QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended |
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 |
THE L. S. STARRETT COMPANY | ||
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class B Common - $1.00 Per Share Par Value | Not applicable | Not applicable |
Common Shares outstanding as of | January 17, 2024 | ||||||||||
Class A Common Shares | |||||||||||
Class B Common Shares |
Page No. | |||||||||||
Condensed Consolidated Statements of Operations (unaudited) – three and six months ended December 31, 2023 and December 31, 2022 | |||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss), (unaudited) – three and six months ended December 31, 2023 and December 31, 2022 | |||||||||||
Condensed Consolidated Statements of Stockholders' Equity (unaudited) – three and six months ended December 31, 2023 and December 31, 2022 | |||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) - six months ended December 31, 2023 and December 31, 2022 | |||||||||||
10-18 | |||||||||||
12/31/2023 | 06/30/2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable (less allowance for credit losses of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Right of use assets | |||||||||||
Deferred tax assets, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current maturities of debt | $ | $ | |||||||||
Current lease liability | |||||||||||
Accounts payable | |||||||||||
Accrued expenses | |||||||||||
Accrued compensation | |||||||||||
Total current liabilities | |||||||||||
Other tax obligations | |||||||||||
Long-term lease liability | |||||||||||
Long-term debt, net of current portion and debt costs | |||||||||||
Postretirement benefit and pension obligations | |||||||||||
Total liabilities | |||||||||||
Contingencies (Note 12) | |||||||||||
Stockholders' equity: | |||||||||||
Class A Common stock $ | |||||||||||
Class B Common stock $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
3 Months Ended | 6 Months Ended | ||||||||||||||||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
% of Net sales | % | % | % | % | |||||||||||||||||||
Restructuring charges | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other (expense), net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
Basic (loss) income per share | $ | ( | $ | $ | $ | ||||||||||||||||||
Diluted (loss) income per share | $ | ( | $ | $ | $ | ||||||||||||||||||
Weighted average outstanding shares used in per share calculations: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
3 Months Ended | 6 Months Ended | ||||||||||||||||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Currency translation gain (loss), net of tax | ( | ( | |||||||||||||||||||||
Pension and postretirement plans, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive (loss) income | — | — | — | ( | |||||||||||||||||||||||||||||||
Repurchase of shares | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuance of stock | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Balance December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | ( | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | |||||||||||||||||||||||||||||||||||
$ | ( |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Repurchase of shares | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuance of stock | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Balance December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | ( | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | |||||||||||||||||||||||||||||||||||
$ | ( |
6 Months Ended | |||||||||||
12/31/2023 | 12/31/2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Non-cash operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Stock-based compensation | |||||||||||
Net long-term tax obligations | |||||||||||
Deferred taxes | |||||||||||
Postretirement benefit and pension obligations | |||||||||||
Working capital changes: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Other current assets | ( | ( | |||||||||
Other current liabilities | ( | ( | |||||||||
Prepaid pension expense | ( | ( | |||||||||
Other | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Software development | ( | ( | |||||||||
Net cash (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowing | |||||||||||
Debt repayments | ( | ( | |||||||||
Proceeds from common stock issued | |||||||||||
Shares repurchased | ( | ( | |||||||||
Net cash (used in) financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash | ( | ||||||||||
Net (decrease) in cash | ( | ( | |||||||||
Cash, beginning of period | |||||||||||
Cash, end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Interest paid | |||||||||||
Income taxes paid, net | $ | $ |
NAI | INI | GTM | Unallocated | Total | |||||||||||||||||||||||||
Three Months ended December 31, 2023 | |||||||||||||||||||||||||||||
Sales1 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating Income (Loss) | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||
Three Months ended December 31, 2022 | |||||||||||||||||||||||||||||
Sales2 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating Income (Loss) | $ | $ | $ | $ | ( | $ |
NAI | INI | GTM | Unallocated | Total | |||||||||||||||||||||||||
Six months ended December 31, 2023 | |||||||||||||||||||||||||||||
Sales1 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating Income (Loss) | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
Six months ended December 31, 2022 | |||||||||||||||||||||||||||||
Sales2 | $ | 0 | $ | $ | $ | $ | |||||||||||||||||||||||
Operating Income (Loss) | $ | $ | $ | $ | ( | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada & Mexico | |||||||||||||||||||||||
Brazil | |||||||||||||||||||||||
United Kingdom | |||||||||||||||||||||||
China | |||||||||||||||||||||||
Australia & New Zealand | |||||||||||||||||||||||
Total Sales | $ | $ | $ | $ |
Right-of-Use Assets | Operating Lease Obligations | Remaining Cash Commitment | |||||||||||||||
Leases | $ | $ | $ |
12/31/2023 | 06/30/2023 | ||||||||||
Raw material and supplies | $ | $ | |||||||||
Goods in process and finished parts | |||||||||||
Finished goods | |||||||||||
LIFO Reserve | ( | ( | |||||||||
$ | $ |
12/31/2023 | 6/30/2023 | ||||||||||
Trademarks and trade names | $ | $ | |||||||||
Customer relationships | |||||||||||
Software development | |||||||||||
Other intangible assets | |||||||||||
Gross intangible assets | |||||||||||
Accumulated amortization and impairment | ( | ( | |||||||||
Net intangible assets | $ | $ |
12/31/2023 | 06/30/2023 | ||||||||||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ | $ | |||||||||
Income taxes | |||||||||||
Professional fees | |||||||||||
Other | |||||||||||
Current portion pension cost | |||||||||||
Taxes other than income tax | |||||||||||
Workers compensation and employee deposits | |||||||||||
Freight | |||||||||||
Total | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Expected net cost total | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Amortization of prior service credit | ( | ( | ( | ( | |||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Total net (benefit) | $ | ( | $ | ( | $ | ( | $ | ( |
12/31/2023 | 06/30/2023 | ||||||||||
Short-term and current maturities | |||||||||||
Loan and security agreement (term loan) | $ | $ | |||||||||
Brazil loans | |||||||||||
Long-term debt (net of current portion) | |||||||||||
Loan and security agreement (term loan) | |||||||||||
Loan and security agreement (line of credit) | |||||||||||
Brazil loans | |||||||||||
Debt reacquisition cost, net | ( | ( | |||||||||
Total debt | $ | $ |
Lending Institution | Interest Rate | Beginning Date | Ending Date | Outstanding Balance | |||||||||||||||||||
Itau | October 2021 | September 2024 | $ | ||||||||||||||||||||
Itau | February 2022 | February 2024 | |||||||||||||||||||||
Brasil | August 2022 | July 2025 | |||||||||||||||||||||
Brasil | September 2022 | August 2024 | |||||||||||||||||||||
$ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(Amounts in thousands) | 12/31/23 | 12/31/2022 | $ Change favorable (unfavorable) | % Change | 12/31/2023 | 12/31/2022 | $ Change favorable (unfavorable) | % Change | |||||||||||||||||||||
Net sales | $ | 62,076 | $ | 66,775 | $ | (4,699) | (7.0) | % | $ | 122,712 | $ | 127,236 | (4,524) | (3.6) | % | ||||||||||||||
Gross profit | 18,964 | 21,576 | (2,612) | (12.1) | % | 38,500 | 41,776 | (3,276) | (7.8) | % | |||||||||||||||||||
% of net sales | 30.5 | % | 32.3 | % | 31.4 | % | 32.8 | % | |||||||||||||||||||||
Selling, general and administrative expenses | 16,470 | 15,561 | (909) | (5.8) | % | 33,548 | 31,855 | (1,693) | (5.3) | % | |||||||||||||||||||
% of net sales | 26.5 | % | 23.3 | % | 27.3 | % | 25.0 | % | |||||||||||||||||||||
Restructuring charges | — | 54 | 54 | (100.0) | % | — | 244 | 244 | (100.0) | % | |||||||||||||||||||
Operating income | 2,494 | 5,961 | (3,467) | (58.2) | % | 4,952 | 9,677 | (4,725) | (48.8) | % | |||||||||||||||||||
Other (expense), net | (526) | (1,121) | 595 | (53.1) | % | (890) | (1,797) | 907 | 50.5 | % | |||||||||||||||||||
Income before income taxes | 1,968 | 4,840 | (2,872) | (59.3) | % | 4,062 | 7,880 | (3,818) | (48.4) | % | |||||||||||||||||||
Income tax expense (benefit) | 2,362 | 1,709 | (653) | (38.2) | % | 2,537 | 2,693 | 156 | 5.8 | % | |||||||||||||||||||
Net (loss) income | $ | (394) | $ | 3,131 | (3,525) | (112.6) | % | $ | 1,525 | $ | 5,187 | (3,662) | (70.6) | % |
GAAP to Non-GAAP reconciliation: | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(Amounts in thousands) | 12/31/2023 | 12/31/2022 | $ Change favorable (unfavorable) | % Change | 12/31/2023 | 12/31/2022 | $ Change favorable (unfavorable) | % Change | |||||||||||||||||||||
Operating income as reported | 2,494 | 5,961 | (3,467) | (58.2) | % | 4,952 | 9,677 | (4,725) | (48.8) | % | |||||||||||||||||||
Add back restructuring charges | — | (54) | (54) | (100) | % | — | (244) | (244) | (100) | % | |||||||||||||||||||
Adjusted operating income | 2,494 | 6,015 | (3,521) | (58.5) | % | 4,952 | 9,921 | (4,969) | (50.1) | % | |||||||||||||||||||
% of net sales | 4.0 | % | 9.0 | % | (500) basis points | 4.0 | % | 7.8 | % | (380) basis points |
Key Results by Reporting Segment | |||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2023 | Three Months Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | NAI | INI | GTM | Corporate | Total | NAI | INI | GTM | Corporate | Total | |||||||||||||||||||||||||
Net sales | $ | 19,814 | $ | 26,425 | $ | 15,837 | $ | — | $ | 62,076 | $ | 22,780 | $ | 26,051 | $ | 17,944 | $ | — | $ | 66,775 | |||||||||||||||
Gross profit | 4,204 | 8,966 | 5,794 | — | 18,964 | 4,599 | 10,135 | 6,842 | — | 21,576 | |||||||||||||||||||||||||
% of net sales | 21.2 | % | 33.9 | % | 36.6 | % | 30.5 | % | 20.2 | % | 38.9 | % | 38.1 | % | 32.3 | % | |||||||||||||||||||
Selling, general and administrative expenses | 4,389 | 6,739 | 3,274 | 3,274 | 16,470 | 4,423 | 6,285 | 3,528 | 1,325 | 15,561 | |||||||||||||||||||||||||
% of net sales | 22.2 | % | 25.5 | % | 20.7 | % | 26.5 | % | 19.4 | % | 24.1 | % | 19.7 | % | 23.3 | % | |||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | 54 | — | — | 54 | |||||||||||||||||||||||||
Operating income (loss) | $ | (185) | $ | 2,227 | $ | 2,520 | $ | (2,068) | $ | 2,494 | $ | 176 | $ | 3,796 | $ | 3,314 | $ | (1,325) | $ | 5,961 | |||||||||||||||
% of net sales | (0.9) | % | 8.4 | % | 15.9 | % | 4.0 | % | 0.8 | % | 14.6 | % | 18.5 | % | 8.9 | % | |||||||||||||||||||
Add back restructuring charges | — | — | — | — | — | — | (54) | — | — | (54) | |||||||||||||||||||||||||
Adjusted operating income | (185) | 2,227 | 2,520 | (2,068) | $ | 2,494 | $ | 176 | $ | 3,850 | $ | 3,314 | $ | (1,325) | $ | 6,015 | |||||||||||||||||||
% of net sales | (0.9) | % | 8.4 | % | 15.9 | % | 4.0 | % | 0.8 | % | 14.8 | % | 18.5 | % | 9.0 | % |
Six Months Ended December 31, 2023 | Six Months Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | NAI | INI | GTM | Corporate | Total | NAI | INI | GTM | Corporate | Total | |||||||||||||||||||||||||
Net sales | $ | 39,284 | $ | 51,799 | $ | 31,629 | $ | — | $ | 122,712 | $ | 45,151 | $ | 49,350 | $ | 32,735 | $ | — | $ | 127,236 | |||||||||||||||
Gross profit | 8,132 | 18,742 | 11,627 | — | 38,501 | 10,014 | 19,087 | 12,675 | — | 41,776 | |||||||||||||||||||||||||
% of net sales | 20.7 | % | 36.2 | % | 36.8 | % | 31.4 | % | 22.2 | % | 38.7 | % | 38.7 | % | 32.8 | % | |||||||||||||||||||
Selling, general and administrative expenses | 9,001 | 13,755 | 6,735 | 4,057 | 33,548 | 9,138 | 12,358 | 7,083 | 3,277 | 31,854 | |||||||||||||||||||||||||
% of net sales | 22.9 | % | 26.6 | % | 21.3 | % | 27.3 | % | 20.2 | % | 25.0 | % | 21.6 | % | 25.0 | % | |||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | 244 | — | — | 244 | |||||||||||||||||||||||||
Operating income (loss) | $ | (869) | $ | 4,987 | $ | 4,892 | $ | (4,058) | $ | 4,952 | $ | 876 | $ | 6,485 | $ | 5,592 | $ | (3,277) | $ | 9,677 | |||||||||||||||
% of net sales | (2.2) | % | 9.6 | % | 15.5 | % | 4.0 | % | 1.9 | % | 13.1 | % | 17.1 | % | 7.6 | % | |||||||||||||||||||
Add back restructuring charges | — | — | — | — | — | — | (244) | — | — | (244) | |||||||||||||||||||||||||
Adjusted operating income | (185) | 2,227 | 2,520 | (2,068) | 2,494 | $ | 876 | $ | 6,729 | $ | 5,592 | $ | (3,277) | $ | 9,922 | ||||||||||||||||||||
% of net sales | (0.9) | % | 8.4 | % | 15.9 | % | 4.0 | % | 1.9 | % | 13.6 | % | 17.1 | % | 7.8 | % |
Three months ended | Six months ended | ||||||||||||||||||||||||||||
(Amounts in Thousands) | 12/31/2023 | 12/31/2022 | $ Change | % Change | 12/31/2023 | 12/31/2022 | $ Change | % Change | |||||||||||||||||||||
Net Sales, as reported | $ | 62,076 | $ | 66,775 | (4,699) | (7.0) | % | $ | 122,712 | $ | 127,236 | (4,524) | (3.6) | % | |||||||||||||||
Currency neutralizing adjustment* | (1,412) | — | (1,412) | (2.1) | % | (2,986) | — | (2,986) | (2.3) | % | |||||||||||||||||||
Q2 FY24 currency neutral net sales | 60,664 | 66,775 | (6,111) | (9.2) | % | 119,726 | 127,236 | (7,510) | (5.9) | % | |||||||||||||||||||
NAI net sales, as reported | 19,814 | 22,780 | (2,966) | (13.0) | % | 39,284 | 45,151 | (5,867) | (13.0) | % | |||||||||||||||||||
Currency neutralizing adjustment* | (81) | — | (81) | (0.4) | % | (171) | — | (171) | (0.4) | % | |||||||||||||||||||
Q2FY24 currency neutral NAI net sales | 19,733 | 22,780 | (3,047) | (13.4) | % | 39,113 | 45,151 | (6,038) | (13.4) | % | |||||||||||||||||||
INI net sales, as reported | 26,425 | 26,051 | 374 | 1.4 | % | 51,799 | 49,350 | 2,449 | 5.0 | % | |||||||||||||||||||
Currency neutralizing adjustment* | (1,308) | — | (1,308) | (5.0) | % | (2,760) | — | (2,760) | (5.6) | % | |||||||||||||||||||
Q2FY24 Currency neutral INI net sales | 25,117 | 26,051 | (934) | (3.6) | % | 49,039 | $ | 56,357 | (7,318) | (13.0) | % | ||||||||||||||||||
GTM net sales, as reported | 15,837 | 17,944 | (2,107) | (11.7) | % | 31,629 | 32,735 | (1,106) | (3.4) | % | |||||||||||||||||||
Currency neutralizing adjustment* | (23) | — | (23) | (0.1) | % | (55) | — | (55) | (0.2) | % | |||||||||||||||||||
Q2FY24 currency neutral GTM net sales | $ | 15,814 | $ | 17,944 | $(2,130) | (11.9) | % | $ | 31,574 | $ | 32,735 | $(1,161) | (3.5) | % | |||||||||||||||
*"Currency Neutralizing Adjustment" = Change when converting Q2FY24 sales in non USD functional currencies at the same exchange rates used in the comparison period |
Cash flows (in thousands) | Six Months Ended | ||||||||||
12/31/2023 | 12/31/2022 | ||||||||||
Cash provided by operating activities | 7,111 | 4,474 | |||||||||
Cash (used in) investing activities | (8,999) | (4,190) | |||||||||
Cash (used in) financing activities | (2,767) | (5,858) | |||||||||
Effect of exchange rate changes on cash | (115) | 8 | |||||||||
Net (decrease) in cash | $ | (4,770) | $ | (5,566) |
Exhibit Number | Description of Exhibit | ||||
3a | Restated Articles of Organization as amended, filed with Form 10-K for the year ended June 30, 2012 filed September 12, 2012, is hereby incorporated by reference. | ||||
3b | Amended and Restated Bylaws, filed with Form 10-Q for the quarter ended December 31, 2012 filed February 7, 2013, is hereby incorporated by reference. | ||||
4a | Rights Agreement dated as of November 2, 2010 between the Company and Mellon Investor Services LLC, as Rights Agent (together with exhibits, including the Form of Rights Certificate, and the Summary of Rights to Purchase Shares of Class A Common Stock), filed with Form 10-Q for the quarter ended September 25, 2010, filed November 4, 2010 is hereby incorporated by reference. | ||||
31.1* | |||||
31.2* | |||||
32.1+ | |||||
101 | The following materials from The L. S. Starrett Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (I) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statement of Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
THE L. S. STARRETT COMPANY (Registrant) | |||||||||||
Date | February 16, 2024 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett - President and CEO (Principal Executive Officer) | |||||||||||
Date | February 16, 2024 | /S/ John C. Tripp | |||||||||
John C. Tripp - Treasurer and CFO (Principal Accounting Officer) |
Date: | February 16, 2024 | /S/ | Douglas A. Starrett | ||||||||
Douglas A. Starrett | |||||||||||
Chief Executive Officer |
Date: | February 16, 2024 | /S/ | John C. Tripp | ||||||||
John C. Tripp | |||||||||||
Chief Financial Officer |
Date | February 16, 2024 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett | |||||||||||
Chief Executive Officer | |||||||||||
Date | February 16, 2024 | /S/ John C. Tripp | |||||||||
John C. Tripp | |||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Allowance for credit losses | $ 546 | $ 449 |
Class A Common Shares | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares, outstanding (in shares) | 6,953,641 | 6,853,673 |
Common stock, shares, issued (in shares) | 8,361,535 | 8,361,535 |
Class B Common Shares | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares, outstanding (in shares) | 551,564 | 576,396 |
Common stock, shares, issued (in shares) | 852,825 | 852,825 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
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Income Statement [Abstract] | ||||
Net sales | $ 62,076 | $ 66,775 | $ 122,712 | $ 127,236 |
Cost of goods sold | 43,112 | 45,199 | 84,212 | 85,460 |
Gross profit | $ 18,964 | $ 21,576 | $ 38,500 | $ 41,776 |
% of Net sales | 30.50% | 32.30% | 31.40% | 32.80% |
Restructuring charges | $ 0 | $ 54 | $ 0 | $ 244 |
Selling, general and administrative expenses | 16,470 | 15,561 | 33,548 | 31,855 |
Operating income | 2,494 | 5,961 | 4,952 | 9,677 |
Other (expense), net | (526) | (1,121) | (890) | (1,797) |
Income before income taxes | 1,968 | 4,840 | 4,062 | 7,880 |
Income tax expense | 2,362 | 1,709 | 2,537 | 2,693 |
Net (loss) income | $ (394) | $ 3,131 | $ 1,525 | $ 5,187 |
Basic income per share (in dollars per share) | $ (0.05) | $ 0.42 | $ 0.20 | $ 0.71 |
Diluted income per share (in dollars per share) | $ (0.05) | $ 0.42 | $ 0.20 | $ 0.69 |
Weighted average outstanding shares used in per share calculations: | ||||
Basic (in shares) | 7,501 | 7,405 | 7,469 | 7,354 |
Diluted (in shares) | 7,501 | 7,541 | 7,623 | 7,511 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (394) | $ 3,131 | $ 1,525 | $ 5,187 |
Other comprehensive income (loss): | ||||
Currency translation gain (loss), net of tax | (2,308) | (2,716) | 97 | 90 |
Pension and postretirement plans, net of tax | (36) | (36) | (70) | (61) |
Other comprehensive income (loss) | 2,272 | 2,680 | (167) | (151) |
Total comprehensive income | $ 1,878 | $ 5,811 | $ 1,358 | $ 5,036 |
Basis of Presentation and Summary of Significant Account Policies |
6 Months Ended |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Account Policies | Basis of Presentation and Summary of Significant Accounting Policies The unaudited Condensed Consolidated Financial Statements as of and for the six months ended December 31, 2023 have been prepared by The L.S. Starrett Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These unaudited Consolidated Financial Statements, which, in the opinion of management, reflect all adjustments (including normal recurring adjustments) necessary for a fair presentation, should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The balance sheet as of June 30, 2023 has been derived from the audited Condensed Consolidated Financial Statements as of and for the year ended June 30, 2023. Operating results are not necessarily indicative of the results that may be expected for any future interim period or for the entire fiscal year. The Company’s “fiscal year” begins July 1st and ends June 30th. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at invoiced amount and do not bear interest. The allowance for credit losses is the Company's estimate of current expected credit losses on its existing accounts receivable and determined based on historical customer assessments, current financial conditions and reasonable and supportable forecasts. Account balances are charged off against the allowance when the Company determines the receivable will not be recovered. Fair Value Measurements Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 10 and 11 to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for financial assets and liabilities held at carrying amount on the unaudited Condensed Consolidated Balance Sheet. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Note 1 within the notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 2 to the Company’s audited Condensed Consolidated Financial Statements included in the Annual Report on Form 10-K, as amended, for the year ended June 30, 2023 describes the significant accounting policies and methods used in the preparation of the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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Segment Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The segment information and the accounting policies of each segment are the same as those described in the notes to the audited Consolidated Financial Statements entitled “Financial Information by Segment” included in our Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The chief operating decision maker, who is the Company’s President and CEO, allocates resources and assesses performance based on three segments: North America Industrial "NAI", International Industrial "INI" and Global Test and Measurement "GTM". Segment income is measured for internal reporting purposes by excluding corporate expenses, which are included in the unallocated column in the table below. Other income and expense, including interest income and expense, and income taxes are excluded entirely from the table below. There were no significant changes in the segment operations or in the segment assets from the Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. Financial results for each reportable segment are as follows (in thousands):
1.Excludes $348 of NAI segment intercompany sales to the INI segment, $114 of GTM segment intercompany sales to the INI segment, $3,560 of INI segment intercompany sales to NAI and $279 of GTM intercompany sales to NAI. 2.Excludes $546 of NAI segment intercompany sales to the INI segment, $161 of GTM segment intercompany sales to the INI segment, $3,992 of INI segment intercompany sales to NAI and $258 of GTM intercompany sales to NAI.
1.Excludes $681 of NAI segment intercompany sales to the INI segment, $192 of GTM segment intercompany sales to the INI segment, $7,036 of INI segment intercompany sales to NAI and $979 of GTM intercompany sales to NAI. 2.Excludes $1,198 of NAI segment intercompany sales to the INI segment, $436 of GTM segment intercompany sales to the INI segment, $8,617 of INI segment intercompany sales to NAI and $668 of GTM intercompany sales to NAI.
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Revenue from Contracts with Customers |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customer | Revenue from Contracts with Customers Under ASC Topic 606, the Company is required to present a refund liability and a return asset within the unaudited Condensed Consolidated Balance Sheet. As of December 31, 2023 and June 30, 2023, the balance of the return asset was $0.2 million and $0.1 million, respectively, and the balance of the refund liability as of December 31, 2023 and June 30, 2023 was $0.3 million and $0.1 million, respectively. They are presented within prepaid expenses and other current assets and accrued expenses, respectively, on the unaudited Condensed Consolidated Balance Sheets. The Company, in general, warrants its products against certain defects in material and workmanship when used as designed, for a period of up to one year. The Company does not sell extended warranties. Contract Balances Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date on contracts with customers. Contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been met, and therefore, revenue has not been recognized. The Company had no contract asset balances, but had contract liability balances of $0.3 million and $0.3 million at December 31, 2023 and June 30, 2023, respectively, located in Accounts Payable in the Condensed Consolidated Balance Sheets. Disaggregation of Revenue The Company operates in three reportable segments. ASC Topic 606 requires further disaggregation of an entity’s revenue. In the following table, the Company's net sales by shipping origin are disaggregated accordingly for the three and six months ended December 31, 2023 and 2022 (in thousands):
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Leases |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Operating lease cost amounted to $0.5 million and $1.0 million for the three and six months ended December 31, 2023 and $0.8 million and $1.0 million for the three and six months ended December 31, 2022. As of December 31, 2023, the Company’s right-of-use assets "ROU", lease obligations and remaining cash commitment on these leases were as follows (in thousands):
The Company has other operating lease agreements with commitments of less than one year or that are not significant. The Company elected the practical expedient option and as such, these lease payments are expensed as incurred. The Company’s weighted average discount rate and remaining term on lease liabilities is approximately 9.0% and 2.8 years. As of December 31, 2023, the Company’s financing leases are not material. The foreign exchange impact affecting the operating leases are, also, not material. The Company entered into $0.1 million and $0.2 million, in new operating lease commitments in the three and six months ended December 31, 2023.
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Stock-based Compensation |
6 Months Ended |
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Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based CompensationCompensation expense related to all stock-based plans for the three and six months ended December 31, 2023 were $0.2 million and $0.3 million as compared to the prior year three and six months of $0.2 million and $0.3 million, respectively. |
Inventories |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following (in thousands):
Of the Company’s $61.3 million and $65.4 million total inventory at December 31, 2023 and June 30, 2023, respectively, the $26.4 million and $26.4 million LIFO reserves belong to the U.S. Precision Tools and Saws Manufacturing “Core U.S.” business. The Core U.S. business total inventory was $38.4 million on a FIFO basis and $12.0 million on a LIFO basis at December 31, 2023. The Core U.S. business had total inventory, on a FIFO basis, of $38.1 million and $11.7 million on a LIFO basis as of June 30, 2023. The use of LIFO, as compared to FIFO, resulted in, during the three months and six months ended December 31, 2023, a $0.1 million increase and no increase in cost of sales as compared to a $0.1 million increase and a $0.6 million decrease in the three and six months ended December 31, 2022.
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Goodwill and Intangible Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Amortizable intangible assets consist of the following (in thousands):
The estimated useful lives of the intangible assets subject to amortization range between 5 years for software development and 20 years for trademark and trade name assets. The goodwill balance at December 31, 2023, gross $4.7 million and accumulated impairment of $3.7 million. There is no change in the six months ended December 31, 2023 to the net goodwill balance of $1.0 million.
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Accrued Expenses |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses The following table represents accrued expenses from the unaudited Condensed Consolidated Balance Sheets (in thousands)
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Pension and Post-retirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Post-retirement Benefits | Pension and Post-retirement Benefits The Company has two defined benefit pension plans, one for U.S. employees which was frozen for new participants in 2016 and another for U.K. employees frozen for new participants in 2009. The Company has a postretirement medical insurance benefit plan for U.S. employees which remains open. The Company also has defined contribution plans. Net periodic benefit costs for the Company's defined benefit pension plans are located in Other (expense) in the unaudited Condensed Consolidated Statements of Operations except for service cost. Service cost are in cost of sales and selling, general and administrative expenses allocated on headcount. Net periodic benefit costs consist of the following (in thousands):
Net periodic benefit costs (credits) for the Company's Postretirement Medical Plan consists of the following (in thousands):
For the three months and six months ended December 31, 2023, the Company contributed in the U.S. $0.6 million and $1.4 million. In the UK pension plans the Company contributed $0.2 million and $0.5 million for the same periods. Based upon the actuarial valuations performed on the Company’s defined benefit plans as of June 30, 2023, the contribution for fiscal 2024 for the U.S. plans would require a contribution of $3.0 million and the U.K. plan would require $1.0 million. However, as a result of the American Rescue Plan Act of 2021, the minimum required company contribution for the U.S. Plan was reduced. The Company believes that government regulation is only a small part of deciding the pension funding, and as a result, may contribute more than the federal requirement. The Company contributed $2.4 million in total during fiscal year 2023, with $1.5 million in the U.S. and $0.9 million in the U.K. The Company evaluates the U.S. future contribution on a quarterly basis. The Company currently believes contributions in fiscal year 2024 will be similar to the prior year or slightly higher. The Company’s pension plans use fair value as the market-related value of plan assets and recognize net actuarial gains or losses in excess of ten percent (10%) of the greater of the market-related value of plan assets or of the plans’ projected benefit obligation in net periodic (benefit) cost as of the plan measurement date. Net actuarial gains or losses that are less than 10% of the thresholds noted above are accounted for as part of accumulated other comprehensive loss.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt is comprised of the following (in thousands):
On April 29, 2022, the Company and certain of the Company’s domestic subsidiaries entered into a Loan and Security agreement (the "Loan and Security Agreement") with HSBC Bank USA ("the Lender"). The Company incurred debt re-acquisition cost of $0.5 million which are recorded net of debt and amortized over five years. These credit facilities are comprised of a $30 million revolving Loan and Security Agreement Line of Credit ("Line of Credit") with a $10 million uncommitted accordion provision, a Loan and Security Agreement Term Loan ("the Term Loan") with original principal of $12.1 million and a $7.0 million Capital Expenditure draw down credit facility (collectively, the "Facilities"). The Facilities are secured by a valid first-priority security interest on substantially all existing and future assets of the Company and its domestic subsidiaries. The interest rate on the Facilities is based on a grid which uses the percentage of the remaining availability of the revolving credit line to determine the floating margin to be added to the one month or three months Secured Overnight Financing Rate, "SOFR". The Facilities mature on April 29, 2027. Availability under the revolving line of credit is secured by and subject to a borrowing base comprised of eligible inventory and accounts receivable. The percentage of receivables included in the borrowing base is 90% for domestic investment grade and foreign insured accounts, 85% for domestic accounts that are neither investment grade nor insured, and 75% of foreign uninsured accounts. The percentage of inventory included in the borrowing base is the lower of 65% of the value of eligible inventory at cost or 85% of the net orderly liquidation value of eligible inventory at cost. Receivables and inventory are reported monthly to HSBC and subject to an annual field exam and inventory appraisal by an independent auditor commissioned by the Bank. The Company believes that the agreement provides an initial borrowing base sufficient for current domestic working capital needs and flexibility to accommodate potential growth-related working capital needs. Availability under the Line of Credit remains subject to a borrowing base comprised of Accounts Receivable, Inventory, and Real Estate. The Company believes that the borrowing base will consistently produce availability under the Line of Credit of $30.0 million. A 0.25% commitment fee is charged on the unused portion of the Line of Credit. Availability under the Term Loan was comprised of 70% of the fair market value of the Borrower's eligible real estate, which included facilities located in Westlake, Ohio, and Waite Park, Minnesota and totaled $4.6 million; and 85% of the net orderly liquidation value of the Borrowers’ machinery and equipment, capped at $7.5 million. The real estate portion of the Term facility is subject to a 12.5 year straight line amortization paid quarterly, and the machinery and equipment portion of the facility is subject to a 6.67 year straight line amortization, also paid quarterly. The Term Loan is subject to equal quarterly installments of $373,650, payable on the last day of each fiscal quarter. The capital expenditure drawn down facility was available for a period of 18 months after April 29, 2022, and its availability expired during the quarter ended December 31, 2023. During the six months ended December 31, 2023, $2.0 million was drawn on the facility for the purpose of facilitating the expansion of production capacity at the Company's precision granite manufacturing facility in Waite Park, MN. Amounts outstanding under the facility are subject to a 3.75% amortization rate per quarter, with interest charged at the same rate as the Term Loan facility. The Facilities contain financial covenants with respect to a minimum fixed charge coverage ratio of 1.00, measured on a trailing twelve-month basis, for both the U.S. borrowing companies tested quarterly and the Consolidated L.S. Starrett Company tested semi-annually. The Loan and Security agreement also contains the customary affirmative and negative covenants, including limitations on indebtedness, liens, acquisitions, asset dispositions, fundamental corporate changes, excess pension contributions, and certain customary events of default. Upon the occurrence or continuation of an event of default, the Lender may terminate all commitments and facilities, and require the immediate payment of the entire unpaid principal balances, accrued interest, and all other obligations. The Company is in compliance with its debt covenants. In Brazil, affecting the need for borrowing, the Company historically had a build-up of ICMS (which translates to "Tax on Commerce and Services"). The Company has changed the methodology of charging and re-claiming ICMS on imports and domestic sales so that this credit is subsequently relieved and does not increase at that rate again. The ICMS balance as of June 30, 2023 was $4.9 million and $4.2 million as of December 31, 2023. The balance is located on the unaudited Condensed Consolidated Balance Sheets in prepaid expenses and other current assets. The Company’s Brazilian subsidiary incurs short-term loans with local banks in order to support the Company’s strategic initiatives. The loans are backed by the entity’s US dollar denominated export receivables. Included in the table below are $0.4 million of financing on purchased fixed assets. The Company’s Brazilian subsidiary has the following loans as of December 31, 2023 (in thousands):
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Income Taxes |
6 Months Ended |
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Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax expense for the three month period ended December 31, 2023 was $2.4 million on profit before tax of $2.0 million (an effective tax rate of 120%). During the three month period ended December 31, 2023, the Company recorded a discrete tax expense of $2.0 million, increasing its valuation allowance against its foreign tax credit carryforwards, due to IRS Notice 2023-80 released in December 2023, which modifies the temporary relief period from applying the final foreign tax credit regulations to tax years beginning on or after December 28, 2021 and ending before the date that notice or guidance withdrawing or modifying the temporary relief is issued. Other than this discrete tax expense recorded, the effective rate for the three months ended December 31, 2023 was lower than the U.S. statutory tax rate of 21% primarily due to the favorable impact that IRS Notice 2023-80 has on the Company current year GILTI inclusion and creditable foreign withholding taxes, offset by the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34% and foreign losses not benefitted. Tax expense for the three month period ended December 31, 2022 was $1.7 million on profit before tax of $4.8 million (an effective tax rate of 35%). The effective tax rate for the three month period ended December 31, 2022 was higher than the U.S. statutory tax rate of 21% primarily due to the GILTI provisions, and the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34%, offset by tax credits and permanent deductions generated from research expenses. Tax expense for the six month period ended December 31, 2023 was $2.5 million on profit before tax of $4.1 million (an effective tax rate of 62%). During the six month period ended December 31, 2023, the Company recorded a discrete tax expense of $1.3 million related to IRS Notice 2023-55 released in July 2023 which grants taxpayers temporary relief from applying these final foreign tax credit regulations for tax years beginning on or after December 28, 2021 and ending on or before December 31, 2023 and IRS Notice 2023-80 released in December 2023 which modifies the temporary relief period from applying the final foreign tax credit regulations to tax years beginning on or after December 28, 2021 and ending before the date that notice or guidance withdrawing or modifying the temporary relief is issued. Other than this discrete tax expense recorded, the effective rate for the six months ended December 31, 2023 was higher than the U.S. statutory tax rate of 21% primarily due to the GILTI provisions, and the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34%, offset by tax credits and permanent deductions generated from research expenses. Tax expense for the six month period ended December 31, 2022 was $2.7 million on profit before tax of $7.9 million (an effective tax rate of 34%). The effective tax rate for the six month period ended December 31, 2022 was higher than the U.S. statutory tax rate of 21% primarily due to the GILTI provisions, and the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34%, offset by discrete tax benefits recognized from excess stock compensation deductions, tax credits and permanent deductions generated from research expenses. The Company has considered the positive and negative evidence to determine the need for a valuation allowance offsetting the deferred tax assets in the U.S. and has concluded that a partial valuation allowance is required against foreign tax credit carryforwards and certain state net operating loss carryforwards at December 31, 2023 and June 30, 2023. The Company had long term tax obligations related primarily to transfer pricing adjustments at December 31, 2023 and June 30, 2023.
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Contingencies |
6 Months Ended |
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Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in certain legal matters, which arise, in the normal course of business. The Company does not believe it is reasonably possible that these matters will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
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Basis of Presentation and Summary of Significant Account Policies (Policies) |
6 Months Ended |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The unaudited Condensed Consolidated Financial Statements as of and for the six months ended December 31, 2023 have been prepared by The L.S. Starrett Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These unaudited Consolidated Financial Statements, which, in the opinion of management, reflect all adjustments (including normal recurring adjustments) necessary for a fair presentation, should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The balance sheet as of June 30, 2023 has been derived from the audited Condensed Consolidated Financial Statements as of and for the year ended June 30, 2023. Operating results are not necessarily indicative of the results that may be expected for any future interim period or for the entire fiscal year. The Company’s “fiscal year” begins July 1st and ends June 30th.
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Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at invoiced amount and do not bear interest. The allowance for credit losses is the Company's estimate of current expected credit losses on its existing accounts receivable and determined based on historical customer assessments, current financial conditions and reasonable and supportable forecasts. Account balances are charged off against the allowance when the Company determines the receivable will not be recovered.
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Fair Value Measurements | Fair Value Measurements Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 10 and 11 to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for financial assets and liabilities held at carrying amount on the unaudited Condensed Consolidated Balance Sheet. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Note 1 within the notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 2 to the Company’s audited Condensed Consolidated Financial Statements included in the Annual Report on Form 10-K, as amended, for the year ended June 30, 2023 describes the significant accounting policies and methods used in the preparation of the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of financial results for reportable segments | inancial results for each reportable segment are as follows (in thousands):
1.Excludes $348 of NAI segment intercompany sales to the INI segment, $114 of GTM segment intercompany sales to the INI segment, $3,560 of INI segment intercompany sales to NAI and $279 of GTM intercompany sales to NAI. 2.Excludes $546 of NAI segment intercompany sales to the INI segment, $161 of GTM segment intercompany sales to the INI segment, $3,992 of INI segment intercompany sales to NAI and $258 of GTM intercompany sales to NAI.
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Revenue from Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | In the following table, the Company's net sales by shipping origin are disaggregated accordingly for the three and six months ended December 31, 2023 and 2022 (in thousands):
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Leases (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of lease assets and liabilities | As of December 31, 2023, the Company’s right-of-use assets "ROU", lease obligations and remaining cash commitment on these leases were as follows (in thousands):
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consist of the following (in thousands):
|
Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable intangible assets | Amortizable intangible assets consist of the following (in thousands):
|
Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | The following table represents accrued expenses from the unaudited Condensed Consolidated Balance Sheets (in thousands)
|
Pension and Post-retirement Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net benefit costs |
Net periodic benefit costs (credits) for the Company's Postretirement Medical Plan consists of the following (in thousands):
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt schedule | Debt is comprised of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term debt, Brazilian subsidiary | The Company’s Brazilian subsidiary has the following loans as of December 31, 2023 (in thousands):
|
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Dec. 31, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Revenue from Contracts with Customers - Narrative (Details) |
6 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
segment
|
Jun. 30, 2023
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Customer return asset | $ 200,000 | $ 100,000 |
Customer refund liability | $ 300,000 | 100,000 |
Standard product warranty period | 1 year | |
Contract asset | $ 0 | 0 |
Contract liability | $ 300,000 | $ 300,000 |
Number of reportable segments | segment | 3 |
Revenue from Contracts with Customers - Disaggregation of revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 62,076 | $ 66,775 | $ 122,712 | $ 127,236 |
United States | North American Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 33,132 | 37,620 | 65,908 | 71,892 |
Canada & Mexico | North American Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,792 | 2,067 | 3,550 | 4,278 |
Brazil | International Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20,209 | 20,057 | 39,639 | 37,305 |
United Kingdom | International Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,095 | 3,294 | 6,630 | 6,494 |
China | International Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,879 | 1,978 | 3,336 | 3,665 |
Australia & New Zealand | International Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,969 | $ 1,759 | $ 3,649 | $ 3,601 |
Leases - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 500,000 | $ 800,000 | $ 1,000,000 | $ 1,000,000 |
Weighted average discount rate | 9.00% | 9.00% | ||
Weighted average remaining lease term | 2 years 9 months 18 days | 2 years 9 months 18 days | ||
Finance lease, liability | $ 0 | $ 0 | ||
Operating lease commitments | $ 100,000 | $ 200,000 |
Leases - Summary of lease assets and liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-Use Assets | $ 4,421 | $ 4,931 |
Operating Lease Obligations | 4,570 | |
Remaining Cash Commitment | $ 5,235 |
Stock-based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
The 2012 Stock Incentive Plan | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense related to stock-based plans | $ 0.2 | $ 0.2 | $ 0.3 | $ 0.3 |
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 34,700 | $ 36,402 |
Goods in process and finished parts | 19,940 | 20,978 |
Finished goods | 33,042 | 34,414 |
Total before LIFO reserve | 87,682 | 91,794 |
LIFO Reserve | (26,398) | (26,380) |
Total | $ 61,284 | $ 65,414 |
Inventories (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2023 |
|
Inventory Disclosure [Abstract] | |||||
Inventories | $ 61,284 | $ 61,284 | $ 65,414 | ||
Inventory, LIFO Reserve | 26,398 | 26,398 | 26,380 | ||
Inventory difference using FIFO basis | 38,400 | 38,400 | 38,100 | ||
LIFO inventory amount | 12,000 | 12,000 | $ 11,700 | ||
Effect of LIFO Reserve on income | $ 0 | $ 600 | $ (100) | $ (100) |
Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 12,551 | $ 13,954 |
Accumulated amortization and impairment | (7,722) | (9,282) |
Net intangible assets | 4,829 | 4,672 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 2,070 | 2,070 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 630 | 630 |
Software development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 9,745 | 11,149 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 106 | $ 105 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Jun. 30, 2023 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill gross | $ 4,700 | |
Goodwill impairment loss | 3,700 | |
Goodwill | $ 1,015 | $ 1,015 |
Computer software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 5 years | |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 20 years |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ 3,323 | $ 2,590 |
Income taxes | 102 | 509 |
Professional fees | 1,860 | 2,237 |
Other | 1,214 | 1,499 |
Current portion pension cost | 2,205 | 2,216 |
Taxes other than income tax | 2,727 | 1,888 |
Workers compensation and employee deposits | 429 | 491 |
Freight | 302 | 149 |
Total | $ 12,162 | $ 11,579 |
Pension and Post-retirement Benefits (Details) - Pension Plan $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Dec. 31, 2023
USD ($)
plan
|
Dec. 31, 2023
USD ($)
plan
|
Jun. 30, 2023
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Number of defined benefit pension plans | plan | 2 | 2 | |
Employer contributions | $ 2.4 | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of defined benefit pension plans | plan | 1 | 1 | |
Employer contributions | $ 0.6 | $ 1.4 | 1.5 |
Expected employer contributions for remainder of the fiscal year | 3.0 | 3.0 | |
Foreign Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 0.2 | 0.5 | $ 0.9 |
Expected employer contributions for remainder of the fiscal year | $ 1.0 | $ 1.0 |
Pension and Post-retirement Benefits - Net Periodic Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 1,502 | $ 1,408 | $ 3,054 | $ 2,890 |
Expected return on plan assets | (1,049) | (960) | (2,147) | (1,992) |
Amortization of net loss | 10 | 10 | 20 | 20 |
Total net (benefit) | 463 | 458 | 927 | 918 |
Post Retirement Medical Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 4 | 5 | 9 | 11 |
Interest cost | 18 | 17 | 35 | 35 |
Amortization of prior service credit | (368) | (368) | (737) | (737) |
Amortization of net loss | 31 | 45 | 62 | 89 |
Total net (benefit) | $ (315) | $ (301) | $ (631) | $ (602) |
Debt - Debt schedule (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Jun. 30, 2023 |
---|---|---|
Short-term Debt [Abstract] | ||
Loan and security agreement (term loan) | $ 4,403 | $ 4,961 |
Brazil loans | 2,386 | |
Short-term and current maturities | 4,403 | 4,961 |
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Loan and Security Agreement | 3,103 | 5,273 |
Total debt | 7,506 | 10,234 |
Loan and security agreement (term loan) | ||
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Loan and Security Agreement | 2,910 | 1,957 |
Loan and Security Agreement (Line of credit) | ||
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Loan and Security Agreement | 397 | 2,897 |
Brazil loans | ||
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Loan and Security Agreement | 151 | 827 |
Debt reacquisition cost, net | (355) | (408) |
Loan and security agreement (term loan) | ||
Short-term Debt [Abstract] | ||
Loan and security agreement (term loan) | 2,168 | 1,495 |
Brazil loans | ||
Short-term Debt [Abstract] | ||
Brazil loans | $ 2,235 | $ 3,466 |
Debt - Short-term Debt (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Statement [Line Items] | |
Outstanding Balance | $ 2,386 |
Itau Bank | 4.52% Short-term loan | |
Statement [Line Items] | |
Interest Rate | 4.52% |
Outstanding Balance | $ 1,714 |
Itau Bank | 4.98% Short-term loan | |
Statement [Line Items] | |
Interest Rate | 4.98% |
Outstanding Balance | $ 305 |
Brasil Bank | 4.95% Short-term loan | |
Statement [Line Items] | |
Interest Rate | 4.95% |
Outstanding Balance | $ 302 |
Brasil Bank | 3.80% Short-term loan | |
Statement [Line Items] | |
Interest Rate | 3.80% |
Outstanding Balance | $ 65 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 2,362 | $ 1,709 | $ 2,537 | $ 2,693 |
Profit before tax | $ 1,968 | $ 4,840 | $ 4,062 | $ 7,880 |
Effective income tax rate percentage | 120.00% | 35.00% | 62.00% | 34.00% |
Discrete tax expense, increase in valuation allowance in the period | $ 2,000 | $ 1,300 |
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