1 unchanged sentence
CTS CORPORATION AND SUBSIDIARIES
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
−Removed: (In thousands, except per share amounts)
+Added: CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS - UNAUDITED
+Added: (In thousands of dollars, except per share amounts)
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Cost of goods sold
7 unchanged sentences
Other (expense) income, net
−Removed: Total other expense, net
+Added: Total other (expense) income, net
(Loss) earnings before income taxes
Income tax (benefit) expense
−Removed: Earnings per share:
+Added: Net (loss) earnings
+Added: Loss (earnings) per share:
Basic weighted – average common shares outstanding:
7 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: Net (loss) earnings
Other comprehensive earnings (loss):
2 unchanged sentences
Cumulative translation adjustment, net of tax
−Removed: Other comprehensive earnings (loss)
+Added: Other comprehensive earnings
Comprehensive earnings
3 unchanged sentences
(In thousands of dollars)
+Added: September 30,
Current Assets
36 unchanged sentences
(In thousands of dollars)
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:
−Removed: Adjustments to reconcile net earnings to net cash provided by operating
+Added: Net (loss) earnings
+Added: Adjustments to reconcile net (loss) earnings to net cash provided by operating
Depreciation and amortization
2 unchanged sentences
Asset impairment charges
+Added: Restructuring non-cash charges
Deferred income taxes
20 unchanged sentences
Taxes paid on behalf of equity award participants
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
11 unchanged sentences
(in thousands of dollars)
−Removed: The following summarizes the changes in total equity for the three and six months ended June 30, 2021:
+Added: The following summarizes the changes in total equity for the three and nine months ended September 30, 2021:
Comprehensive
14 unchanged sentences
Balances at June 30, 2021
+Added: Changes in fair market value of derivatives, net of tax
+Added: Changes in unrealized pension cost, net of tax
+Added: Cumulative translation adjustment, net of tax
+Added: Cash dividends of $ 0.04 per share
+Added: Acquired 148,035 shares of treasury stock
+Added: Issued shares on vesting of restricted stock units
+Added: Stock compensation
+Added: Balances at September 30, 2021
See notes to unaudited condensed consolidated financial statements.
2 unchanged sentences
(in thousands of dollars)
−Removed: The following summarizes the changes in total equity for the three and six months ended June 30, 2020:
+Added: The following summarizes the changes in total equity for the three and nine months ended September 30, 2020:
Comprehensive
16 unchanged sentences
Balances at June 30, 2020
+Added: Changes in fair market value of derivatives, net of tax
+Added: Changes in unrealized pension cost, net of tax
+Added: Cumulative translation adjustment, net of tax
+Added: Cash dividends of $ 0.04 per share
+Added: Issued shares on vesting of restricted stock units
+Added: Stock compensation
+Added: Balances at September 30, 2020
See notes to unaudited condensed consolidated financial statements.
1 unchanged sentence
(in thousands except for share and per share data)
−Removed: June 30, 2021
+Added: September 30, 2021
NOTE 1 — Basis of Presentation and Summary of Significant Accounting Policies
21 unchanged sentences
ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022, and an entity may elect to apply ASU 2020-04 for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.
−Removed: We are currently evaluating the impact of the transition from LIBOR to an alternative reference interest rate in our financial instruments including the potential election of certain practical expedients.
−Removed: Our LIBOR based revolving credit facility includes a provision for the determination of a successor LIBOR rate, and we are still evaluating the impact to potential future hedging activities.
+Added: As a result of the reference rate reform, we have determined that we will modify our credit agreement and associated hedging relationships in order to effectively transition to an alternative reference rate prior to June 30, 2022.
+Added: We continue evaluating the impact of the transition from LIBOR to an alternative reference interest rate in our financial instruments including the potential election of certain practical expedients.
NOTE 2 – Revenue Recognition
9 unchanged sentences
We usually expect payment within 30 to 90 days from the shipping date, depending on our terms with the customer.
−Removed: None of our contracts as of June 30, 2021 contained a significant financing component.
Differences between the amount of revenue recognized and the amount invoiced, collected from, or paid to our customers are recognized as contract assets or liabilities.
5 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2021
−Removed: June 30, 2020
−Removed: June 30, 2021
−Removed: June 30, 2020
+Added: Nine Months Ended
+Added: September 30, 2021
+Added: September 30, 2020
+Added: September 30, 2021
+Added: September 30, 2020
Transportation
4 unchanged sentences
SSI has complementary capabilities with our existing temperature sensing platform and the acquisition expands our presence in the medical and industrial end markets.
−Removed: It also provides high quality ceramic processing capabilities and valuable customer partnerships that expands our temperature sensing product portfolio and builds on our strategy to focus on innovative products that sense, connect and move.
−Removed: The purchase price, which includes assumed changes in working capital, of $ 10,309 has been allocated to the fair values of assets and liabilities acquired as of December 30, 2020.
−Removed: The allocation of the purchase price continues to be preliminary pending the completion of the final net working capital adjustment, which is expected to occur in the third quarter.
−Removed: The information included below represents our current estimate of the purchase price allocation and is not expected to materially change.
+Added: It also provides high quality ceramic processing capabilities and valuable customer partnerships that expand our temperature sensing product portfolio and build on our strategy to focus on innovative products that sense, connect and move.
+Added: The final purchase price, which includes changes in working capital, of $ 10,221 has been allocated to the fair values of assets and liabilities acquired as of December 30, 2020.
The following table summarizes the consideration paid and the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition of SSI:
23 unchanged sentences
The components of accounts receivable, net are as follows:
+Added: September 30,
Accounts receivable, gross
3 unchanged sentences
Inventories, net consists of the following:
+Added: September 30,
Finished goods
5 unchanged sentences
Property, plant and equipment, net is comprised of the following:
+Added: September 30,
Land and land improvements
3 unchanged sentences
Property, plant and equipment, net
−Removed: Depreciation expense for the six months ended June 30, 2021 and June 30, 2020 was $ 8,795 and $ 8,580 , respectively.
+Added: Depreciation expense for the nine months ended September 30, 2021 and September 30, 2020 was $ 13,166 and $ 13,003 , respectively.
NOTE 7 – Retirement Plans
Pension Plans
−Removed: Net pension expense for our domestic and foreign plans included in other expense, net in the Condensed Consolidated Statements of Earnings is as follows:
+Added: Net pension expense for our domestic and foreign plans included in other (expense) income, net in the Condensed Consolidated Statements of (Loss) Earnings is as follows:
Three months ended
−Removed: Six Months Ended
+Added: Nine months ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Net pension expense
4 unchanged sentences
Three Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Interest cost
6 unchanged sentences
Foreign Pension Plans
−Removed: Six Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Interest cost
9 unchanged sentences
Approximately 365 participants elected to receive the settlement, and lump sum payments of approximately $ 35,594 were made from Plan assets to these participants in June 2021.
−Removed: As required under US GAAP, t he Company recognizes a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost.
+Added: As required under U.S.
+Added: GAAP, the Company recognizes a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost.
The amount of settlement gain or loss recognized is the pro rata amount of the existing unrealized gain or loss immediately prior to the settlement.
In general, both the projected benefit obligation and fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss.
−Removed: Upon the partial settlement of the pension liability due to the lump sum offering the Company recognized a non-cash and non-operating settlement charge of $ 20,063 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's Condensed Consolidated Statements of Earnings.
−Removed: Upon final settlement of the pension liability with the purchase of annuities, expected to occur in the third quarter, we will reclassify the remaining related unrecognized pension losses, currently recorded in accumulated other comprehensive loss, to the Condensed Consolidated Statements of Earnings.
−Removed: Since the final amount of the settlement depends on a number of factors determined as of the liquidation date, including the annuity pricing interest rate environment and asset performance, the unrecognized losses value may fluctuate from June 30, 2021.
−Removed: As of June 30, 2021, we had gross unrecognized pension losses related to the Plan of $ 101,125 .
−Removed: We do not expect any cash contributions from the Company to the Plan as a result of this termination as Plan assets continue to significantly exceed estimated liabilities.
+Added: Upon the partial settlement of the pension liability due to the lump sum offering in the second quarter of 2021, the Company recognized a non-cash and non-operating settlement charge of $ 20,063 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's Condensed Consolidated Statements of (Loss) Earnings.
+Added: On July 29, 2021, the Plan purchased a group annuity contract that transferred our benefit obligations for approximately 2,700 CTS participants and beneficiaries in the United States (“Transferred Participants”).
+Added: As part of the purchase of the group annuity contract, Plan benefit obligations and related annuity administration services for Transferred Participants were irrevocably assumed and guaranteed by the insurance company effective as of August 3, 2021.
+Added: There will be no change to pension benefits for Transferred Participants.
+Added: The purchase of the group annuity contract was fully funded directly by Plan assets.
+Added: As a result of the final settlement of the pension liability with the purchase of annuities, we reclassified the remaining related unrecognized pension losses of $ 106,206 that were previously recorded in accumulated other comprehensive loss to the Condensed Consolidated Statements of (Loss) Earnings.
+Added: The Plan assets of $ 50,638 as of September 30, 2021, will remain in the Plan until final administrative tasks are completed.
+Added: This process is expected to be completed in the first quarter of 2022, whereby the Plan assets will liquidate and revert to CTS.
+Added: At that time, the funds will be subject to income and excise taxes.
+Added: We continue to evaluate potential plans to optimize tax implications as well as the use of the surplus cash.
Other Post-retirement Benefit Plan
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Interest cost
4 unchanged sentences
Other intangible assets, net consist of the following components:
−Removed: June 30, 2021
+Added: September 30, 2021
Customer lists/relationships
Technology and other intangibles
−Removed: In process research and development
Other intangible assets, net
Amortization expense for the three months ended
−Removed: June 30, 2021
−Removed: Amortization expense for the six months ended
−Removed: June 30, 2021
+Added: September 30, 2021
+Added: Amortization expense for the nine months ended
+Added: September 30, 2021
December 31, 2020
1 unchanged sentence
Technology and other intangibles
−Removed: In process research and development
Other intangible assets, net
Amortization expense for the three months ended
−Removed: June 30, 2020
−Removed: Amortization expense for the six months ended
−Removed: June 30, 2020
−Removed: Remaining amortization expense for other intangible assets as of June 30, 2021 is as follows:
+Added: September 30, 2020
+Added: Amortization expense for the nine months ended
+Added: September 30, 2020
+Added: Remaining amortization expense for other intangible assets as of September 30, 2021 is as follows:
Total amortization expense
3 unchanged sentences
Increase due to acquisition
−Removed: Goodwill as of June 30, 2021
+Added: Goodwill as of September 30, 2021
In addition to the purchase accounting adjustments from the SSI transaction, goodwill increased due to an acquisition completed during the second quarter.
The purchase price was approximately $ 510 , with $ 255 paid in the second quarter of 2021 and an additional $ 255 to be paid in the second quarter of 2022.
−Removed: We expect small adjustments to the purchase price allocation to be completed in the third quarter.
NOTE 9 – Costs Associated with Exit and Restructuring Activities
−Removed: Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statements of Earnings.
+Added: Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statements of (Loss) Earnings.
Total restructuring charges are as follows:
Three Months Ended
−Removed: June 30, 2021
−Removed: June 30, 2020
+Added: September 30, 2021
+Added: September 30, 2020
Restructuring charges
−Removed: Six Months Ended
−Removed: June 30, 2021
−Removed: June 30, 2020
+Added: Nine Months Ended
+Added: September 30, 2021
+Added: September 30, 2020
Restructuring charges
2 unchanged sentences
This plan includes transitioning certain administrative functions to a shared service center, realignment of manufacturing locations, and certain other efficiency improvement actions.
−Removed: The restructuring cost of the September 2020 Plan is estimated to be in the range of $ 4,600 to $ 6,000 , including workforce reduction charges, building and equipment relocation charges and other contract and asset-related costs.
−Removed: In addition to these charges, we expect an additional $ 4,000 to $ 5,100 of other costs to be incurred related to initiatives that would not qualify as restructuring charges.
−Removed: These costs would include certain employee overlap and training costs as well as additional capital expenditures.
−Removed: Restructuring charges under the September 2020 Plan were $( 10 ) during the three months ended June 30, 2021, consisting of $( 10 ) in workforce reduction adjustments.
−Removed: Restructuring charges for the six months ended June 30, 2021 were $( 27 ), consisting of $ 26 in workforce reduction costs and $( 53 ) of other contract termination and facility closure cost true ups.
−Removed: The total restructuring liability related to the September 2020 Plan was $ 38 at June 30, 2021 and $ 512 at December 31, 2020.
+Added: The restructuring cost of the September 2020 Plan is now estimated to be in the range of $ 3,500 to $ 4,500 , including workforce reduction charges, building and equipment relocation charges and other contract and asset-related costs.
+Added: We have incurred $ 1,397 program to date.
+Added: There were no substantial restructuring charges under the September 2020 Plan during the three and nine months ended September 30, 2021.
+Added: There was no restructuring liability related to the September 2020 Plan as of September 30, 2021.
+Added: As of December 31, 2020 the liability related to the September 2020 Plan was $ 512 .
June 2016 Plan
−Removed: In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart, IN facility and transitioning it into a research and development center supporting our global operations (the "June 2016 Plan").
+Added: In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart, Indiana facility and transitioning it into a research and development center supporting our global operations (the "June 2016 Plan").
Additional organizational changes were also implemented in various other locations.
−Removed: In 2017, we revised the June 2016 Plan to include an additional $ 1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility.
+Added: In 2017, we revised the June 2016 Plan to include an additional $ 1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, Illinois and our plant in Bolingbrook, Illinois, both of which have now been consolidated into a single facility.
These restructuring actions were completed as of March 31, 2021.
5 unchanged sentences
Charges associated with these restructuring activities primarily relate to workforce reduction costs.
−Removed: During the three and six months ended June 30, 2021 we incurred restructuring charges of $ 161 and $ 262 , respectively.
−Removed: During the three and six months ended June 30, 2020, we incurred restructuring charges of $ 135 and $ 407 , respectively.
−Removed: The total restructuring liability associated with these actions was $ 163 at June 30, 2021 and $ 9 at December 31, 2020.
−Removed: The following table displays the restructuring liability activity included in accrued expenses and other liabilities for all plans for the six months ended June 30, 2021:
+Added: During the three and nine months ended September 30, 2021, we incurred restructuring charges of $ 319 and $ 582 , respectively.
+Added: During the three and nine months ended September 30, 2020, we incurred restructuring charges of $ 33 and $ 440 , respectively.
+Added: The total restructuring liability associated with these actions was $ 263 at September 30, 2021 and $ 9 at December 31, 2020.
+Added: The following table displays the restructuring liability activity included in accrued expenses and other liabilities for all plans for the nine months ended September 30, 2021:
Restructuring liability at January 1, 2021
1 unchanged sentence
Other activity (1)
−Removed: Restructuring liability at June 30, 2021
+Added: Restructuring liability at September 30, 2021
Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.
1 unchanged sentence
The components of accrued expenses and other liabilities are as follows:
+Added: September 30,
Accrued product related costs
17 unchanged sentences
A roll-forward of remediation reserves included in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets is comprised of the following:
+Added: September 30,
Balance at beginning of period
12 unchanged sentences
Long-term debt was comprised of the following:
+Added: September 30,
Total credit facility
12 unchanged sentences
Failure to comply with these covenants could reduce the borrowing availability under the revolving credit facility.
−Removed: We were compliant with all debt covenants at June 30, 2021.
+Added: We were compliant with all debt covenants at September 30, 2021.
The Credit Agreement requires that we deliver quarterly financial statements, annual financial statements, auditor certifications, and compliance certificates within a specified number of days after the end of a quarter and year.
8 unchanged sentences
and make stock repurchases and dividend payments.
−Removed: Interest rates on the credit facility fluctuate based upon the LIBOR and the Company’s quarterly total leverage ratio.
+Added: Interest rates on the credit facility fluctuate based upon LIBOR and the Company’s quarterly total leverage ratio.
We have debt issuance costs related to our long-term debt that are being amortized using the straight-line method over the life of the debt.
−Removed: Amortization expense for the three and six months ended June 30, 2021 and 2020 was approximately $ 42 and $ 42 and $ 84 and $ 84 , respectively.
−Removed: These costs are included in interest expense in our Condensed Consolidated Statements of Earnings.
+Added: Amortization expense for the three and nine months ended September 30, 2021 and 2020 was approximately $ 42 and $ 42 and $ 126 and $ 126 , respectively.
+Added: These costs are included in interest expense in our Condensed Consolidated Statements of (Loss) Earnings.
We use interest rate swaps to convert the revolving credit facility's variable rate of interest into a fixed rate on a portion of the debt as described more fully in Note 13 "Derivative Financial Instruments".
4 unchanged sentences
The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts.
−Removed: We manage our credit risk by entering derivative contracts with only highly rated financial institutions and by using netting agreements.
+Added: We manage our credit risk by entering into derivative contracts with only highly rated financial institutions and by using netting agreements.
The effective portion of derivative gains and losses are recorded in accumulated other comprehensive (loss) income until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales.
2 unchanged sentences
We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default.
−Removed: No recognition of ineffectiveness was recorded in our Condensed Consolidated Statements of Earnings for the three and six months ended June 30, 2021.
+Added: No recognition of ineffectiveness was recorded in our Condensed Consolidated Statements of (Loss) Earnings for the three and nine months ended September 30, 2021.
Foreign Currency Hedges
2 unchanged sentences
We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future.
−Removed: At June 30, 2021, we had a net unrealized gain of $ 811 in accumulated other comprehensive (loss) income, of which $ 808 is expected to be reclassified to earnings within the next 12 months.
−Removed: At June 30, 2020, we had a net unrealized loss of $ 1,247 in accumulated other comprehensive (loss) income.
−Removed: The notional amount of foreign currency forward contracts outstanding was $ 11,430 at June 30, 2021.
+Added: At September 30, 2021, we had a net unrealized gain of $ 388 in accumulated other comprehensive (loss) income, of which $ 385 is expected to be reclassified to earnings within the next 12 months.
+Added: At September 30, 2020, we had a net unrealized loss of $ 458 in accumulated other comprehensive (loss) income.
+Added: The notional amount of foreign currency forward contracts outstanding was $ 6,282 at September 30, 2021.
Interest Rate Swaps
We use interest rate swaps to convert a portion of our revolving credit facility’s outstanding balance from a variable rate of interest to a fixed rate.
−Removed: As of June 30, 2021, we have agreements to fix interest rates on $ 50,000 of long-term debt through February 2024.
+Added: As of September 30, 2021, we have agreements to fix interest rates on $ 50,000 of long-term debt through February 2024.
The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.
1 unchanged sentence
The estimated net amount of the existing losses that are reported in accumulated other comprehensive (loss) income that are expected to be reclassified into earnings within the next twelve months is approximately $ 527 .
−Removed: The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of June 30, 2021, are shown in the following table:
+Added: The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of September 30, 2021, are shown in the following table:
+Added: September 30,
Interest rate swaps reported in accrued expenses and other liabilities
2 unchanged sentences
The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20, Balance Sheet, Offsetting .
−Removed: On a gross basis, there were foreign currency derivative assets of $ 1,023 and foreign currency derivative liabilities of $ 0 at June 30, 2021 .
−Removed: The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:
+Added: On a gross basis, there were foreign currency derivative assets of $ 474 and foreign currency derivative liabilities of $ 0 at September 30, 2021.
+Added: The effect of derivative instruments on the Condensed Consolidated Statements of (Loss) Earnings is as follows:
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Foreign Exchange Contracts:
21 unchanged sentences
Changes in exchange rates between the functional currency and the currency in which a transaction is denominated are foreign exchange transaction gains or losses.
−Removed: Transaction losses for the three and six months ended June 30, 2021 were $ 928 and $( 401 ), respectively, and transaction losses for the three and six months ended June 30, 2020 were $ 892 and $( 379 ), respectively, which have been included in other (expense) income in the Condensed Consolidated Statements of Earnings.
−Removed: The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2021 are as follows:
+Added: Transaction losses for the three and nine months ended September 30, 2021 were $( 1,011 ) and $( 1,412 ), respectively, and transaction gains for the three and nine months ended September 30, 2020 were $ 2,326 and $ 1,947 , respectively, which have been included in other (expense) income in the Condensed Consolidated Statements of (Loss) Earnings.
+Added: The components of accumulated other comprehensive (loss) income for the three months ended September 30, 2021 are as follows:
+Added: September 30,
Changes in fair market value of derivatives:
4 unchanged sentences
Total accumulated other comprehensive (loss) income
−Removed: The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2020, are as follows:
+Added: The components of accumulated other comprehensive (loss) income for the three months ended September 30, 2020, are as follows:
+Added: September 30,
Changes in fair market value of derivatives:
−Removed: Income tax (expense) benefit
+Added: Income tax benefit (expense)
Changes in unrealized pension cost:
2 unchanged sentences
Total accumulated other comprehensive (loss) income
−Removed: The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2021, are as follows:
+Added: The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2021, are as follows:
+Added: September 30,
Changes in fair market value of derivatives:
−Removed: Income tax (expense) benefit
+Added: Income tax benefit (expense)
Changes in unrealized pension cost:
2 unchanged sentences
Total accumulated other comprehensive (loss) income
−Removed: The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2020, are as follows:
+Added: The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2020, are as follows:
+Added: September 30,
Changes in fair market value of derivatives:
−Removed: Income tax (expense) benefit
+Added: Income tax benefit (expense)
Changes in unrealized pension cost:
1 unchanged sentence
Cumulative translation adjustment:
−Removed: Income tax benefit
+Added: Income tax benefit (expense)
Total accumulated other comprehensive (loss) income
1 unchanged sentence
Share count and par value data related to shareholders’ equity are as follows:
+Added: September 30,
Preferred Stock
9 unchanged sentences
The repurchase program has no set expiration date and replaces the repurchase program approved by the Board of Directors on February 7, 2019.
−Removed: During the six months ended June 30, 2021, no shares of common stock were repurchased.
−Removed: During the six months ended June 30, 2020, 342,731 shares of common stock were repurchased for $ 8,080 .
+Added: During the nine months ended September 30, 2021, 148,035 shares of common stock were repurchased for $ 4,939 .
+Added: During the nine months ended September 30, 2020, 342,731 shares of common stock were repurchased for $ 8,080 .
Approximately $ 45,061 is available for future purchases.
A roll-forward of common shares outstanding is as follows:
−Removed: Six Months Ended
+Added: Nine months ended
+Added: September 30,
+Added: September 30,
Balance at the beginning of the year
1 unchanged sentence
Balance at the end of the period
−Removed: Certain potentially dilutive restricted stock units are excluded from diluted earnings per share because they are anti-dilutive.
−Removed: The number of outstanding awards that were anti-dilutive for the three months ended June 30, 2021 and 2020 were 93 and 84,720 , respectively.
−Removed: The number of outstanding awards that were anti-dilutive for the six months ended June 30, 2021 and 2020 were 46,810 and 61,780 , respectively.
+Added: Certain potentially dilutive restricted stock units are excluded from diluted (loss) earnings per share because they are anti-dilutive.
+Added: The number of outstanding awards that were anti-dilutive for the nine months ended September 30, 2021 and 2020 were 1,029 and 68,198 , respectively.
+Added: There were 462 anti-dilutive awards outstanding for the three months ended September 30, 2021 and no anti-dilutive awards outstanding the three months ended September 30, 2020.
NOTE 16 - Stock-Based Compensation
−Removed: At June 30, 2021, we had five active stock-based compensation plans:
+Added: At September 30, 2021, we had five active stock-based compensation plans:
the Non-Employee Directors’ Stock Retirement Plan (“Directors’ Plan”), the 2004 Omnibus Long-Term Incentive Plan (“2004 Plan”), the 2009 Omnibus Equity and Performance Incentive Plan (“2009 Plan”), the 2014 Performance and Incentive Compensation Plan (“2014 Plan”), and the 2018 Equity and Incentive Compensation Plan ("2018 Plan").
1 unchanged sentence
These plans allow for grants of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance shares, performance units, and other stock awards subject to the terms of the specific plans under which the awards are granted.
−Removed: The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings related to stock-based compensation plans:
+Added: The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of (Loss) Earnings related to stock-based compensation plans:
Three months ended
−Removed: Six Months Ended
+Added: Nine months ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Service-based RSUs
3 unchanged sentences
The following table summarizes the unrecognized compensation expense related to non-vested RSUs by type and the weighted-average period in which the expense is to be recognized:
−Removed: June 30, 2021
+Added: September 30, 2021
Period (years)
2 unchanged sentences
We recognize expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.
−Removed: The following table summarizes the status of these plans as of June 30, 2021:
+Added: The following table summarizes the status of these plans as of September 30, 2021:
Awards originally available
+Added: Maximum potential RSU and cash settled awards outstanding
Maximum potential awards outstanding
2 unchanged sentences
Service-Based Restricted Stock Units
−Removed: The following table summarizes the service-based RSU activity for the six months ended June 30, 2021:
+Added: The following table summarizes the service-based RSU activity for the nine months ended September 30, 2021:
Outstanding at December 31, 2020
Vested and released
−Removed: Outstanding at June 30, 2021
−Removed: Releasable at June 30, 2021
+Added: Outstanding at September 30, 2021
+Added: Releasable at September 30, 2021
Performance and Market-Based Restricted Stock Units
−Removed: The following table summarizes the performance and market-based RSU activity for the six months ended June 30, 2021:
+Added: The following table summarizes the performance and market-based RSU activity for the nine months ended September 30, 2021:
Outstanding at December 31, 2020
Attained by performance
−Removed: Outstanding at June 30, 2021
−Removed: Releasable at June 30, 2021
+Added: Outstanding at September 30, 2021
+Added: Releasable at September 30, 2021
Cash-Settled Restricted Stock Units
3 unchanged sentences
Cash-Settled RSUs are classified as liabilities and are remeasured at each reporting date until settled.
−Removed: At June 30, 2021 and December 31, 2020 we had 32,085 and 30,009 cash-settled RSUs outstanding, respectively.
−Removed: At June 30, 2021 and December 31, 2020, liabilities of $ 261 and $ 396 , respectively, were included in accrued expenses and other liabilities on our Condensed Consolidated Balance Sheets.
+Added: At September 30, 2021 and December 31, 2020 we had 32,085 and 30,009 cash-settled RSUs outstanding, respectively.
+Added: At September 30, 2021 and December 31, 2020, liabilities of $ 276 and $ 396 , respectively, were included in accrued expenses and other liabilities on our Condensed Consolidated Balance Sheets.
NOTE 17 — Fair Value Measurements
−Removed: The table below summarizes our financial liabilities that were measured at fair value on a recurring basis at June 30, 2021:
+Added: The table below summarizes our financial liabilities that were measured at fair value on a recurring basis at September 30, 2021:
(Liability) Asset
+Added: September 30,
Interest rate swaps
19 unchanged sentences
Reclassified to payable in accrued expenses and other liabilities
−Removed: Balance at June 30, 2021
+Added: Balance at September 30, 2021
Less current portion in accrued expenses and other liabilities
4 unchanged sentences
NOTE 18 — Income Taxes
−Removed: The effective tax rates for the three and six months ended June 30, 2021 and 2020 are as follows:
+Added: The effective tax rates for the three and nine months ended September 30, 2021 and 2020 are as follows:
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
+Added: September 30,
+Added: September 30,
Effective tax rate
−Removed: Our effective income tax rate was 245.6 % and 17.6 % in the second quarters of 2021 and 2020, respectively.
−Removed: This increase is primarily attributed to a one-time settlement expense related to lump sum payments made for the CTS Corporation U.S.
+Added: Our effective income tax rate was 28.9 % and 22.2 % in the third quarters of 2021 and 2020, respectively.
+Added: This increase is primarily attributed to a one-time settlement expense related to the final annuity purchase made for the CTS Corporation U.S.
pension plan.
−Removed: The second quarter 2021 tax rate was higher than the U.S.
+Added: The third quarter 2021 tax rate was higher than the U.S.
statutory federal tax rate for the same reason noted above.
−Removed: The second quarter 2020 tax rate was lower than the U.S.
−Removed: statutory federal tax rate due to foreign earnings that are taxed at lower rates and a reduction in reserves related to uncertain tax positions.
−Removed: Our effective income tax rate was 9.3 % and 27.1 % in the first half of 2021 and 2020, respectively.
−Removed: This decrease is primarily attributed to the change in mix of earnings by jurisdiction, a one-time settlement expense related to lump sum payments made for the CTS Corporation U.S.
−Removed: pension plan, and tax benefits recorded upon vesting of restricted stock units.
−Removed: The tax rate in the first half of 2021 was lower than the U.S.
+Added: The third quarter 2020 tax rate was higher than the U.S.
+Added: statutory federal tax rate due to foreign withholding taxes, state taxes, and foreign earnings that are taxed at higher rates.
+Added: Our effective income tax rate was 32.5 % and 24.4 % in the nine months ended September 30, 2021 and 2020, respectively.
+Added: This increase is primarily attributed to the settlement expenses related to lump sum payments made for the CTS Corporation U.S.
+Added: Pension Plan termination process in the second and third quarters of 2021.
+Added: The tax rate in the first nine months of 2021 was higher than the U.S.
statutory federal tax rate for the same reason noted above.
−Removed: The tax rate in the first half of 2020 was higher than the U.S.
+Added: The tax rate in the first nine months of 2020 was higher than the U.S.
statutory federal tax rate primarily due to the establishment of valuation allowances on certain U.S.
−Removed: tax credits and the Company’s decision to no longer reinvest the earnings of its Taiwan subsidiary offset by a reduction in reserves related to uncertain tax positions.
+Added: tax credits and the Company’s decision to no longer reinvest the earnings of its Taiwan subsidiary.
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.