2 unchanged sentences
Consolidated Condensed Balance Sheets
−Removed: July 3, 2021 with Comparative Figures for December 31, 2020
+Added: October 2, 2021 with Comparative Figures for December 31, 2020
(In thousands)
−Removed: July 3, 2021 December 31, 2020
+Added: October 2, 2021 December 31, 2020
Current Assets:
40 unchanged sentences
Consolidated Condensed Statements of Operations
−Removed: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
+Added: Three and Nine Months Ended October 2, 2021 With Comparative Figures for 2020
(In thousands, except per share data)
−Removed: Six Months Ended Three Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Sales $ 328,856 $ 387,784 $ 111,841 $ 106,506
15 unchanged sentences
Consolidated Condensed Statements of Comprehensive (Loss) Income
−Removed: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
+Added: Three and Nine Months Ended October 2, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Six Months Ended Three Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Net Loss $ ( 27,182 ) $ ( 95,796 ) $ ( 7,174 ) $ ( 5,254 )
9 unchanged sentences
Consolidated Condensed Statements of Cash Flows
−Removed: Six Months Ended July 3, 2021 With Comparative Figures for 2020
+Added: Nine Months Ended October 2, 2021 With Comparative Figures for 2020
(Unaudited, In thousands)
−Removed: Six Months Ended
+Added: Nine Months Ended
Cash Flows from Operating Activities:
−Removed: July 3, 2021 June 27, 2020
+Added: October 2, 2021 September 26, 2020
Net Loss $ ( 27,182 ) $ ( 95,796 )
6 unchanged sentences
Operating Lease Non-Cash Expense 3,783 3,352
−Removed: Non-cash Litigation Provision — 1,450
Equity Investment Other Than Temporary Impairment — 3,493
26 unchanged sentences
Effect of Exchange Rates on Cash ( 521 ) ( 63 )
−Removed: (Decrease) Increase in Cash and Cash Equivalents ( 6,825 ) 14,733
+Added: Decrease in Cash and Cash Equivalents ( 11,321 ) ( 2,009 )
Cash and Cash Equivalents at Beginning of Period 40,412 31,906
3 unchanged sentences
Consolidated Condensed Statements of Shareholders' Equity
−Removed: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
+Added: Three and Nine Months Ended October 2, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Six Months Ended Three Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Beginning of Period $ 278 $ 269 $ 283 $ 274
+Added: Net Exercise of Stock Options 6 — 6 —
Class B Stock Converted to Common Stock 5 8 — 3
26 unchanged sentences
Consolidated Condensed Statements of Shareholders' Equity, Continued
−Removed: Three and Six Months Ended July 3, 2021 With Comparative Figures for 2020
+Added: Three and Nine Months Ended October 2, 2021 With Comparative Figures for 2020
(In thousands)
−Removed: Six Months Ended Three Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (Shares) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Beginning of Period 27,825 26,874 28,315 27,355
14 unchanged sentences
Notes to Consolidated Condensed Financial Statements
+Added: October 2, 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 six months ended July 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 nine months ended October 2, 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 earnout when that review is complete and agreement is reached.
+Added: The Company expects to record the additional gain 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.
2 unchanged sentences
On March 11, 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic.
−Removed: The COVID-19 pandemic had a sudden and significant impact on the global economy, and particularly in the
−Removed: aerospace industry, resulting in the grounding of the majority of the global commercial transportation fleet and significant cost cutting and cash preservation actions by the global airlines.
+Added: The COVID-19 pandemic had a sudden and significant impact on the global economy, and particularly in the aerospace industry, resulting in the grounding of the majority of the global commercial transportation fleet and significant cost
+Added: cutting and cash preservation actions by the global airlines.
This in turn has resulted in a significant reduction in airlines spending for both new aircraft and on upgrading their existing fleet with the Company’s products.
22 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 following table presents the COVID-19 related government assistance received during the three and six months ended July 3, 2021:
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: In September 2021 the Company also entered into an agreement with the U.S.
+Added: Department of Transportation (“USDOT”) under the Aviation Manufacturing Jobs Protection Program (“AMJP”) for a grant of up to $ 14.7 million.
+Added: The Company received the first installment of $ 7.3 million under the grant in September 2021.
+Added: The remaining balance due to be received of $ 7.4 million has been classified within Prepaid Expenses and Other Current Assets on the Consolidated Condensed Balance Sheets as of October 2, 2021.
+Added: The Company expects to receive a second installment in the range of $ 5 million to $ 6 million during the fourth quarter of 2021 and a final installment in the second or third quarter of 2022 upon final confirmation from the USDOT of the Company meeting its grant commitments.
+Added: The receipt of the full award is primarily conditioned upon the Company committing to not furlough or lay off a defined group of employees during the six-month period of performance between September 2021 and March 2022.
+Added: The grant benefit will be recognized over the six-month performance period as a reduction to Cost of Products Sold in proportion to the compensation expense that the award is intended to defray.
+Added: During the quarter ended October 2, 2021, the Company recognized $ 1.1 million of the award.
+Added: The unearned portion of the AMJP award of $ 13.6 million has been reported within Accrued Expenses and Other Current Liabilities in the Consolidated Balance Sheet at October 2, 2021.
+Added: The following table presents the COVID-19 related government assistance, including AMJP, recorded during the three and nine months ended October 2, 2021:
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Cost of Products Sold $ 3,185 $ 1,457 $ 1,706 $ 906
4 unchanged sentences
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 $ 3.3 million and $ 3.2 million at July 3, 2021 and December 31, 2020, respectively.
−Removed: 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.
−Removed: Total recoveries and writeoffs charged against the allowance were insignificant in the three and six months ended July 3, 2021 and June 27, 2020.
+Added: The allowance for estimated credit losses balance was $ 3.3 million and $ 3.2 million at October 2, 2021 and December 31, 2020, respectively.
+Added: The Company’s bad debt expense was insignificant during the three and nine months ended October 2, 2021, and insignificant and $ 1.7 million in the three and nine months ended September 26, 2020, respectively.
+Added: Total writeoffs charged against the allowance were insignificant in the three and nine months ended October 2, 2021, and $ 1.1 million and $ 1.2 million in the three and nine months ended September 26, 2020.
+Added: Total recoveries were insignificant in both the three and nine months ended October 2, 2021 and September 26, 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.
−Removed: 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: 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 companies’ cash flows are impacted by the COVID-19 pandemic.
Assets of Business Held for Sale
2 unchanged sentences
These estimates are based upon available market data and operating cash flows of the assets held for sale.
−Removed: As of July 3, 2021, the Company has agreed to sell certain facilities within the Aerospace segment as a result of consolidating certain facilities.
−Removed: 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: As of October 2, 2021, the Company has agreed to sell one of its facilities within the Aerospace segment as a result of consolidating certain facilities.
+Added: Accordingly, the property, plant and equipment assets associated with this facility of $ 3.8 million have been classified as held for sale in the Consolidated Condensed Balance Sheets at October 2, 2021.
+Added: The facility was sold subsequent to quarter-end.
+Added: See note 19 for further information.
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 $ 21.3 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.
+Added: Research and development, design and related engineering amounted to $ 21.8 million and $ 16.4 million for the three months ended and $ 64.7 million and $ 65.0 million for the nine months ended October 2, 2021 and September 26, 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 and six months ended July 3, 2021 and June 27, 2020.
+Added: Interest income was insignificant for the three and nine months ended October 2, 2021 and September 26, 2020.
Goodwill Impairment
1 unchanged sentence
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.
−Removed: 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.
−Removed: respectively.
−Removed: 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.
+Added: Based on our quantitative assessments, the Company recorded goodwill impairment charges associated with four Aerospace reporting units, totaling $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statements of Operations in the nine months ended September 26, 2020.
+Added: As of October 2, 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 nine 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 six months ended June 27, 2020.
−Removed: As of July 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 Statements of Operations in the nine months ended September 26, 2020.
+Added: As of October 2, 2021 and for the three and nine month periods then ended, 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 and six months ended July 3, 2021 and June 27, 2020.
+Added: The aggregate foreign currency transaction gain or loss included in operations was insignificant for the three and nine months ended October 2, 2021 and September 26, 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 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.
+Added: As of October 2, 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 July 3, 2021, the Company does not have material capitalized fulfillment costs.
+Added: As of October 2, 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.
27 unchanged sentences
The Company typically recognizes revenue on a straight-line basis throughout the contract period.
−Removed: On July 3, 2021, we had $ 312.7 million of remaining performance obligations, which we refer to as total backlog.
−Removed: We expect to recognize approximately $ 183.6 million of our remaining performance obligations as revenue in 2021.
+Added: On October 2, 2021, we had $ 354.4 million of remaining performance obligations, which we refer to as total backlog.
+Added: We expect to recognize approximately $ 113.3 million of our remaining performance obligations as revenue in the remainder of 2021.
Costs in excess of billings includes unbilled amounts resulting from revenues under contracts with customers that are satisfied over time and when the cost-to-cost measurement method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time.
5 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 $ 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.
+Added: We recognized $ 6.5 million and $ 8.5 million during the three months ended and $ 15.1 million and $ 20.1 million during the nine months ended October 2, 2021 and September 26, 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 six months ended July 3, 2021:
+Added: The following table presents the beginning and ending balances of contract assets and contract liabilities during the nine months ended October 2, 2021:
(In thousands) Contract Assets Contract Liabilities
Beginning Balance, January 1, 2021 $ 17,697 $ 28,641
−Removed: Ending Balance, July 3, 2021
+Added: Ending Balance, October 2, 2021
$ 23,381 $ 26,516
The following table presents our revenue disaggregated by Market Segments as follows:
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Aerospace Segment
13 unchanged sentences
The following table presents our revenue disaggregated by Product Lines as follows:
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Aerospace Segment
14 unchanged sentences
( In thousands )
−Removed: July 3, 2021 December 31, 2020
+Added: October 2, 2021 December 31, 2020
Finished Goods
10 unchanged sentences
(In thousands)
−Removed: July 3, 2021 December 31, 2020
+Added: October 2, 2021 December 31, 2020
$ 8,654 $ 9,891
8 unchanged sentences
$ 97,435 $ 106,678
−Removed: Additionally, net Property, Plant and Equipment of $ 3.8 million is classified in Assets Held for Sale at July 3, 2021.
+Added: Additionally, net Property, Plant and Equipment of $ 3.8 million is classified in Assets Held for Sale at October 2, 2021.
5) Intangible Assets
The following table summarizes acquired intangible assets as follows:
−Removed: July 3, 2021 December 31, 2020
+Added: October 2, 2021 December 31, 2020
(In thousands) Weighted
9 unchanged sentences
Amortization expense for acquired intangibles is summarized as follows:
−Removed: Six Months Ended Three Months Ended
+Added: Nine Months Ended Three Months Ended
(In thousands)
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Amortization Expense
7 unchanged sentences
2025 $ 10,935
−Removed: The following table summarizes the changes in the carrying amount of goodwill for the six months ended July 3, 2021:
+Added: The following table summarizes the changes in the carrying amount of goodwill for the nine months ended October 2, 2021:
(In thousands) December 31, 2020 Foreign
+Added: October 2, 2021
Aerospace $ 36,648 $ — $ 36,648
8 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
+Added: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statements of Operations in the nine months ended September 26, 2020.
+Added: As of October 2, 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 nine months then ended.
7) Long-term Debt and Notes Payable
6 unchanged sentences
The Amended Facility suspended the application of the leverage ratio up through and including the second quarter of 2021 (the “suspension period”).
−Removed: 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 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.
+Added: The maximum net leverage ratio is set at 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 returns to 3.75 to 1 for each quarter thereafter.
+Added: At October 2, 2021, there was $ 183.0 million outstanding on the revolving credit facility and there remained $ 190.9 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 July 3, 2021, outstanding letters of credit totaled $ 1.1 million.
−Removed: 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.
+Added: At October 2, 2021, outstanding letters of credit totaled $ 1.1 million.
+Added: Through the third quarter of 2021, the Amended Facility required the Company to maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $ 180 million at all times.
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.
−Removed: The Company was in compliance with its financial covenants at July 3, 2021.
+Added: As noted above, the maximum net leverage ratio was set at 6.00 to 1 for the quarter ended October 2, 2021.
+Added: The Company was in compliance with its financial covenants at October 2, 2021.
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 %.
The Company paid a commitment fee to the lenders in an amount equal to 0.35 % on the undrawn portion of the Amended Facility.
−Removed: 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.
−Removed: The Company will also pay a commitment fee to the lenders in an amount equal to 0.10 % to 0.35 % on the undrawn portion of the Amended Facility, based upon the Company’s leverage ratio.
+Added: After the suspension period, the Company pays 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.
+Added: The Company also pays a commitment fee to the lenders in an amount equal to 0.10 % to 0.35 % on the undrawn portion of the Amended Facility, based upon the Company’s leverage ratio.
The Amended Facility provided for the payment of a consent fee of 15 basis points of the commitment for each consenting lender.
7 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
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Activity in the warranty accrual is summarized as follows:
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Balance at Beginning of Period $ 7,018 $ 7,660 $ 6,835 $ 6,965
10 unchanged sentences
The following is a summary of the Company's ROU assets and liabilities:
−Removed: (In thousands) July 3, 2021 December 31, 2020
+Added: (In thousands) October 2, 2021 December 31, 2020
Operating Leases:
14 unchanged sentences
The following is a summary of the Company's total lease costs:
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Finance Lease Cost:
17 unchanged sentences
10) Income Taxes
−Removed: 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.
−Removed: 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 and permanently nondeductible goodwill impairments.
−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 July 3, 2021 the Company is continuing to forecast that it will generate a taxable loss in 2021.
+Added: The effective tax rates were approximately ( 4.9 )% and 52.8 % for the three months ended and ( 1.4 )% and 8.7 % for the nine months ended October 2, 2021 and September 26, 2020, respectively.
+Added: 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 U.S.
+Added: Federal deferred tax assets.
+Added: As discussed below, the tax rate in the 2020 period was impacted primarily by the initial recording of a valuation allowance against U.S.
+Added: 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 October 2, 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 July 3, 2021.
+Added: Federal deferred tax assets as of October 2, 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 six months ended July 3, 2021.
+Added: These provisions did not have a material impact on our income tax provision for the three or nine months ended October 2, 2021.
11) Earnings Per Share
Basic and diluted weighted-average shares outstanding are as follows:
−Removed: Six Months Ended Three Months Ended
+Added: Nine Months Ended Three Months Ended
(In thousands)
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 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 645,000 shares as of July 3, 2021 and 872,000 shares as of June 27, 2020.
−Removed: 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.
+Added: The number of common shares covered by out-of-the-money stock options was approximately 647,000 shares as of October 2, 2021 and 831,000 shares as of September 26, 2020.
+Added: Further, due to our net loss in the three and nine month periods ended October 2, 2021 and September 26, 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) July 3, 2021 December 31, 2020
+Added: (In thousands) October 2, 2021 December 31, 2020
Foreign Currency Translation Adjustments $ ( 5,633 ) $ ( 4,468 )
4 unchanged sentences
The components of other comprehensive income (loss) are as follows:
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Foreign Currency Translation Adjustments $ ( 1,165 ) $ ( 85 ) $ ( 1,143 ) $ 1,409
11 unchanged sentences
The following table sets forth information regarding the net periodic pension cost for the plans.
−Removed: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Service Cost $ 146 $ 167 $ 49 $ 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 and six months ended July 3, 2021 and June 27, 2020.
+Added: The net periodic cost was insignificant for the three and nine months ended October 2, 2021 and September 26, 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 and six months ended July 3, 2021, the Company had no customer in excess of 10 % of consolidated sales.
−Removed: 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.
+Added: In the three and nine months ended October 2, 2021, the Company had no customer in excess of 10 % of consolidated sales.
+Added: Sales to two customers in the Aerospace segment represented 6 % and 10 % of consolidated sales for the three months ended and 12 % and 9 % for the nine months ended September 26, 2020, respectively.
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 three and six months ended July 3, 2021.
−Removed: 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.
+Added: There were no significant developments in any of these matters during the three and nine months ended October 2, 2021.
+Added: The reserve for the German indirect claim was approximately $ 17.1 million at October 2, 2021, which included an additional $ 0.1 million and $ 0.4 million in interest accrued during the three and nine 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 July 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 October 2, 2021 and December 31, 2020.
On March 23, 2020, Teradyne, Inc.
3 unchanged sentences
The case is currently in discovery.
−Removed: In addition, on December 21, 2020, ATS filed a petition with the US Patent Trial and Appeal Board (“PTAB”), seeking to invalidate the subject patent.
+Added: In addition, on December 21, 2020, ATS filed a petition with the U.S.
+Added: Patent Trial and Appeal Board (“PTAB”), seeking to invalidate the subject patent.
The parties are waiting to learn whether the PTAB will institute the proceeding.
1 unchanged sentence
A summary judgment hearing is scheduled for May 19, 2022 and the jury trial is scheduled to begin on July 12, 2022.
−Removed: 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.
+Added: No amounts have been accrued for this matter in the October 2, 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 six months ended July 3, 2021 and June 27, 2020 and a reconciliation of segment operating profit to income before income taxes.
+Added: Below are the sales and operating profit (loss) by segment for the three and nine months ended October 2, 2021 and September 26, 2020 and a reconciliation of segment operating profit (loss) 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: Six Months Ended Three Months Ended
−Removed: (In thousands) July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Nine Months Ended Three Months Ended
+Added: (In thousands) October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Aerospace $ 266,425 $ 326,282 $ 95,775 $ 82,548
10 unchanged sentences
( 3.1 ) % 6.9 % ( 13.7 ) % 3.9 %
−Removed: Total Segment Measure of Operating (Loss) Profit ( 8,026 ) ( 76,901 ) ( 3,652 ) ( 14,478 )
+Added: Total Segment Measure of Operating Loss ( 8,310 ) ( 82,297 ) ( 284 ) ( 5,396 )
( 2.5 ) % ( 21.2 ) % ( 0.3 ) % ( 5.1 ) %
−Removed: Additions/Deductions from Segment Measure of Operating (Loss) Profit
+Added: Deductions from Segment Measure of Operating Loss
Interest Expense, Net of Interest Income
5 unchanged sentences
(In thousands)
−Removed: July 3, 2021 December 31, 2020
+Added: October 2, 2021 December 31, 2020
$ 474,042 $ 484,885
17 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
+Added: Based on actual and forecasted new orders, the fair value was zero as of October 2, 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 Statements of Operations in the nine months ended October 2, 2021.
+Added: There were no other financial assets or liabilities carried at fair value measured on a recurring basis at December 31, 2020 or October 2, 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 $ 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: Based on our quantitative assessments, the Company recorded non-cash goodwill impairment charges associated with four Aerospace reporting units, totaling approximately $ 86.3 million within the Impairment Loss line in the Consolidated Condensed Statements of Operations in the nine months ended September 26, 2020.
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 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.
+Added: As of October 2, 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 nine 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 six months ended June 27, 2020.
−Removed: As of July 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 Statements of Operations in the nine months ended September 26, 2020.
+Added: As of October 2, 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.
+Added: Additional restructuring activities occurred during 2021 to align the workforce to expected activities and to consolidate certain facilities.
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: There were $ 0.2 million in additional restructuring charges associated with this initiative recorded in the three and six months ended July 3, 2021.
−Removed: The Company incurred $ 0.3 million in additional restructuring charges associated with severance at AeroSat during the six months ended June 27, 2020.
+Added: There were $ 0.5 million and $ 0.7 million in restructuring-related severance charges and other charges recorded in the three and nine months ended October 2, 2021.
+Added: The Company incurred $ 0.2 million and $ 5.6 million in restructuring charges during the three and nine months ended September 26, 2020.
The following tables reconcile the beginning and ending liability for restructuring charges:
2 unchanged sentences
Cash Paid ( 2,801 )
−Removed: Balance as of July 3 $ 4,293
+Added: Balance as of October 2 $ 3,543
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.
−Removed: 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: The non-cancelable purchase commitments are for inventory in the future which was not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan.
19) Subsequent Events
−Removed: As of July 3, 2021, the Company has agreed to sell certain facilities within the Aerospace segment as a result of consolidating certain facilities.
−Removed: 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.
−Removed: Subsequent to July 3, 2021, the Company signed an agreement with a buyer to sell the facilities.
−Removed: The gain on sale of approximately $ 5.3 million will be recorded during the third quarter of 2021.
+Added: As of October 2, 2021, the Company has agreed to sell one of its 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 October 2, 2021.
+Added: On October 6, 2021, the transaction closed and control of the assets transferred to the buyer.
+Added: The net cash proceeds from the sale totaled approximately $ 8.8 million.
+Added: The net gain on sale of approximately $ 5.0 million will be recognized in the fourth 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.