)
Accumulated other comprehensive (loss) income
AOCI Attributable to Parent, Net of Tax
Total accumulated other comprehensive (loss) income, beginning of period	(96,548)	(76,803)	(97,739)	(78,960)
Gain (Loss) recognized in OCI, Net	(62)	(189)	274	950
Gain (Loss) reclassified from AOCI to income, Net	707	1,130	1,562	2,148
Total accumulated other comprehensive (loss) income, end of period	(95,903)	(75,862)	(95,903)	(75,862)
Changes in fair market value of hedges
Changes in AOCI, Gross
Gross, beginning of the period	1,416	1,332	1,316	289
Other Comprehensive Income (Loss), before Reclassifications, before Tax	32	240	348	1,397
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	(412)	(154)	(628)	(268)
Gross, ending balance	1,036	1,418	1,036	1,418
Changes in AOCI, Income tax (benefit)
Income tax (benefit), beginning of period	(320)	(341)	(298)	(105)
Income tax (benefit), Gain (Loss) recognized in OCI	(7)	(54)	(78)	(315)
Income tax (benefit), Gain (Loss) reclassified from AOCI to income	93	35	142	60
Income tax (benefit), ending of period	(234)	(360)	(234)	(360)
AOCI Attributable to Parent, Net of Tax
Total accumulated other comprehensive (loss) income, beginning of period	1,096	991	1,018	184
Gain (Loss) recognized in OCI, Net	25	186	270	1,082
Gain (Loss) reclassified from AOCI to income, Net	(319)	(119)	(486)	(208)
Total accumulated other comprehensive (loss) income, end of period	802	1,058	802	1,058
Changes in unrealized pension cost
Changes in AOCI, Gross
Gross, beginning of the period	(131,135)	(128,672)	(132,454)	(130,096)
Other Comprehensive Income (Loss), before Reclassifications, before Tax	0	0	0	0
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	1,325	1,617	2,644	3,041
Gross, ending balance	(129,810)	(127,055)	(129,810)	(127,055)
Changes in AOCI, Income tax (benefit)
Income tax (benefit), beginning of period	35,596	52,520	35,893	52,837
Income tax (benefit), Gain (Loss) recognized in OCI	0	0	0	0
Income tax (benefit), Gain (Loss) reclassified from AOCI to income	(299)	(368)	(596)	(685)
Income tax (benefit), ending of period	35,297	52,152	35,297	52,152
AOCI Attributable to Parent, Net of Tax
Total accumulated other comprehensive (loss) income, beginning of period	(95,539)	(76,152)	(96,561)	(77,259)
Gain (Loss) recognized in OCI, Net	0	0	0	0
Gain (Loss) reclassified from AOCI to income, Net	1,026	1,249	2,048	2,356
Total accumulated other comprehensive (loss) income, end of period	(94,513)	(74,903)	(94,513)	(74,903)
Cumulative translation adjustment
Changes in AOCI, Gross
Gross, beginning of the period	(2,203)	(1,747)	(2,291)	(1,985)
Other Comprehensive Income (Loss), before Reclassifications, before Tax	(84)	(368)	4	(130)
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	0	0	0
Gross, ending balance	(2,287)	(2,115)	(2,287)	(2,115)
Changes in AOCI, Income tax (benefit)
Income tax (benefit), beginning of period	98	105	95	100
Income tax (benefit), Gain (Loss) recognized in OCI	(3)	(7)	0	(2)
Income tax (benefit), Gain (Loss) reclassified from AOCI to income	0	0	0	0
Income tax (benefit), ending of period	95	98	95	98
AOCI Attributable to Parent, Net of Tax
Total accumulated other comprehensive (loss) income, beginning of period	(2,105)	(1,642)	(2,196)	(1,885)
Gain (Loss) recognized in OCI, Net	(87)	(375)	4	(132)
Gain (Loss) reclassified from AOCI to income, Net	0	0	0	0
Total accumulated other comprehensive (loss) income, end of period	$ (2,192)	$ (2,017)	$ (2,192)	$ (2,017)

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Shareholders' Equity - Summary of Share Count and Par Value Data Related to Shareholders' Equity (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Preferred Stock
Preferred stock, par value per share	$ 0		$ 0		$ 0
Preferred stock, shares authorized	25,000,000		25,000,000		25,000,000
Preferred stock, shares outstanding	0		0		0
Common Stock
Common stock, par value per share	$ 0		$ 0		$ 0
Common stock, shares authorized	75,000,000		75,000,000		75,000,000
Common stock, shares issued	56,923,369		56,923,369		56,786,849
Common stock, shares outstanding	32,707,281	33,087,043	32,707,281	33,087,043	32,750,727	32,938,466
Treasury stock
Treasury stock, shares held	24,216,088		24,216,088		24,036,122
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0	108,894	72,658

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Shareholders' Equity - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Feb. 07, 2019
Stockholders' Equity Note [Abstract]
Treasury Shares Authorized to be Purchased					$ 25,000
Common stock repurchased, shares			179,966	0
Common stock repurchased, value			$ 5,002
Shares are available for future issuances	$ 20,565		$ 20,565
Antidilutive securities excluded from computation of earnings per share (shares)	0	0	108,894	72,658

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Shareholders' Equity - Summary of Common Shares Outstanding (Details) - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Roll forward of common shares outstanding
Balance at the beginning of the year	32,750,727	32,938,466
Restricted share issuances	136,520	148,577
Balance at the end of the period	32,707,281	33,087,043

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Equity-Based Compensation - Summary of Equity-Based Compensation Expense (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) plan $ / shares shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) plan $ / shares shares	Jun. 30, 2018 USD ($)	Dec. 31, 2018 $ / shares shares
Share-based Compensation
Number of Equity-Based Compensation Plans | plan	5		5
Restricted stock units			$ 2,793	$ 2,186
Allocated Share-based Compensation Expense, Net of Tax	$ 1,222	$ 978	2,162	1,692
Service-Based RSUs
Share-based Compensation
Restricted stock units	488	563	1,094	1,018
Performance-Based RSUs
Share-based Compensation
Restricted stock units	$ 1,038	643	$ 1,586	1,153
Cash Settled Awards
Share-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | shares	17,468		17,468		17,248
Restricted stock units	$ 53		$ 113	15
Restricted Stock Expense (Benefit)		57
RSUs
Share-based Compensation
Restricted stock units	1,579	1,263	2,793	2,186
Income tax benefit	$ 357	$ 285	$ 631	$ 494
Officers, key employees, and non-employee directors | Service-Based RSUs
Share-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | shares			15,918
Releasable - weighted average fair value | $ / shares	$ 13.79		$ 13.79
Granted - shares | shares			72,591
Forfeited - weighted average fair value | $ / shares			$ 26.95
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Released Number | shares			65,623
Granted - weighted average fair value | $ / shares			$ 28.79
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares	$ 19.39		19.39		$ 17.91
Converted - weighted average fair value | $ / shares			$ 19.91
Releasable - shares | shares	207,140		207,140
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | shares	346,640		346,640		355,590

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Equity-Based Compensation - Summary of Equity-Based Compensation Expense related to Non-Vested RSUs (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) shares
Service-Based RSUs
Share-based Compensation
Unrecognized compensation cost	$ 2,168
Weighted average period	1 year 5 months 9 days
Performance-Based RSUs
Share-based Compensation
Unrecognized compensation cost	$ 4,039
Weighted average period	1 year 8 months 67 days
RSUs
Share-based Compensation
Unrecognized compensation cost	$ 6,207
Weighted average period	1 year 7 months 45 days
Two Thousand Fourteen Plan [Member]
Share-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | shares	0

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Equity-Based Compensation - Summary of Status of Equity-Based Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Summary of Status of Equity-Based Compensation Plans
Other accrued liabilities	$ 4,625	$ 6,165
2018 Plan
Summary of Status of Equity-Based Compensation Plans
Awards originally available	2,500,000
Shares outstanding	243,943
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Released Number	0
Awards available for grant	2,256,057
2014 Plan
Summary of Status of Equity-Based Compensation Plans
Awards originally available	1,500,000
Awards available for grant	0
2009 Plan
Summary of Status of Equity-Based Compensation Plans
Awards originally available	3,400,000
2004 Plan
Summary of Status of Equity-Based Compensation Plans
Awards originally available	6,500,000
RSUs | 2014 Plan
Summary of Status of Equity-Based Compensation Plans
Shares outstanding	419,793
RSUs | 2009 Plan
Summary of Status of Equity-Based Compensation Plans
Shares outstanding	92,600
RSUs | 2004 Plan
Summary of Status of Equity-Based Compensation Plans
Shares outstanding	35,952
RSUs | Directors' Plan
Summary of Status of Equity-Based Compensation Plans
Shares outstanding	5,522
Performance-Based Stock Options | 2018 Plan
Summary of Status of Equity-Based Compensation Plans
Stock options outstanding	0
Performance-Based Stock Options | 2014 Plan
Summary of Status of Equity-Based Compensation Plans
Awards originally available	350,000
Shares outstanding	250,000
Stock options outstanding	250,000
Cash Settled Awards
Summary of Status of Equity-Based Compensation Plans
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	17,468	17,248
Other accrued liabilities	$ 211	$ 300
Officers, key employees, and non-employee directors | Service-Based RSUs
Share-based Compensation
Releasable - weighted average fair value	$ 13.79
Summary of Status of Equity-Based Compensation Plans
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	346,640	355,590

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Equity-Based Compensation - Performance-Based Stock Options (Details) - USD ($)		6 Months Ended
	May 26, 2015	Jun. 30, 2019
Performance and Market-based Restricted Stock Units
Share-based Compensation
Attained by performance - weighted average fair value		$ 13.54
2014 Plan
Share-based Compensation
Awards granted (in shares)		1,500,000
2014 Plan | Performance-Based Stock Options
Share-based Compensation
Awards granted (in shares)		350,000
Grant date fair value (in dollars per share)	$ 18.37
Option term (in years)	5 years
Revenue threshold for award	$ 600,000

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Equity-Based Compensation - Summary of Service-Based Restricted Stock Units (Details) - Officers, key employees, and non-employee directors - Service-Based RSUs	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Units
Outstanding at beginning of year - shares | shares	355,590
Granted - shares | shares	72,591
Released - shares | shares	(65,623)
Forfeited - shares | shares	(15,918)
Outstanding at end of year - shares | shares	346,640
Releasable - shares | shares	207,140
Weighted Average Grant Date Fair Value
Beginning of year - weighted average fair value | $ / shares	$ 17.91
Granted - weighted average fair value | $ / shares	28.79
Converted - weighted average fair value | $ / shares	19.91
Forfeited - weighted average fair value | $ / shares	26.95
End of year - weighted average fair value | $ / shares	19.39
Releasable - weighted average fair value | $ / shares	$ 13.79

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Equity-Based Compensation - Schedule of Performance-Based RSUs (Details) - shares	Jun. 30, 2019	Feb. 07, 2019	Feb. 16, 2018	Feb. 08, 2018	Feb. 09, 2017
Performance and Market-based Restricted Stock Units
Share-based Compensation
Maximum potential units outstanding at June 30, 2016 - shares	0
Performance-Based RSUs
Share-based Compensation
Target Units Outstanding		65,642	31,820	34,478	71,188
Shared Based Compensation Maximum Potential Awards		131,285	63,640	68,956	142,376
Performance Shares [Member]
Share-based Compensation
Target Units Outstanding					13,556
Shared Based Compensation Maximum Potential Awards					13,556

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Equity-Based Compensation Equity-Based Compensation - Performance and Market Based RSUs (Details) - $ / shares	6 Months Ended
	Jun. 30, 2019	Feb. 07, 2019
Performance Goal [Member]
Units
Target Units Outstanding		6,945
Shared Based Compensation Maximum Potential Awards		13,890
Performance and Market-based Restricted Stock Units
Units
Outstanding at beginning of year - shares	267,792
Granted - shares	82,103
Attained by performance - shares	60,779
Vested and released - shares	(160,889)
Forfeited - shares	(26,156)
Outstanding at end of year - shares	223,629
Maximum potential units outstanding at June 30, 2016 - shares	0
Weighted Average Grant Date Fair Value
Beginning of year - weighted average fair value	$ 21.44
Granted - weighted average fair value	30.98
Attained by performance - weighted average fair value	13.54
Vested and released - weighted average fair value	14.34
Forfeited - weighted average fair value	23.81
End of year - weighted average fair value	27.70
Maximum potential units outstanding at June 30, 2016 - weighted average fair value	$ 0

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Fair Value Measurements - Summary of Financial Liability Measured at Fair Value on a Recurring Basis (Details) - Designated As Hedging - Cash Flow Hedge - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest rate swap
Recurring financial liability that was measured at carrying value
Realized gain (loss) on cash flow hedge	$ 313	$ (421)
Derivative Asset	252	945	$ 971
Foreign currency hedges
Recurring financial liability that was measured at carrying value
Derivative liability		(393)	$ 742
Realized gain (loss) on cash flow hedge	315	484
Derivative Asset	718
Recurring | Significant Other Observable Inputs (Level 2) | Interest rate swap
Recurring financial liability that was measured at carrying value
Derivative liability	(252)	(945)
Recurring | Significant Other Observable Inputs (Level 2) | Foreign currency hedges
Recurring financial liability that was measured at carrying value
Derivative liability		(393)
Derivative Asset	718
Recurring | Carrying Value | Interest rate swap
Recurring financial liability that was measured at carrying value
Derivative liability	(252)	(945)
Recurring | Carrying Value | Foreign currency hedges
Recurring financial liability that was measured at carrying value
Derivative liability		$ (393)
Derivative Asset	$ 718

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Fair Value Measurements - Reconciliation of Recurring Financial Liability Related to Interest Rate Swaps (Details) - Designated As Hedging - Cash Flow Hedge - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Interest rate swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Cost of Hedge Net of Cash Received	$ (313)	$ 421
Reconciliation of the recurring financial derivatives
Beginning balance, derivative asset	945	971
Total gains/(losses) for the period:
Included in earnings	313	(421)
Included in other comprehensive income	(693)	(26)
Ending balance, derivative asset	252	945
Foreign currency hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Cost of Hedge Net of Cash Received	(403)	(402)
Reconciliation of the recurring financial derivatives
Beginning balance, derivative liability	(393)	742
Total gains/(losses) for the period:
Included in earnings	315	484
Included in other comprehensive income	413	1,053
Ending balance, derivative liability		$ (393)
Ending balance, derivative asset	$ 718

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Income Taxes - Schedule of Effective Income Tax Rate (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate	25.10%	37.70%	22.70%	30.20%

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Income Taxes - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Taxes [Line Items]
Document Period End Date			Jun. 30, 2019
Reconciliation of effective income taxes rate
Effective income tax rate	25.10%	37.70%	22.70%	30.20%

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Leases Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating Lease, Expense	$ 1,075	$ 2,069
Short-term Lease Payments	176	249
Operating Leases, Rent Expense, Net	$ 1,251	$ 2,318

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Leases Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Leases [Abstract]
Lessee, Operating Lease Payment on Extension Option	$ 4,615
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months	2,014
Lessee, Operating Lease, Liability, Payments, Due Year Two	4,106
Lessee, Operating Lease, Liability, Payments, Due Year Three	4,021
Lessee, Operating Lease, Liability, Payments, Due Year Four	3,819
Lessee, Operating Lease, Liability, Payments, Due Year Five	3,573
Lessee, Operating Lease, Liability, Payments, Due after Year Five	20,084
Lessee, Operating Lease, Liability, Payments, Due	37,617
Lessee, Operating Lease, Discount Value	$ (10,839)

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Leases Operating Lease Disclosure (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	9 years 8 months 15 days
Operating Lease, Liability, Current	$ 2,076		$ 0
Operating Lease, Liability, Noncurrent	24,702		$ 0
Operating Lease, Liability	$ 26,778	$ 24,792
Operating Lease, Weighted Average Discount Rate, Percent	6.91%
Operating Lease, Payments, Use	$ 1,862
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 2,961
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Lessee, Operating Lease, Existence of Option to Terminate [true false]	true

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Business Combinations - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Business Acquisition
Cost of goods sold	$ 79,480	$ 76,208	$ 156,490	$ 151,305

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Business Combinations - Acquisition (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Business Acquisition
Goodwill	$ 71,057	$ 71,057