What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-14 compared with 2023-03-06 · 184 added, 201 removed, 948 unchanged (29% of the section changed)

7 unchanged sentences

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Cash Flows for the years e3nded December 31, 2022, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

Notes to Consolidated Financial Statements

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 6, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 14, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

41 unchanged sentences

Selling, general and administrative expenses 85,663 66,361 69,406

Goodwill and other impairment — — 29,017

Operating income (loss) 20,144 49,581 ( 23,169 )

Operating income 48,060 20,144 49,581

Other (income) expense 1,195 10,463 ( 878 )

57 unchanged sentences

Total liabilities 310,282 350,228

Commitments and contingencies (Note 15)

Stockholders’ equity:

29 unchanged sentences

Share-based compensation expense — — — 6,254 — — 6,254

Total comprehensive income (loss) — — — — ( 37,049 ) 944 ( 36,105 )

Total comprehensive income — — — — 23,732 2,568 26,300

Balance - December 31, 2021 32,034,592 $ 321 $ ( 13,172 ) $ 255,566 $ ( 73,624 ) $ ( 42,438 ) $ 126,653

2 unchanged sentences

Share-based compensation expense — — — 5,805 — — 5,805

Total comprehensive income — — — — 23,732 2,568 26,300

Total comprehensive income (loss) — — — — ( 21,971 ) 10,888 ( 11,083 )

Balance - December 31, 2022 32,826,852 $ 328 $ ( 14,514 ) $ 261,371 $ ( 95,595 ) $ ( 31,550 ) $ 120,040

15 unchanged sentences

Depreciation and amortization 17,630 18,181 18,495

Impairment expense — — 29,017

Noncash amortization of debt financing costs 303 350 1,008

3 unchanged sentences

Deferred income taxes ( 20,699 ) 12,480 2,078

Noncash loss (gain) on forward exchange contracts ( 43 ) ( 788 ) 299

Noncash gain on forward exchange contracts

( 535 ) ( 43 ) ( 788 )

Loss on extinguishment of debt — 921 7,155

7 unchanged sentences

Other operating activities, net ( 10,317 ) 2,728 ( 7,126 )

Net cash (used in) provided by operating activities 68,947 ( 29,832 ) 34,372

Net cash provided by (used in) operating activities

38,276 68,947 ( 29,832 )

CASH FLOWS FROM INVESTING ACTIVITIES:

10 unchanged sentences

Repayment of ABL revolving credit facility — — ( 11,300 )

Borrowings under China credit facility

Repayment of China credit facility ( 4,368 ) — —

Surrender of common stock by employees ( 1,636 ) ( 1,342 ) ( 1,279 )

3 unchanged sentences

Other financing activities, net ( 155 ) ( 201 ) ( 342 )

Net cash provided by (used in) financing activities ( 50,091 ) 31,011 ( 19,262 )

Net cash (used in) provided by financing activities

( 12,729 ) ( 50,091 ) 31,011

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH 172 ( 2,279 ) 842

16 unchanged sentences

and its subsidiaries.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Belgium, Czech Republic, Ukraine, Thailand, India and Australia.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Morocco, Thailand, India and Australia.

Our products are primarily sold in North America, Europe, and the Asia-Pacific region.

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Inventory quantities on-hand are regularly reviewed and when necessary provisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements, taking into consideration expected market volumes and future potential use.

During the years ended December 31, 2022 and 2021, we recorded an inventory charge of $ 10.4 million and zero , respectively.

The charge recorded during the year ended December 31, 2022 was primarily related to decreased demand in the Industrial Automation segment.

During the year ended December 31, 2022, we recorded an inventory charge of $ 10.4 million, which was primarily related to a decreased demand in the Industrial Automation segment.

Inventories consisted of the following as of December 31:

2 unchanged sentences

Finished goods 16,856 16,368

Total Inventory $ 142,542 $ 141,045

Total Inventories

$ 128,082 $ 142,542

Property, Plant and Equipment - Property, plant and equipment are stated at cost, net of accumulated depreciation.

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Therefore, changes in the fair value of the interest rate swap are recorded in accumulated other comprehensive income (loss) and recognized in the Consolidated Statement of Operations when the contracts are settled.

Share-Based Compensation - We recognize share-based compensation based on the grant-date fair value of the equity instruments awarded.

Share-based compensation expense is recognized in the consolidated financial statements on a straight-line basis over the requisite service period for the entire award.

We account for forfeitures of stock-based compensation awards as they occur.

Refer to Note 11, Share-Based Compensation for additional discussion.

Recently Issued Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No.

2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting".

The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

Also, in January 2021, the FASB issued ASU No.

2021-01 "Reference Rate Reform (Topic 848):

Scope", to clarify that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.

The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022.

The Company will apply the guidance to impacted transactions during the transition period.

The Company does not expect the adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements.

Effective May 12, 2022, the Company transitioned all of its U.S.

Dollar borrowings from LIBOR to the Secured Overnight Financing Rate ("SOFR").

See Note 3, Debt for further discussion.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption

is also permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

Revenue Recognition

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Electrical wire harnesses, panels and assemblies 2,985 228,424 13,967 26,258 271,634

Trim 179,910 — 5,552 — 185,462

Plastic & Trim components 186,816 — 7,604 — 194,420

Industrial Automation — — — 12,642 12,642

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Electrical wire harnesses, panels and assemblies 89 179,849 10,316 14,927 205,181

Trim 154,205 — 2,555 — 156,760

Plastic & Trim components 179,910 — 5,552 — 185,462

Industrial Automation — 520 — 72,820 73,340

6 unchanged sentences

Electrical wire harnesses, panels and assemblies 2,682 168,108 11,214 25,329 207,333

Trim 109,450 — 2,413 — 111,863

Plastic & Trim components 154,205 — 2,555 — 156,760

Industrial Automation — — — 162,583 162,583

4 unchanged sentences

Term loan facility $ 141,563 $ 152,500

Revolving credit facility — 49,400

Unamortized discount and issuance costs ( 49 ) ( 63 )

7 unchanged sentences

The Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $ 75 million, and (b) thereafter, (i) $ 75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50 :1.0.

The proceeds of the Credit Facilities were used, together with cash on hand of the Company, to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding secured credit facility due 2023 (the “2023 Term Loan Facility”) issued pursuant to a term facility agreement (the “Term Facility Agreement”) between, among others, Bank of America, N.A.

as administrative agent and other lender parties thereto, (b) fund the redemption, satisfaction and discharge of all of the Company’s asset-based revolving credit facility (the “ABL Revolving Credit Facility”) issued pursuant to a facility agreement

(the “ABL Facility Agreement”) between, among others, Bank of America, N.A.

as agent and certain financial institutions as lenders, (c) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Credit Agreement, and (d) for working capital and other lawful corporate purposes of the Company and its subsidiaries.

On May 12, 2022, the Company and certain of its subsidiaries entered into a second amendment (the “Amendment”) to its Credit Agreement pursuant to which the Lenders upsized the existing term loan facility to $ 175 million in aggregate principal amount and increased the revolving credit facility commitments by $ 25 million to an aggregate of $ 150 million in revolving credit facility commitments.

The Revolving Credit Facility includes a $ 10 million swing line sublimit and a $ 10 million letter of credit sublimit.

The amended Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $ 75 million, and (b) thereafter, (i) $ 75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50 :1.0.

receipt of financial statements for the fiscal quarter ending June 30, 2022, $ 75 million, and (b) thereafter, (i) $ 75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50 :1.0.

Further, separate from the Company’s annual $ 35 million capital spending cap, a one-time $ 45 million capital project basket was included in the Amendment.

4 unchanged sentences

At December 31, 2023 we had no borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 148.8 million.

The unamortized deferred financing fees associated with the Revolving Credit Facility were $ 1.3 million as of December 31, 2022 and December 31, 2021, and are being amortized over the remaining life of the Credit Agreement.

At December 31, 2021, we had $ 49.4 million of borrowings under the Revolving Credit Facility and outstanding letters of credit of $ 1.4 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 11.3 million, total consolidated availability was $ 160.1 million at December 31, 2023.

The unamortized deferred financing fees associated with the Revolving Credit Facility were $ 1.0 million and $ 1.3 million as of December 31, 2023 and December 31, 2022, respectively, and are being amortized over the remaining life of the Credit Agreement.

At December 31, 2022, we had no borrowings under the Revolving Credit Facility and outstanding letters of credit of $ 1.2 million.

Interest rates and fees

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dispose of certain assets;

make payments on certain

indebtedness;

make payments on certain indebtedness;

merge, combine with any other person or liquidate;

11 unchanged sentences

breach or default of agreements related to material debt;

revocation or attempted revocation of guarantees;

revocation or attempted revocation of

denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect;

4 unchanged sentences

Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.

The Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20 :1.0, and (b) a maximum consolidated total leverage ratio of 3.75 :1.0 (which will be subject to step-downs to 3.50 :1.0 at the end of the fiscal quarter ending March 31, 2023;

The Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20 :1.0, and (b) a maximum consolidated total leverage ratio of 3.75 :1.0 (which was subject to step-downs to 3.50 :1.0 at the end of the fiscal quarter ending March 31, 2023;

to 3.25 :1.0 at the end of the fiscal quarter ending June 30, 2023;

7 unchanged sentences

Voluntary prepayments of amounts outstanding under the Credit Facilities are permitted at any time, without premium or penalty.

Term Loan and Security Agreement

On April 12, 2017, the Company entered into the $ 175.0 million 2023 Term Loan Facility, maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”).

On April 30, 2021, the 2023 Term Loan Facility was fully repaid and terminated as described below.

ABL Revolving Credit Facility

On September 18, 2019, the Company entered into an amendment of the Third Amended and Restated Loan and Security Agreement (the “Third ARLS Agreement”), dated as of April 12, 2017, which governed the Company’s ABL Revolving Credit Facility.

On March 1, 2021, the Company and certain of its subsidiaries entered into Amendment No.

3, which amended the terms of the Third ARLS Agreement, among other things, to extend the maturity date of the ABL Revolving Credit Facility to March 1, 2026 and to remove the condition that the first $ 7.0 million of the $ 90.0 million Revolver Commitments are available as a first-in, last-out facility.

The Third ARLS Agreement, as amended, also allowed the Company to increase the size of the ABL Revolving Credit Facility by up to $ 50.0 million with the consent of Lenders providing the increase in the ABL Revolving Credit Facility.

On April 30, 2021, the ABL Revolving Credit Facility was fully repaid and terminated as described below.

Termination of TLS Agreement and Third ARLS Agreement

Effective on April 30, 2021, the Company issued a notice of redemption in respect of its 2023 Term Loan Facility and the ABL Revolving Credit Facility and deposited with the Bank of America, N.A., as Administrative Agent under the TLS Agreement and the Third ARLS Agreement proceeds from the Credit Facilities, together with cash on hand in an amount sufficient to discharge the Company’s obligations under the TLS Agreement and the Third ARLS Agreement and respective related agreements.

All amounts under the 2023 Term Loan Facility and ABL Revolving Credit Facility were repaid and discharged in full on April 30, 2021 and the TLS Agreement and Third ARLS Agreement were terminated.

The discharge resulted in a loss on extinguishment of debt of $ 7.2 million, including $ 3.7 million non-cash write off relating to deferred financing costs and unamortized discount of the 2023 Term Loan Facility, a voluntary repayment premium of

$ 3.0 million, and $ 0.5 million of other associated fees, recorded in our Consolidated Statements of Operations for the Twelve Months Ended December 31, 2021.

Foreign Facility

In the quarter ended March 31, 2023, we established a credit facility in China consisting of a line of credit which is subject to annual renewal (the "China Credit Facility").

China Credit Facility was renewed in the quarter ended December 31, 2023, with availability of approximately $ 11.3 million (denominated in the local currency).

We utilize the China Credit Facility to meet local working capital demands, fund letters of credit and bank guarantees, and support other short-term cash requirements in our China operations.

We had no outstanding borrowings under the China Credit Facility as of December 31, 2023 and December 31, 2022.

At December 31, 2023, we had $ 11.3 million of availability under the China Credit Facility.

Intangible Assets

19 unchanged sentences

The aggregate intangible asset amortization expense was $ 3.4 million for the fiscal year ended December 31, 2023, 2022 and 2021.

The estimated intangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2022 is $ 3.4 million for the years ending December 31, 2023, $ 2.9 million for the year ending December 31, 2024 and $ 1.4 million for the years ending December 31, 2025 through 2027.

The estimated intangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2023 is $ 2.9 million for the year ending December 31, 2024 and $ 1.4 million for the years ending December 31, 2025 through 2028.

Fair Value Measurement

9 unchanged sentences

Foreign Currency Forward Exchange Contracts.

Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and

counterparty credit risk.

Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2.

8 unchanged sentences

Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the consolidated statements of operations.

During the second quarter ended June 30, 2022, the Company entered into transactions to cash settle existing interest rate swaps and received proceeds of $ 3.9 million.

During the second quarter ended June 30, 2022, the Company entered into transactions to cash settle existing interest rate swaps ("Interest rate swap agreements settled in 2022") and received proceeds of $ 3.9 million.

The gain on the swap settlement has been recorded in Other comprehensive income (loss) and will be recognized over the life of the settled swaps.

Following the settlement of the existing interest rate swaps, we entered into a new interest rate swap agreement to align with the SOFR rate and maturity date of the Credit Agreement.

Contingent Consideration.

As a result of the acquisition of First Source Electronics, LLC (“FSE”) on September 17, 2019, the Company agreed to pay up to $ 10.8 million in contingent milestone payments (“Contingent Consideration”).

The Contingent Consideration is payable based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds over the periods from (a) September 18, 2019 through September 17, 2020, (b) September 18, 2019 through March 17, 2021, (c) September 18, 2019 through September 17, 2022 and (d) March 18, 2021 through September 17, 2022.

The payment amount will be determined on a sliding scale for reaching between 90 % and 100 % of the respective EBITDA targets.

The fair value for the milestone payments is based on a Monte Carlo simulation utilizing forecasted EBITDA through September 17, 2022.

A payment of $ 5.0 million was made during the second quarter of 2021 based on achievement of the second EBITDA threshold, and the final payment of $ 4.8 million was made during the fourth quarter of 2022 based on achievement of the third EBITDA threshold.

As of December 31, 2022, there was no remaining Contingent Consideration obligations.

The fair values of our derivative assets and liabilities and Contingent Consideration measured on a recurring basis as of December 31 and are categorized as follows:

1 unchanged sentence

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

Foreign exchange contract $ — $ — $ — $ — $ 1,375 $ — $ 1,375 $ —

Interest rate swap agreement $ 1,849 $ — $ 1,849 $ — $ 241 $ — $ 241 $ —

Foreign exchange contract $ 356 $ — $ 356 $ — $ — $ — $ — $ —

Foreign exchange contract designated as hedging instruments

$ 1,318 $ — $ 1,318 $ — $ — $ — $ — $ —

Interest rate swap agreement $ 1,073 $ — $ 1,073 $ — $ 1,849 $ — $ 1,849 $ —

Contingent Consideration $ — $ — $ — $ — $ 4,409 $ — $ — $ 4,409

Details of the changes in value for the Contingent Consideration that is measured using significant unobservable inputs (Level 3) are as follows:

Contingent Consideration liability balance at December 31, 2021

Change in fair value 341

Payments ( 4,750 )

Contingent Consideration liability balance at December 31, 2022

Foreign exchange contract designated as hedging instruments

$ — $ — $ — $ — $ 246 $ — $ 246 $ —

Foreign exchange contract not designated as hedging instruments

$ 304 $ — $ 304 $ — $ 110 $ — $ 110 $ —

The following table summarizes the notional amount of our open foreign exchange contracts at December 31:

2 unchanged sentences

Equivalent U.S.

Commitments to buy or sell currencies $ 55,220 $ 53,847 $ 49,601 $ 48,712

Commitments to buy or sell currencies - Foreign exchange contract designated as hedging instruments

$ 56,741 $ 58,094 $ 41,049 $ 40,797

Commitments to buy or sell currencies - Foreign exchange contract not designated as hedging instruments

$ 16,608 $ 16,806 $ 14,171 $ 13,050

We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.

3 unchanged sentences

Location Fair Value

Foreign exchange contracts Other current assets $ — $ 1,375

Foreign exchange contract designated as hedging instruments

Other current assets $ 1,179 $ —

Foreign exchange contract designated as hedging instruments Other assets $ 139 $ —

Interest rate swap agreement Other assets $ 1,073 $ 1,849

Interest rate swap agreement Accrued liabilities and other $ — $ 241

Derivative Liability

1 unchanged sentence

Location Fair Value

Foreign exchange contracts Accrued liabilities and other $ 356 $ —

Interest rate swap agreement Accrued liabilities and other $ — $ 498

Foreign exchange contract designated as hedging instruments

Accrued liabilities and other $ — $ 246

Foreign exchange contract not designated as hedging instruments

Accrued liabilities and other $ 304 $ 110

Derivative Equity

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Location Fair Value

Derivative instruments Accumulated other comprehensive (loss) income $ 3,777 $ 757

Foreign exchange contract designated as hedging instruments Accumulated other comprehensive (loss) income $ 1,354 $ ( 235 )

Interest rate swap agreements Accumulated other comprehensive (loss) income $ 3,484 $ 4,012

The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations:

2 unchanged sentences

Recognized in Income on

Foreign exchange contracts Cost of revenues $ 3,236 $ 2,452

Foreign exchange contract designated as hedging instruments

Cost of revenues $ 5,339 $ 3,236

Interest rate swap agreements Interest expense $ 1,466 $ ( 458 )

Foreign exchange contracts Other (income) expense $ ( 334 ) $ 134

Interest rate swap agreements settled in 2022

Interest expense $ 756 $ 378

Foreign exchange contract not designated as hedging instruments

Other (income) expense $ ( 220 ) $ ( 334 )

We consider the impact of our credit risk on the fair value of the contracts, as well as our ability to honor obligations under the contract.

8 unchanged sentences

$ 141,514 $ 139,213 $ 152,437 $ 143,477

Revolving Credit Facility 1

$ — $ — $ 49,400 $ 49,400

1 Presented in the Consolidated Balance Sheets as the current portion of long-term debt of $ 15.3 million and long-term debt of $ 126.2 million as of December 31, 2023, and current portion of long-term debt of $ 10.9 million and long-term debt of $ 141.5 million as of December 31, 2022.

The Company leases office, warehouse and manufacturing space and certain equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees.

Our leases have remaining lease terms of one year to nine years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .

Our leases have remaining lease terms of one year to nineteen years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .

The components of lease expense are as follows:

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In making such judgments, significant weight is given to evidence that can be objectively verified.

The Company believes that significant uncertainty exists with respect to the future realization of our U.S.

deferred tax assets and has therefore established a full valuation allowance as of December 31, 2022.

Separately, the Company reversed the valuation allowance on its U.K.

deferred tax assets as it believes that the weight of the positive evidence, including the cumulative income position in the three most recent years and forecasts for a sustained level of future taxable income, was sufficient to overcome the weight of the negative evidence during the year ended December 31, 2022.

During 2022, we recorded an additional valuation allowance of $ 24.5 million primarily related to establishing a full valuation allowance on our U.S.

deferred tax assets, and released $ 11.8 million in valuation allowances, $ 9.9 million of which related to the deferred tax assets of our U.K.

During 2022, (1) the Company established a valuation allowance on its U.S.

deferred tax assets of $ 24.5 million due to significant negative evidence including severity of recent losses, and (2) reversed the valuation allowance on its U.K.

deferred tax assets of $ 9.9 million based on the weight of positive evidence, including the cumulative income position in the three most recent years and forecasts for a sustained level of future taxable income.

During 2023, the Company reversed the valuation allowance on its U.S.

deferred tax assets of $ 22.0 million as it believes that the weight of the positive evidence, including the cumulative income position in the three most recent years and forecasts for a sustained level of future taxable income, was sufficient to overcome the weight of the negative evidence during the year ended December 31, 2023.

During 2023, we recorded an additional valuation allowance of $ 1.9 million primarily related to a $ 1.6 million increase in foreign tax credits.

We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuation allowance, as discussed above.

4 unchanged sentences

Provisions 1,883 24,506 2,529

Utilizations ( 11,787 ) ( 599 ) ( 62 )

Utilizations and reversals ( 23,631 ) ( 11,787 ) ( 599 )

Balance - End of the year $ 9,342 $ 31,090 $ 18,371

As of December 31, 2023, the Company had net operating loss carryforwards of $ 78.5 million, of which $ 36.5 million related to foreign jurisdictions and $ 42.0 million related to U.S.

state jurisdictions.

The carryforward periods for these net operating losses range from five years to indefinite.

Utilization of these losses is subject to the tax laws of the applicable tax jurisdiction and may be limited by the ability of certain subsidiaries to generate taxable income in the associated tax jurisdiction.

We have established valuation allowances for all net operating losses that we believe are more likely than not to expire before they can be utilized.

As of December 31, 2022, we had $ 5.0 million of U.S.

foreign tax credit carryforwards, primarily attributable to the deemed repatriation of the accumulated untaxed earnings of our foreign subsidiaries resulting from the U.S.

Utilization of these credits may be limited if the Company does not generate sufficient U.S.

federal taxable income in future years.

The credits begin to expire in 2027.

We have established valuation allowances for all foreign tax credits that we believe are more likely than not to expire before they can be utilized.

As of December 31, 2022, we had $ 1.7 million of research and development tax credit carryforwards related to our U.S.

Utilization of these credits may be limited if the Company does not generate sufficient U.S.

federal taxable income in future years.

The credits begin to expire in 2032.

We have established valuation allowances for all foreign tax credits that we believe are more likely than not to expire before they can be utilized.

state jurisdictions, $ 4.8 million of U.S.

foreign tax credit carryforwards, and $ 1.4 million of research and development tax credit carryforwards.

The carryforward periods for these net operating losses range from five years to indefinite, foreign tax credits begin to expire in 2027, and research and development tax credits begin to expire in 2036.

Utilization of these carryforwards is subject to the tax laws of the applicable tax jurisdiction and may be limited by the ability of certain subsidiaries to generate taxable income in the associated tax jurisdiction.

We have established valuation allowance for certain U.S.

foreign tax credits, State NOLs, and Foreign NOLs that we believe are more likely than not to expire before they can be utilized.

As of December 31, 2023, cash of $ 37.8 million was held by foreign subsidiaries.

During the year ended December 31, 2023, $ 7.0 million was repatriated from the Company's foreign subsidiaries.

The Company had a $ 0.5 million deferred tax liability as of December 31, 2022 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which no indefinite reinvestment assertion has been made.

The Company had a $ 0.5 million deferred tax liability as of December 31, 2023 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.

We file federal income tax returns in the U.S.

14 unchanged sentences

Gross decreases - tax positions in prior periods — — —

Gross increases - current period tax positions 149 — —

Lapse of statute of limitations — ( 389 ) —

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Compensation and benefits $ 23,659 $ 13,370

Accrued freight 4,225 5,628

Taxes payable 5,018 5,092

Contingent Consideration — 4,409

Accrued freight 2,679 4,225

Accrued legal and professional fees 1,535 1,027

Warranty Costs 1,458 1,433

6 unchanged sentences

We recognized expense associated with the plan of $ 4.8 million, $ 4.6 million and $ 4.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The increase in expense for the year ended December 31, 2021 as compared to the to the prior year period primarily resulted from the temporary suspension of the employer 401(k) match taken in response to the COVID-19 pandemic in the year ended December 31, 2020.

Pension and Other Post-Retirement Benefit Plans - We sponsor pension and other post-retirement benefit plans that cover certain hourly and salaried employees in the U.S.

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Each of the plans are frozen to new participants and to additional service credits earned.

In December 2018, we consolidated the U.S.

Our policy is to make annual contributions to the plans to fund the minimum contributions, as required by local regulations.

During the year ended December 31, 2022, the Company settled its U.S.

As of December 31, 2022, the Company settled its U.S.

Pension Plan liabilities through lump-sum payments and purchase of an annuity contract.

1 unchanged sentence

The change in benefit obligation, plan assets and funded status as of December 31 is as follows:

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2022 2021 2022 2021

Change in benefit obligation:

Benefit obligation — Beginning of the year $ 29,885 $ 48,545

Service cost — — — —

Interest cost 1,418 785

Participant contributions — 1 — —

Benefits paid ( 1,801 ) ( 1,744 )

6 unchanged sentences

Employer contributions 1,125 1,016

Participant contributions — 1 — —

Benefits paid ( 1,801 ) ( 1,744 )

2 unchanged sentences

Funded status $ ( 9,120 ) $ ( 8,348 )

Actuarial Gain - The projected U.S.

benefit obligation includes a net gain of $ 7.8 million for the year ended December 31, 2022, which was a result of significant increase in actual interest rates as compared to the discount rate used in 2021 to estimate the total pension obligation.

The projected Non-U.S.

benefit obligation includes a net gain of $ 12.9 million for the year ended December 31, 2022 driven primarily by a significant increase in the discount rate assumption.

Actuarial Gain - The projected Non-U.S.

benefit obligation includes a net loss of $ 1.1 million for the year ended December 31, 2023 driven primarily by a decrease in the discount rate assumption.

Amounts recognized in the Consolidated Balance Sheets at December 31 consisted of:

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2022 2021 2022 2021

Noncurrent assets $ 3,967 $ 2,479 $ — $ —

Current liabilities ( 6 ) ( 126 ) — —

Noncurrent liabilities ( 9,120 ) ( 8,348 )

26 unchanged sentences

Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2022 2021 2022 2021

Discount rate 4.45 % 4.75 %

Weighted-average assumptions used to determine net periodic benefit cost at December 31 were as follows:

Pension and Other Post-Retirement Plans Non-U.S.

2023 2022 2021

4 unchanged sentences

Our pension plan investment strategy is reviewed periodically, but no less frequently than annually.

Due to the termination of the U.S.

Pension Plan effective December 31, 2021, the related investments were reallocated to fixed income securities.

We employ a total return investment approach whereby a mix of equities, fixed income and real estate investments are intended to maximize the long-term return of plan assets taking into consideration a prudent level of risk.

8 unchanged sentences

Investment risk is measured and monitored on an ongoing basis in light of annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.

We expect to contribute approximately $ 1.1 million to our pension plans and our other post-retirement benefit plans in 2023.

Our investment allocation target for our pension plans for 2022 and our weighted-average asset allocations of our pension assets for the years ended December 31, by asset category, are as follows:

We expect to contribute approximately $ 1.1 million to our non-U.S.

pension plan and our other post-retirement benefit plans in 2024.

Our investment allocation target for our non-U.S.

pension plan for 2023 and our weighted-average asset allocations of our pension assets for the years ended December 31, by asset category, are as follows:

Target Allocation % Actual Allocations %

3 unchanged sentences

Fixed income securities 77 58 76 58

Real estate and other — — — — — — 25 —

100 % 100 % 100 % 100 %

Our plan assets can be described as follows:

pension plan assets are held in a pooled separate account which represents an insurance contract under which plan assets are administered through pooled funds.

The contract portfolio includes cash and cash equivalents, equity/ balanced securities, and fixed income securities.

The contract is valued daily based on the market value of the underlying net assets.

The majority of the underlying net assets have observable Level 1 and/or 2 quoted pricing inputs which are used to determine the unit value of the contract, which is not publicly quoted and therefore classified as Level 2 of the fair value hierarchy.

See Note 1, Significant Accounting Policies, for further detail on fair value hierarchy.

The assets within the insurance contract can be described as follows:

Equity Securities - Includes common stocks issued by U.S., United Kingdom and other international companies, equity funds that invest in common stocks and unit linked insurance policies.

5 unchanged sentences

Investments generally allow near-term liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

The fair value of fixed income securities is determined by either direct or indirect quoted market prices.

When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges.

Real Estate - Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets.

The fair value of real estate investments is determined by the fund managers.

The fund managers value the real estate investments via independent third-party appraisals on a periodic basis.

Assumptions used to revalue the properties are updated every quarter.

The fair values of our pension plan assets by asset category and by level as described in Note 6, Fair Value Measurement, for the years ended December 31, 2022 and 2021 are as follows:

The fair values of our pension plan assets by asset category and by level as described in Note 1, Significant Accounting Policies, for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

2 unchanged sentences

Identical Assets Significant

Observable Inputs Net Asset Value Per Share

Total Level 1 Level 2 NAV

Cash and cash equivalents $ 4,107 $ 150 $ — $ 3,957

Balanced 8,989 — — 8,989

Fixed income securities:

Corporate bonds 10 — 10 —

Other 12,398 — — 12,398

Observable Inputs Significant

Unobservable Inputs

Total Level 1 Level 2 Level 3

Insurance contracts and other $ 23,052 $ — $ 23,052 $ —

Total pension fund assets $ 23,052 $ — $ 23,052 $ —

3 unchanged sentences

Identical Assets Significant

Observable Inputs Net Asset Value Per Share

Total Level 1 Level 2 NAV

Cash and cash equivalents $ 9,192 $ 442 $ — $ 8,750

Balanced 20,239 — — 20,239

Fixed income securities:

Corporate bonds 37,117 — 22,361 14,756

Other 13,293 — 10,090 3,203

Observable Inputs 2

Unobservable Inputs

Total Level 1 Level 2 Level 3

Insurance contract and other $ 21,537 $ — $ 21,537 $ —

Total pension fund assets 1

The fair value of our pension plan assets measured using significant unobservable inputs (Level 3) at December 31 are as follows:

Beginning balance $ 4,088

Actual return on assets held at reporting date —

Purchases, sales and settlements, net ( 4,088 )

Ending balance $ —

$ 21,537 $ — $ 21,537 $ —

Not included in the table are the remaining $ 4.0 million of plan assets under the U.S.

pension plan which has been invested in Cash and cash equivalents (NAV) as of December 31, 2022.

During 2023, the Company corrected an immaterial error in the presentation of asset category and level of the non-U.S.

pension plan assets as of December 31, 2022.

The assets were previously disclosed as Net Asset Value per share (NAV) rather than Level 2.

Additionally, the asset category previously disclosed was the underlying assets of the insurance contract rather than the insurance contract itself.

The correction had no impact on investment values and had no impact on the consolidated balance sheets, statements of operations or statements of cash flows.

The following table summarizes our expected future benefit payments of our pension and other post-retirement benefit plans:

9 unchanged sentences

The total amount payable as of the award's vesting date is determined based upon the number of shares allocated to a participant, the Company’s relative total shareholder return in terms of ranking which can fluctuate as compared to the peer group over the performance period, ROIC performance, and the share price of the Company's stock.

Total shareholder return is determined by the percentage change in value (positive or negative) over the applicable measurement period as measured by dividing (A) the sum of the cumulative value of dividends and other distributions paid on the Common Stock for the applicable measurement period and the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price.

the Common Stock for the applicable measurement period and the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price.

Performance targets are based on relative total shareholder return in terms of ranking as compared to the peer group over the performance period.

49 unchanged sentences

Diluted earnings (loss) per share attributable to common stockholders $ 1.47 $ ( 0.68 ) $ 0.72

For the year ended December 31, 2022, diluted earnings per share excludes 113 thousand shares, of non-vested restricted stock as the effect would have been anti-dilutive.

There were no anti-dilutive shares for the year ended December 31, 2023.

For the year ended December 31, 2020, diluted earnings (loss) per share excludes 220 thousand shares, of non-vested restricted stock as the effect would have been anti-dilutive.

There were 113 thousand anti-dilutive shares for the year ended December 31, 2022.

There were no anti-dilutive shares for the year ended December 31, 2021.

Dividends — We have not declared or paid any cash dividends in the past.

1 unchanged sentence

Other Comprehensive Income (Loss)

The activity for each item of accumulated other comprehensive loss is as follows:

The activity for each item of accumulated other comprehensive income (loss) is as follows:

currency items Pension and Other Post-Retirement Benefit Plans Derivative Instruments Accumulated other

2 unchanged sentences

Net current period change ( 4,366 ) 11,207 7,172 14,013

Reclassification adjustments for losses reclassified into income — 97 — 97

Derivative instruments — — ( 684 ) ( 684 )

Amounts reclassified into earnings — 31 ( 3,156 ) ( 3,125 )

Balance - December 31, 2022 $ ( 24,811 ) $ ( 11,512 ) $ 4,773 $ ( 31,550 )

Net current period change $ 1,584 $ ( 178 ) $ 7,627 $ 9,033

Reclassification adjustments for losses reclassified into income — 31 — 31

Derivative instruments — — 4,016 4,016

Amounts reclassified into earnings — ( 206 ) ( 7,561 ) ( 7,767 )

Balance - December 31, 2023 $ ( 23,227 ) $ ( 11,896 ) $ 4,839 $ ( 30,284 )

The related tax effects allocated to each component of other comprehensive (loss) income for the years ended December 31, 2022 and 2021 are as follows:

The related tax effects allocated to each component of other comprehensive income (loss) for the years ended December 31, 2023 and 2022 are as follows:

2023 Before Tax

Amount Tax Expense After Tax Amount

Retirement benefits adjustment:

Net current period change

Cumulative translation adjustment $ 1,584 $ — $ 1,584

Net actuarial gain and prior service credit

( 438 ) 260 ( 178 )

Reclassification of actuarial loss and prior service cost to net income 31 — 31

Net unrealized gain 10,967 271 11,238

Cumulative translation adjustment ( 4,366 ) — ( 4,366 )

Derivative instruments

Total other comprehensive gain $ 10,620 $ 268 $ 10,888

9,792 ( 2,165 ) 7,627

Net unrealized gain (loss)

10,938 ( 1,905 ) 9,033

Amounts reclassified into earnings:

Actuarial loss and prior service cost

( 206 ) — ( 206 )

Derivative instruments

( 10,085 ) 2,524 ( 7,561 )

Net realized loss

( 10,291 ) 2,524 ( 7,767 )

Total other comprehensive income $ 647 $ 619 $ 1,266

2022 Before Tax

Amount Tax Expense After Tax Amount

Retirement benefits adjustment:

Net actuarial loss and prior service credit $ 4,620 $ ( 44 ) $ 4,576

Reclassification of actuarial loss and prior service cost to net income 97 — 97

Net unrealized gain 4,717 ( 44 ) 4,673

Net current period change

Cumulative translation adjustment $ ( 4,366 ) $ — $ ( 4,366 )

Net actuarial gain and prior service credit 1

10,936 271 11,207

Derivative instruments

Total other comprehensive gain $ 2,398 $ 170 $ 2,568

7,175 ( 3 ) 7,172

Net unrealized gain (loss)

13,745 268 14,013

Amounts reclassified into earnings:

Actuarial loss and prior service cost

Derivative instruments

( 3,156 ) — ( 3,156 )

Net realized loss

( 3,125 ) — ( 3,125 )

Total other comprehensive income $ 10,620 $ 268 $ 10,888

1 Included in Net actuarial gain and prior service credit is $ 9.2 million US pension non-cash settlement charge as of December 31, 2022.

1 unchanged sentence

Cost Reduction and Manufacturing Capacity Rationalization

On November 1, 2021, the Company's Board of Directors approved a restructuring program to align the Company's cost structure to support margin expansion.

The program includes workforce reductions and footprint optimization across segments.

During the quarter ended December 31, 2023, management approved restructuring programs to align the Company’s cost structure to support margin expansion.

The programs include workforce reductions and footprint optimization across segments.

We incurred $ 1.1 million expense during the year ended December 31, 2023 related to this program and expect the cost to be between $ 3.0 million to $ 3.5 million for the entire program.

The changes in accrued restructuring balances are as follows:

10 unchanged sentences

Of the $ 2.3 million costs incurred in the twelve months ended December 31, 2023, $ 2.0 million primarily related to headcount reductions and $ 0.3 million related to facility exit and other costs.

For the twelve months ended December 31, 2022, the Vehicle Solutions segment had new charges of $ 0.5 million and $ 0.3 million related to headcount and facilities, respectively.

For the twelve months ended December 31, 2023, the Vehicle Solutions segment had new charges of $ 0.8 million related to headcount.

The Industrial Automation segment had new charges of $ 0.2 million and $ 0.3 million related to headcount and facilities, respectively.

Corporate had a new charge of $ 1.0 million related to headcount.

Of the $ 2.3 million costs incurred, $ 1.3 million was recorded in cost of revenues and $ 1.0 million was recorded in selling, general and administrative expenses.

Of the $ 5.4 million costs incurred in the twelve months ended December 31, 2022, $ 2.5 million related to headcount reductions and $ 2.8 million related to facility exit and other costs.

For the twelve months ended December 31, 2022, Vehicle Solutions segment had new charges of $ 0.5 million and $ 0.3 million related to headcount and facilities, respectively.

The Electrical Systems segment had a new charges of $ 0.7 million related to headcount.

The Aftermarket & Accessories segment had new charges of $ 0.6 million and $ 1.3 million related to headcount and facilities respectively.

The Industrial

Automation segment had new charges of $ 0.5 million and $ 1.2 million related to headcount and facilities, respectively.

The Industrial Automation segment had new charges of $ 0.5 million and $ 1.2 million related to headcount and facilities, respectively.

Corporate had a new charge of $ 0.3 million related to headcount.

Of the $ 5.4 million costs incurred, $ 4.0 million was recorded in cost of revenues and $ 1.4 million was recorded in selling, general and administrative expenses.

Substantially all of the $ 1.9 million costs incurred in the twelve months ended December 31, 2021, related to headcount reductions and none related to facility exit and other costs.

More than half of the costs were incurred in the Electrical Systems segment with the remainder split between Vehicle Solutions and Industrial Automation segments.

Of the $ 1.9 million costs incurred, $ 1.2 million was recorded in cost of revenues and $ 0.7 million was recorded in selling, general and administrative expenses.

Commitments and Contingencies

13 unchanged sentences

These amounts, as they relate to the years ended December 31, 2023 and 2022, are included within accrued liabilities and other in the accompanying Consolidated Balance Sheets.

On July 24, 2023, one of our customers issued a voluntary safety recall related to certain wiper system components supplied by us.

To the extent a loss occurs that is attributed to us, we believe that we have reasonable levels of insurance coverage to mitigate recall exposure risk.

It is reasonably possible that we will incur additional losses and fees above the amount accrued for warranty claims but we cannot estimate a range of such reasonably possible losses or fees related to these claims at this time.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts normally accrued.

The following presents a summary of the warranty provision for the years ended December 31:

12 unchanged sentences

2027 $ 82,500

2027 $ 82,498

Thereafter $ —

Segment Reporting

Contemporaneously with the filing of this Form 10-K, we updated our reportable segments to rename Warehouse Automation to Industrial Automation.

We continue to report our results in four segments - Vehicle Solutions, Electrical Systems, Aftermarket & Accessories and Industrial Automation.

The segment name change did not result in any change to the composition of the Company's segments and therefore did not result in any change to historical results.

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our President and Chief Executive Officer.

5 unchanged sentences

This segment includes a portion of the company’s activities in the electric vehicle market.

• Plastic components ("Trim") primarily for the North America commercial vehicle market and power sports markets;

• Plastic & Trim components primarily for the North America commercial vehicle market and power sports markets;

and Cab structures for the North American MD/HD truck market.

1 unchanged sentence

• Cable and harness assemblies for both high and low voltage applications, control boxes, dashboard assemblies and design and engineering for these applications.

• The end markets for these products are construction, agricultural, warehouse, automotive (both internal combustion and electric vehicles), truck, mining, rail and the military/ defense industries in North America, Europe and Asia-Pacific.

• The end markets for these products are construction, agricultural, industrial, automotive (both internal combustion and electric vehicles), truck, mining, rail, marine, power generation and the military/defense industries in North America, Europe and Asia-Pacific.

The Aftermarket & Accessories segment designs, manufactures and sells the following products:

35 unchanged sentences

Selling, general & administrative expenses 26,959 6,213 5,889 6,106 24,239 69,406

Goodwill and other impairment 7,245 1,150 — 19,829 793 29,017

Operating income (loss) $ 23,649 $ 14,560 $ 12,091 $ 23,563 $ ( 24,282 ) $ 49,581

11 unchanged sentences

$ 994,679 $ 104,837 $ 981,553 $ 94,447 $ 971,578 $ 89,710

Sales to two customers were individually in excess of 10% of total Company revenues in each of the years ended December 31, 2022, 2021 and 2020, as noted in the table below.

No other customers exceed 10% of the Company’s revenues in any period presented.

The following table presents revenue from the above mentioned customers as a percentage of total revenue:

Sales to one of our customers was individually in excess of 10% of total Company revenues in each of the years ended December 31, 2023, 2022 and 2021, as noted in the table below.

The following table presents revenue from the above mentioned customer as a percentage of total revenue:

Years Ended December 31,

1 unchanged sentence

Customer A Vehicle Solutions 23 % 22 % 17 %

Customer B Vehicle Solutions 12 % 12 % 14 %

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data