2 unchanged sentences
Consolidated Condensed Balance Sheets
−Removed: April 3, 2021 with Comparative Figures for December 31, 2020
+Added: July 3, 2021 with Comparative Figures for December 31, 2020
(In thousands)
−Removed: April 3, 2021 December 31, 2020
+Added: July 3, 2021 December 31, 2020
Current Assets:
6 unchanged sentences
26,061 26,420
+Added: Assets Held for Sale 3,760 —
Total Current Assets
31 unchanged sentences
Consolidated Condensed Statements of Operations
−Removed: Three Months Ended April 3, 2021 With Comparative Figures for 2020
+Added: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
(In thousands, except per share data)
−Removed: Three Months Ended
−Removed: April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Sales $ 217,015 $ 281,278 $ 111,158 $ 123,694
15 unchanged sentences
Consolidated Condensed Statements of Comprehensive (Loss) Income
−Removed: Three Months Ended April 3, 2021 With Comparative Figures for 2020
+Added: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Three Months Ended
−Removed: April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Net Loss $ ( 20,008 ) $ ( 90,542 ) $ ( 8,099 ) $ ( 23,579 )
−Removed: Other Comprehensive (Loss) Income:
+Added: Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments
1 unchanged sentence
Retirement Liability Adjustment – Net of Tax
−Removed: Total Other Comprehensive Loss ( 203 ) ( 2,089 )
+Added: 868 430 434 215
+Added: Total Other Comprehensive Income (Loss) 846 ( 1,064 ) 1,049 1,025
Comprehensive Loss $ ( 19,162 ) $ ( 91,606 ) $ ( 7,050 ) $ ( 22,554 )
2 unchanged sentences
Consolidated Condensed Statements of Cash Flows
−Removed: Three Months Ended April 3, 2021 With Comparative Figures for 2020
+Added: Six Months Ended July 3, 2021 With Comparative Figures for 2020
(Unaudited, In thousands)
−Removed: Three Months Ended
+Added: Six Months Ended
Cash Flows from Operating Activities:
−Removed: April 3, 2021 March 28, 2020
+Added: July 3, 2021 June 27, 2020
Net Loss $ ( 20,008 ) $ ( 90,542 )
4 unchanged sentences
Deferred Tax (Benefit) Expense ( 153 ) 1,190
+Added: Non-cash Severance Expense — 4,669
Operating Lease Non-Cash Expense 2,343 2,236
+Added: Non-cash Litigation Provision — 1,450
+Added: Equity Investment Other Than Temporary Impairment — 3,493
Impairment Loss — 87,016
+Added: Contingent Consideration Liability Fair Value Adjustment ( 2,200 ) —
Other 2,105 4,459
12 unchanged sentences
Capital Expenditures ( 3,566 ) ( 3,905 )
+Added: Proceeds on Sale of Assets — 1,600
Cash Flows from Investing Activities ( 3,566 ) ( 2,305 )
3 unchanged sentences
Purchase of Outstanding Shares for Treasury — ( 7,732 )
+Added: Financing Fees — ( 360 )
Stock Options Activity ( 59 ) 34
8 unchanged sentences
Consolidated Condensed Statements of Shareholders' Equity
−Removed: Three Months Ended April 3, 2021 With Comparative Figures for 2020
+Added: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Three Months Ended
−Removed: April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Beginning of Period $ 278 $ 269 $ 279 $ 271
27 unchanged sentences
Consolidated Condensed Statements of Shareholders' Equity, Continued
−Removed: Three Months Ended April 3, 2021 With Comparative Figures for 2020
+Added: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Three Months Ended
−Removed: April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Beginning of Period 27,825 26,874 27,897 27,088
14 unchanged sentences
Notes to Consolidated Condensed Financial Statements
−Removed: April 3, 2021
1) Basis of Presentation
7 unchanged sentences
In addition, the COVID-19 pandemic has increased the volatility we experience in our financial results in recent periods and this could continue in future interim and annual periods.
−Removed: Operating results for the three months ended April 3, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.
+Added: Operating results for the six months ended July 3, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.
The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S.
17 unchanged sentences
The Company and the buyer are currently reviewing the calculations and underlying data and are engaged in negotiations.
−Removed: The Company expects to record the additional gain for whatever amount is realized on the sale when that review is complete and agreement is reached.
+Added: The Company expects to record the additional gain for whatever amount is realized on the earnout when that review is complete and agreement is reached.
The timing and amount of any amount realized is uncertain and subject to risks and uncertainties as we continue the review and negotiation process.
23 unchanged sentences
We are also monitoring the impacts of COVID-19 on the fair value of assets.
−Removed: Refer to Note 6 for a discussion of goodwill impairment charges recorded in the first quarter of 2020.
+Added: Refer to Note 6 for a discussion of goodwill impairment charges recorded in 2020.
Should future changes in sales, earnings and cash flows differ significantly from our expectations, long-lived assets to be held and used and goodwill could become impaired in the future.
2 unchanged sentences
The grants are recognized as income over the periods in which the Company recognizes as expenses the costs the grants are intended to defray.
−Removed: The Company recorded $ 0.6 million in COVID-19 related government assistance in the Consolidated Condensed Statements of Operations for the three months ended April 3, 2021, of which $ 0.5 million and $ 0.1 million was included in Cost of Products Sold and Selling, General and Administrative (“SG&A”) expenses, respectively.
+Added: The following table presents the COVID-19 related government assistance received during the three and six months ended July 3, 2021:
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Cost of Products Sold $ 1,478 $ 551 $ 933 $ 551
+Added: Selling, General and Administrative Expenses 147 101 78 101
+Added: Total $ 1,625 $ 652 $ 1,011 $ 652
Trade Accounts Receivable and Contract Assets
1 unchanged sentence
The Company regularly reviews the allowance by considering factors such as the age of the receivable balances, historical experience, credit quality, current economic conditions, and reasonable and supportable forecasts of future economic conditions that may affect a customer’s ability to pay.
−Removed: The allowance for estimated credit losses balance was $ 3.5 million and $ 3.2 million at April 3, 2021 and December 31, 2020, respectively.
−Removed: The Company’s bad debt expense was $ 0.3 million during the three months ended April 3, 2021 and insignificant in the three months ended March 28, 2020.
−Removed: Total recoveries and writeoffs and charged against the allowance were insignificant in the three months ended April 3, 2021 and March 28, 2020.
+Added: The allowance for estimated credit losses balance was $ 3.3 million and $ 3.2 million at July 3, 2021 and December 31, 2020, respectively.
+Added: The Company’s bad debt expense was insignificant during the three and six months ended July 3, 2021 and $ 1.6 million in the three and six months ended June 27, 2020.
+Added: Total recoveries and writeoffs charged against the allowance were insignificant in the three and six months ended July 3, 2021 and June 27, 2020.
The Company's exposure to credit losses may increase if its customers are adversely affected by global economic recessions, disruption associated with the current COVID-19 pandemic, industry conditions, or other customer-specific factors.
Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables and contract assets as airlines and other aerospace company’s cash flows are impacted by the COVID-19 pandemic.
+Added: Assets of Business Held for Sale
+Added: Assets held for sale are to be reported at lower of its carrying amount or fair value less cost to sell.
+Added: Judgment is required in estimating the sales price of assets held for sale and the time required to sell the assets.
+Added: These estimates are based upon available market data and operating cash flows of the assets held for sale.
+Added: As of July 3, 2021, the Company has agreed to sell certain facilities within the Aerospace segment as a result of consolidating certain facilities.
+Added: Accordingly, the property, plant and equipment assets associated with these facilities of $ 3.8 million have been classified as held for sale in the Consolidated Condensed Balance Sheets at July 3, 2021.
Cost of Products Sold, Engineering and Development, Interest, and Selling, General and Administrative Expenses
2 unchanged sentences
These costs are expensed when incurred and included in cost of products sold.
−Removed: Research and development, design and related engineering amounted to $ 21.6 million and $ 26.2 million for the three months ended April 3, 2021 and March 28, 2020, respectively.
+Added: Research and development, design and related engineering amounted to $ 21.3 million and $ 22.4 million for the three months ended and $ 42.9 million and $ 48.6 million for the six months ended July 3, 2021 and June 27, 2020, respectively.
Selling, general and administrative expenses include costs primarily related to our sales and marketing departments and administrative departments.
Interest expense is shown net of interest income.
−Removed: Interest income was insignificant for the three months ended April 3, 2021 and March 28, 2020.
+Added: Interest income was insignificant for the three and six months ended July 3, 2021 and June 27, 2020.
Goodwill Impairment
The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
−Removed: As a result of the qualitative factors related to the COVID-19 pandemic, as discussed above, we performed interim quantitative assessments for the reporting units which had goodwill as of March 28, 2020.
−Removed: Based on our quantitative assessment, the Company recorded goodwill impairment charges associated with four Aerospace reporting units, totaling $ 73.7 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020.
−Removed: As of April 3, 2021, the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three months then ended.
+Added: As a result of the qualitative factors related to the COVID-19 pandemic, as discussed above, we performed interim quantitative assessments for the reporting units which had goodwill as of March 28, 2020, and an additional assessment of our PECO reporting unit as of June 27, 2020.
+Added: Based on our quantitative assessments, the Company recorded goodwill impairment charges associated with four Aerospace reporting units, totaling $ 12.6 million and $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three and six months ended June 27, 2020.
+Added: respectively.
+Added: As of July 3, 2021, the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three or six months then ended.
For additional information regarding the quantitative test and the related goodwill impairment see Note 6.
3 unchanged sentences
Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value.
−Removed: In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to right-of-use (“ROU”) assets of approximately $ 0.7 million incurred in one reporting unit in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020.
−Removed: As of April 3, 2021, the Company concluded that no indicators of additional impairment relating to long-lived assets existed.
+Added: In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to right-of-use (“ROU”) assets of approximately $ 0.7 million incurred in one reporting unit in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the six months ended June 27, 2020.
+Added: As of July 3, 2021, the Company concluded that no indicators of additional impairment relating to long-lived assets existed.
Foreign Currency Translation
−Removed: The aggregate foreign currency transaction gain or loss included in operations was insignificant for the three months ended April 3, 2021 and March 28, 2020.
+Added: The aggregate foreign currency transaction gain or loss included in operations was insignificant for the three and six months ended July 3, 2021 and June 27, 2020.
Newly Adopted and Recent Accounting Pronouncements
35 unchanged sentences
These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer.
−Removed: As of April 3, 2021, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year.
+Added: As of July 3, 2021, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year.
The Company recognizes an asset for certain, material costs to fulfill a contract if it is determined that the costs relate directly to a contract or an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered.
3 unchanged sentences
Should future orders not materialize or it is determined the costs are no longer probable of recovery, the capitalized costs are written off.
−Removed: As of April 3, 2021, the Company does not have material capitalized fulfillment costs.
+Added: As of July 3, 2021, the Company does not have material capitalized fulfillment costs.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account.
4 unchanged sentences
For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.
−Removed: The primary method used to estimate standalone selling price is the expected cost plus margin approach, under which expected costs are forecast to satisfy a performance obligation and then an
−Removed: appropriate margin is added for that distinct good or service.
+Added: The primary method used to estimate standalone selling price is the expected cost plus margin approach, under which expected costs are forecast to satisfy a performance obligation and then an appropriate margin is added for that distinct good or service.
Shipping and handling activities that occur after the customer has obtained control of the good are considered fulfillment activities, not performance obligations.
17 unchanged sentences
The Company also recognizes revenue from service contracts (including service-type warranties) over time.
−Removed: The Company recognizes revenue over time during the term of the agreement as the customer is simultaneously receiving and consuming the benefits provided throughout the Company’s performance.
+Added: The Company recognizes revenue over time during the term of the agreement as the customer is simultaneously receiving and consuming the
+Added: benefits provided throughout the Company’s performance.
The Company typically recognizes revenue on a straight-line basis throughout the contract period.
−Removed: On April 3, 2021, we had $ 297.5 million of remaining performance obligations, which we refer to as total backlog.
+Added: On July 3, 2021, we had $ 312.7 million of remaining performance obligations, which we refer to as total backlog.
We expect to recognize approximately $ 183.6 million of our remaining performance obligations as revenue in 2021.
6 unchanged sentences
Once the beginning contract liability balance for an individual contract has been fully recognized as revenue, any additional payments received in the period are recognized as revenue once the related costs have been incurred.
−Removed: We recognized $ 8.3 million and $ 8.7 million for the three months ended April 3, 2021 and March 28, 2020, respectively, in revenues that were included in the contract liability balance at the beginning of the period.
+Added: We recognized $ 11.3 million and $ 10.6 million during the three months ended and $ 14.4 million and $ 14.5 million during the six months ended July 3, 2021 and June 27, 2020, respectively, in revenues that were included in the contract liability balance at the beginning of the period.
The Company's contract assets and contract liabilities consist primarily of costs and profits in excess of billings and billings in excess of cost and profits, respectively.
−Removed: The following table presents the beginning and ending balances of contract assets and contract liabilities during the three months ended April 3, 2021:
+Added: The following table presents the beginning and ending balances of contract assets and contract liabilities during the six months ended July 3, 2021:
(In thousands) Contract Assets Contract Liabilities
Beginning Balance, January 1, 2021 $ 17,697 $ 28,641
−Removed: Ending Balance, April 3, 2021
+Added: Ending Balance, July 3, 2021
$ 25,104 $ 27,930
The following table presents our revenue disaggregated by Market Segments as follows:
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Aerospace Segment
3 unchanged sentences
29,022 30,548 14,994 15,542
+Added: 17,830 10,607 9,632 5,431
Aerospace Total 170,636 243,643 89,220 102,573
1 unchanged sentence
Semiconductor
+Added: — 2,822 — 1,188
Aerospace & Defense
3 unchanged sentences
The following table presents our revenue disaggregated by Product Lines as follows:
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Aerospace Segment
5 unchanged sentences
Systems Certification
+Added: 1,838 4,991 960 1,660
+Added: 2,544 5,096 1,491 2,054
+Added: 17,830 10,607 9,632 5,431
Aerospace Total 170,636 243,643 89,220 102,573
4 unchanged sentences
( In thousands )
−Removed: April 3, 2021 December 31, 2020
+Added: July 3, 2021 December 31, 2020
Finished Goods
10 unchanged sentences
(In thousands)
−Removed: April 3, 2021 December 31, 2020
+Added: July 3, 2021 December 31, 2020
$ 8,677 $ 9,891
8 unchanged sentences
$ 99,683 $ 106,678
+Added: Additionally, net Property, Plant and Equipment of $ 3.8 million is classified in Assets Held for Sale at July 3, 2021.
5) Intangible Assets
The following table summarizes acquired intangible assets as follows:
−Removed: April 3, 2021 December 31, 2020
+Added: July 3, 2021 December 31, 2020
(In thousands) Weighted
9 unchanged sentences
Amortization expense for acquired intangibles is summarized as follows:
−Removed: Three Months Ended
+Added: Six Months Ended Three Months Ended
(In thousands)
−Removed: April 3, 2021 March 28, 2020
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Amortization Expense
7 unchanged sentences
2025 $ 10,935
−Removed: The following table summarizes the changes in the carrying amount of goodwill for the three months ended April 3, 2021:
+Added: The following table summarizes the changes in the carrying amount of goodwill for the six months ended July 3, 2021:
(In thousands) December 31, 2020 Foreign
−Removed: April 3, 2021
Aerospace $ 36,648 $ 47 $ 36,695
5 unchanged sentences
Therefore, we performed a quantitative test for all eight reporting units with goodwill as of March 28, 2020.
−Removed: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $ 73.7 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020.
−Removed: As of April 3, 2021, the Company concluded that no indicators of additional impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three months then ended.
+Added: We determined that the estimated fair value of four of the eight reporting units was less than their respective carrying values.
+Added: During the second quarter of 2020, further commercial aircraft order reductions, delays and cancellations at a major customer of our PECO reporting unit resulted in revisions to PECO’s forecast.
+Added: We therefore performed a quantitative test for the PECO reporting unit as of June 27, 2020 and we determined that the estimated fair value was less than the respective carrying value.
+Added: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling $ 12.6 million and $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three and six months ended June 27, 2020, respectively.
+Added: As of July 3, 2021, the Company concluded that no indicators of additional impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three or six months then ended.
7) Long-term Debt and Notes Payable
5 unchanged sentences
In May 2020, the Company executed an amendment to the Agreement (the “Amended Facility”), which reduced the revolving credit line from $ 500 million to $ 375 million.
−Removed: The Amended Facility suspends the application of the leverage ratio up through and including the second quarter of 2021 (the “suspension period”).
+Added: The Amended Facility suspended the application of the leverage ratio up through and including the second quarter of 2021 (the “suspension period”).
The maximum net leverage ratio will be 6.00 to 1 for the third quarter of 2021, 5.50 to 1 for the fourth quarter of 2021, 4.50 to 1 for the first quarter of 2022, and return to 3.75 to 1 for each quarter thereafter.
−Removed: At April 3, 2021, there was $ 173.0 million outstanding on the revolving credit facility and there remained $ 200.9 million available subject to the minimum liquidity covenant discussed below, net of outstanding letters of credit.
+Added: At July 3, 2021, there was $ 173.0 million outstanding on the revolving credit facility and there remained $ 200.9 million available subject to the minimum liquidity covenant discussed below, net of outstanding letters of credit.
The credit facility allocates up to $ 20 million of the $ 375 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit.
−Removed: At April 3, 2021, outstanding letters of credit totaled $ 1.1 million.
+Added: At July 3, 2021, outstanding letters of credit totaled $ 1.1 million.
Through the third quarter of 2021, the Amended Facility requires the Company to maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $ 180 million at all times.
−Removed: Through the second quarter of 2021, the Company is required to maintain a minimum interest coverage ratio of 1.75 x on a quarterly basis, except for the first quarter of 2021, which was set at 1.50 x.
−Removed: The Company was in compliance with its financial covenants at April 3, 2021.
−Removed: During the suspension period, the Company will pay interest on the unpaid principal amount of the Amended Facility at a rate equal to one-, three- or six-month LIBOR (which shall be at least 1.00 %) plus 2.25 %.
−Removed: The Company will also pay a commitment fee to the lenders in an amount equal to 0.35 % on the undrawn portion of the Amended Facility.
+Added: Through the second quarter of 2021, the Company was required to maintain a minimum interest coverage ratio of 1.75 x on a quarterly basis, except for the first quarter of 2021, which was set at 1.50 x.
+Added: The Company was in compliance with its financial covenants at July 3, 2021.
+Added: During the suspension period, the Company paid interest on the unpaid principal amount of the Amended Facility at a rate equal to one-, three- or six-month LIBOR (which shall be at least 1.00 %) plus 2.25 %.
+Added: The Company paid a commitment fee to the lenders in an amount equal to 0.35 % on the undrawn portion of the Amended Facility.
After the suspension period, the Company will pay interest on the unpaid principal amount of the Amended Facility at a rate equal to one-, three- or six-month LIBOR (which shall be at least 1.00 %) plus between 1.00 % to 2.25 % based upon the Company’s leverage ratio.
1 unchanged sentence
The Amended Facility provided for the payment of a consent fee of 15 basis points of the commitment for each consenting lender.
−Removed: The Amended Facility also temporarily restricts certain activities, including acquisitions and share repurchases, and requires mandatory prepayments during the suspension period when the Company’s cash balance exceeds $ 100 million.
−Removed: The Company has not made any prepayments during the three months ended April 3, 2021.
+Added: The Amended Facility also temporarily restricts certain activities, including acquisitions and share repurchases, through the second quarter of 2022.
The Company’s obligations under the Amended Facility are jointly and severally guaranteed by each domestic subsidiary of the Company other than non-material subsidiaries.
5 unchanged sentences
The Company determines warranty reserves needed by product line based on experience and current facts and circumstances.
−Removed: Activity in the warranty accrual is summarized as follows:
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Activity in the warranty accrual is summarized as
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Balance at Beginning of Period $ 7,018 $ 7,660 $ 6,842 $ 7,122
7 unchanged sentences
Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
−Removed: The weighted-average remaining term for the Company's operating and financing leases are approximately 6 and 1 , respectively.
+Added: The weighted-average remaining term for the Company's operating and financing leases are approximately 5 and 1 years, respectively.
The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3 % and 1.3 %, respectively.
The following is a summary of the Company's ROU assets and liabilities:
−Removed: (In thousands) April 3, 2021 December 31, 2020
+Added: (In thousands) July 3, 2021 December 31, 2020
Operating Leases:
11 unchanged sentences
Short-term Finance Lease Liabilities — Included in Accrued Expenses and Other Current Liabilities
−Removed: $ 2,196 $ 2,081
Long-term Finance Lease Liabilities — Included in Other Liabilities
1 unchanged sentence
The following is a summary of the Company's total lease costs:
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Finance Lease Cost:
12 unchanged sentences
Remainder of 2021
−Removed: $ 4,120 $ 1,701
Thereafter 3,363 —
3 unchanged sentences
10) Income Taxes
−Removed: The effective tax rates were approximately ( 0.9 )% and 3.3 % for the three months ended April 3, 2021 and March 28, 2020, respectively.
+Added: The effective tax rates were approximately 0.8 % and 3.6 % for the three months ended and ( 0.2 )% and 3.4 % for the six months ended July 3, 2021 and June 27, 2020, respectively.
The tax rate in the 2021 period was impacted by State and Foreign income taxes as well as changes in the valuation allowance previously recorded against federal deferred tax assets.
−Removed: As discussed below, the tax rate in the 2020 period was impacted primarily by the initial recording of a valuation allowance against federal deferred tax assets.
−Removed: As a result of the COVID-19 pandemic and its adverse effects on the global economy and aerospace industry that began to take shape in the first quarter of fiscal 2020, through April 3, 2021 the Company is continuing to forecast that it will generate a taxable loss in 2021.
+Added: As discussed below, the tax rate in the 2020 period was impacted primarily by the initial recording of a valuation allowance against federal deferred tax assets and permanently nondeductible goodwill impairments.
+Added: As a result of the COVID-19 pandemic and its adverse effects on the global economy and aerospace industry that began to take shape in the first quarter of fiscal 2020, through July 3, 2021 the Company is continuing to forecast that it will generate a taxable loss in 2021.
The Company records a valuation allowance against the deferred tax assets if and to the extent it is more likely than not that the Company will not recover the deferred tax assets.
4 unchanged sentences
federal deferred tax assets in the first quarter of 2020 and continues to maintain the valuation allowance against its U.S.
−Removed: federal deferred tax assets as of April 3, 2021.
+Added: federal deferred tax assets as of July 3, 2021.
On March 11, 2021, the American Rescue Plan Act, or ARPA, was signed into law.
The ARPA enacted certain provisions that are relevant to corporate income tax.
−Removed: These provisions did not have a material impact on our income tax provision for the three months ended April 3, 2021.
+Added: These provisions did not have a material impact on our income tax provision for the six months ended July 3, 2021.
11) Earnings Per Share
Basic and diluted weighted-average shares outstanding are as follows:
−Removed: Three Months Ended
+Added: Six Months Ended Three Months Ended
(In thousands)
−Removed: April 3, 2021 March 28, 2020
+Added: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Weighted Average Shares - Basic
4 unchanged sentences
Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive.
−Removed: The number of common shares covered by out-of-the-money stock options was approximately 652,000 shares as of April 3, 2021 and 785,000 shares as of March 28, 2020.
−Removed: Further, due to our net loss in the three month periods ended April 3,
−Removed: 2021 and March 28, 2020, the assumed exercise of stock compensation had an antidilutive effect and therefore was excluded from the computation of diluted loss per share.
+Added: The number of common shares covered by out-of-the-money stock options was approximately 645,000 shares as of July 3, 2021 and 872,000 shares as of June 27, 2020.
+Added: Further, due to our net loss in the three and six month periods ended July 3, 2021 and June 27, 2020, the assumed exercise of stock compensation had an antidilutive effect and therefore was excluded from the computation of diluted loss per share.
12) Shareholders' Equity
6 unchanged sentences
The components of accumulated other comprehensive loss are as follows:
−Removed: (In thousands) April 3, 2021 December 31, 2020
+Added: (In thousands) July 3, 2021 December 31, 2020
Foreign Currency Translation Adjustments $ ( 4,490 ) $ ( 4,468 )
3 unchanged sentences
Accumulated Other Comprehensive Loss $ ( 15,604 ) $ ( 16,450 )
−Removed: The components of other comprehensive (loss) income are as follows:
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: The components of other comprehensive income (loss) are as follows:
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Foreign Currency Translation Adjustments $ ( 22 ) $ ( 1,494 ) $ 615 $ 810
2 unchanged sentences
Amortization of Prior Service Cost
+Added: 201 201 100 100
Amortization of Net Actuarial Losses
+Added: 667 344 334 173
+Added: — ( 115 ) — ( 58 )
Retirement Liability Adjustment 868 430 434 215
−Removed: Other Comprehensive Loss $ ( 203 ) $ ( 2,089 )
+Added: Other Comprehensive Income (Loss) $ 846 $ ( 1,064 ) $ 1,049 $ 1,025
13) Supplemental Retirement Plan and Related Post Retirement Benefits
1 unchanged sentence
The following table sets forth information regarding the net periodic pension cost for the plans.
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Service Cost $ 97 $ 111 $ 48 $ 56
4 unchanged sentences
Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan.
−Removed: The net periodic cost was insignificant for the three months ended April 3, 2021 and March 28, 2020.
+Added: The net periodic cost was insignificant for the three and six months ended July 3, 2021 and June 27, 2020.
The service cost component of net periodic benefit costs above is recorded in Selling, General and Administrative Expenses within the Consolidated Condensed Statements of Operations, while the remaining components are recorded in Other Expense, Net of Other Income.
1 unchanged sentence
The loss of major customers or a significant reduction in business with a major customer would significantly, negatively impact our sales and earnings.
−Removed: In the three months ended April 3, 2021, the Company had no customer in excess of 10% of consolidated sales.
−Removed: Sales to one customer in the Aerospace segment represented 17 % of consolidated sales for the three months ended March 28, 2020.
+Added: In the three and six months ended July 3, 2021, the Company had no customer in excess of 10 % of consolidated sales.
+Added: Sales to one customer in the Aerospace segment represented 11 % and 14 % of consolidated sales for the three and six months ended June 27, 2020.
15) Legal Proceedings
2 unchanged sentences
Additional information about these legal proceedings can be found in Note 19 “Legal Proceedings” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
−Removed: There were no significant developments in any of these matters during the quarter ended April 3, 2021.
−Removed: The reserve for the German indirect claim was approximately $ 16.8 million at April 3, 2021, which included an additional $ 0.1 million in interest accrued during the quarter then ended.
+Added: There were no significant developments in any of these matters during the three and six months ended July 3, 2021.
+Added: The reserve for the German indirect claim was approximately $ 17.0 million at July 3, 2021, which included an additional $ 0.1 million and $ 0.3 million in interest accrued during the three and six months then ended.
We currently believe it is unlikely that the appeals process will be completed and the damages and related interest will be paid within the next twelve months.
−Removed: Therefore, the liability related to this matter is classified within Other Liabilities (non-current) in the Consolidated Condensed Balance Sheets at April 3, 2021 and December 31, 2020.
+Added: Therefore, the liability related to this matter is classified within Other Liabilities (non-current) in the Consolidated Condensed Balance Sheets at July 3, 2021 and December 31, 2020.
On March 23, 2020, Teradyne, Inc.
5 unchanged sentences
The parties are waiting to learn whether the PTAB will institute the proceeding.
−Removed: The District Court scheduled a claims construction hearing on the patent for June 2021.
−Removed: Fact discovery has begun on both the patent and copyright claims.
−Removed: We will not have a trial date until 2022 at the earliest.
−Removed: No amounts have been accrued for this matter in the April 3, 2021 financial statements, as loss exposure is neither probable nor estimable at this time.
+Added: Fact discovery has begun on both the patent and copyright claims and is not scheduled to be completed until February 2022.
+Added: A summary judgment hearing is scheduled for May 19, 2022 and the jury trial is scheduled to begin on July 12, 2022.
+Added: No amounts have been accrued for this matter in the July 3, 2021 financial statements, as loss exposure is neither probable nor estimable at this time.
Other than these proceedings, we are not party to any significant pending legal proceedings that management believes will result in a material adverse effect on our financial condition or results of operations.
16) Segment Information
−Removed: Below are the sales and operating profit by segment for the three and three months ended April 3, 2021 and March 28, 2020 and a reconciliation of segment operating profit to income before income taxes.
+Added: Below are the sales and operating profit by segment for the three and six months ended July 3, 2021 and June 27, 2020 and a reconciliation of segment operating profit to income before income taxes.
Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses.
Cost of products sold and other operating expenses are directly identifiable to the respective segment.
−Removed: Three Months Ended
−Removed: (In thousands) April 3, 2021 March 28, 2020
+Added: Six Months Ended Three Months Ended
+Added: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
Aerospace $ 170,650 $ 243,734 $ 89,220 $ 102,597
8 unchanged sentences
( 4.8 ) % ( 32.9 ) % ( 3.0 ) % ( 16.7 ) %
+Added: 243 3,334 ( 946 ) 2,612
+Added: 0.5 % 8.9 % ( 4.3 ) % 12.4 %
Total Segment Measure of Operating (Loss) Profit ( 8,026 ) ( 76,901 ) ( 3,652 ) ( 14,478 )
2 unchanged sentences
Interest Expense, Net of Interest Income
+Added: 3,457 3,316 1,699 1,983
Corporate Expenses and Other
+Added: 8,487 13,511 2,815 7,990
Loss Before Income Taxes $ ( 19,970 ) $ ( 93,728 ) $ ( 8,166 ) $ ( 24,451 )
1 unchanged sentence
(In thousands)
−Removed: April 3, 2021 December 31, 2020
+Added: July 3, 2021 December 31, 2020
$ 474,682 $ 484,885
15 unchanged sentences
The terms of the Diagnosys acquisition allow for a potential earn-out of up to an additional $ 13.0 million over the three years post-acquisition based on achievement of new order levels of over $ 72.0 million during that period.
−Removed: The fair value of this contingent consideration is estimated at $ 2.2 million as of April 3, 2021.
−Removed: The fair value assigned to the earnout is determined using the real options method, which requires Level 3 inputs such as new order forecasts, discount rate, volatility factors, and other market variables to assess the probability of Diagnosys achieving certain order levels over the period.
−Removed: There were no other financial assets or liabilities carried at fair value measured on a recurring basis at December 31, 2020 or April 3, 2021.
+Added: The fair value of this contingent consideration was estimated at $ 2.2 million as of December 31, 2020.
+Added: The fair value assigned to the earnout was determined using the real options method, which requires Level 3 inputs such as new order forecasts, discount rate, volatility factors, and other market variables to assess the probability of Diagnosys achieving certain order levels over the period.
+Added: Based on actual and forecasted new orders, the fair value was reduced to zero as of July 3, 2021, with the contingent consideration liability fair value adjustment of $ 2.2 million recorded within the Selling, General and Administrative line in the Consolidated Condensed Statement of Operations in the three and six months ended July 3, 2021.
+Added: There were no other financial assets or liabilities carried at fair value measured on a recurring basis at December 31, 2020 or July 3, 2021.
On a Non-recurring Basis:
4 unchanged sentences
As further discussed in Note 6, we performed interim quantitative assessments for the reporting units which had goodwill as of March 28, 2020.
−Removed: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $ 73.7 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020.
+Added: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $ 12.6 million and $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three and six months ended June 27, 2020, respectively.
The impairment loss was calculated as the difference between the fair value of the reporting unit (which was calculated using level 3 inputs) and the carrying value of the reporting unit.
−Removed: As of April 3, 2021, the Company concluded that no indicators of additional impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three months then ended.
+Added: As of July 3, 2021, the Company concluded that no indicators of additional impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three or six months then ended.
Long-lived assets are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable.
1 unchanged sentence
Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value.
−Removed: In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to ROU assets of approximately $ 0.7 million incurred in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the three months ended March 28, 2020.
−Removed: As of April 3, 2021, the Company concluded that no indicators of additional impairment relating to long-lived assets existed.
+Added: In conjunction with the deteriorating economic conditions associated with the COVID-19 pandemic, we recorded an impairment charge to ROU assets of approximately $ 0.7 million incurred in the Aerospace segment within the Impairment Loss line in the Consolidated Condensed Statement of Operations in the six months ended June 27, 2020.
+Added: As of July 3, 2021, the Company concluded that no indicators of additional impairment relating to long-lived assets existed.
Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value.
3 unchanged sentences
As a result, the Company executed restructuring activities in the form of workforce reduction, primarily in the second quarter of 2020, to align capacity with expected demand.
−Removed: There were no additional restructuring charges associated with this initiative recorded in the three months ended April 3, 2021.
In the fourth quarter of 2019, in an effort to reduce the significant operating losses at our AeroSat business, the Company initiated a restructuring plan to reduce costs and minimize losses of our AeroSat antenna business.
−Removed: The Company incurred $ 0.3 million in additional restructuring charges associated with severance at AeroSat during the three months ended March 28, 2020.
+Added: There were $ 0.2 million in additional restructuring charges associated with this initiative recorded in the three and six months ended July 3, 2021.
+Added: The Company incurred $ 0.3 million in additional restructuring charges associated with severance at AeroSat during the six months ended June 27, 2020.
The following tables reconcile the beginning and ending liability for restructuring charges:
2 unchanged sentences
Cash Paid ( 1,559 )
−Removed: Balance as of April 3 $ 4,650
−Removed: The liability is within Accrued Expenses and Other Current Liabilities and is comprised of employee termination benefits expected to be paid within the next 12 months as well as the current portions of payments to be made under AeroSat’s non-cancelable inventory purchase commitments.
+Added: Balance as of July 3 $ 4,293
+Added: The liability is within Accrued Expenses and Other Current Liabilities and is comprised of employee termination benefits expected to be paid within the next 12 months as well as payments to be made under AeroSat’s non-cancelable inventory purchase commitments.
The non-cancelable purchase commitments are for inventory in the future which is not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan.
+Added: 19) Subsequent Events
+Added: As of July 3, 2021, the Company has agreed to sell certain facilities within the Aerospace segment as a result of consolidating certain facilities.
+Added: Accordingly, the property, plant and equipment assets associated with these facilities of $ 3.8 million have been classified as held for sale in the Consolidated Condensed Balance Sheets at July 3, 2021.
+Added: Subsequent to July 3, 2021, the Company signed an agreement with a buyer to sell the facilities.
+Added: The gain on sale of approximately $ 5.3 million will be recorded during the third quarter of 2021.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.