UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For The Quarterly Period Ended
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:
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(IRS Employer Identification Number) |
|
|
|
|
||
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
|
Trading Symbol(s) |
|
Name of Each Exchange on Which Registered |
|
|
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
☒ |
|
Accelerated filer |
|
☐ |
|
|
|
|
|
|||
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
|
|
|
|
|
|
|
|
Emerging growth company |
|
|
|
|
|
|
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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of April 21, 2023:
CTS CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
|
|
Page |
|||
|
|
|
|||
|
|
||||
|
|
|
|
|
|
|
Item 1. |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets As of March 31, 2023 (Unaudited) and December 31, 2022 |
|
5 |
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements ‑ (Unaudited) |
|
9 |
|
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
25 |
|
|
|
|
|
|
|
Item 3. |
|
|
29 |
|
|
|
|
|
|
|
|
Item 4. |
|
|
30 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
Item 1. |
|
|
30 |
|
|
|
|
|
|
|
|
Item 1A. |
|
|
30 |
|
|
|
|
|
|
|
|
Item 2. |
|
|
30 |
|
|
|
|
|
|
|
|
Item 6. |
|
|
32 |
|
|
|
|
|
|
|
|
33 |
||||
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 |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Net sales |
|
$ |
|
|
$ |
|
||
Cost of goods sold |
|
|
|
|
|
|
||
Gross margin |
|
|
|
|
|
|
||
Selling, general and administrative expenses |
|
|
|
|
|
|
||
Research and development expenses |
|
|
|
|
|
|
||
Restructuring charges |
|
|
|
|
|
|
||
Operating earnings |
|
|
|
|
|
|
||
Other income (expense): |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
Interest income |
|
|
|
|
|
|
||
Other income, net |
|
|
|
|
|
|
||
Total other income (expense), net |
|
|
|
|
|
( |
) |
|
Earnings before income taxes |
|
|
|
|
|
|
||
Income tax expense |
|
|
|
|
|
|
||
Net earnings |
|
$ |
|
|
$ |
|
||
Earnings per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
|
|
$ |
|
||
Diluted |
|
$ |
|
|
$ |
|
||
Basic weighted – average common shares outstanding: |
|
|
|
|
|
|
||
Effect of dilutive securities |
|
|
|
|
|
|
||
Diluted weighted – average common shares outstanding: |
|
|
|
|
|
|
||
Cash dividends declared per share |
|
$ |
|
|
$ |
|
||
See notes to unaudited condensed consolidated financial statements.
3
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS ‑ UNAUDITED
(In thousands of dollars)
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Net earnings |
|
$ |
|
|
$ |
|
||
Other comprehensive earnings (loss): |
|
|
|
|
|
|
||
Changes in fair market value of derivatives, net of tax |
|
|
|
|
|
|
||
Changes in unrealized pension cost, net of tax |
|
|
( |
) |
|
|
|
|
Cumulative translation adjustment, net of tax |
|
|
|
|
|
( |
) |
|
Other comprehensive earnings |
|
$ |
|
|
$ |
|
||
Comprehensive earnings |
|
$ |
|
|
$ |
|
||
See notes to unaudited condensed consolidated financial statements.
4
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
|
|
(Unaudited) |
|
|
|
|
||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Inventories, net |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
|
|
|
|
||
Operating lease assets, net |
|
|
|
|
|
|
||
Other Assets |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Other intangible assets, net |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total other assets |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Operating lease obligations |
|
|
|
|
|
|
||
Accrued payroll and benefits |
|
|
|
|
|
|
||
Accrued expenses and other liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Long-term debt |
|
|
|
|
|
|
||
Long-term operating lease obligations |
|
|
|
|
|
|
||
Long-term pension obligations |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Other long-term obligations |
|
|
|
|
|
|
||
Total Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Shareholders’ Equity |
|
|
|
|
|
|
||
Common stock |
|
|
|
|
|
|
||
Additional contributed capital |
|
|
|
|
|
|
||
Retained earnings |
|
|
|
|
|
|
||
Accumulated other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
Total shareholders’ equity before treasury stock |
|
|
|
|
|
|
||
Treasury stock |
|
|
( |
) |
|
|
( |
) |
Total shareholders’ equity |
|
|
|
|
|
|
||
Total Liabilities and Shareholders’ Equity |
|
$ |
|
|
$ |
|
||
See notes to unaudited condensed consolidated financial statements.
5
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ‑ UNAUDITED
(In thousands of dollars)
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net earnings |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net earnings to net cash provided by operating |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Pension and other post-retirement plan expense |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
Gain (loss) on foreign currency hedges, net of cash |
|
|
|
|
|
( |
) |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Operating lease assets |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Accrued payroll and benefits |
|
|
( |
) |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
|
|
|
|
Accrued expenses and other liabilities |
|
|
( |
) |
|
|
|
|
Pension and other post-retirement plans |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Payments for acquisitions, net of cash acquired |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Payments of long-term debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from borrowings of long-term debt |
|
|
|
|
|
|
||
Purchases of treasury stock |
|
|
( |
) |
|
|
( |
) |
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Payments of contingent consideration |
|
|
— |
|
|
|
( |
) |
Taxes paid on behalf of equity award participants |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for income taxes, net |
|
$ |
|
|
$ |
|
||
Non-cash financing and investing activities: |
|
|
|
|
|
|
||
Capital expenditures incurred but not paid |
|
$ |
|
|
$ |
|
||
See notes to unaudited condensed consolidated financial statements.
6
CTS CORPORATION AND SUBSIDIARIES
(in thousands of dollars)
The following summarizes the changes in total equity for the three months ended March 31, 2023:
|
|
Common |
|
|
Additional |
|
|
Retained |
|
|
Accumulated |
|
|
Treasury |
|
|
Total |
|
||||||
Balances at December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Changes in fair market value of derivatives, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Changes in unrealized pension cost, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Cumulative translation adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Cash dividends of $ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Acquired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issued shares on vesting of restricted stock units |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Stock compensation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balances at March 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
See notes to unaudited condensed consolidated financial statements.
7
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 months ended March 31, 2022:
|
|
Common |
|
|
Additional |
|
|
Retained |
|
|
Accumulated |
|
|
Treasury |
|
|
Total |
|
||||||
Balances at December 31, 2021 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Changes in fair market value of derivatives, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Changes in unrealized pension cost, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Cumulative translation adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Cash dividends of $ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Acquired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issued shares on vesting of restricted stock units |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Stock compensation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balances at March 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
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)
March 31, 2023
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, 2022.
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.
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
NOTE 2 – Revenue Recognition
The core principle of Accounting Standard Codification (“ASC”) Topic 606 Revenue from Contracts with Customers 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:
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 or shipment 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 March 31, 2023 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.
9
Disaggregated Revenue
The following table presents revenues disaggregated by the major markets we serve:
|
|
Three months ended |
|
|||||
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
||
Transportation |
|
$ |
|
|
$ |
|
||
Industrial |
|
|
|
|
|
|
||
Medical |
|
|
|
|
|
|
||
Aerospace & Defense |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
NOTE 3 – Business Acquisitions
TEWA Temperature Sensors SP. Zo.o. Acquisition
On February 28, 2022, we acquired
The final purchase price of $
|
|
Fair Values at |
|
|
Accounts Receivable |
|
$ |
|
|
Inventory |
|
|
|
|
Other current assets |
|
|
|
|
Property, plant and equipment |
|
|
|
|
Other assets |
|
|
|
|
Goodwill |
|
|
|
|
Intangible assets |
|
|
|
|
Fair value of assets acquired |
|
|
|
|
Less fair value of liabilities acquired |
|
|
( |
) |
Purchase price |
|
$ |
|
|
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes.
The Company recorded a $
The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|
|
Carrying |
|
|
Weighted |
|
||
Customer lists/relationships |
|
$ |
|
|
|
|
||
Technology and other intangibles |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
|
|
||
Ferroperm Piezoceramics A/S Acquisition
On June 30, 2022, we acquired
10
and aerospace applications. Ferroperm has complementary capabilities with our existing medical diagnostics and imaging product lines. The acquisition supports our end market diversification strategy and expands our presence in European end markets.
The final purchase price of $
|
|
Fair Values at |
|
|
Accounts Receivable |
|
$ |
|
|
Inventory |
|
|
|
|
Other current assets |
|
|
|
|
Property, plant and equipment |
|
|
|
|
Other assets |
|
|
|
|
Goodwill |
|
|
|
|
Intangible assets |
|
|
|
|
Fair value of assets acquired |
|
|
|
|
Less fair value of liabilities acquired |
|
|
( |
) |
Purchase price |
|
$ |
|
|
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes.
The Company recorded a $
The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|
|
Carrying |
|
|
Weighted |
|
||
Customer lists/relationships |
|
$ |
|
|
|
|
||
Technology and other intangibles |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
|
|
||
Maglab AG Acquisition
On February 6, 2023, we acquired
The purchase price, which includes estimated changes in working capital, of $
The following tables summarize the purchase price, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition of Maglab:
|
|
Consideration Paid |
|
|
Cash paid, net of cash acquired of $ |
|
$ |
|
|
Contingent consideration |
|
|
|
|
Purchase price |
|
$ |
|
|
11
|
|
Fair Values at |
|
|
Accounts Receivable |
|
$ |
|
|
Inventory |
|
|
|
|
Other Current Assets |
|
|
|
|
Property, plant and equipment |
|
|
|
|
Goodwill |
|
|
|
|
Intangible assets |
|
|
|
|
Fair value of assets acquired |
|
|
|
|
Less fair value of liabilities acquired |
|
|
( |
) |
Purchase price |
|
$ |
|
|
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes.
Intangible assets acquired have been assigned a provisional value of $
All contingent consideration is payable in cash and is based on success factors related to the integration process as well as upon the achievement of annual revenue and customer order targets through the fiscal year ending December 31, 2025. The Company recorded $
NOTE 4 – Accounts Receivable, net
The components of accounts receivable, net are as follows:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Accounts receivable, gross |
|
$ |
|
|
$ |
|
||
Less: Allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
NOTE 5 – Inventories, net
Inventories, net consists of the following:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Finished goods |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Raw materials |
|
|
|
|
|
|
||
Less: Inventory reserves |
|
|
( |
) |
|
|
( |
) |
Inventories, net |
|
$ |
|
|
$ |
|
||
12
NOTE 6 – Property, Plant and Equipment, net
Property, plant and equipment, net is comprised of the following:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Land and land improvements |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense for the three months ended March 31, 2023 and March 31, 2022 was $
NOTE 7 – Retirement Plans
Pension Plans
Net pension expense for our domestic and foreign plans included in other expense, net in the Condensed Consolidated Statements of Earnings is as follows:
|
|
Three months ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Net pension expense |
|
$ |
|
|
$ |
|
||
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 |
|
||||||||||
|
|
March 31, |
|
|
March 31, |
|
|
March 31, |
|
|
March 31, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected return on plan assets(1) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Amortization of loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total expense, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other Post-retirement Benefit Plan
Net post-retirement expense for our other post-retirement plan includes the following components:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Service cost |
|
$ |
|
|
$ |
|
||
Interest cost |
|
|
|
|
|
|
||
Amortization of gain |
|
|
( |
) |
|
|
|
|
Total (income) expense, net |
|
$ |
( |
) |
|
$ |
|
|
NOTE 8 – Goodwill and Other Intangible Assets
Goodwill
Changes in the net carrying amount of goodwill were as follows:
13
|
|
Total |
|
|
Goodwill as of December 31, 2022 |
|
$ |
|
|
Changes from acquisition purchase accounting |
|
|
|
|
Foreign exchange impact |
|
|
( |
) |
Goodwill as of March 31, 2023 |
|
$ |
|
|
Other Intangible Assets
Other intangible assets, net consist of the following components:
|
|
As of |
|
|||||||||
|
|
March 31, 2023 |
|
|||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net Amount |
|
|||
Customer lists/relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Technology and other intangibles |
|
|
|
|
|
( |
) |
|
|
|
||
Other intangible assets, net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Amortization expense for the three months ended March 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|||
The changes in the gross carrying amounts of intangible assets are primarily due to business acquisition and purchase accounting activity in the quarter as discussed in Note 3.
|
|
As of |
|
|||||||||
|
|
December 31, 2022 |
|
|||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net Amount |
|
|||
Customer lists/relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Technology and other intangibles |
|
|
|
|
|
( |
) |
|
|
|
||
Other intangible assets, net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Amortization expense for the three months ended March 31, 2022 |
|
|
|
|
$ |
|
|
|
|
|||
Remaining amortization expense for other intangible assets as of March 31, 2023 is as follows:
|
|
Amortization |
|
|
2023 |
|
$ |
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
Thereafter |
|
|
|
|
Total amortization expense |
|
$ |
|
|
NOTE 9 – Costs Associated with Exit and Restructuring Activities
Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statements of Earnings.
Total restructuring charges are as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
||
Restructuring charges |
|
$ |
|
|
$ |
|
||
14
September 2020 Plan
In September 2020, we initiated a restructuring plan focused on optimizing our manufacturing footprint and improving operational efficiency by better utilizing our systems capabilities (the "September 2020 Plan"). This plan includes transitioning certain administrative functions to a shared service center, realignment of manufacturing locations, and certain other efficiency improvement actions. The restructuring cost of the September 2020 Plan is estimated to be in the range of $
Other Restructuring Activities
From time to time, we may incur charges that are not considered part of a formal plan. During the three months ended March 31, 2023, we incurred restructuring charges of $
During the first quarter of 2023 we announced the shutdown of our Juarez manufacturing facility. As a part of this activity, operations from the Juarez plant will be consolidated into our expanded Matamoros facility. We expect the completion of these activities to occur in 2024. The total restructuring cost of the activities associated with the closure and consolidation is estimated to be in the range of $
The following table displays the restructuring liability activity included in accrued expenses and other liabilities for all plans for the three months ended March 31, 2023:
Restructuring liability at January 1, 2023 |
|
$ |
|
|
Restructuring charges |
|
|
|
|
Costs paid |
|
|
( |
) |
Restructuring liability at March 31, 2023 |
|
$ |
|
NOTE 10 – Accrued Expenses and Other Liabilities
The components of accrued expenses and other liabilities are as follows:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Accrued product related costs |
|
$ |
|
|
$ |
|
||
Accrued income taxes |
|
|
|
|
|
|
||
Accrued property and other taxes |
|
|
|
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
||
Accrued customer related liabilities |
|
|
|
|
|
|
||
Dividends payable |
|
|
|
|
|
|
||
Remediation reserves |
|
|
|
|
|
|
||
Derivative liabilities |
|
|
|
|
|
|
||
Other accrued liabilities |
|
|
|
|
|
|
||
Total accrued expenses and other liabilities |
|
$ |
|
|
$ |
|
||
15
NOTE 11 – 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 (”EPA”), 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.
A roll-forward of remediation reserves included in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets is comprised of the following:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Balance at beginning of period |
|
$ |
|
|
$ |
|
||
Remediation expense |
|
|
|
|
|
|
||
Net remediation payments |
|
|
( |
) |
|
|
( |
) |
Other activity(1) |
|
|
|
|
|
( |
) |
|
Balance at end of the period |
|
$ |
|
|
$ |
|
||
The Company operates under and in accordance with a federal consent decree, dated March 7, 2017, with the EPA for the CTS of Asheville, Inc. Superfund Site (“Ashveville Site”). On February 8, 2023, the Company received a letter from the EPA (the “EPA Letter”) seeking reimbursement of its past response costs and interest thereon relating to any release or threatened release of hazardous substances at the Asheville Site in the aggregate amount of $
Unrelated to the environmental claims described above, certain other legal claims are pending against us with respect to matters arising out of the ordinary conduct of our business.
We provide product warranties when we sell our products and accrue for estimated liabilities at the time of sale. Warranty estimates are forecasts based on the best available information and historical claims experience. We accrue for specific warranty claims if we believe that the facts of a specific claim make it probable that a liability in excess of our historical experience has been or will be incurred, and provide disclosures for specific claims whenever it is reasonably possible that a material loss may be incurred which cannot be estimated.
We cannot provide assurance that the ultimate disposition of environmental, legal, and product warranty claims will not materially exceed the amount of our accrued losses and adversely impact 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.
16
NOTE 12 - Debt
Long-term debt is comprised of the following:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Total credit facility |
|
$ |
|
|
$ |
|
||
Balance outstanding |
|
|
|
|
|
|
||
Standby letters of credit |
|
|
|
|
|
|
||
Amount available, subject to covenant restrictions |
|
$ |
|
|
$ |
|
||
Weighted-average interest rate |
|
|
% |
|
|
% |
||
On December 15, 2021, we entered into a second amended and restated five-year credit agreement with a group of banks (the “Revolving Credit Facility”) to (i) increase the total credit facility to $
Borrowings in U.S. dollars under the Revolving Credit Facility bear interest, at a per annum rate equal to the applicable Term SOFR rate (but not less than
The Revolving Credit Facility includes a swing line sublimit of $
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, which approximates the effective interest method. Amortization expense for the three months ended March 31, 2023 and 2022 were $
Note 13 - 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 as well as interest rate and cross-currency 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.
17
The effective portion of derivative gains and losses are recorded in accumulated other comprehensive loss 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 to other income (expense), net.
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.
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 March 31, 2023, we had a net unrealized gain of $
Interest Rate Swaps
We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest to a fixed rate. As of March 31, 2023, we have agreements to fix interest rates on $
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 $
Cross-Currency Swap
The Company has operations and investments in various international locations and is subject to risks associated with changing foreign exchange rates. In order to hedge the Krone-based purchase price of the Ferroperm acquisition, the Company entered into a cross currency interest rate swap agreement on June 27, 2022 that synthetically swapped $
Accordingly, any gains or losses on this derivative instrument are included in the foreign currency translation component of other comprehensive (loss) income until the net investment is sold, diluted or liquidated. At March 31, 2023 we had a net unrealized loss of $
18
The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2023, are shown in the following table:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Interest rate swaps reported in |
|
$ |
|
|
$ |
|
||
Interest rate swaps reported in |
|
$ |
|
|
$ |
|
||
|
$ |
( |
) |
|
$ |
( |
) |
|
|
$ |
|
|
$ |
|
|||
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 $
The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Foreign Exchange Contracts: |
|
|
|
|
|
|
||
Amounts reclassified from AOCI to earnings: |
|
|
|
|
|
|
||
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|||
Total net gain reclassified from AOCI to earnings |
|
|
|
|
|
|
||
Total derivative gain on foreign exchange contracts recognized in earnings |
|
$ |
|
|
$ |
|
||
Interest Rate Swaps: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Cross-Currency Swap: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Total net gains on derivatives |
|
$ |
|
|
$ |
|
||
NOTE 14 – Accumulated Other Comprehensive Loss
Shareholders’ equity includes certain items classified as accumulated other comprehensive loss (“AOCI”) in the Condensed Consolidated Balance Sheets, including:
19
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 ended March 31, 2023 and March 31, 2022 were $
The components of accumulated other comprehensive loss for the three months ended March 31, 2023, are as follows:
|
|
|
|
|
|
|
|
(Gain) Loss |
|
|
|
|
||||
|
|
As of |
|
|
Gain (Loss) |
|
|
Reclassified |
|
|
As of |
|
||||
|
|
December 31, |
|
|
Recognized |
|
|
from AOCI |
|
|
March 31, |
|
||||
|
|
2022 |
|
|
in OCI |
|
|
to Earnings |
|
|
2023 |
|
||||
Changes in fair market value of derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Income tax benefit (expense) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Changes in unrealized pension cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Cumulative translation adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Income tax benefit (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total accumulated other comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The components of accumulated other comprehensive loss for the three months ended March 31, 2022, are as follows:
|
|
|
|
|
|
|
|
(Gain) Loss |
|
|
|
|
||||
|
|
As of |
|
|
Gain (Loss) |
|
|
Reclassified |
|
|
As of |
|
||||
|
|
December 31, |
|
|
Recognized |
|
|
from AOCI |
|
|
March 31, |
|
||||
|
|
2021 |
|
|
in OCI |
|
|
to Earnings |
|
|
2022 |
|
||||
Changes in fair market value of derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Income tax benefit (expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Changes in unrealized pension cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Income tax benefit (expense) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Cumulative translation adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Income tax benefit (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Total accumulated other comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
20
NOTE 15 – Shareholders’ Equity
Share count and par value data related to shareholders’ equity are as follows:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Preferred Stock |
|
|
|
|
|
|
||
Par value per share |
|
par value |
|
|
par value |
|
||
Shares authorized |
|
|
|
|
|
|
||
Shares outstanding |
|
|
|
|
|
|
||
Common Stock |
|
|
|
|
|
|
||
Par value per share |
|
par value |
|
|
par value |
|
||
Shares authorized |
|
|
|
|
|
|
||
Shares issued |
|
|
|
|
|
|
||
Shares outstanding |
|
|
|
|
|
|
||
Treasury stock |
|
|
|
|
|
|
||
Shares held |
|
|
|
|
|
|
||
On February 9, 2023, the Board of Directors approved a new share repurchase program that authorizes the Company to repurchase up to $
A roll-forward of common shares outstanding is as follows:
|
|
Three months ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Balance at the beginning of the year |
|
|
|
|
|
|
||
Repurchases |
|
|
( |
) |
|
|
( |
) |
Restricted share issuances |
|
|
|
|
|
|
||
Balance at the end of the period |
|
|
|
|
|
|
||
Certain potentially dilutive restricted stock units are excluded from diluted earnings per share because they are anti-dilutive. The number of outstanding awards that were anti-dilutive for the three months ended March 31, 2023 and March 31, 2022 were
NOTE 16- Stock-Based Compensation
At March 31, 2023, we had
These plans allow or allowed (as applicable) for grants of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance shares, performance units, and other stock awards subject to the terms of the specific plans under which the awards are granted.
21
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 |
|
|
|||||
|
|
March 31, |
|
|
March 31, |
|
|
||
|
|
2023 |
|
|
2022 |
|
|
||
Service-based RSUs |
|
$ |
|
|
$ |
|
|
||
Performance-based RSUs |
|
|
|
|
|
|
|
||
Cash-settled RSUs |
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
||
Income tax benefit |
|
|
|
|
|
|
|
||
Net expense |
|
$ |
|
|
$ |
|
|
||
The following table summarizes the unrecognized compensation expense related to unvested RSUs by type and the weighted-average period in which the expense is to be recognized:
|
|
Unrecognized |
|
|
|
|
||
|
|
Compensation |
|
|
Weighted- |
|
||
|
|
Expense at |
|
|
Average |
|
||
|
|
March 31, 2023 |
|
|
Period (years) |
|
||
Service-based RSUs |
|
$ |
|
|
|
|
||
Performance-based RSUs |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
|
|
||
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 March 31, 2023:
|
|
2018 Plan |
|
|
2014 Plan |
|
|
2009 Plan |
|
|
2004 Plan |
|
|
Directors' |
|
|||||
Awards originally available |
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|||||
Maximum potential awards outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RSUs and cash-settled awards vested and released |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Awards available for grant |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Service-Based Restricted Stock Units
The following table summarizes the service-based RSU activity for the three months ended March 31, 2023:
|
|
Units |
|
|
Weighted |
|
||
Outstanding at December 31, 2022 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested and released |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding at March 31, 2023 |
|
|
|
|
$ |
|
||
Releasable at March 31, 2023 |
|
|
|
|
$ |
|
||
22
Performance-Based Restricted Stock Units
The following table summarizes the performance-based RSU activity for the three months ended March 31, 2023:
|
|
Units |
|
|
Weighted |
|
||
Outstanding at December 31, 2022 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Attained by performance |
|
|
|
|
|
|
||
Released |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding at March 31, 2023 |
|
|
|
|
$ |
|
||
Releasable at March 31, 2023 |
|
|
|
|
$ |
|
||
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 March 31, 2023 and December 31, 2022, we had
NOTE 17 — Fair Value Measurements
The table below summarizes our financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2023:
|
|
Asset (Liability) Carrying |
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Interest rate swaps |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Foreign currency hedges |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Cross-currency swap |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Qualified replacement plan assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Contingent consideration |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022:
|
|
Asset (Liability) Carrying |
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Interest rate swaps |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Foreign currency hedges |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Cross-currency swap |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Qualified replacement plan assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a 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. The Company entered into a cross-currency swap agreement in order to manage its exposure to
23
changes in interest rates related to foreign debt. These derivative financial instruments are measured at fair value on a recurring basis. 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 fair value of the contingent consideration requires significant judgment. The Company's fair value estimates used in the contingent consideration valuation are considered Level 3 fair value measurements. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and timing of events and activities that are expected to take place. Refer to Note 3 for further discussion on contingent consideration.
A roll-forward of the contingent consideration is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Contingent |
|
|
Balance at December 31, 2022 |
|
$ |
|
|
Acquisition date fair value of contingent consideration |
|
|
3,564 |
|
Balance at March 31, 2023 |
|
$ |
|
|
As of March 31, 2023, approximately $
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 its 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.
The qualified replacement plan assets consist of investment funds maintained for future contributions to the Company’s U.S. 401(k) program. The investments are Level 1 marketable securities and are recorded in Other Assets on our Condensed Consolidated Balance Sheets.
NOTE 18 — Income Taxes
The effective tax rates for the three months ended March 31, 2023 and March 31, 2022 are as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Effective tax rate |
|
|
% |
|
|
% |
||
The decrease in effective income tax is primarily attributed to tax benefits recorded upon vesting of restricted stock units. The first quarter 2023 effective income tax rate was lower than the U.S. statutory federal tax rate for the same reason as noted above. The first quarter 2022 effective tax rate was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes and state taxes.
24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
(in thousands of dollars, 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, 2022.
Overview
CTS Corporation ("CTS", "we", "our" or "us") is a leading designer and manufacturer of products that Sense, Connect and Move. Our vision is to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. These devices are categorized by their ability to Sense, Connect or Move. Sense products provide vital inputs to electronic systems. Connect products allow systems to function in synchronization with other systems. Move products ensure required movements are effectively and accurately executed. We are committed to achieving our vision by continuing to invest in the development of products, technologies and talent within these categories.
We manufacture sensors, actuators, and connectivity components in North America, Europe, and Asia. CTS provides engineered products to OEMs and tier one suppliers in the aerospace and defense, industrial, medical, and transportation markets.
There is an increasing proliferation of sensing and motion applications within various markets we serve. In addition, the increasing connectivity of various devices to the internet results in greater demand for communication bandwidth and data storage, increasing the need for our connectivity products. Our success is dependent on the ability to execute our strategy to support these trends. We are subject to a number of challenges including, without limitation, periodic market softness, competition from other suppliers, changes in technology, and the ability to add new customers, launch new products or penetrate new markets. Many of these, and other risks and uncertainties relating to the Company and our business, are discussed in further detail in Item 1A. of our Annual Report on Form 10-K and other filings made with the SEC.
On February 6, 2023, we acquired 100% of the outstanding shares of Maglab AG ("Maglab") for $4,164 in cash subject to additional earnout payments based on future performance. Maglab has deep expertise in magnetic system design and current measurement solutions for use in e-mobility, industrial automation, and renewable energy applications. Maglab's domain expertise coupled with CTS’ commercial, technical and operational capabilities position us to advance our status as a recognized innovator in electric motor sensing and controls markets.
Supply Chain Uncertainties
The COVID-19 pandemic and subsequent supply chain uncertainties have had a significant negative impact on the global economy in 2022 and 2021. These events disrupted the financial markets, negatively impacted the global supply chain and increased the cost of materials and operations, particularly within the global automotive industry. While supply chain conditions have eased, material shortages could still impact our or our customers’ production schedules. With customers changing orders on short notice, we run the risk of carrying excess inventory in these situations. These developments are outside of our control, remain uncertain, and cannot be predicted. We continue to actively monitor the ongoing impacts of the supply chain uncertainties and will seek to mitigate and minimize their impact on our business, when possible.
25
Results of Operations: First Quarter 2023 versus First Quarter 2022
The following table highlights changes in significant components of the Unaudited Condensed Consolidated Statements of Earnings for the quarters ended March 31, 2023 and March 31, 2022:
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
Percent |
|
|
Percentage of Net Sales – |
|
|
Percentage of Net Sales – |
|
|||||
Net sales |
|
$ |
145,994 |
|
|
$ |
147,695 |
|
|
|
(1.2 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
94,342 |
|
|
|
93,355 |
|
|
|
1.1 |
|
|
|
64.6 |
|
|
|
63.2 |
|
Gross margin |
|
|
51,652 |
|
|
|
54,340 |
|
|
|
(4.9 |
) |
|
|
35.4 |
|
|
|
36.8 |
|
Selling, general and administrative expenses |
|
|
21,979 |
|
|
|
21,788 |
|
|
|
0.9 |
|
|
|
15.1 |
|
|
|
14.8 |
|
Research and development expenses |
|
|
6,586 |
|
|
|
6,194 |
|
|
|
6.3 |
|
|
|
4.5 |
|
|
|
4.2 |
|
Restructuring charges |
|
|
912 |
|
|
|
312 |
|
|
|
192.3 |
|
|
|
0.6 |
|
|
|
0.2 |
|
Total operating expenses |
|
|
29,477 |
|
|
|
28,294 |
|
|
|
4.2 |
|
|
|
20.2 |
|
|
|
19.2 |
|
Operating earnings |
|
|
22,175 |
|
|
|
26,046 |
|
|
|
(14.9 |
) |
|
|
15.2 |
|
|
|
17.6 |
|
Total other expense, net |
|
|
534 |
|
|
|
(300 |
) |
|
|
(278.0 |
) |
|
|
0.4 |
|
|
|
(0.2 |
) |
Earnings before income taxes |
|
|
22,709 |
|
|
|
25,746 |
|
|
|
(11.8 |
) |
|
|
15.6 |
|
|
|
17.4 |
|
Income tax expense |
|
|
4,365 |
|
|
|
5,507 |
|
|
|
(20.7 |
) |
|
|
3.0 |
|
|
|
3.7 |
|
Net earnings |
|
$ |
18,344 |
|
|
$ |
20,239 |
|
|
|
(9.4 |
) |
|
|
12.6 |
% |
|
|
13.7 |
% |
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net earnings per share |
|
$ |
0.58 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
|||
Net sales were $145,994 in the first quarter of 2023, a decrease of $(1,701) or (1.2)% from the first quarter of 2022. Net sales to non-transportation markets increased $3,123 or 4.6% while net sales to transportation markets decreased $(4,824) or (6.1)%. Changes in foreign exchange rates decreased net sales by $2,321 year-over-year primarily due to the U.S. Dollar appreciating compared to the Renminbi and Euro.
Gross margin was $51,652 in the first quarter of 2023, a decrease of $(2,688), or (4.9)% from the first quarter of 2022. The year over year decrease in gross margin was driven by increased material and freight costs and unfavorable impacts from foreign exchange rates of $1,778 year-over-year. We continue to experience inflation in material costs as well as interruptions in some areas of the supply chain.
Selling, general and administrative ("SG&A") expenses of $21,979 or 15.1% of net sales in the first quarter of 2023 were consistent with SG&A expenses of $21,788 or 14.8% of net sales in the first quarter of 2022.
Research and development (“R&D”) expenses were $6,586 or 4.5% of net sales in the first quarter of 2023 compared to $6,194 or 4.2% of net sales in the first quarter of 2022, in line with our commitment to continue investing in research and product development to drive organic growth.
Restructuring charges were $912 or 0.6% of net sales in the first quarter of 2023 compared to $312 or 0.2% of net sales in the first quarter of 2022. We continue to implement certain restructuring actions to improve our cost structure.
Other income and expense items are summarized in the following table:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Interest expense |
|
$ |
(694 |
) |
|
$ |
(546 |
) |
Interest income |
|
|
1,063 |
|
|
|
180 |
|
Other expense, net |
|
|
165 |
|
|
|
66 |
|
Total other expense, net |
|
$ |
534 |
|
|
$ |
(300 |
) |
26
The reduction in total other expense, net was primarily driven by higher interest income from our short-term investments classified as cash equivalents in line with market rate increases seen recently.
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Effective tax rate |
|
|
19.2 |
% |
|
|
21.4 |
% |
Our effective income tax rate was 19.2% and 21.4% in the first quarters of 2023 and 2022, respectively. The decrease in effective income tax rate is primarily due to tax benefits recorded upon vesting of restricted stock units.
Liquidity and Capital Resources
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 (as defined below). 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, investments, and debt service requirements for at least the next twelve months and for the foreseeable future thereafter. However, we may choose to pursue additional equity and debt financing to provide additional liquidity or to fund acquisitions.
Cash and cash equivalents were $143,537 at March 31, 2023, and $156,910 at December 31, 2022, of which $98,249 and $90,244, respectively, were held outside the United States. Total long-term debt was $80,261 as of March 31, 2023 and $83,670 as of December 31, 2022.
Cash Flow Overview
Cash Flows from Operating Activities
Net cash provided by operating activities was $11,186 during the three months ended March 31, 2023. Components of net cash provided by operating activities included net earnings of $18,344, depreciation and amortization expense of $6,918, other net non-cash items of $7,821, and a net cash outflow from changes in assets and liabilities of $15,649 primarily driven by 2022’s annual bonus payout and an increase in accounts receivables.
Cash Flows from Investing Activities
Net cash used in investing activities for the three months ended March 31, 2023 was $7,896, driven by the acquisition payments for the Maglab acquisition and finalization of the TEWA Temperature Sensors SP. Zo.o. (“TEWA”) net working capital adjustment of $3,356 and capital expenditures of $4,540. See Note 3 "Business Acquisitions" in the Notes to the Condensed Consolidated Financial Statements.
Cash Flows from Financing Activities
Net cash used in financing activities for the three months ended March 31, 2023 was $(16,625). The net cash outflow was the result of treasury stock purchases of $8,802, dividends paid of $1,272, taxes paid on behalf of equity award participants of $3,142, and net cash used in the paydown of long-term debt of $3,409.
27
Capital Resources
Revolving Credit Facility
Long‑term debt is comprised of the following:
|
|
As of |
|
|||||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Total credit facility |
|
$ |
400,000 |
|
|
$ |
400,000 |
|
Balance outstanding |
|
|
80,261 |
|
|
|
83,670 |
|
Standby letters of credit |
|
|
1,640 |
|
|
|
1,640 |
|
Amount available, subject to covenant restrictions |
|
$ |
318,099 |
|
|
$ |
314,690 |
|
On December 15, 2021, we entered into a second amended and restated five-year credit agreement with a group of banks (the “Revolving Credit Facility”) to (i) increase the total credit facility availability to $400,000, which may be increased by $200,000 at the request of the Company, subject to the administrative agent's approval, (ii) extend the maturity of the Revolving Credit Facility from February 12, 2024 to December 15, 2026, (iii) replace LIBOR with SOFR as the primary reference rate used to calculate interest on the loans under the Revolving Credit Facility, (iv) increase available sublimits for letters of credit, and swingline loans as well as providing for additional alternative currency borrowing capabilities, and (v) modify the financial and non-financial covenants to provide the Company additional flexibility. This new unsecured credit facility replaced the prior $300,000 unsecured credit facility, which would have expired on February 12, 2024.
Borrowings in U.S. Dollars under the Revolving Credit Facility bear interest, at a per annum rate equal to the applicable Term SOFR rate (but not less than 0.0%), plus the Term SOFR adjustment, and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. Similarly, borrowings of alternative currencies under the Revolving Credit Facility bear interest equal to a defined risk-free reference rate, plus the applicable risk-free rate adjustment and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio.
The Revolving Credit Facility includes a swing-line sublimit of $20,000 and a letter of credit sublimit of $20,000. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.175% to 0.25% based on our net leverage ratio. We were in compliance with all debt covenants at March 31, 2023.
Acquisitions
On February 6, 2023, we acquired 100% of the outstanding shares of Maglab for $4,164 in cash subject to additional earnout payments based on future performance. The acquisition was funded from cash on hand.
Critical Accounting Policies and Estimates
The Company’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of the condensed consolidated financial statements, the Company uses estimates and makes judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. The assumptions, estimates, and judgments are based on historical experience, current trends, and other factors the Company believes are relevant at the time it prepares the Condensed Consolidated Financial Statements.
The critical accounting policies and estimates are consistent with those discussed in Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements and the MD&A section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. During and as of the three months ended March 31, 2023, there were no significant changes in the application of critical accounting policies or estimates.
28
Significant Customers
Our net sales to customers representing at least 10% of total net sales is as follows:
|
|
Three months ended |
|
|
|||||
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
||
Cummins Inc. |
|
|
14.1 |
% |
|
|
15.7 |
% |
|
Toyota Motor Corporation |
|
|
10.7 |
% |
|
|
11.5 |
% |
|
No other customer accounted for 10% or more of total net sales during these periods. We continue to focus on broadening our customer base to diversify our non-transportation end market exposure.
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 CTS’ 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: supply chain disruptions; changes in the economy generally, including inflationary and/or recessionary conditions, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions, including our acquisitions of TEWA Temperature Sensors, Ferroperm Piezoceramics and maglab, A.G.; the results of actions to reposition CTS’ business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises (including the ultimate impact of the COVID-19 pandemic on CTS’ business, results of operations or financial condition), natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS’ intellectual property; pricing pressures and demand for CTS’ products; and risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact U.S./China relations and the conflict between Russia and Ukraine may have on our business, results of operations and financial condition). Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’ most recent Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS’ forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
See Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of our Annual Report on Form 10-K for the year ended December 31, 2022. During the three months ended March 31, 2023, there have been no material changes in our exposure to market risk.
29
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within CTS have been detected.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting for the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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, we believe we have established adequate accruals pursuant to U.S. generally accepted accounting principles for our expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based on presently available information. However, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on our business, results of operations, financial condition, or cash flows.
See Note 11 "Commitments and Contingencies" in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no significant changes to our risk factors from those contained in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity
On February 9, 2023, the Board approved a new share repurchase program that authorizes the Company to repurchase up to $50 million of its common stock. The repurchase program has no set expiration date and supersedes and replaces the repurchase program approved by the Board in May 2021.
30
|
|
|
|
|
|
|
|
Total Number |
|
|
Maximum Dollar |
|
||||
|
|
|
|
|
|
|
|
of Shares |
|
|
Value of Shares |
|
||||
|
|
|
|
|
|
|
|
Purchased as |
|
|
That May Yet Be |
|
||||
|
|
Total Number |
|
|
|
|
|
Part of Publicly |
|
|
Purchased Under |
|
||||
|
|
of Shares |
|
|
Average Price |
|
|
Announced |
|
|
Publicly Announced |
|
||||
|
|
Purchased |
|
|
Paid per Share |
|
|
Programs |
|
|
Plans or Programs |
|
||||
January 1, 2023 through January 31, 2023 |
|
|
72,401 |
|
|
$ |
43.57 |
|
|
|
72,401 |
|
|
$ |
16,612 |
|
February 1, 2023 through February 28, 2023 |
|
|
57,000 |
|
|
$ |
45.21 |
|
|
|
57,000 |
|
|
$ |
48,513 |
|
March 1, 2023 through March 31, 2023 |
|
|
68,870 |
|
|
$ |
45.22 |
|
|
|
68,870 |
|
|
$ |
45,399 |
|
Total |
|
|
198,271 |
|
|
|
|
|
|
198,271 |
|
|
|
|
||
31
Item 6. Exhibits
|
|
10(a) |
|
|
|
10(b) |
|
|
|
10(c) |
|
|
|
10(d) |
|
|
|
10(e) |
|
|
|
(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) |
|
|
|
(32)(b) |
|
|
|
101.1 |
The following information from CTS Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 formatted in Inline XBRL: (i) Condensed Consolidated Statements of Earnings; (ii) Condensed Consolidated Statements of Comprehensive Earnings; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Shareholders’ Equity; (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
|
|
104 |
The cover page from this Current Report on Form 10-Q formatted as inline XBRL |
|
|
|
|
|
|
32
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/ Thomas M. White |
|
/s/ Ashish Agrawal |
Thomas M. White |
|
Ashish Agrawal |
Corporate Controller (Principal Accounting Officer) |
|
Vice President and Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
|
Dated: April 27, 2023 |
|
Dated: April 27, 2023 |
33
EXHIBIT 10(a)
CTS CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT is made as of the __________ (the "Grant Date") between CTS CORPORATION, an Indiana corporation (the "Company"), and __________ (the "Grantee").
It is intended that this Agreement and its administration comply with the provisions of Section 409A of the Code (as defined below). Accordingly, notwithstanding any provision in this Agreement or in the Plan to the contrary, this Agreement and the Plan will be interpreted, applied and amended, to the minimum extent necessary to comply with Section 409A of the Code, so that the Agreement does not fail to meet, and is operated in accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal Revenue Code of 1986 as amended from time to time, and any interpretations thereof issued by the U.S. Treasury Department on which the Company is permitted to rely.
2. Vesting and Settlement of Restricted Stock Units. The Award shall vest and become non-forfeitable in installments equal to thirty-three and thirty-three tenths of a percent (33.33%) multiplied by the initial number of Restricted Stock Units specified in Section 1 of this Agreement on __________; thirty-three and thirty-four tenths of a percent (33.34%) multiplied by the initial number of Restricted Stock Units specified in Section 1 of this Agreement on __________; and thirty-three and thirty-three tenths of a percent (33.33%) multiplied by the initial number of Restricted Stock Units specified in Section 1 of this Agreement on __________. Each specified date shall be a "Vesting Date," provided that the Grantee remains in the continuous employ of the Company and is an employee of the Company on the Vesting Date.
Restricted Stock Units shall be settled on the basis of one Share for each vested Restricted Stock Unit. The Company shall distribute to the Grantee on each Vesting Date, or as soon thereafter as practicable, but in no event later than March 15th of the year following the year in which the applicable Vesting Date occurs, one Share for each Restricted Stock Unit vesting as of the Vesting Date (each such date of distribution, a "Settlement Date"). The Company’s obligations to the Grantee with respect to vested Restricted Stock Units will be satisfied in full upon the distribution of one Share for each Restricted Stock Unit. On the Settlement Date(s), the Company shall credit the number of Shares to be distributed to the Grantee as of that Settlement Date to a book-entry account in the name of the Grantee held by the Company’s transfer agent. In no event may any Settlement Date be accelerated except in accordance with Section 409A of the Code.
1
Notwithstanding anything to the contrary in this Agreement, upon the first to occur of the following events all Restricted Stock Units granted hereunder shall vest and become nonforfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in settlement of Restricted Stock Units as soon as reasonably practicable, but in no event later than 30 days after the occurrence of such event, and such date(s) of distribution shall be deemed to be the Settlement Date(s):
(a) Grantee’s becoming disabled, as defined by Section 409A of the Code;
(b) Grantee’s death;
(c) the termination of the Grantee's employment either (i) without Cause (as defined in Section 1(c) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement or as defined below for such other Grantees), or (ii) for a reason consistent with the constructive termination provisions of Section 3(b) and Subsections (b)(i) through (b)(vi) (but not Subsection (b)(vii)) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement), provided, that any such termination must occur with 24 months following a Change in Control; or
(d) the occurrence of a Change in Control, if the successor or surviving company does not assume, substitute, or continue the Award on substantially similar terms or with substantially equivalent benefits (as determined by the Committee prior to the Change in Control) or if the stock of the successor or surviving company is not listed on the New York Stock Exchange or the NASDAQ Stock Market.
Unless the Compensation[ and Talent] Committee of the Company’s Board of Directors (the “Committee”) determines otherwise in its sole discretion, if the Grantee’s employment with the Company terminates for any reason not specified above, all Restricted Stock Units granted hereunder which have not vested as of the date of such termination of employment shall be permanently forfeited on such termination date.
As used herein: “Cause” means that the Grantee’s employment is terminated because he or she: (i) has been convicted of a criminal violation involving fraud, embezzlement or theft in connection with his or her duties or in the course of his or her employment with the Company or any Affiliate; (ii) has intentionally and wrongfully damaged property of the Company or any Affiliate; or (iii) has intentionally and wrongfully disclosed secret processes, trade secrets or confidential information of the Company or any Affiliate; provided, that any such act has been demonstrably and materially harmful to the Company. For purposes of this Agreement, no act or failure to act on the part of the Grantee will be deemed to be “intentional” if it was due primarily to an error in judgment or negligence, and will be deemed to be “intentional” only if done or omitted to be done by the Grantee not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company.
3. Tax Withholding. The Company shall have the right to deduct from any compensation due the Grantee from the Company any federal, state, local or foreign taxes required by the law of any jurisdiction to be withheld in connection with the grant of Restricted Stock Units,
2
the issuance of Shares or the vesting of Restricted Stock Units pursuant to this Agreement. The Company shall retain Shares otherwise deliverable on the Settlement Date in an amount sufficient to satisfy the amount of tax required to be withheld provided that such amounts shall not exceed the statutorily required maximum withholding. The determination of the number of Shares retained for this purpose shall be based on the Fair Market Value of the Shares. Tax withholding shall be calculated based on the Fair Market Value of the Shares on the Vesting Date. In the event that the retention of Shares to satisfy withholding taxes would otherwise result in the delivery of a fractional Share, the Company will round up to the next whole Share and apply the value of the fractional Share to the recipient's tax obligations or, in the alternative, the Company may make such other arrangements to avoid the issuance of a fractional Share as may be permitted by law. No Shares shall be transferred to the Grantee hereunder until such time as all applicable withholding taxes have been satisfied. The Company will not retain Shares as described herein unless tax withholding applies under the laws of the local jurisdiction. To the extent that the amounts payable to the Grantee are insufficient for such withholding, it shall be a condition to the issuance of Shares or the grant or vesting of the Restricted Stock Units, as the case may be, that the Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.
4. Rights Not Conferred. The Grantee shall have none of the rights of a stockholder with respect to the Restricted Stock Units, including the right to receive dividends or vote stock. Until distribution, the Company’s obligation will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held as collateral security for the obligations of the Company hereunder, and all assets of the Company will be subject to the claims of the Company creditor. Nothing contained in the Plan or in this Agreement shall confer upon the Grantee any right with respect to continued employment by the Company or any subsidiary thereof or interfere in any way with the right of the Company to terminate the employment of the Grantee at any time.
5. Agreement Not Assignable. This Agreement and the Restricted Stock Units awarded hereunder are not transferable or assignable by the Grantee; provided that no provision herein shall prevent the distribution of shares to the Grantee’s estate or designated beneficiary as provided in Section 2.
6. Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, or corporate transaction or event having an effect similar to the foregoing, the Committee shall adjust the Award, as provided by the Plan.
7. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois.
8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment to the Plan or the Agreement shall adversely affect the value or number
3
of the Grantee’s Restricted Stock Units without the Grantee’s written consent, except to the extent necessary to comply with the provisions of Section 409A of the Code.
9. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
10. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Agreement shall not be included as compensation, earnings, salary or other similar terms used when calculating the Grantee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.
11. Severability. If any provision of the Plan or this Agreement is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or award hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or award, such provision shall be stricken as to such jurisdiction or award, and the remainder of the Plan or Agreement shall be in full force and effect.
12. Construction. The Restricted Stock Units granted hereunder are being issued pursuant to the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Grantee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Agreement violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall be of no force or effect.
13. Data Protection. By signing below, the Grantee expressly consents to the transfer and use of personal data by the Company and its agents in connection with the administration of this Award.
14. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
_____________________________________
Grantee: __________
CTS CORPORATION
By: __________________________________
[NAME]
[TITLE]
By: ______________________________________
[NAME]
[TITLE]
5
EXHIBIT 10(b)
CTS CORPORATION
FOCUS 2025 INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT (this “Agreement”) is made as of the __________ (the "Grant Date") between CTS CORPORATION, an Indiana corporation (the "Company"), and __________ (the "Grantee").
1. Grant. Subject to the terms set forth in this Agreement and in the Company's 2018 Equity and Incentive Compensation Plan (the "Plan"), the Company hereby grants to the Grantee __________ Restricted Stock Units (the “Award”). Except as expressly provided herein, capitalized terms used herein shall have the meaning ascribed to such terms under the Plan. As used in this Agreement, the “Performance Period” means the five-year period beginning on __________ ___, 2020 and ending on __________ ___, 2024.
It is intended that this Agreement and its administration comply with the provisions of Section 409A of the Code (as defined below). Accordingly, notwithstanding any provision in this Agreement or in the Plan to the contrary, this Agreement and the Plan will be interpreted, applied and amended to the minimum extent necessary to comply with Section 409A of the Code, so that the Agreement does not fail to meet, and is operated in accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal Revenue Code of 1986 as amended from time to time, and any interpretations thereof issued by the U.S. Treasury Department on which the Company is permitted to rely.
2. Vesting and Settlement of Restricted Stock Units. The Award vests and becomes non-forfeitable, subject to the calculation of the Settlement Amount (as defined below), in one installment of 100% of the Award upon attainment of the Performance Goal shown in Exhibit A (the "Vesting Date"), provided that the Grantee remained in the continuous employ of the Company through the Vesting Date. In the event that the Performance Period expires and the Performance Goal is not achieved, the Award shall expire and be cancelled.
Restricted Stock Units shall be settled on the basis of one Share for each vested Restricted Stock Unit. The Company shall distribute to the Grantee Shares equal to the number of Restricted Stock Units specified in Section 1 above, on or before the end of the thirteenth month following the Vesting Date (such date of distribution, the "Settlement Date"). The Company’s obligations to the Grantee with respect to vested Restricted Stock Units will be satisfied in full upon the distribution of one Share for each Restricted Stock Unit. On the Settlement Date(s), the Company shall credit the number of Shares to be distributed to the Grantee as of that Settlement Date to a book-entry account in the name of the Grantee held by the Company’s transfer agent. In no event may any Settlement Date be accelerated except in accordance with Section 409A of the Code.
1
The settlement of an Award for any Grantee will be the number of Restricted Stock Units specified in Section 1 above or as little as zero depending upon achieved results calculated on the basis set forth in Exhibit A to this Agreement (as so calculated, the “Settlement Amount”); provided, that the Company may, in its discretion, adjust a Grantee’s Settlement Amount after consideration of other business factors, including overall performance of the Company and the individual Grantee’s contribution to Company performance.
Notwithstanding anything to the contrary in this Agreement, all Restricted Stock Units granted hereunder shall terminate and be forfeited upon the occurrence of any of the following events: Grantee’s becoming disabled, as defined by Section 409A of the Code; Grantee’s death; or the termination of the Grantee's employment for any reason or no reason.
The Committee may, in its sole discretion, at any time, (including if the Grantee’s employment with the Company terminates for any reason), immediately vest all or any portion of the Restricted Stock Units granted hereunder, with a settlement date occurring as determined by the Committee, or if not so specified, upon achievement of the Performance Goal as otherwise set forth herein.
3. Tax Withholding. The Company shall have the right to deduct from any compensation due the Grantee from the Company any federal, state, local or foreign taxes required by the law of any jurisdiction to be withheld in connection with the grant of Restricted Stock Units, the issuance of Shares or the vesting of Restricted Stock Units pursuant to this Agreement. The Company shall retain Shares otherwise deliverable on the Settlement Date in an amount sufficient to satisfy the amount of tax required to be withheld provided that such amounts shall not exceed the statutorily required maximum withholding. The determination of the number of Shares retained for this purpose shall be based on the Fair Market Value of the Shares. Tax withholding shall be calculated based on the Fair Market Value of the Shares on the Settlement Date. In the event that the retention of Shares to satisfy withholding taxes would otherwise result in the delivery of a fractional Share, the Company will round up to the next whole Share and apply the value of the fractional Share to the recipient's tax obligations or, in the alternative, the Company may make such other arrangements to avoid the issuance of a fractional Share as may be permitted by law. No Shares shall be transferred to the Grantee hereunder until such time as all applicable withholding taxes have been satisfied. The Company will not retain Shares as described herein unless tax withholding applies under the laws of the local jurisdiction. To the extent that the amounts payable to the Grantee are insufficient for such withholding, it shall be a condition to the issuance of Shares or the grant or vesting of the Restricted Stock Units, as the case may be, that the Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.
4. Rights Not Conferred. The Grantee shall have none of the rights of a stockholder with respect to the Restricted Stock Units, including the right to receive dividends or vote stock. Until distribution, the Company’s obligation will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the
2
Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held as collateral security for the obligations of the Company hereunder, and all assets of the Company will be subject to the claims of the Company’s creditors. Nothing contained in the Plan or in this Agreement shall confer upon the Grantee any right with respect to continued employment by the Company or any subsidiary thereof or interfere in any way with the right of the Company to terminate the employment of the Grantee at any time.
5. Agreement Not Assignable. This Agreement and the Restricted Stock Units awarded hereunder are not transferable or assignable by the Grantee; provided that no provision herein shall prevent the distribution of shares to the Grantee’s estate or designated beneficiary as provided in Section 2.
6. Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, or corporate transaction or event having an effect similar to the foregoing, the Committee shall adjust the Award, as provided by the Plan.
7. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois.
8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment to the Plan or the Agreement shall adversely affect the value or number of the Grantee’s Restricted Stock Units without the Grantee’s written consent, except to the extent necessary to comply with the provisions of Section 409A of the Code.
9. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
10. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Agreement shall not be included as compensation, earnings, salary or other similar terms used when calculating the Grantee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.
11. Severability. If any provision of the Plan or this Agreement is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or
3
award hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or award, such provision shall be stricken as to such jurisdiction or award, and the remainder of the Plan or Agreement shall be in full force and effect.
12. Construction. The Restricted Stock Units granted hereunder are being issued pursuant to the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Grantee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Agreement violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall be of no force or effect.
13. Data Protection. By signing below, the Grantee expressly consents to the transfer and use of personal data by the Company and its agents in connection with the administration of this Award.
14. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
___________________
Grantee: __________
CTS CORPORATION
By: __________________________________
[NAME]
[TITLE]
By: __________________________________
[NAME]
[TITLE]
5
EXHIBIT A
Performance Goal:
The Performance Goal must be achieved during the Performance Period (as reported in the subsequent quarter) in order for the RSUs to vest. In the event that the Performance Period expires and the Performance Goal is not achieved, the Grants shall expire and be cancelled.
6
EXHIBIT 10(c)
CTS CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT (this “Agreement”) is made as of the __________ (the "Grant Date") between CTS CORPORATION, an Indiana corporation (the "Company"), and __________ (the "Grantee").
1. Grant. Subject to the terms set forth in this Agreement and in the Company's 2018 Equity and Incentive Compensation Plan (the "Plan"), the Company hereby grants to the Grantee __________ Restricted Stock Units (the “Award”). Except as expressly provided herein, capitalized terms used herein shall have the meaning ascribed to such terms under the Plan. As used in this Agreement, the “Performance Period” means the three-year period beginning on __________ ___, 2021 and ending on __________ ___, 2023.
It is intended that this Agreement and its administration comply with the provisions of Section 409A of the Code (as defined below). Accordingly, notwithstanding any provision in this Agreement or in the Plan to the contrary, this Agreement and the Plan will be interpreted, applied and amended to the minimum extent necessary to comply with Section 409A of the Code, so that the Agreement does not fail to meet, and is operated in accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal Revenue Code of 1986 as amended from time to time, and any interpretations thereof issued by the U.S. Treasury Department on which the Company is permitted to rely.
2. Vesting and Settlement of Restricted Stock Units. The Award vests and becomes non-forfeitable, subject to the calculation of the Settlement Amount (as defined below), in one installment of 100% of the Award on the last day of the Performance Period (the "Vesting Date"), provided that the Grantee remained in the continuous employ of the Company through the end of the Performance Period.
Restricted Stock Units shall be settled on the basis of one Share for each vested Restricted Stock Unit. The Company shall distribute to the Grantee Shares equal to the number of Restricted Stock Units specified in Section 1 above, on or before March 15th of the year immediately following the end of the Performance Period (such date of distribution, the "Settlement Date"). The Company’s obligations to the Grantee with respect to vested Restricted Stock Units will be satisfied in full upon the distribution of one Share for each Restricted Stock Unit. On the Settlement Date(s), the Company shall credit the number of Shares to be distributed to the Grantee as of that Settlement Date to a book-entry account in the name of the Grantee held by the Company’s transfer agent. In no event may any Settlement Date be accelerated except in accordance with Section 409A of the Code.
The settlement of an Award for any Grantee may be as much as __________ the number of Restricted Stock Units specified in Section 1 above or as little as zero depending upon achieved results calculated on the basis set forth in Exhibit A to this Agreement (as so
1
calculated, the “Settlement Amount”); provided, that the Company may, in its discretion, adjust a Grantee’s Settlement Amount after consideration of other business factors, including overall performance of the Company and the individual Grantee’s contribution to Company performance.
Notwithstanding anything to the contrary in this Agreement, upon the first to occur of the following events all Restricted Stock Units granted hereunder shall vest and become nonforfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in settlement of Restricted Stock Units with respect to the events set forth in sections (a) through (d) below, as soon as reasonably practicable, but in no event later than 30 days after the occurrence of such event, and such date(s) of distribution shall be deemed to be the Settlement Date(s), and with respect to the events described in (e) below as described therein:
(a) Grantee’s becoming disabled, as defined by Section 409A of the Code;
(b) Grantee’s death;
(c) the termination of the Grantee's employment either (i) without Cause (as defined in Section 1(c) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement or as defined below for such other Grantees), or (ii) for a reason consistent with the constructive termination provisions of Section 3(b) and Subsections (b)(i) through (b)(vi) (but not Subsection (b)(vii)) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement), provided, that any such termination must occur with 24 months following a Change in Control;
(d) the occurrence of a Change in Control, if the successor or surviving company does not assume, substitute, or continue the Award on substantially similar terms or with substantially equivalent benefits (as determined by the Committee prior to the Change in Control) or if the stock of the successor or surviving company is not listed on the New York Stock Exchange or the NASDAQ Stock Market; or
(e) Grantee's Qualified Retirement, which means that the Grantee has (i) attained age 55; (ii) completed five years of service; and (iii) provided at least one year notice prior to his intended retirement date. Upon the occurrence of Grantee’s Qualified Retirement, the requirement of continued employment with the Company will lapse with respect to a prorated portion of the Award, determined by multiplying the Award by a fraction, the numerator of which is the number of full months of service the Grantee completes of the Performance Period and the denominator of which is _____. That portion of the Award shall vest and become non-forfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in the settlement of vested Restricted Stock Units on or before March 15 of the year immediately following the end of the Performance Period.
2
The Settlement Amount to be paid upon the occurrence of the events described above shall be calculated as follows:
(x) upon the occurrence of a Grantee’s death or disability as described in 2(a) or (b) above, the Settlement Amount shall be equal to the greater of (1) 100% of the number of Restricted Stock Units specified in Section 1 above, or (2) the amount calculated pursuant to Section (y) below if occurring after a Change in Control;
(y) upon the occurrence of a Change in Control, the Settlement Amount for all purposes under this Agreement will be the greater of (1) the number of Restricted Stock Units specified in Section 1 above, and (2) the amount calculated based on the Company’s actual performance calculated from the Performance Period start date until the date of the occurrence of the Change in Control, as determined by the Committee in its sole discretion immediately prior to the Change in Control; and
(z) upon the occurrence of a Qualified Retirement as described in (e) above, the Settlement Amount shall be calculated as set forth in Exhibit A hereto as if the Grantee had remained employed by the Company for the entire measurement period and pro-rated as provided in 2(e) above; except, that, if such Qualified Retirement occurs following a Change in Control, the Settlement Amount shall be calculated as set forth in 2(y) above and pro-rated as provided in 2(e) above.
Unless the Committee determines otherwise in its sole discretion, if the Grantee’s employment with the Company terminates for any reason not specified above, all Restricted Stock Units granted hereunder which have not vested as of the date of such termination of employment shall be permanently forfeited on such termination date.
3. Tax Withholding. The Company shall have the right to deduct from any compensation due the Grantee from the Company any federal, state, local or foreign taxes required by the law of any jurisdiction to be withheld in connection with the grant of Restricted Stock Units, the issuance of Shares or the vesting of Restricted Stock Units pursuant to this Agreement. The Company shall retain Shares otherwise deliverable on the Settlement Date in an amount sufficient to satisfy the amount of tax required to be withheld provided that such amounts shall not exceed the statutorily required maximum withholding. The determination of the number of Shares retained for this purpose shall be based on the Fair Market Value of the Shares. Tax withholding shall be calculated based on the Fair Market Value of the Shares on the Settlement Date. In the event that the retention of Shares to satisfy withholding taxes would otherwise result in the delivery of a fractional Share, the Company will round up to the next whole Share and apply the value of the fractional Share to the recipient's tax obligations or, in the alternative, the Company may make such other arrangements to avoid the issuance of a fractional Share as may be permitted by law. No Shares shall be transferred to the Grantee hereunder until such time as all applicable withholding taxes have been satisfied. The Company will not retain Shares as described herein unless tax withholding applies under the laws of the local jurisdiction. To the extent that the amounts payable to the Grantee are insufficient for
3
such withholding, it shall be a condition to the issuance of Shares or the grant or vesting of the Restricted Stock Units, as the case may be, that the Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.
4. Rights Not Conferred. The Grantee shall have none of the rights of a stockholder with respect to the Restricted Stock Units, including the right to receive dividends or vote stock. Until distribution, the Company’s obligation will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held as collateral security for the obligations of the Company hereunder, and all assets of the Company will be subject to the claims of the Company’s creditors. Nothing contained in the Plan or in this Agreement shall confer upon the Grantee any right with respect to continued employment by the Company or any subsidiary thereof or interfere in any way with the right of the Company to terminate the employment of the Grantee at any time.
5. Agreement Not Assignable. This Agreement and the Restricted Stock Units awarded hereunder are not transferable or assignable by the Grantee; provided that no provision herein shall prevent the distribution of shares to the Grantee’s estate or designated beneficiary as provided in Section 2.
6. Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, or corporate transaction or event having an effect similar to the foregoing, the Committee shall adjust the Award, as provided by the Plan.
7. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois.
8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment to the Plan or the Agreement shall adversely affect the value or number of the Grantee’s Restricted Stock Units without the Grantee’s written consent, except to the extent necessary to comply with the provisions of Section 409A of the Code.
9. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
4
10. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Agreement shall not be included as compensation, earnings, salary or other similar terms used when calculating the Grantee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.
11. Severability. If any provision of the Plan or this Agreement is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or award hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or award, such provision shall be stricken as to such jurisdiction or award, and the remainder of the Plan or Agreement shall be in full force and effect.
12. Construction. The Restricted Stock Units granted hereunder are being issued pursuant to the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Grantee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Agreement violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall be of no force or effect.
13. Data Protection. By signing below, the Grantee expressly consents to the transfer and use of personal data by the Company and its agents in connection with the administration of this Award.
14. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
___________________
Grantee: __________
CTS CORPORATION
By: __________________________________
[NAME]
[TITLE]
By: __________________________________
[NAME]
[TITLE]
6
EXHIBIT A
Performance Goals are based on three metrics:
3 yr <___% ≥___% ≥___% ≥___% ≥___%
Annualized <___% ___% ___% ___% ___%
Award ___% ___% ___% ___% ___%
3 yr <___ ≥___ ≥___ ≥___ ≥___
Annualized <___ ≥ ___ ≥___ ≥___ ≥___
Award ___% ___% ___% ___% ___%
Performance versus Peer Group
RTSR <___% ___ ___ ___ ≥___
Award ___% ___% ___% ___% ___%
7
Exhibit A-1
Determining Three-Year Relative Total Shareholder Return
For purposes of calculating Three-Year Relative Total Shareholder Return (rounding shall be to the nearest tenth of a percent, with all hundredths of a percent equal to or greater than 5 rounded up to the nearest tenth of a percent):
8
Peer Group ( Peers)
NAME SYMBOL STOCK EXCHANGE
9
Peer Group Adjustment Protocol
10
EXHIBIT 10(d)
CTS CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT (this “Agreement”) is made as of the __________ (the "Grant Date") between CTS CORPORATION, an Indiana corporation (the "Company"), and __________ (the "Grantee").
1. Grant. Subject to the terms set forth in this Agreement and in the Company's 2018 Equity and Incentive Compensation Plan (the "Plan"), the Company hereby grants to the Grantee __________ Restricted Stock Units (the “Award”). Except as expressly provided herein, capitalized terms used herein shall have the meaning ascribed to such terms under the Plan. As used in this Agreement, the “Performance Period” means the three-year period beginning on __________ ___, 2022 and ending on __________ ___, 2024.
It is intended that this Agreement and its administration comply with the provisions of Section 409A of the Code (as defined below). Accordingly, notwithstanding any provision in this Agreement or in the Plan to the contrary, this Agreement and the Plan will be interpreted, applied and amended to the minimum extent necessary to comply with Section 409A of the Code, so that the Agreement does not fail to meet, and is operated in accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal Revenue Code of 1986 as amended from time to time, and any interpretations thereof issued by the U.S. Treasury Department on which the Company is permitted to rely.
2. Vesting and Settlement of Restricted Stock Units. The Award vests and becomes non-forfeitable, subject to the calculation of the Settlement Amount (as defined below), in one installment of 100% of the Award on the last day of the Performance Period (the "Vesting Date"), provided that the Grantee remained in the continuous employ of the Company through the end of the Performance Period.
Restricted Stock Units shall be settled on the basis of one Share for each vested Restricted Stock Unit. The Company shall distribute to the Grantee Shares equal to the number of Restricted Stock Units specified in Section 1 above, on or before March 15th of the year immediately following the end of the Performance Period (such date of distribution, the "Settlement Date"). The Company’s obligations to the Grantee with respect to vested Restricted Stock Units will be satisfied in full upon the distribution of one Share for each Restricted Stock Unit. On the Settlement Date(s), the Company shall credit the number of Shares to be distributed to the Grantee as of that Settlement Date to a book-entry account in the name of the Grantee held by the Company’s transfer agent. In no event may any Settlement Date be accelerated except in accordance with Section 409A of the Code.
The settlement of an Award for any Grantee may be as much as __________ the number of Restricted Stock Units specified in Section 1 above or as little as zero depending upon achieved results calculated on the basis set forth in Exhibit A to this Agreement (as so
1
calculated, the “Settlement Amount”); provided, that the Company may, in its discretion, adjust a Grantee’s Settlement Amount after consideration of other business factors, including overall performance of the Company and the individual Grantee’s contribution to Company performance.
Notwithstanding anything to the contrary in this Agreement, upon the first to occur of the following events all Restricted Stock Units granted hereunder shall vest and become nonforfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in settlement of Restricted Stock Units with respect to the events set forth in sections (a) through (d) below, as soon as reasonably practicable, but in no event later than 30 days after the occurrence of such event, and such date(s) of distribution shall be deemed to be the Settlement Date(s), and with respect to the events described in (e) below as described therein:
(a) Grantee’s becoming disabled, as defined by Section 409A of the Code;
(b) Grantee’s death;
(c) the termination of the Grantee's employment either (i) without Cause (as defined in Section 1(c) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement or as defined below for such other Grantees), or (ii) for a reason consistent with the constructive termination provisions of Section 3(b) and Subsections (b)(i) through (b)(vi) (but not Subsection (b)(vii)) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement), provided, that any such termination must occur with 24 months following a Change in Control;
(d) the occurrence of a Change in Control, if the successor or surviving company does not assume, substitute, or continue the Award on substantially similar terms or with substantially equivalent benefits (as determined by the Committee prior to the Change in Control) or if the stock of the successor or surviving company is not listed on the New York Stock Exchange or the NASDAQ Stock Market; or
(e) Grantee's Qualified Retirement, which means that the Grantee has (i) attained age 55; (ii) completed five years of service; and (iii) provided at least one year notice prior to his intended retirement date. Upon the occurrence of Grantee’s Qualified Retirement, the requirement of continued employment with the Company will lapse with respect to a prorated portion of the Award, determined by multiplying the Award by a fraction, the numerator of which is the number of full months of service the Grantee completes of the Performance Period and the denominator of which is _____. That portion of the Award shall vest and become non-forfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in the settlement of vested Restricted Stock Units on or before March 15 of the year immediately following the end of the Performance Period.
2
The Settlement Amount to be paid upon the occurrence of the events described above shall be calculated as follows:
(x) upon the occurrence of a Grantee’s death or disability as described in 2(a) or (b) above, the Settlement Amount shall be equal to the greater of (1) 100% of the number of Restricted Stock Units specified in Section 1 above, or (2) the amount calculated pursuant to Section (y) below if occurring after a Change in Control;
(y) upon the occurrence of a Change in Control, the Settlement Amount for all purposes under this Agreement will be the greater of (1) the number of Restricted Stock Units specified in Section 1 above, and (2) the amount calculated based on the Company’s actual performance calculated from the Performance Period start date until the date of the occurrence of the Change in Control, as determined by the Committee in its sole discretion immediately prior to the Change in Control; and
(z) upon the occurrence of a Qualified Retirement as described in (e) above, the Settlement Amount shall be calculated as set forth in Exhibit A hereto as if the Grantee had remained employed by the Company for the entire measurement period and pro-rated as provided in 2(e) above; except, that, if such Qualified Retirement occurs following a Change in Control, the Settlement Amount shall be calculated as set forth in 2(y) above and pro-rated as provided in 2(e) above.
Unless the Committee determines otherwise in its sole discretion, if the Grantee’s employment with the Company terminates for any reason not specified above, all Restricted Stock Units granted hereunder which have not vested as of the date of such termination of employment shall be permanently forfeited on such termination date.
3. Tax Withholding. The Company shall have the right to deduct from any compensation due the Grantee from the Company any federal, state, local or foreign taxes required by the law of any jurisdiction to be withheld in connection with the grant of Restricted Stock Units, the issuance of Shares or the vesting of Restricted Stock Units pursuant to this Agreement. The Company shall retain Shares otherwise deliverable on the Settlement Date in an amount sufficient to satisfy the amount of tax required to be withheld provided that such amounts shall not exceed the statutorily required maximum withholding. The determination of the number of Shares retained for this purpose shall be based on the Fair Market Value of the Shares. Tax withholding shall be calculated based on the Fair Market Value of the Shares on the Settlement Date. In the event that the retention of Shares to satisfy withholding taxes would otherwise result in the delivery of a fractional Share, the Company will round up to the next whole Share and apply the value of the fractional Share to the recipient's tax obligations or, in the alternative, the Company may make such other arrangements to avoid the issuance of a fractional Share as may be permitted by law. No Shares shall be transferred to the Grantee hereunder until such time as all applicable withholding taxes have been satisfied. The Company will not retain Shares as described herein unless tax withholding applies under the laws of the local jurisdiction. To the extent that the amounts payable to the Grantee are insufficient for
3
such withholding, it shall be a condition to the issuance of Shares or the grant or vesting of the Restricted Stock Units, as the case may be, that the Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.
4. Rights Not Conferred. The Grantee shall have none of the rights of a stockholder with respect to the Restricted Stock Units, including the right to receive dividends or vote stock. Until distribution, the Company’s obligation will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held as collateral security for the obligations of the Company hereunder, and all assets of the Company will be subject to the claims of the Company’s creditors. Nothing contained in the Plan or in this Agreement shall confer upon the Grantee any right with respect to continued employment by the Company or any subsidiary thereof or interfere in any way with the right of the Company to terminate the employment of the Grantee at any time.
5. Agreement Not Assignable. This Agreement and the Restricted Stock Units awarded hereunder are not transferable or assignable by the Grantee; provided that no provision herein shall prevent the distribution of shares to the Grantee’s estate or designated beneficiary as provided in Section 2.
6. Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, or corporate transaction or event having an effect similar to the foregoing, the Committee shall adjust the Award, as provided by the Plan.
7. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois.
8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment to the Plan or the Agreement shall adversely affect the value or number of the Grantee’s Restricted Stock Units without the Grantee’s written consent, except to the extent necessary to comply with the provisions of Section 409A of the Code.
9. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
4
10. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Agreement shall not be included as compensation, earnings, salary or other similar terms used when calculating the Grantee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.
11. Severability. If any provision of the Plan or this Agreement is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or award hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or award, such provision shall be stricken as to such jurisdiction or award, and the remainder of the Plan or Agreement shall be in full force and effect.
12. Construction. The Restricted Stock Units granted hereunder are being issued pursuant to the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Grantee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Agreement violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall be of no force or effect.
13. Data Protection. By signing below, the Grantee expressly consents to the transfer and use of personal data by the Company and its agents in connection with the administration of this Award.
14. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
___________________
Grantee: __________
CTS CORPORATION
By: __________________________________
[NAME]
[TITLE]
By: __________________________________
[NAME]
[TITLE]
6
EXHIBIT A
Performance Goals are based on three metrics:
3 yr <___% ≥___% ≥___% ≥___% ≥___%
Annualized <___% ___% ___% ___% ___%
Award ___% ___% ___% ___% ___%
3 yr <___ ≥___ ≥___ ≥___ ≥___
Annualized <___ ≥ ___ ≥___ ≥___ ≥___
Award ___% ___% ___% ___% ___%
Performance versus Peer Group
RTSR <___% ___ ___ ___ ≥___
Award ___% ___% ___% ___% ___%
7
Exhibit A-1
Determining Three-Year Relative Total Stockholder Return
For purposes of calculating Three-Year Relative Total Stockholder Return (rounding shall be to the nearest tenth of a percent, with all hundredths of a percent equal to or greater than 5 rounded up to the nearest tenth of a percent):
8
Peer Group ( Peers)
NAME SYMBOL STOCK EXCHANGE
9
Peer Group Adjustment Protocol
10
EXHIBIT 10(e)
CTS CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT (this “Agreement”) is made as of the __________ (the "Grant Date") between CTS CORPORATION, an Indiana corporation (the "Company"), and __________ (the "Grantee").
1. Grant. Subject to the terms set forth in this Agreement and in the Company's 2018 Equity and Incentive Compensation Plan (the "Plan"), the Company hereby grants to the Grantee __________ Restricted Stock Units (the “Award”). Except as expressly provided herein, capitalized terms used herein shall have the meaning ascribed to such terms under the Plan. As used in this Agreement, the “Performance Period” means the three-year period beginning on __________ ___, 20__ and ending on __________ ___, 20__.
It is intended that this Agreement and its administration comply with the provisions of Section 409A of the Code (as defined below). Accordingly, notwithstanding any provision in this Agreement or in the Plan to the contrary, this Agreement and the Plan will be interpreted, applied and amended to the minimum extent necessary to comply with Section 409A of the Code, so that the Agreement does not fail to meet, and is operated in accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal Revenue Code of 1986 as amended from time to time, and any interpretations thereof issued by the U.S. Treasury Department on which the Company is permitted to rely.
2. Vesting and Settlement of Restricted Stock Units. The Award vests and becomes non-forfeitable, subject to the calculation of the Settlement Amount (as defined below), in one installment of 100% of the Award on the last day of the Performance Period (the "Vesting Date"), provided that the Grantee remained in the continuous employ of the Company through the end of the Performance Period.
Restricted Stock Units shall be settled on the basis of one Share for each vested Restricted Stock Unit. The Company shall distribute to the Grantee Shares equal to the number of Restricted Stock Units specified in Section 1 above, on or before March 15th of the year immediately following the end of the Performance Period (such date of distribution, the "Settlement Date"). The Company’s obligations to the Grantee with respect to vested Restricted Stock Units will be satisfied in full upon the distribution of one Share for each Restricted Stock Unit. On the Settlement Date(s), the Company shall credit the number of Shares to be distributed to the Grantee as of that Settlement Date to a book-entry account in the name of the Grantee held by the Company’s transfer agent. In no event may any Settlement Date be accelerated except in accordance with Section 409A of the Code.
The settlement of an Award for any Grantee may be as much as __________ the number of Restricted Stock Units specified in Section 1 above or as little as zero depending upon achieved results calculated on the basis set forth in Exhibit A to this Agreement (as so
1
calculated, the “Settlement Amount”); provided, that the Company may, in its discretion, adjust a Grantee’s Settlement Amount after consideration of other business factors, including overall performance of the Company and the individual Grantee’s contribution to Company performance.
Notwithstanding anything to the contrary in this Agreement, upon the first to occur of the following events all Restricted Stock Units granted hereunder shall vest and become nonforfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in settlement of Restricted Stock Units with respect to the events set forth in sections (a) through (d) below, as soon as reasonably practicable, but in no event later than 30 days after the occurrence of such event, and such date(s) of distribution shall be deemed to be the Settlement Date(s), and with respect to the events described in (e) below as described therein:
(a) Grantee’s becoming disabled, as defined by Section 409A of the Code;
(b) Grantee’s death;
(c) the termination of the Grantee's employment either (i) without Cause (as defined in Section 1(c) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement or as defined below for such other Grantees), or (ii) for a reason consistent with the constructive termination provisions of Section 3(b) and Subsections (b)(i) through (b)(vi) (but not Subsection (b)(vii)) of any applicable Change in Control Severance Agreement between the Company and the Grantee for any Grantee subject to such an agreement), provided, that any such termination must occur with 24 months following a Change in Control;
(d) the occurrence of a Change in Control, if the successor or surviving company does not assume, substitute, or continue the Award on substantially similar terms or with substantially equivalent benefits (as determined by the Compensation and Talent Committee (the “Committee”) prior to the Change in Control) or if the stock of the successor or surviving company is not listed on the New York Stock Exchange or the NASDAQ Stock Market; or
(e) Grantee's Qualified Retirement, which means that the Grantee has (i) attained age 55; (ii) completed five years of service; and (iii) provided at least one year notice prior to his intended retirement date. Upon the occurrence of Grantee’s Qualified Retirement, the requirement of continued employment with the Company will lapse with respect to a prorated portion of the Award, determined by multiplying the Award by a fraction, the numerator of which is the number of full months of service the Grantee completes of the Performance Period and the denominator of which is _____. That portion of the Award shall vest and become non-forfeitable and Shares shall be distributed to the Grantee, estate, guardian or designated beneficiary of the Grantee as the case may be, in the settlement of vested Restricted Stock Units on or before March 15 of the year immediately following the end of the Performance Period.
2
The Settlement Amount to be paid upon the occurrence of the events described above shall be calculated as follows:
(x) upon the occurrence of a Grantee’s death or disability as described in 2(a) or (b) above, the Settlement Amount shall be equal to the greater of (1) 100% of the number of Restricted Stock Units specified in Section 1 above, or (2) the amount calculated pursuant to Section (y) below if occurring after a Change in Control;
(y) upon the occurrence of a Change in Control, the Settlement Amount for all purposes under this Agreement will be the greater of (1) the number of Restricted Stock Units specified in Section 1 above, and (2) the amount calculated based on the Company’s actual performance calculated from the Performance Period start date until the date of the occurrence of the Change in Control, as determined by the Committee in its sole discretion immediately prior to the Change in Control; and
(z) upon the occurrence of a Qualified Retirement as described in (e) above, the Settlement Amount shall be calculated as set forth in Exhibit A hereto as if the Grantee had remained employed by the Company for the entire measurement period and pro-rated as provided in 2(e) above; except, that, if such Qualified Retirement occurs following a Change in Control, the Settlement Amount shall be calculated as set forth in 2(y) above and pro-rated as provided in 2(e) above.
Unless the Committee determines otherwise in its sole discretion, if the Grantee’s employment with the Company terminates for any reason not specified above, all Restricted Stock Units granted hereunder which have not vested as of the date of such termination of employment shall be permanently forfeited on such termination date.
3. Tax Withholding. The Company shall have the right to deduct from any compensation due the Grantee from the Company any federal, state, local or foreign taxes required by the law of any jurisdiction to be withheld in connection with the grant of Restricted Stock Units, the issuance of Shares or the vesting of Restricted Stock Units pursuant to this Agreement. The Company shall retain Shares otherwise deliverable on the Settlement Date in an amount sufficient to satisfy the amount of tax required to be withheld provided that such amounts shall not exceed the statutorily required maximum withholding. The determination of the number of Shares retained for this purpose shall be based on the Fair Market Value of the Shares. Tax withholding shall be calculated based on the Fair Market Value of the Shares on the Settlement Date. In the event that the retention of Shares to satisfy withholding taxes would otherwise result in the delivery of a fractional Share, the Company will round up to the next whole Share and apply the value of the fractional Share to the recipient's tax obligations or, in the alternative, the Company may make such other arrangements to avoid the issuance of a fractional Share as may be permitted by law. No Shares shall be transferred to the Grantee hereunder until such time as all applicable withholding taxes have been satisfied. The Company will not retain Shares as described herein unless tax withholding applies under the laws of the local jurisdiction. To the extent that the amounts payable to the Grantee are insufficient for
3
such withholding, it shall be a condition to the issuance of Shares or the grant or vesting of the Restricted Stock Units, as the case may be, that the Grantee shall pay such taxes or make provisions that are satisfactory to the Company for the payment thereof.
4. Rights Not Conferred. The Grantee shall have none of the rights of a stockholder with respect to the Restricted Stock Units, including the right to receive dividends or vote stock. Until distribution, the Company’s obligation will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held as collateral security for the obligations of the Company hereunder, and all assets of the Company will be subject to the claims of the Company’s creditors. Nothing contained in the Plan or in this Agreement shall confer upon the Grantee any right with respect to continued employment by the Company or any subsidiary thereof or interfere in any way with the right of the Company to terminate the employment of the Grantee at any time.
5. Agreement Not Assignable. This Agreement and the Restricted Stock Units awarded hereunder are not transferable or assignable by the Grantee; provided that no provision herein shall prevent the distribution of shares to the Grantee’s estate or designated beneficiary as provided in Section 2.
6. Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, or corporate transaction or event having an effect similar to the foregoing, the Committee shall adjust the Award, as provided by the Plan.
7. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois.
8. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment to the Plan or the Agreement shall adversely affect the value or number of the Grantee’s Restricted Stock Units without the Grantee’s written consent, except to the extent necessary to comply with the provisions of Section 409A of the Code.
9. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.
4
10. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Agreement shall not be included as compensation, earnings, salary or other similar terms used when calculating the Grantee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.
11. Severability. If any provision of the Plan or this Agreement is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or award hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or award, such provision shall be stricken as to such jurisdiction or award, and the remainder of the Plan or Agreement shall be in full force and effect.
12. Construction. The Restricted Stock Units granted hereunder are being issued pursuant to the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Grantee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Agreement violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall be of no force or effect.
13. Data Protection. By signing below, the Grantee expressly consents to the transfer and use of personal data by the Company and its agents in connection with the administration of this Award.
14. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
___________________
Grantee: __________
CTS CORPORATION
By: __________________________________
[NAME]
[TITLE]
By: __________________________________
[NAME]
[TITLE]
6
EXHIBIT A
Performance Goals are based on two metrics with a modifier as noted below:
3 yr <___% ≥___% ≥___% ≥___% ≥___%
Annualized <___% ___% ___% ___% ___%
Award ___% ___% ___% ___% ___%
3 yr <___ ≥___ ≥___ ≥___ ≥___
Annualized <___ ≥ ___ ≥___ ≥___ ≥___
Award ___% ___% ___% 150% 200%
7
Exhibit A-1
Determining Three-Year Relative Total Stockholder Return
For purposes of calculating Three-Year Relative Total Stockholder Return (rounding shall be to the nearest tenth of a percent, with all hundredths of a percent equal to or greater than 5 rounded up to the nearest tenth of a percent):
8
Peer Group ( Peers)
NAME SYMBOL STOCK EXCHANGE
9
Peer Group Adjustment Protocol
10
EXHIBIT (31)(a)
CERTIFICATION
I, Kieran O’Sullivan, certify that:
Date: April 27, 2023 |
|
/s/ Kieran O’Sullivan |
|
|
Kieran O’Sullivan |
|
|
Chairman, President and Chief Executive Officer |
|
EXHIBIT (31)(b)
CERTIFICATION
I, Ashish Agrawal, certify that:
Date: April 27, 2023 |
|
/s/Ashish Agrawal |
|
|
Ashish Agrawal |
|
|
Vice President and Chief Financial Officer |
|
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 March 31, 2023, 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:
Date: April 27, 2023 |
|
/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.
|
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 March 31, 2023, 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:
Date: April 27, 2023 |
|
/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.
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||
| Net sales | $ 145,994 | $ 147,695 |
| Cost of goods sold | 94,342 | 93,355 |
| Gross margin | 51,652 | 54,340 |
| Selling, general and administrative expenses | 21,979 | 21,788 |
| Research and development expenses | 6,586 | 6,194 |
| Restructuring charges | 912 | 312 |
| Operating earnings | 22,175 | 26,046 |
| Other income (expense): | ||
| Interest expense | (694) | (546) |
| Interest income | 1,063 | 180 |
| Other income, net | 165 | 66 |
| Total other income (expense), net | 534 | (300) |
| Earnings before income taxes | 22,709 | 25,746 |
| Income tax expense | 4,365 | 5,507 |
| Net earnings | $ 18,344 | $ 20,239 |
| Earnings per share: | ||
| Basic | $ 0.58 | $ 0.63 |
| Diluted | $ 0.58 | $ 0.63 |
| Basic weighted – average common shares outstanding: | 31,634 | 32,123 |
| Effect of dilutive securities | 259 | 204 |
| Diluted weighted – average common shares outstanding: | 31,893 | 32,327 |
| Cash dividends declared per share | $ 0.04 | $ 0.04 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - UNAUDITED - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Statement of Comprehensive Income [Abstract] | ||
| Net earnings | $ 18,344 | $ 20,239 |
| Other comprehensive earnings (loss): | ||
| Changes in fair market value of derivatives, net of tax | 379 | 1,235 |
| Changes in unrealized pension cost, net of tax | (34) | 94 |
| Cumulative translation adjustment, net of tax | 1,024 | (249) |
| Other comprehensive earnings | 1,369 | 1,080 |
| Comprehensive earnings | $ 19,713 | $ 21,319 |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - UNAUDITED (Parenthetical) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Statement of Stockholders' Equity [Abstract] | ||
| Cash dividends declared per share | $ 0.04 | $ 0.04 |
| Treasury stock, shares, acquired | 198,271 | 116,176 |
Basis of Presentation |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| 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, 2022. 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. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Revenue Recognition |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Recognition | NOTE 2 – Revenue Recognition The core principle of Accounting Standard Codification (“ASC”) Topic 606 Revenue from Contracts with Customers 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 or shipment 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 March 31, 2023 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. Disaggregated Revenue The following table presents revenues disaggregated by the major markets we serve:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisitions | NOTE 3 – Business Acquisitions TEWA Temperature Sensors SP. Zo.o. Acquisition On February 28, 2022, we acquired 100% of the outstanding shares of TEWA Temperature Sensors SP. Zo.o. (“TEWA”). TEWA is a designer and manufacturer of high-quality temperature sensors. TEWA has complementary capabilities with our existing temperature sensing platform, and the acquisition supports our end market diversification strategy and expands our presence in Europe. The final purchase price of $23,721, net of cash acquired of $2,979, has been allocated to the fair values of assets and liabilities acquired as of February 28, 2022. The purchase price was reduced by $794 for the final settlement of net working capital in the quarter. The following table summarizes the consideration paid, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition:
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. The Company recorded a $1,180 step-up of inventory to its fair value as of the acquisition date. The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold with $580 recognized in the first quarter of 2022. The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
Ferroperm Piezoceramics A/S Acquisition On June 30, 2022, we acquired 100% of the outstanding shares of Ferroperm Piezoceramics A/S (“Ferroperm”). Ferroperm specializes in the design and manufacture of high performance piezoceramic components for use in complex and demanding medical, industrial, and aerospace applications. Ferroperm has complementary capabilities with our existing medical diagnostics and imaging product lines. The acquisition supports our end market diversification strategy and expands our presence in European end markets. The final purchase price of $72,340, net of cash acquired of $5,578, has been allocated to the fair values of assets and liabilities acquired as of June 30, 2022. The valuation of intangible assets and associated deferred tax liability was finalized in the quarter. The following table summarizes the final consideration paid, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition:
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. The Company recorded a $3,012 step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold in the third and fourth quarters of 2022. The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
Maglab AG Acquisition On February 6, 2023, we acquired 100% of the outstanding shares of Maglab AG (”Maglab”). Maglab has deep expertise in magnetic system design and current measurement solutions for use in e-mobility, industrial automation, and renewable energy applications. Maglab’s domain expertise coupled with CTS’ commercial, technical and operational capabilities position us to advance our status as a recognized innovator in electric motor sensing and controls markets. The purchase price, which includes estimated changes in working capital, of $7,714 has been allocated to the fair values of assets and liabilities acquired as of February 6, 2023. The allocation of the purchase price continues to be preliminary pending the completion of the valuation of intangible assets and finalization of management’s estimates. The information included below represents our current estimate of the purchase price allocation. The following tables summarize the purchase price, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition of Maglab:
Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is expected to be deductible for tax purposes. Intangible assets acquired have been assigned a provisional value of $1,955 with an estimated weighted average amortization period of 12 years. They are included as customer lists/relationships in our Condensed Consolidated Balance Sheets and subsequent notes. Due to the timing of the acquisition, the identification and valuation of all intangible assets remains incomplete; however, management used historical experience and projections to estimate the potential value at March 31, 2023. The amount and assumptions included above remain an estimate that will be adjusted once purchase accounting is complete. All contingent consideration is payable in cash and is based on success factors related to the integration process as well as upon the achievement of annual revenue and customer order targets through the fiscal year ending December 31, 2025. The Company recorded $3,564 as the acquisition date fair value of the contingent consideration based on the estimate of the probability of achieving the performance targets. This amount is also reflected as an addition to the purchase price. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Receivable, Net | NOTE 4 – Accounts Receivable, net The components of accounts receivable, net are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories, Net | NOTE 5 – Inventories, net Inventories, net consists of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment, Net | NOTE 6 – Property, Plant and Equipment, net Property, plant and equipment, net is comprised of the following:
Depreciation expense for the three months ended March 31, 2023 and March 31, 2022 was $4,407 and $4,368, respectively. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Plans | NOTE 7 – Retirement Plans Pension Plans Net pension expense for our domestic and foreign plans included in other expense, net in the Condensed Consolidated Statements of Earnings is as follows:
The components of net pension expense for our domestic and foreign plans include the following:
(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:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Other Intangible Assets | NOTE 8 – Goodwill and Other Intangible Assets Goodwill Changes in the net carrying amount of goodwill were as follows:
Other Intangible Assets Other intangible assets, net consist of the following components:
The changes in the gross carrying amounts of intangible assets are primarily due to business acquisition and purchase accounting activity in the quarter as discussed in Note 3.
Remaining amortization expense for other intangible assets as of March 31, 2023 is as follows:
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs Associated with Exit and Restructuring Activities |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Costs Associated with Exit and Restructuring Activities | NOTE 9 – Costs Associated with Exit and Restructuring Activities Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statements of Earnings. Total restructuring charges are as follows:
September 2020 Plan In September 2020, we initiated a restructuring plan focused on optimizing our manufacturing footprint and improving operational efficiency by better utilizing our systems capabilities (the "September 2020 Plan"). This plan includes transitioning certain administrative functions to a shared service center, realignment of manufacturing locations, and certain other efficiency improvement actions. The restructuring cost of the September 2020 Plan is estimated to be in the range of $3,500 to $4,500, including workforce reduction charges, building and equipment relocation charges and other contract and asset-related costs. We have incurred $2,279 in program costs to date. We recorded $ workforce reduction costs during the three months ended March 31, 2023, under the 2020 Plan. The total restructuring liability associated with these actions was $485 as of March 31, 2023. The total restructuring liability associated with these actions was $634 as of December 31, 2022. Other Restructuring Activities From time to time, we may incur charges that are not considered part of a formal plan. During the three months ended March 31, 2023, we incurred restructuring charges of $692. The total restructuring liability associated with other restructuring activity was $615 at March 31, 2023 and $235 at December 31, 2022. During the first quarter of 2023 we announced the shutdown of our Juarez manufacturing facility. As a part of this activity, operations from the Juarez plant will be consolidated into our expanded Matamoros facility. We expect the completion of these activities to occur in 2024. The total restructuring cost of the activities associated with the closure and consolidation is estimated to be in the range of $1,500 to $3,000, including workforce reduction charges, building and equipment relocation charges and other contract and asset-related costs. During the three months ended March 31, 2023, we incurred costs of $102 that are associated with the planned Juarez shutdown activities. The restructuring liability associated with the shutdown is $56 as of March 31, 2023. These balances were included in our other restructuring activity amounts referenced in the preceding paragraph. The following table displays the restructuring liability activity included in accrued expenses and other liabilities for all plans for the three months ended March 31, 2023:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses and Other Liabilities | NOTE 10 – Accrued Expenses and Other Liabilities The components of accrued expenses and other liabilities are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contingencies | NOTE 11 – 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 (”EPA”), 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. Two of those sites, Asheville, North Carolina and Mountain View, California, are designated National Priorities List sites under the EPA’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. A roll-forward of remediation reserves included in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets is comprised of the following:
(1) Other activity includes currency translation adjustments not recorded through remediation expense. The Company operates under and in accordance with a federal consent decree, dated March 7, 2017, with the EPA for the CTS of Asheville, Inc. Superfund Site (“Ashveville Site”). On February 8, 2023, the Company received a letter from the EPA (the “EPA Letter”) seeking reimbursement of its past response costs and interest thereon relating to any release or threatened release of hazardous substances at the Asheville Site in the aggregate amount of $9,955 from the three potentially responsible parties associated with the Asheville Site, including the Company. The Company is analyzing its potential exposure for the costs sought in the EPA Letter and will respond thereto in due course; however, at this time, we are unable to reasonably estimate the liability from the EPA Letter, and therefore, we did not record an accrual for the EPA Letter as of March 31, 2023. Unrelated to the environmental claims described above, certain other legal claims are pending against us with respect to matters arising out of the ordinary conduct of our business. We provide product warranties when we sell our products and accrue for estimated liabilities at the time of sale. Warranty estimates are forecasts based on the best available information and historical claims experience. We accrue for specific warranty claims if we believe that the facts of a specific claim make it probable that a liability in excess of our historical experience has been or will be incurred, and provide disclosures for specific claims whenever it is reasonably possible that a material loss may be incurred which cannot be estimated. We cannot provide assurance that the ultimate disposition of environmental, legal, and product warranty claims will not materially exceed the amount of our accrued losses and adversely impact 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. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | NOTE 12 - Debt Long-term debt is comprised of the following:
On December 15, 2021, we entered into a second amended and restated five-year credit agreement with a group of banks (the “Revolving Credit Facility”) to (i) increase the total credit facility to $400,000, which may be increased by $200,000 at the request of the Company, subject to the administrative agent's approval, (ii) extend the maturity of the Revolving Credit Facility from February 12, 2024 to December 15, 2026, (iii) replace LIBOR with SOFR as the primary reference rate used to calculate interest on the loans under the Revolving Credit Facility, (iv) increase available sublimits for letters of credit and swingline loans as well as providing for additional alternative currency borrowing capabilities, and (v) modify the financial and non-financial covenants to provide the Company additional flexibility. Borrowings in U.S. dollars under the Revolving Credit Facility bear interest, at a per annum rate equal to the applicable Term SOFR rate (but not less than 0.0%), plus the Term SOFR adjustment, and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. Similarly, borrowings of alternative currencies under the Revolving Credit Facility bear interest equal to a defined risk-free reference rate, plus the applicable risk-free rate adjustment and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. The Revolving Credit Facility includes a swing line sublimit of $20,000 and a letter of credit sublimit of $20,000. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.175% to 0.25% based on our net leverage ratio. The Revolving Credit Facility requires, in addition to customary representations and warranties, that we comply with a maximum net leverage ratio and a minimum interest 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 March 31, 2023. 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. 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, which approximates the effective interest method. Amortization expense for the three months ended March 31, 2023 and 2022 were $48 and $48, respectively. These costs are included in interest expense in our Consolidated Statements of Earnings. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments | Note 13 - 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 as well as interest rate and cross-currency 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 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 to other income (expense), net. 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 Statements of Earnings for the three months ended March 31, 2023. 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 March 31, 2023, we had a net unrealized gain of $2,123 in accumulated other comprehensive (loss) income, $2,078 of which is expected to be reclassified to earnings within the next 12 months. The notional amount of foreign currency forward contracts outstanding was $24,165 at March 31, 2023. Interest Rate Swaps We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest to a fixed rate. As of March 31, 2023, we have agreements to fix interest rates on $50,000 of long-term debt until December 2026. 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 $1,451. Cross-Currency Swap The Company has operations and investments in various international locations and is subject to risks associated with changing foreign exchange rates. In order to hedge the Krone-based purchase price of the Ferroperm acquisition, the Company entered into a cross currency interest rate swap agreement on June 27, 2022 that synthetically swapped $25,000 of variable rate debt to Krone denominated variable rate debt. Upon completion of the Ferroperm acquisition on June 30, 2022, the transaction was designated as a net investment hedge for accounting purposes and will mature on June 30, 2027. Accordingly, any gains or losses on this derivative instrument are included in the foreign currency translation component of other comprehensive (loss) income until the net investment is sold, diluted or liquidated. At March 31, 2023 we had a net unrealized loss of $860 in accumulated other comprehensive (loss) income. Interest payments received for the cross-currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense in the Condensed Consolidated Statements of Earnings. The assumptions used in measuring fair value of the cross-currency swap are considered level 2 inputs, which are based upon the Krone to U.S. Dollar exchange rate market. The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2023, are shown in the following table:
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 $2,143 and foreign currency derivative liabilities of $191 at March 31, 2023. The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Loss | NOTE 14 – Accumulated Other Comprehensive Loss Shareholders’ equity includes certain items classified as accumulated other comprehensive loss (“AOCI”) in the Condensed Consolidated Balance Sheets, including: • Unrealized gains (losses) on hedges relate to interest rate swaps to convert a portion of our Revolving Credit Facility's outstanding balance from a variable rate of interest into a fixed rate, foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies, as well as a cross-currency swap that synthetically converts our U.S. Dollar variable rate debt to Krone-denominated variable rate debt. 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 13 - Derivative Financial Instruments and Note 17 – 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 7 – 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 (loss) 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 ended March 31, 2023 and March 31, 2022 were $68 and $288, respectively. The impact of these changes have been included in other income (expense) in the Condensed Consolidated Statements of Earnings. The components of accumulated other comprehensive loss for the three months ended March 31, 2023, are as follows:
The components of accumulated other comprehensive loss for the three months ended March 31, 2022, are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity | NOTE 15 – Shareholders’ Equity Share count and par value data related to shareholders’ equity are as follows:
On February 9, 2023, the Board of Directors approved a new share repurchase program that authorizes the Company to repurchase up to $50,000 of the Company’s common stock. The repurchase program has no set expiration date and replaces the repurchase program approved by the Board of Directors on May 13, 2021. During the three months ended March 31, 2023, 198,271 shares of common stock were repurchased for $8,802 across both share repurchase programs. During the three months ended March 31, 2022, 116,176 shares of common stock were repurchased for $3,920. As of March 31, 2023, approximately $45,399 remains available for future purchases. A roll-forward of common shares outstanding is as follows:
Certain potentially dilutive restricted stock units are excluded from diluted earnings per share because they are anti-dilutive. The number of outstanding awards that were anti-dilutive for the three months ended March 31, 2023 and March 31, 2022 were 37,676 and 38,384, respectively. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | NOTE 16- Stock-Based Compensation At March 31, 2023, we had five active stock-based compensation plans: the Non-Employee 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 and Incentive Compensation Plan (“2014 Plan”), and the 2018 Equity and Incentive Compensation Plan ("2018 Plan"). Future grants can only be made under the 2018 Plan. These plans allow or allowed (as applicable) for grants of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance shares, performance units, and other stock awards subject to the terms of the specific plans under which the awards are granted. 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:
The following table summarizes the unrecognized compensation expense related to unvested RSUs by type and the weighted-average period in which the expense is to be recognized:
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 March 31, 2023:
Service-Based Restricted Stock Units The following table summarizes the service-based RSU activity for the three months ended March 31, 2023:
Performance-Based Restricted Stock Units The following table summarizes the performance-based RSU activity for the three months ended March 31, 2023:
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 March 31, 2023 and December 31, 2022, we had 50,847 and 46,641 Cash-Settled RSUs outstanding, respectively. At March 31, 2023 and December 31, 2022, liabilities of $451 and $566, respectively, were included in accrued expenses and other liabilities on our Condensed Consolidated Balance Sheets. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | NOTE 17 — Fair Value Measurements The table below summarizes our financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2023:
The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022:
We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a 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. The Company entered into a cross-currency swap agreement in order to manage its exposure to changes in interest rates related to foreign debt. These derivative financial instruments are measured at fair value on a recurring basis. 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 fair value of the contingent consideration requires significant judgment. The Company's fair value estimates used in the contingent consideration valuation are considered Level 3 fair value measurements. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and timing of events and activities that are expected to take place. Refer to Note 3 for further discussion on contingent consideration. A roll-forward of the contingent consideration is as follows:
As of March 31, 2023, approximately $1,424 was recorded in accrued expenses and other liabilities with the remainder in other long-term obligations. 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 its 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. The qualified replacement plan assets consist of investment funds maintained for future contributions to the Company’s U.S. 401(k) program. The investments are Level 1 marketable securities and are recorded in Other Assets on our Condensed Consolidated Balance Sheets. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | NOTE 18 — Income Taxes The effective tax rates for the three months ended March 31, 2023 and March 31, 2022 are as follows:
The decrease in effective income tax is primarily attributed to tax benefits recorded upon vesting of restricted stock units. The first quarter 2023 effective income tax rate was lower than the U.S. statutory federal tax rate for the same reason as noted above. The first quarter 2022 effective tax rate was higher than the U.S. statutory federal tax rate primarily due to foreign withholding taxes and state taxes. |
|||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| 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, 2022. 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. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Disaggregated Revenues | The following table presents revenues disaggregated by the major markets we serve:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TEWA Temperature Sennsors SP.Zo.o. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Consideration Paid and Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Carrying Amounts and Weighted Average Lives of Acquired Intangible Assets | The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ferroperm Piezoceramics A/S Acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Consideration Paid and Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the final consideration paid, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Carrying Amounts and Weighted Average Lives of Acquired Intangible Assets | The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maglab AG Acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Consideration Paid and Fair Values of Assets Acquired and Liabilities Assumed | The following tables summarize the purchase price, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition of Maglab:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Accounts Receivable, Net | The components of accounts receivable, net are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Inventories, Net | Inventories, net consists of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net is comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Pension (Income) Expense or Postretirement Expense | Net pension expense for our domestic and foreign plans included in other expense, net in the Condensed Consolidated Statements of Earnings is as follows:
The components of net pension expense for our domestic and foreign plans include the following:
(1)
Expected return on plan assets is net of expected investment expenses and certain administrative expenses. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Postretirement Benefits Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Pension (Income) Expense or Postretirement Expense | Net post-retirement expense for our other post-retirement plan includes the following components:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets (Tables) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Other Intangible Assets | Other intangible assets, net consist of the following components:
The changes in the gross carrying amounts of intangible assets are primarily due to business acquisition and purchase accounting activity in the quarter as discussed in Note 3.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Amortization Expense Remaining for Other Intangible Assets | Remaining amortization expense for other intangible assets as of March 31, 2023 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary Changes in Net Carrying Amount of Goodwill |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs Associated with Exit and Restructuring Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of Restructuring Charges | Total restructuring charges are as follows:
|
||||||||||||||||||||||||||||||||||||
| Schedule of Restructuring Liability Activity | The following table displays the restructuring liability activity included in accrued expenses and other liabilities for all plans for the three months ended March 31, 2023:
|
||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Accrued Expenses and Other Liabilities | The components of accrued expenses and other liabilities are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roll-forward of Remediation Reserves Included in Accrued Expenses and Other Liabilities | A roll-forward of remediation reserves included in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets is comprised of the following:
(1)
Other activity includes currency translation adjustments not recorded through remediation expense. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Long-Term Debt | Long-term debt is comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Location and Fair Values of Derivative Instruments | The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2023, are shown in the following table:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Effect of Derivative Instruments on Consolidated Statements of Earnings | The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss for the three months ended March 31, 2023, are as follows:
The components of accumulated other comprehensive loss for the three months ended March 31, 2022, are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Common Shares Outstanding | A roll-forward of common shares outstanding is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of 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:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Unrecognized Compensation Expense related to Non-Vested RSUs | The following table summarizes the unrecognized compensation expense related to unvested RSUs by type and the weighted-average period in which the expense is to be recognized:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Status of Plans | The following table summarizes the status of these plans as of March 31, 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Service-Based Restricted Stock Units | The following table summarizes the service-based RSU activity for the three months ended March 31, 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Performance and Market Based RSUs | The following table summarizes the performance-based RSU activity for the three months ended March 31, 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The table below summarizes our financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2023:
The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roll-forward of the Contingent Consideration | A roll-forward of the contingent consideration is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Effective Income Tax Rate | The effective tax rates for the three months ended March 31, 2023 and March 31, 2022 are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition - Summary of Disaggregated Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Disaggregation of Revenue [Line Items] | ||
| Revenues | $ 145,994 | $ 147,695 |
| Transportation | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | 74,310 | 79,134 |
| Industrial | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | 40,673 | 40,007 |
| Medical | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | 17,311 | 15,867 |
| Aerospace and Defense | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | $ 13,700 | $ 12,687 |
Business Acquisitions - Summary of Consideration Paid and Fair Values of Assets Acquired and Liabilities Assumed (Parenthetical) (Details) $ in Thousands |
Feb. 06, 2023
USD ($)
|
|---|---|
| Maglab AG Acquisition | |
| Business Acquisition [Line Items] | |
| Cash acquired from acquisition | $ 14 |
Accounts Receivable, Net - Components of Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Receivables [Abstract] | ||
| Accounts receivable, gross | $ 98,797 | $ 92,171 |
| Less: Allowance for credit losses | (1,090) | (1,236) |
| Accounts receivable, net | $ 97,707 | $ 90,935 |
Inventories, Net - Summary of Inventories, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Finished goods | $ 13,428 | $ 12,865 |
| Work-in-process | 21,892 | 22,819 |
| Raw materials | 39,504 | 37,362 |
| Less: Inventory reserves | (11,354) | (10,786) |
| Inventories, net | $ 63,470 | $ 62,260 |
Property, Plant and Equipment, Net - Summary of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Less: Accumulated depreciation | $ (236,813) | $ (233,897) |
| Property, plant and equipment, net | 96,280 | 97,300 |
| Land and Land Improvements | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, plant and equipment gross | 1,100 | 1,100 |
| Buildings and Improvements | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, plant and equipment gross | 73,383 | 71,938 |
| Machinery and Equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, plant and equipment gross | $ 258,610 | $ 258,159 |
Property, Plant and Equipment, Net - Additional Information - (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 4,407 | $ 4,368 |
Retirement Plans - Net Pension Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Pension Plans | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Net pension expense | $ 67 | $ 65 |
Retirement Plans - Net Pension Expense Domestic and Foreign (Details) - Pension Plans - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Net pension expense (income) | ||
| Total (income) expense, net | $ 67 | $ 65 |
| UNITED STATES | ||
| Net pension expense (income) | ||
| Service cost | 0 | 0 |
| Interest cost | 10 | 5 |
| Expected return on plan assets | 0 | 0 |
| Amortization of loss | 5 | 8 |
| Total (income) expense, net | 15 | 13 |
| Foreign Plan | ||
| Net pension expense (income) | ||
| Service cost | 6 | 6 |
| Interest cost | 10 | 4 |
| Expected return on plan assets | (7) | (3) |
| Amortization of loss | 43 | 45 |
| Total (income) expense, net | $ 52 | $ 52 |
Retirement Plans - Other Postretirement Benefit Plan (Details) - Other Postretirement Benefits Plan - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Service cost | $ 0 | $ 0 |
| Interest cost | 48 | 26 |
| Amortization of gain | (84) | 0 |
| Total (income) expense, net | $ (36) | $ 26 |
Goodwill and Other Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
| Finite Lived Intangible Assets [Line Items] | |||
| Gross Carrying Amount | $ 195,923 | $ 194,154 | |
| Accumulated Amortization | (86,217) | (86,101) | |
| Net Amount | 109,706 | 108,053 | |
| Amortization expense | 2,511 | $ 2,381 | |
| Customer Lists/Relationships | |||
| Finite Lived Intangible Assets [Line Items] | |||
| Gross Carrying Amount | 141,952 | 148,899 | |
| Accumulated Amortization | (56,891) | (59,603) | |
| Net Amount | 85,061 | 89,296 | |
| Technology and Other Intangibles | |||
| Finite Lived Intangible Assets [Line Items] | |||
| Gross Carrying Amount | 53,971 | 45,255 | |
| Accumulated Amortization | (29,326) | (26,498) | |
| Net Amount | $ 24,645 | $ 18,757 | |
Goodwill and Other Intangible Assets - Summary of Amortization Expense (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule | ||
| 2023 | $ 8,449 | |
| 2024 | 10,959 | |
| 2025 | 10,482 | |
| 2026 | 10,328 | |
| 2027 | 10,270 | |
| Thereafter | 59,218 | |
| Net Amount | $ 109,706 | $ 108,053 |
Goodwill and Other Intangible Assets - Summary Changes in Net Carrying Amount of Goodwill (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Goodwill Roll Forward | |
| Beginning balance | $ 152,361,000 |
| Changes from acquisition purchase accounting | 3,444 |
| Foreign exchange impact | (154) |
| Ending balance | $ 155,651,000 |
Costs Associated with Exit and Restructuring Activities - Schedule of Restructuring Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Restructuring and Related Activities [Abstract] | ||
| Restructuring charges | $ 912 | $ 312 |
Costs Associated with Exit and Restructuring Activities - Schedule of Restructuring Liability Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Restructuring and Related Activities [Abstract] | ||
| Restructuring liability | $ 869 | |
| Restructuring charges | 912 | $ 312 |
| Cost paid | (681) | |
| Restructuring liability | $ 1,100 | |
Accrued Expenses and Other Liabilities - Components of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Payables and Accruals [Abstract] | |||
| Accrued product related costs | $ 2,092 | $ 2,368 | |
| Accrued income taxes | 9,210 | 9,630 | |
| Accrued property and other taxes | 2,279 | 2,142 | |
| Accrued professional fees | 1,587 | 1,472 | |
| Accrued customer related liabilities | 2,648 | 2,837 | |
| Dividends payable | 1,263 | 1,272 | |
| Remediation reserves | 11,058 | 11,048 | $ 10,979 |
| Derivative liabilities | 649 | 357 | |
| Other accrued liabilities | 5,748 | 4,196 | |
| Total accrued expenses and other liabilities | $ 36,534 | $ 35,322 |
Commitments and Contingencies - Additional Information (Details) - U.S. Environmental Protection Agency $ in Thousands |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2023
Site
|
Feb. 08, 2023
USD ($)
|
|
| Loss Contingencies [Line Items] | ||
| Number of sites under National Priorities List of Superfund program | Site | 2 | |
| Reimbursement costs and interest | $ | $ 9,955 |
Commitments and Contingencies - Roll-forward of Remediation Reserves Included in Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Balance at beginning of period | $ 11,048 | $ 10,979 |
| Remediation expense | 562 | 2,750 |
| Net remediation payments | (555) | (2,661) |
| Other activity | 3 | (20) |
| Balance at end of the period | $ 11,058 | $ 11,048 |
Debt - Summary of Long-Term Debt (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
Dec. 15, 2021 |
|---|---|---|---|
| Long-term debt | |||
| Total credit facility | $ 400,000,000 | $ 400,000,000 | |
| Balance outstanding | 80,261,000 | 83,670,000 | |
| Standby letters of credit | 1,640,000 | 1,640,000 | |
| Amount available, subject to covenant restrictions | 318,099,000 | 314,690,000 | |
| Revolving Credit Facility Due 2024 | |||
| Long-term debt | |||
| Total credit facility | $ 400,000,000 | ||
| Balance outstanding | $ 80,261,000 | $ 83,670,000 | |
| Weighted-average interest rate | 5.47% | 2.96% |
Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Foreign currency transaction loss | ||
| Foreign currency transaction losses | $ (68) | $ (288) |
Shareholders' Equity - Summary of Share Count and Par Value Data Related to Shareholders' Equity (Details) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|---|---|
| Preferred Stock | ||||
| Preferred stock, par value per share | ||||
| Preferred stock, shares authorized | 25,000,000 | 25,000,000 | ||
| Preferred stock, shares outstanding | 0 | 0 | ||
| Common Stock | ||||
| Common stock, par value per share | ||||
| Common stock, shares authorized | 75,000,000 | 75,000,000 | ||
| Common stock, shares issued | 57,429,297 | 57,330,761 | ||
| Common stock, shares outstanding | 31,581,155 | 31,680,890 | 32,123,222 | 32,178,715 |
| Treasury stock | ||||
| Treasury stock, shares held | 25,848,142 | 25,649,871 |
Shareholders' Equity - Additional Information (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Feb. 09, 2023 |
|
| Equity Class Of Treasury Stock [Line Items] | |||
| Common stock repurchased, shares | 198,271 | 116,176 | |
| Common stock repurchased, value | $ 8,802,000 | $ 3,920,000 | |
| Shares available for future purchases | $ 45,399,000 | ||
| Antidilutive securities excluded from computation of earnings per share (shares) | 37,676 | 38,384 | |
| Maximum | |||
| Equity Class Of Treasury Stock [Line Items] | |||
| Treasury shares authorized to be purchased | $ 50,000,000 | ||
Shareholders' Equity - Summary of Common Shares Outstanding (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Roll forward of common shares outstanding | ||
| Balance at the beginning of the year | 31,680,890 | 32,178,715 |
| Repurchases | (198,271) | (116,176) |
| Restricted share issuances | 98,536 | 60,683 |
| Balance at the end of the period | 31,581,155 | 32,123,222 |
Stock-Based Compensation - Additional Information (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
Plan
shares
|
Dec. 31, 2022
USD ($)
shares
|
|---|---|---|
| Share-based Compensation | ||
| Number of equity based compensation plans | Plan | 5 | |
| Other accrued liabilities | $ 5,748 | $ 4,196 |
| Cash Settled Awards | ||
| Share-based Compensation | ||
| Outstanding shares | shares | 50,847 | 46,641 |
| Other accrued liabilities | $ 451 | $ 566 |
Stock-Based Compensation - Summary of Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
| Stock-based compensation | $ 1,586 | $ 1,950 |
| Service-Based RSUs | ||
| Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
| Stock-based compensation | 770 | 676 |
| Performance and Market-based RSUs | ||
| Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
| Stock-based compensation | 634 | 1,222 |
| Cash Settled Awards | ||
| Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
| Stock-based compensation | 182 | 52 |
| RSUs | ||
| Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
| Stock-based compensation | 1,586 | 1,950 |
| Income tax benefit | 365 | 449 |
| Net expense | $ 1,221 | $ 1,501 |
Stock-Based Compensation - Summary of Unrecognized Compensation Expense related to Non-vested RSUs (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Service-Based RSUs | |
| Share-based Compensation | |
| Unrecognized compensation expense | $ 4,003 |
| Weighted-average period (years) | 1 year 7 months 2 days |
| Performance and Market-based RSUs | |
| Share-based Compensation | |
| Unrecognized compensation expense | $ 6,366 |
| Weighted-average period (years) | 2 years 21 days |
| RSUs | |
| Share-based Compensation | |
| Unrecognized compensation expense | $ 10,369 |
| Weighted-average period (years) | 1 year 10 months 17 days |
Stock-Based Compensation - Summary of Status of Plans (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
shares
| |
| 2018 Plan | |
| Summary of Status of Equity-Based Compensation Plans | |
| Awards originally available | 2,500,000 |
| Maximum potential awards outstanding | 825,641 |
| RSUs and cash settled awards vested and released | 427,202 |
| Awards available for grant | 1,247,157 |
| 2014 Plan | |
| Summary of Status of Equity-Based Compensation Plans | |
| Awards originally available | 1,500,000 |
| Maximum potential awards outstanding | 35,100 |
| 2009 Plan | |
| Summary of Status of Equity-Based Compensation Plans | |
| Awards originally available | 3,400,000 |
| Maximum potential awards outstanding | 30,000 |
| 2004 Plan | |
| Summary of Status of Equity-Based Compensation Plans | |
| Awards originally available | 6,500,000 |
| Maximum potential awards outstanding | 14,545 |
| Directors' Plan | |
| Summary of Status of Equity-Based Compensation Plans | |
| Maximum potential awards outstanding | 4,722 |
Stock-Based Compensation - Summary of Service-Based Restricted Stock Units (Details) - Service-Based RSUs |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
$ / shares
shares
| |
| Units | |
| Outstanding at beginning of year - Units | shares | 282,124 |
| Granted - Units | shares | 64,046 |
| Vested and released - Units | shares | (55,738) |
| Forfeited - Units | shares | (1,005) |
| Outstanding at end of year - Units | shares | 289,427 |
| Releasable - Units | shares | 135,467 |
| Weighted Average Grant Date Fair Value | |
| Beginning of year - Weighted Average Grant Date Fair Value | $ / shares | $ 27.44 |
| Granted - Weighted Average Grant Date Fair Value | $ / shares | 43.77 |
| Vested and released - Weighted Average Grant Date Fair Value | $ / shares | 32.29 |
| Forfeited - Weighted Average Grant Date Fair Value | $ / shares | 33.06 |
| End of year - Weighted Average Grant Date Fair Value | $ / shares | 30.10 |
| Releasable - Weighted Average Grant Date Fair Value | $ / shares | $ 20.73 |
Fair Value Measurements - Roll-forward of the Contingent Consideration (Details) - Contingent Consideration $ in Thousands |
Mar. 31, 2023
USD ($)
|
|---|---|
| Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
| Balance at December 31, 2022 | $ 0 |
| Balance at March 31, 2023 | $ 3,564 |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Other long-term obligations | $ 5,223 | $ 3,249 |
| Accrued Expenses and Other Liabilities | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Other long-term obligations | $ 1,424 |
Income Taxes - Schedule of Effective Income Tax Rate (Details) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Effective tax rate | 19.20% | 21.40% |
Income Taxes - Additional Information (Details) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Effective income tax rate | 19.20% | 21.40% |