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 | April 24, 2024 | ||||||||||
Class A Common Shares | |||||||||||
Class B Common Shares |
Page No. | |||||||||||
Condensed Consolidated Balance Sheets – March 31, 2024 (unaudited) and June 30, 2023 | |||||||||||
Condensed Consolidated Statements of Operations (unaudited)– three and nine months ended March 31, 2024 and March 31, 2023 | |||||||||||
Condensed Consolidated Statements of Comprehensive Income (unaudited) – three and nine months ended March 31, 2024 and March 31, 2023 | |||||||||||
Condensed Consolidated Statements of Stockholders' Equity (unaudited) – three and nine months ended March 31, 2024 and March 31, 2023 | 5-8 | ||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) - nine months ended March 31, 2024 and March 31, 2023 | |||||||||||
9-21 | |||||||||||
Item 1. | Legal Proceedings | ||||||||||
03/31/2024 | 06/30/2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
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: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Current maturities of debt | |||||||||||
Accrued compensation | |||||||||||
Current lease liability | |||||||||||
Total current liabilities | |||||||||||
Other tax obligations | |||||||||||
Long-term lease liability | |||||||||||
Long-term debt, net of current portion | |||||||||||
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 | 9 Months Ended | ||||||||||||||||||||||
03/31/2024 | 03/31/2023 | 03/31/2024 | 03/31/2023 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
% of Net sales | % | % | % | % | |||||||||||||||||||
Restructuring charges | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other (expense) income, net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic income per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted income per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average outstanding shares used in per share calculations: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
3 Months Ended | 9 Months Ended | ||||||||||||||||||||||
03/31/2024 | 03/31/2023 | 03/31/2024 | 03/31/2023 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Currency translation (loss) gain, net of tax | ( | ( | |||||||||||||||||||||
Pension and postretirement plans, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Total comprehensive (loss) 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 of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive (loss) income | — | — | — | ( | |||||||||||||||||||||||||||||||
Repurchase of shares | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuance of stock | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance March 31, 2024 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Balance of accumulated other comprehensive (loss) 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 of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Repurchase of shares | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Issuance of stock | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of class B to class A stock | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance March 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Balance of accumulated other comprehensive (loss) consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | ( | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | |||||||||||||||||||||||||||||||||||
$ | ( |
9 Months Ended | |||||||||||
03/31/2024 | 03/31/2023 | ||||||||||
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 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
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 | ( | ( | |||||||||
Intangibles-other | ( | ||||||||||
Net cash (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from term loan borrowings | |||||||||||
Proceeds from line of credit borrowings | |||||||||||
Term debt repayments | ( | ( | |||||||||
Line of credit 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 March 31, 2024 | |||||||||||||||||||||||||||||
Sales1 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating (Loss) Income | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||
Three Months ended March 31, 2023 | |||||||||||||||||||||||||||||
Sales2 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating Income (Loss) | $ | $ | $ | $ | ( | $ |
NAI | INI | GTM | Unallocated | Total | |||||||||||||||||||||||||
Nine Months ended March 31, 2024 | |||||||||||||||||||||||||||||
Sales1 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating (Loss) Income | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||
Nine months ended March 31, 2023 | |||||||||||||||||||||||||||||
Sales2 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating Income (Loss) | $ | $ | $ | $ | ( | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
03/31/2024 | 03/31/2023 | 03/31/2024 | 03/31/2023 | ||||||||||||||||||||
North America | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada & Mexico | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Brazil | |||||||||||||||||||||||
United Kingdom | |||||||||||||||||||||||
China | |||||||||||||||||||||||
Australia & New Zealand | |||||||||||||||||||||||
Total Sales | $ | $ | $ | $ |
Right-of-Use Assets | Operating Lease Obligations | Remaining Cash Commitment | |||||||||||||||
Total leases | $ | $ | $ |
Operating Lease Commitments | |||||
2024 (Remainder of year) | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Subtotal | |||||
Imputed interest | ( | ||||
Total | $ |
03/31/2024 | 06/30/2023 | ||||||||||
Raw material and supplies | $ | $ | |||||||||
Goods in process and finished parts | |||||||||||
Finished goods | |||||||||||
LIFO Reserve | ( | ( | |||||||||
$ | $ |
03/31/2024 | 6/30/2023 | ||||||||||
Trademarks and trade names | $ | $ | |||||||||
Customer relationships | |||||||||||
Software development | |||||||||||
Other intangible assets | |||||||||||
Gross intangible assets | |||||||||||
Accumulated amortization and impairment | ( | ( | |||||||||
Net intangible assets | $ | $ |
03/31/2024 | 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 | Nine Months Ended | ||||||||||||||||||||||
03/31/2024 | 03/31/2023 | 03/31/2024 | 03/31/2023 | ||||||||||||||||||||
Interest cost | $ | $ | $ | $ | |||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Expected net cost (benefit) total | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
03/31/2024 | 03/31/2023 | 03/31/2024 | 03/31/2023 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Amortization of prior service credit | ( | ( | ( | ( | |||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Total net (benefit) | $ | ( | $ | ( | $ | ( | $ | ( |
03/31/2024 | 06/30/2023 | ||||||||||
Short-term and current maturities | |||||||||||
Loan and Security Agreement (Term Loan) | $ | $ | |||||||||
Brazil Loans | |||||||||||
Subtotal short-term and current maturities | |||||||||||
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 | ( | ( | |||||||||
Subtotal long-term debt | |||||||||||
Total debt | $ | $ |
Lending Institution | Interest Rate | Beginning Date | Ending Date | Outstanding Balance | |||||||||||||||||||
Itau | October 2021 | September 2024 | $ | ||||||||||||||||||||
Brasil | August 2022 | July 2025 | |||||||||||||||||||||
Brasil | September 2022 | August 2024 | |||||||||||||||||||||
Total Brazilian short-term loans | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
(Amounts in thousands) | 03/31/24 | 03/31/23 | $ Change favorable (unfavorable) | % Change | 03/31/24 | 03/31/23 | $ Change favorable (unfavorable) | % Change | |||||||||||||||||||||
Net sales | $ | 60,767 | $ | 61,678 | $ | (911) | (1.5) | % | $ | 183,479 | $ | 188,914 | $ | (5,435) | (2.9) | % | |||||||||||||
Gross margin | 17,580 | 19,223 | (1,643) | (8.5) | % | 56,080 | 60,998 | (4,918) | (8.1) | % | |||||||||||||||||||
% of net sales | 28.9 | % | 31.2 | % | 30.6 | % | 32.3 | % | |||||||||||||||||||||
Selling, general and administrative expenses | 16,070 | 15,109 | (961) | (6.4) | % | 50,417 | 46,962 | (3,455) | (7.4) | % | |||||||||||||||||||
% of net sales | 27.8 | % | 24.5 | % | 27.5 | % | 24.9 | % | |||||||||||||||||||||
Restructuring charges | — | — | — | — | % | — | 244 | 244 | (100.0) | % | |||||||||||||||||||
Transaction merger expenses | 800 | — | (800) | (100.0) | % | — | — | — | — | % | |||||||||||||||||||
Operating income | 710 | 4,114 | (3,404) | (82.7) | % | 5,663 | 13,792 | (8,129) | (58.9) | % | |||||||||||||||||||
Other income, net | (17) | (602) | 585 | (97.2) | % | (908) | (2,399) | 1,491 | 62.2 | % | |||||||||||||||||||
Income before income taxes | 693 | 3,512 | (2,819) | (80.3) | % | 4,755 | 11,393 | (6,638) | (58.3) | % | |||||||||||||||||||
Income tax expense | 55 | (3,961) | (4,016) | 101.4 | % | 2,592 | (1,267) | (3,859) | 304.6 | % | |||||||||||||||||||
Net income | $ | 638 | $ | 7,473 | (6,835) | (91.5) | % | $ | 2,163 | $ | 12,660 | (10,497) | (82.9) | % |
GAAP to Non-GAAP reconciliation: | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
(Amounts in thousands) | 03/31/24 | 03/31/23 | $ Change favorable (unfavorable) | % Change | 03/31/24 | 03/31/23 | $ Change favorable (unfavorable) | % Change | |||||||||||||||||||||
Operating income as reported | 710 | 4,114 | (3,404) | (82.7) | % | 5,663 | 13,792 | (8,129) | (58.9) | % | |||||||||||||||||||
Add back restructuring charges | — | — | — | — | % | — | 244 | (244) | (100.0) | % | |||||||||||||||||||
Add back transaction charges | 800 | — | — | 100.0 | % | 1,000 | — | 1,000 | 100.0 | % | |||||||||||||||||||
Non- GAAP adjusted operating income | 1,510 | 4,114 | (2,604) | (63.3) | % | 6,663 | 14,036 | (7,373) | (52.5) | % | |||||||||||||||||||
% of net sales | 2.5 | % | 6.7 | % | 3.6 | % | 7.4 | % |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | NAI | INI | GTM | Corporate | Total | NAI | INI | GTM | Corporate | Total | |||||||||||||||||||||||||
Net sales | $ | 21,806 | $ | 23,820 | $ | 15,141 | $ | — | $ | 60,767 | $ | 22,310 | $ | 23,849 | $ | 15,519 | $ | — | $ | 61,678 | |||||||||||||||
Gross margin | 3,892 | 8,209 | 5,478 | — | 17,579 | 4,712 | 8,543 | 5,968 | — | 19,223 | |||||||||||||||||||||||||
% of net sales | 17.8 | % | 34.5 | % | 36.2 | % | — | 28.9 | % | 21.1 | % | 35.8 | % | 38.5 | % | — | % | 31.2 | % | ||||||||||||||||
Selling, general and administrative expenses | 4,809 | 6,424 | 2,969 | 1,868 | 16,070 | 4,056 | 6,127 | 3,353 | 1,573 | 15,109 | |||||||||||||||||||||||||
% of net sales | 22.1 | % | 27.0 | % | 19.6 | % | 26.4 | % | 18.2 | % | 25.7 | % | 21.6 | % | 24.5 | % | |||||||||||||||||||
Transaction Cost | — | — | — | 800 | 800 | — | — | — | — | — | |||||||||||||||||||||||||
Operating income (loss) | $ | (917) | $ | 1,785 | $ | 2,509 | $ | (2,668) | $ | 710 | $ | 656 | $ | 2,416 | $ | 2,615 | $ | (1,573) | $ | 4,114 | |||||||||||||||
% of net sales | (4.2) | % | 7.5 | % | 16.6 | % | 1.2 | % | 2.9 | % | 10.1 | % | 16.9 | % | 6.7 | % | |||||||||||||||||||
Add back restructuring expenses | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Add back transaction expenses | — | — | — | 800 | 800 | — | — | — | — | — | |||||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | (917) | $ | 1,785 | $ | 2,509 | $ | (1,868) | $ | 1,510 | $ | 656 | $ | 2,416 | $ | 2,615 | $ | (1,573) | $ | 4,114 | |||||||||||||||
% of net sales | (4.2) | % | 7.5 | % | 16.6 | % | 2.5 | % | 2.9 | % | 10.1 | % | 16.9 | % | 6.7 | % |
Nine Months Ended March 31, 2024 | Nine Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | NAI | IAI | GTM | Corporate | Total | NAI | INI | GTM | Corporate | Total | |||||||||||||||||||||||||
Net sales | $ | 61,090 | $ | 75,619 | $ | 46,770 | $ | — | $ | 183,479 | $ | 67,461 | $ | 73,199 | $ | 48,254 | $ | — | $ | 188,914 | |||||||||||||||
Gross profit | 12,024 | 26,951 | 17,105 | — | 56,080 | 14,725 | 27,630 | 18,643 | — | 60,998 | |||||||||||||||||||||||||
% gross margin | 19.7 | % | 35.6 | % | 36.6 | % | 30.6 | % | 21.8 | % | 37.7 | % | 38.6 | % | 32.3 | % | |||||||||||||||||||
Selling, general and administrative expenses | 13,808 | 20,180 | 9,705 | 5,724 | 49,417 | 13,193 | 18,484 | 10,436 | 4,849 | 46,962 | |||||||||||||||||||||||||
% of net sales | 22.6 | % | 26.7 | % | 20.8 | % | 26.9 | % | 19.6 | % | 25.3 | % | 21.6 | % | 24.9 | % | |||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | 244 | — | 244 | ||||||||||||||||||||||||||
Merger transaction expenses | — | — | — | 1,000 | 1,000 | — | — | — | — | — | |||||||||||||||||||||||||
Operating income (loss) | $ | (1,784) | $ | 6,771 | $ | 7,400 | $ | (6,724) | $ | 5,663 | $ | 1,532 | $ | 8,902 | $ | 8,207 | $ | (4,849) | $ | 13,792 | |||||||||||||||
% of net sales | (2.9) | % | 9.0 | % | 15.8 | % | 3.1 | % | 2.3 | % | 12.2 | % | 17.0 | % | 7.3 | % | |||||||||||||||||||
Add back restructuring charges | — | — | — | — | — | — | 244 | — | — | 244 | |||||||||||||||||||||||||
Add back transaction expenses | — | — | — | 1,000 | 1,000 | — | — | — | — | — | |||||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | (1,784) | $ | 6,771 | $ | 7,400 | $ | (5,724) | $ | 6,663 | $ | 1,532 | $ | 9,146 | $ | 8,207 | $ | (4,849) | $ | 14,036 | |||||||||||||||
% of net sales | (2.9) | % | 9.0 | % | 15.8 | % | 3.6 | % | 2.3 | % | 12.5 | % | 17.0 | % | 7.4 | % |
Non-GAAP Measure Reconciliation: Fiscal 2024 Q3 "Currency Neutral" Net Sales | ||||||||||||||||||||||||||
Fiscal Year | Comparison to three month ending 3/31/2024 | Fiscal Year | Comparison to Nine month ending 3/31/2023 | |||||||||||||||||||||||
(Amounts in Thousands) | 03/31/2024 | 03/31/2023 | $ Change | % Change | 03/31/2024 | 03/31/2023 | $ Change | % Change | ||||||||||||||||||
Net sales, as reported | $ | 60,767 | 61,678 | (911) | (1.5) | % | $ | 183,479 | 188,914 | (5,435) | (2.9) | % | ||||||||||||||
Currency neutralizing adjustment* | (923) | — | (923) | (1.5) | % | (3,909) | — | (3,909) | (2.1) | % | ||||||||||||||||
Q3 FY24 currency neutral net sales | 59,844 | 61,678 | (1,834) | (3.0) | % | 179,570 | 188,914 | (9,344) | (4.9) | % | ||||||||||||||||
NAI net sales, as reported | $ | 21,806 | $ | 22,310 | (504) | (2.3) | % | $ | 61,090 | $ | 67,461 | (6,371) | (9.4) | % | ||||||||||||
Currency neutralizing adjustment* | (67) | — | (67) | (0.3) | % | (238) | — | (238) | (0.4) | % | ||||||||||||||||
Q3FY24 currency neutral NAI net sales | 21,739 | 22,310 | (571) | (2.6) | % | 60,852 | 67,461 | (6,609) | (9.8) | % | ||||||||||||||||
INI net sales, as reported | $ | 23,820 | $ | 23,849 | (29) | (0.1) | % | $ | 75,619 | 80,548 | (4,929) | (6.1) | % | |||||||||||||
Currency neutralizing adjustment* | (849) | — | (849) | (3.6) | % | (3,609) | — | (3,609) | (4.5) | % | ||||||||||||||||
Q3FY24 currency neutral INI net sales | 22,971 | 23,849 | (878) | (3.7) | % | 72,010 | $ | 73,199 | (1,189) | (1.6) | % | |||||||||||||||
GMT net sales as reported | $ | 15,141 | $ | 15,519 | (378) | (2.4) | % | $ | 46,770 | $ | 48,254 | (1,484) | (3.1) | % | ||||||||||||
Currency neutralizing adjustment* | (7) | — | (7) | (0.1) | % | (63) | — | (63) | (0.1) | % | ||||||||||||||||
Q3FY24 currency neutral GMT net sales | 15,134 | 15,519 | (385) | (2.5) | % | 46,707 | 48,254 | (1,547) | (3.2) | % | ||||||||||||||||
*"Currency Neutralizing Adjustment" = Change when converting Q3FY24 sales in non USD functional currencies at the same exchange rates used in the comparison period |
Three Months Ended | Nine Month Ended | ||||||||||||||||
03/31/24 | 03/31/2023 | 03/31/24 | 03/31/2023 | ||||||||||||||
Net income | $ | 638 | $ | 7,473 | $ | 2,163 | $ | 12,660 | |||||||||
Add back restructuring expenses | — | — | — | 244 | |||||||||||||
Add back transaction expense | 800 | — | 1,000 | — | |||||||||||||
Non-GAAP adjusted Net Income | $ | 1,438 | $ | 7,473 | $ | 3,163 | $ | 12,904 | |||||||||
Shares diluted | 7,577 | 7,492 | 7,538 | 7,480 | |||||||||||||
Diluted EPS as reported | $ | 0.08 | $ | 0.99 | $ | 0.28 | $ | 1.68 | |||||||||
Non-GAAP adjusted diluted EPS | $ | 0.19 | $ | 0.99 | $ | 0.41 | $ | 1.71 |
Cash flows (in thousands) | Nine Months Ended | ||||||||||
03/31/2024 | 03/31/2023 | ||||||||||
Cash provided by operating activities | $ | 11,123 | $ | 15,897 | |||||||
Cash (used in) investing activities | (11,717) | (5,639) | |||||||||
Cash (used in) financing activities | (2,223) | (16,209) | |||||||||
Effect of exchange rate changes on cash | (110) | 23 | |||||||||
Net (decrease) in cash | $ | (2,927) | $ | (5,928) |
Exhibit Number | Description of Exhibit | ||||
2.1 | Agreement and Plan of Merger, dated as of March 8, 2024, between the Company, Uhu Inc. and Unicornfish Corp., filed with the Current Report on Form 8-K filed March 11, 2024, is hereby incorporated by reference | ||||
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 | Amended and Restated Rights Agreement dated as of October 30, 2020 between the Company and Computershare Inc, 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 30, 2020, filed November 12, 2020 is hereby incorporated by reference. | ||||
4b | Amendment No. 1 to Amended and Restated Rights Agreement dated as of March 8, 2024 by and between the Company and Computershare Inc, filed with the Current Report on Form 8-K filed March 11, 2024 is hereby incorporated by reference. | ||||
10.1 | Amended and Restated Change in Control Agreement, dated as of March 8, 2024, by and between the Company and Douglas A. Starrett, filed with the Current Report on Form 8-K filed March 11, 2024, 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 March 31, 2024 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (I) the Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed 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 | May 13, 2024 | /S/R. Douglas A. Starrett | |||||||||
Douglas A. Starrett - President and CEO (Principal Executive Officer) | |||||||||||
Date | May 13, 2024 | /S/R. John C. Tripp | |||||||||
John C. Tripp - Treasurer and CFO (Principal Accounting Officer) |
Date: | May 13, 2024 | /S/ | Douglas A. Starrett | ||||||||
Douglas A. Starrett | |||||||||||
Chief Executive Officer |
Date: | May 13, 2024 | /S/ | John C. Tripp | ||||||||
John C. Tripp | |||||||||||
Chief Financial Officer |
Date | May 13, 2024 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett | |||||||||||
Chief Executive Officer | |||||||||||
Date | May 13, 2024 | /S/ John C. Tripp | |||||||||
John C. Tripp | |||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Allowance for doubtful accounts | $ 515 | $ 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) | 6,967,791 | 6,853,673 |
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) | 536,130 | 576,396 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
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Income Statement [Abstract] | ||||
Net sales | $ 60,767 | $ 61,678 | $ 183,479 | $ 188,914 |
Cost of goods sold | 43,187 | 42,455 | 127,399 | 127,916 |
Gross profit | $ 17,580 | $ 19,223 | $ 56,080 | $ 60,998 |
% of Net sales | 28.90% | 31.20% | 30.60% | 32.30% |
Restructuring charges | $ 0 | $ 0 | $ 0 | $ 244 |
Selling, general and administrative expenses | 16,870 | 15,109 | 50,417 | 46,962 |
Operating income | 710 | 4,114 | 5,663 | 13,792 |
Other (expense) income, net | (17) | (602) | (908) | (2,399) |
Income before income taxes | 693 | 3,512 | 4,755 | 11,393 |
Income tax expense (benefit) | 55 | (3,961) | 2,592 | (1,267) |
Net income | $ 638 | $ 7,473 | $ 2,163 | $ 12,660 |
Basic income per share (in dollars per share) | $ 0.09 | $ 1.01 | $ 0.29 | $ 1.72 |
Diluted income per share (in dollars per share) | $ 0.08 | $ 0.99 | $ 0.28 | $ 1.68 |
Weighted average outstanding shares used in per share calculations: | ||||
Basic (in shares) | 7,505 | 7,427 | 7,481 | 7,379 |
Diluted (in shares) | 7,657 | 7,577 | 7,638 | 7,538 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 638 | $ 7,473 | $ 2,163 | $ 12,660 |
Other comprehensive (loss) income: | ||||
Currency translation (loss) gain, net of tax | (1,813) | 1,545 | (1,910) | 1,455 |
Pension and postretirement plans, net of tax | (36) | (44) | (106) | (105) |
Other comprehensive (loss) income | (1,849) | 1,501 | (2,016) | 1,350 |
Total comprehensive (loss) income | $ (1,211) | $ 8,974 | $ 147 | $ 14,010 |
Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The unaudited Condensed Consolidated Financial Statements as of and for the nine months ended March 31, 2024 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 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 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. 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 within the notes 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 Condensed Consolidated Financial Statements and accompanying notes. Note 1 within the notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 2 to the Company’s audited 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 |
9 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 $345 of NAI segment intercompany sales to the INI segment, $83 of GTM segment intercompany sales to the INI segment, $2,625 of INI segment intercompany sales to NAI and $277 of GTM intercompany sales to NAI. 2. Excludes $243 of NAI segment intercompany sales to the INI segment, $83 of GTM segment intercompany sales to the INI segment, $3,208 of INI segment intercompany sales to NAI and $348 of GTM intercompany sales to NAI
1.Excludes $1,027 of NAI segment intercompany sales to the INI segment, $274 of GTM segment intercompany sales to the INI segment, $9,660 of INI segment intercompany sales to NAI and $1,256 of GTM intercompany sales to NAI. 2. Excludes $1,442 of NAI segment intercompany sales to the INI segment, $519 of GTM segment intercompany sales to the INI segment, $11,825 of INI segment intercompany sales to NAI and $1,016 of GTM intercompany sales to NAI
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Revenue from Contracts with Customers |
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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 March 31, 2024 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 March 31, 2024 and June 30, 2023 were both $0.2 million. They are presented within prepaid expenses and other current assets and accrued expenses, respectively, on the 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 March 31, 2024 and June 30, 2023, respectively, recorded in Accounts Payable in the Condensed Consolidated Balance Sheets. Disaggregation of Revenue The Company operates in three reportable segments: NAI, INI and GTM. 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 nine months ended March 31, 2024 and 2023 (in thousands):
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Leases |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Operating lease expense amounted to $0.5 million and $1.5 million for the three and nine months period ended for March 31, 2024 and March 31, 2023. For the three and nine months period ended March 31, 2023 operating lease expense was $0.5 million and $1.5 million. As of March 31, 2024, the Company’s right-of-use assets "ROU", lease obligations and remaining cash commitment on these leases (in thousands):
The Company has other operating lease agreements with commitments of less than one year or that are not material. The Company expenses lease payments as incurred. The Company’s weighted average discount rate and remaining term on lease liabilities is approximately 9.0% and 2.7 years. As of March 31, 2024, the Company’s financing leases are not material. The foreign exchange impact affecting the operating leases are, also, not material. In the three months and nine months ended March 31, 2024 the Company entered into no new leases and $0.3 million. At March 31, 2024, the Company had the following fiscal year minimum operating lease commitments (in thousands):
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Stock-based Compensation |
9 Months Ended |
---|---|
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Compensation expense related to all stock-based plans for the three and nine months ended March 31, 2024 were $0.2 million and $0.5 million as compared to the prior year three and nine months of $0.2 million and $0.5 million, respectively. |
Inventories |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following (in thousands):
Of the Company’s $58.5 million and $65.4 million total inventory at March 31, 2024 and June 30, 2023, respectively, the $30.1 million and $26.4 million LIFO reserves belong to the U.S. Precision Tools and Saws Manufacturing “Precision Tools.” business. The Precision Tools business total inventory was $40.5 million on a FIFO basis and $10.4 million on a LIFO basis at March 31, 2024. The Precision Tools 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, during the nine months ended March 31, 2024 resulted in a $3.8 million increase in the cost of goods sold in the nine months ended March 31, 2024 compared to a $0.4 million decrease in the nine months ended March 31, 2023.
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Goodwill and Intangible Assets |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. For the periods ending three and nine months ended March 31, 2024 the amortization expense was $0.3 million and $0.8 million, respectively. The goodwill balance at March 31, 2024, was gross $4.7 million and accumulated impairment of $3.7 million. There is no change in the three and nine months ended March 31, 2024.
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Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses The following table represents accrued expenses from the 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), net in Condensed Consolidated Statements of Operations except (in the table below) 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 for the Company's Postretirement Medical Plan consists of the following (in thousands):
For the three months and nine months ended March 31, 2024, the Company contributed in the U.S. $1.1 million and $2.4 million. In the UK pension plans the Company contributed $0.2 million and $0.7 million for the same periods. 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.
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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 new credit facilities replaced the Company’s previous TD Bank credit facilities and 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 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 loan facility is available for the purchase of new machinery and equipment at 80% of the net invoice value of new machinery and equipment purchases, with a draw period of eighteen months past the closing date, with any amount outstanding under the facility subject to a 3.75% amortization rate per quarter. 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 Condensed 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’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. The Company’s Brazilian subsidiary has the following loans of March 31, 2024 (in thousands):
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Income Taxes |
9 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax expense for the three month period ended March 31, 2024 was $0.1 million on profit before tax of $0.7 million (an effective tax rate of 14%). The effective rate for the three months ended March 31, 2024 was lower than the U.S. statutory tax rate of 21% due in part to a discrete tax benefit of $0.1 million related to the reversal of uncertain tax positions due to the lapse in the statute of limitations and tax credits and permanent deductions generated from research expenses, offset by the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34% and foreign losses not benefited. During the three month period ended March 31, 2023 the Company recorded a discrete tax benefit of $5.0 million related to the Company’s partial release of its valuation allowance against its U.S. foreign tax credits and state net operating losses carryforwards, which are expected to be utilized based on demonstrated profitability and current and future forecast income. Excluding the tax benefit related to the partial release of valuation allowance of 144%, the effective tax rate for the three months ended March 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%, and non-creditable foreign withholding tax. Tax expense for the nine month period ended March 31, 2024 was $2.6 million on profit before tax of $4.8 million (an effective tax rate of 51%). During the nine month period ended March 31, 2024, 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 nine months ended March 31, 2024 was higher than the U.S. statutory tax rate of 21% primarily due to 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 nine months ended March 31, 2023 was a benefit of $1.3 million on profit before tax of $11.4 million (an effective tax rate of 11%). During the nine months ended March 31, 2023, the Company recorded a discrete tax benefit of $5.0 million related to the Company’s partial release of its valuation allowance against its U.S. foreign tax credits and state net operating losses carryforwards, which are expected to be utilized based on demonstrated profitability and current and future forecast income. In addition the Company used current forecasts of future taxable income. Excluding the tax benefit related to the partial release of valuation allowance of 44%, the effective tax rate for the nine months ended March 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%, and non-creditable foreign withholding tax. 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 March 31, 2024 and June 30, 2023. The Company had long term tax obligations related primarily to transfer pricing adjustments at March 31, 2024 and June 30, 2023.
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Contingencies |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in certain legal matters, which arise, in the normal course of business. Although the outcomes of these legal matters are inherently difficult to predict, management does not expect the resolution of these legal matters to 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 Accounting Policies (Policies) |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The unaudited Condensed Consolidated Financial Statements as of and for the nine months ended March 31, 2024 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 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 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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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 within the notes 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 Condensed Consolidated Financial Statements and accompanying notes. Note 1 within the notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 2 to the Company’s audited 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Results for Reportable Segments | Financial results for each reportable segment are as follows (in thousands):
1.Excludes $345 of NAI segment intercompany sales to the INI segment, $83 of GTM segment intercompany sales to the INI segment, $2,625 of INI segment intercompany sales to NAI and $277 of GTM intercompany sales to NAI. 2. Excludes $243 of NAI segment intercompany sales to the INI segment, $83 of GTM segment intercompany sales to the INI segment, $3,208 of INI segment intercompany sales to NAI and $348 of GTM intercompany sales to NAI
1.Excludes $1,027 of NAI segment intercompany sales to the INI segment, $274 of GTM segment intercompany sales to the INI segment, $9,660 of INI segment intercompany sales to NAI and $1,256 of GTM intercompany sales to NAI. 2. Excludes $1,442 of NAI segment intercompany sales to the INI segment, $519 of GTM segment intercompany sales to the INI segment, $11,825 of INI segment intercompany sales to NAI and $1,016 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | In the following table, the Company's net sales by shipping origin are disaggregated accordingly for the three and nine months ended March 31, 2024 and 2023 (in thousands):
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Assets And Liabilities | As of March 31, 2024, the Company’s right-of-use assets "ROU", lease obligations and remaining cash commitment on these leases (in thousands):
|
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Schedule of Fiscal Year Minimum Operating Lease Commitments | At March 31, 2024, the Company had the following fiscal year minimum operating lease commitments (in thousands):
|
Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consist of the following (in thousands):
|
Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortizable Intangible Assets | Amortizable intangible assets consist of the following (in thousands):
|
Accrued Expenses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | The following table represents accrued expenses from the Condensed Consolidated Balance Sheets (in thousands):
|
Pension and Post-retirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Net periodic benefit costs consist of the following (in thousands):
Net periodic benefit costs for the Company's Postretirement Medical Plan consists of the following (in thousands):
|
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt is comprised of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Debt, Brazilian Subsidiary | The Company’s Brazilian subsidiary has the following loans of March 31, 2024 (in thousands):
|
Segment Information - Narrative (Details) |
9 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Revenue from Contracts with Customers - Narrative (Details) |
9 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
segment
|
Jun. 30, 2023
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Customer return asset | $ 200,000 | $ 100,000 |
Customer refund liability | $ 200,000 | 200,000 |
Standard product warranty period | 1 year | |
Contract asset | $ 0 | 0 |
Contract liability | $ 300,000 | $ 300,000 |
Number of reportable segments | segment | 3 |
Leases - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 500,000 | $ 500,000 | $ 1,500,000 | $ 1,500,000 |
Weighted average discount rate | 9.00% | 9.00% | ||
Weighted average remaining lease term | 2 years 8 months 12 days | 2 years 8 months 12 days | ||
Operating lease commitments | $ 0 | $ 300,000 |
Leases - Schedule of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-Use Assets | $ 3,978 | $ 4,931 |
Operating Lease Obligations | 4,132 | |
Remaining Cash Commitment | $ 4,701 |
Leases - Schedule of Fiscal Year Minimum Operating Lease Commitments (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2024 (Remainder of year) | $ 580 |
2025 | 1,782 |
2026 | 1,486 |
2027 | 742 |
2028 | 111 |
Thereafter | 0 |
Subtotal | 4,701 |
Imputed interest | (569) |
Operating lease obligations | $ 4,132 |
Stock-based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
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 | $ 0.5 | $ 0.5 |
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 34,779 | $ 36,402 |
Goods in process and finished parts | 21,298 | 20,978 |
Finished goods | 32,534 | 34,414 |
Total before LIFO reserve | 88,611 | 91,794 |
LIFO Reserve | (30,093) | (26,380) |
Total | $ 58,518 | $ 65,414 |
Inventories - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Jun. 30, 2023 |
|
Inventory Disclosure [Abstract] | |||
Inventories | $ 58,518 | $ 65,414 | |
LIFO reserves | 30,093 | 26,380 | |
Inventory difference using FIFO basis | 40,500 | 38,100 | |
LIFO inventory amount | 10,400 | $ 11,700 | |
Effect of LIFO reserve on income | $ (3,800) | $ 400 |
Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 12,904 | $ 13,954 |
Accumulated amortization and impairment | (8,008) | (9,282) |
Net intangible assets | 4,896 | 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 | 10,099 | 11,149 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 105 | $ 105 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 300,000 | $ 800,000 | ||
Goodwill, gross | 4,700,000 | 4,700,000 | ||
Goodwill impairment loss | 3,700,000 | |||
Goodwill | $ 1,015,000 | $ 1,015,000 | $ 1,015,000 | $ 0 |
Computer Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset useful life | 5 years | 5 years | ||
Trademarks and Trade Names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset useful life | 20 years | 20 years |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ 2,796 | $ 2,590 |
Income taxes | 46 | 509 |
Professional fees | 1,575 | 2,237 |
Other | 1,355 | 1,499 |
Current portion pension cost | 2,225 | 2,216 |
Taxes other than income tax | 3,123 | 1,888 |
Workers compensation and employee deposits | 437 | 491 |
Freight | 344 | 149 |
Total | $ 11,901 | $ 11,579 |
Pension and Post-retirement Benefits - Narrative (Details) - Pension Plan $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Mar. 31, 2024
USD ($)
plan
|
Mar. 31, 2024
USD ($)
plan
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Number of defined benefit pension plans | plan | 2 | 2 |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Number of defined benefit pension plans | plan | 1 | 1 |
Employer contributions | $ | $ 1.1 | $ 2.4 |
Foreign Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions | $ | $ 0.2 | $ 0.7 |
Pension and Post-retirement Benefits - Net Periodic Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 1,537 | $ 1,464 | $ 4,591 | $ 4,354 |
Expected return on plan assets | (1,084) | (1,015) | (3,231) | (3,007) |
Amortization of net loss | 10 | 10 | 30 | 30 |
Total | 463 | 459 | 1,390 | 1,377 |
Post Retirement Medical Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 5 | 6 | 14 | 17 |
Interest cost | 17 | 18 | 52 | 53 |
Amortization of prior service credit | (369) | (369) | (1,106) | (1,106) |
Amortization of net loss | 30 | 44 | 92 | 133 |
Total | $ (317) | $ (301) | $ (948) | $ (903) |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jun. 30, 2023 |
---|---|---|
Short-term and current maturities | ||
Loan and Security Agreement (Term Loan) | $ 2,326 | $ 4,961 |
Brazil Loans | 1,396 | |
Subtotal short-term and current maturities | 2,326 | 4,961 |
Long-term debt (net of current portion) | ||
Loan and security agreement | 5,768 | 5,273 |
Total debt | 8,094 | 10,234 |
Loan and Security Agreement (Term Loan) | ||
Long-term debt (net of current portion) | ||
Loan and security agreement | 1,625 | 1,957 |
Loan and Security Agreement (Line of Credit) | ||
Long-term debt (net of current portion) | ||
Loan and security agreement | 4,397 | 2,897 |
Brazil Loans | ||
Long-term debt (net of current portion) | ||
Loan and security agreement | 74 | 827 |
Debt reacquisition cost | (328) | (408) |
Loan and Security Agreement (Term Loan) | ||
Short-term and current maturities | ||
Loan and Security Agreement (Term Loan) | 1,004 | 1,495 |
Brazil Loans | ||
Short-term and current maturities | ||
Brazil Loans | $ 1,322 | $ 3,466 |
Debt - Short-term Debt (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Statement [Line Items] | |
Outstanding Balance | $ 1,396 |
Itau Bank | 4.52% Short-term loan | |
Statement [Line Items] | |
Interest Rate | 4.52% |
Outstanding Balance | $ 1,143 |
Brasil Bank | 4.95% Short-Term Loan | |
Statement [Line Items] | |
Interest Rate | 4.95% |
Outstanding Balance | $ 221 |
Brasil Bank | 3.80% Short-Term Loan | |
Statement [Line Items] | |
Interest Rate | 3.80% |
Outstanding Balance | $ 32 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (55) | $ 3,961 | $ (2,592) | $ 1,267 |
Profit before tax | 693 | 3,512 | $ 4,755 | $ 11,393 |
Reduction resulting from lapse of applicable statute of limitations | $ 100 | |||
Effective income tax rate percentage | 14.00% | 51.00% | 11.00% | |
Discrete tax benefit (expense) | $ 5,000 | $ 1,300 | $ 5,000 | |
Valuation allowance of the effective tax rate | 144.00% | 44.00% |
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