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Item 1. Financial Statements

2024-05-06 compared with 2023-11-09 · 136 added, 245 removed, 424 unchanged (47% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands, except per share amounts)

4 unchanged sentences

Operating income 6,572 14,644

Other expense 383 1,924 488 2,798

Other expense (income) 212 ( 202 )

Interest expense 2,251 2,890

Loss on extinguishment of debt — — — 921

Income before provision for income taxes 4,109 11,956

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands)

3 unchanged sentences

Minimum pension liability, net of tax ( 467 ) 140

Derivative instrument, net of tax ( 869 ) 1,838 1,772 4,011

Derivative instruments, net of tax 2,032 1,343

Other comprehensive income (loss) ( 994 ) 4,040

Comprehensive income (loss) $ 2,070 $ 534 $ 25,050 $ 5,425

Comprehensive income $ 1,945 $ 12,740

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(In thousands, except share and per share amounts)

38 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

8 unchanged sentences

Non-cash loss (income) on derivative contracts 18 ( 658 )

Loss on extinguishment of debt — 921

Settlement of derivative contract — 3,900

Change in other operating items:

4 unchanged sentences

Other operating activities, net ( 7,550 ) 5,301

Net cash provided by operating activities 29,990 33,794

Net cash (used in) provided by operating activities ( 2,356 ) 58

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment ( 5,059 ) ( 3,321 )

Proceeds from disposal/sale of property, plant and equipment — 16

Proceeds from sale of business 3,200 —

Net cash used in investing activities ( 1,859 ) ( 3,321 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under term loan facility — 30,625

Repayment of term loan facility ( 3,281 ) ( 2,188 )

Borrowings under revolving credit facility 17,500 11,000

Repayment of revolving credit facility ( 20,000 ) ( 103,013 )

Surrender of shares to pay withholding taxes ( 2 ) ( 764 )

Debt issuance and amendment costs — ( 648 )

Other financing activities ( 41 ) 4,329

Net cash provided by (used in) financing activities 531 ( 13,031 )

Net cash provided by financing activities 14,176 12,377

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH ( 993 ) 545

10 unchanged sentences

Shares Amount

(In thousands, except share amounts)

(In thousands)

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

2 unchanged sentences

Balance - March 31, 2023 32,991,468 $ 330 $ ( 15,278 ) $ 263,142 $ ( 86,895 ) $ ( 27,510 ) $ 133,789

Share-based compensation expense 290,558 3 ( 448 ) 1,701 — — 1,256

Total comprehensive income (loss) — — — — 2,485 ( 4,688 ) ( 2,203 )

Balance - June 30, 2022 32,447,768 $ 325 $ ( 14,084 ) $ 258,384 $ ( 67,157 ) $ ( 44,014 ) $ 133,454

Share-based compensation expense 103,573 1 ( 54 ) 1,826 — — 1,773

Total comprehensive income (loss) — — — — 3,551 ( 3,017 ) 534

Balance - September 30, 2022 32,551,341 $ 326 $ ( 14,138 ) $ 260,210 $ ( 63,606 ) $ ( 47,031 ) $ 135,761

Balance - December 31, 2023 33,322,535 $ 333 $ ( 16,150 ) $ 265,217 $ ( 46,184 ) $ ( 30,284 ) $ 172,932

Share-based compensation expense 3,438 — ( 2 ) 664 — — 662

Total comprehensive income — — — — 8,700 4,040 12,740

Total comprehensive income (loss) — — — — 2,939 ( 994 ) 1,945

Balance - March 31, 2024 33,325,973 $ 333 $ ( 16,152 ) $ 265,881 $ ( 43,245 ) $ ( 31,278 ) $ 175,539

Share-based compensation expense 101,524 — ( 24 ) ( 245 ) — — ( 269 )

Total comprehensive income — — — — 10,140 100 10,240

Balance - June 30, 2023 33,092,992 $ 330 $ ( 15,302 ) $ 262,897 $ ( 76,755 ) $ ( 27,410 ) $ 143,760

Share-based compensation expense 15,997 — ( 20 ) 744 — — 724

Total comprehensive income — — — — 7,290 ( 5,220 ) 2,070

Balance - September 30, 2023 33,108,989 $ 330 $ ( 15,322 ) $ 263,641 $ ( 69,465 ) $ ( 32,630 ) $ 146,554

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

23 unchanged sentences

Recently Issued Accounting Pronouncements

New accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

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

We had outstanding customer accounts receivable, net of allowances, of $ 159.9 million as of September 30, 2023 and $ 152.6 million as of December 31, 2022.

We had outstanding customer accounts receivable, net of allowances, of $ 145.1 million as of March 31, 2024 and $ 133.9 million as of December 31, 2023.

We generally do not have material other assets or liabilities associated with customer arrangements.

Revenue Disaggregation - The following is the composition, by product category, of our revenues:

Three Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

Seats $ 66,862 $ — $ 17,703 $ — $ 84,565

Electrical wire harnesses, panels and assemblies 657 53,862 3,273 6,632 64,424

Trim 46,255 — 1,845 — 48,100

Industrial Automation — — — 6,388 6,388

Cab structures 30,158 — 612 — 30,770

Mirrors, wipers and controls 1,461 — 10,979 — 12,440

Total $ 145,393 $ 53,862 $ 34,412 $ 13,020 $ 246,687

Three Months Ended September 30, 2022

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

Seats $ 77,843 $ — $ 20,080 $ — $ 97,923

Electrical wire harnesses, panels and assemblies 45 45,608 2,744 3,416 51,813

Trim 45,980 — 2,623 — 48,603

Industrial Automation — 521 — 10,700 11,221

Cab structures 28,739 — 497 — 29,236

Mirrors, wipers and controls 1,417 — 11,199 — 12,616

Total $ 154,024 $ 46,129 $ 37,143 $ 14,116 $ 251,412

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

1 unchanged sentence

Electrical wire harnesses, panels and assemblies 530 55,795 2,931 4,282 63,538

Trim 141,206 — 6,191 — 147,397

Plastic & Trim components 39,866 — 1,789 — 41,655

Industrial Automation — — — 20 20

2 unchanged sentences

Total $ 137,910 $ 55,795 $ 34,061 $ 4,302 $ 232,068

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

1 unchanged sentence

Electrical wire harnesses, panels and assemblies — 54,749 3,786 — 58,535

Trim 138,207 — 3,919 — 142,126

Plastic & Trim components 46,423 — 2,873 — 49,296

Industrial Automation — — — 9,747 9,747

3 unchanged sentences

Debt consisted of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Term loan facility $ 138,281 $ 141,563

Revolving credit facility 17,500 —

China credit facility 4,112 —

Unamortized issuance costs ( 45 ) ( 49 )

$ 155,736 $ 141,514

current portion of long-term debt and short-term debt

current portion of long-term debt

( 16,406 ) ( 15,313 )

3 unchanged sentences

as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders made available a $ 150 million Term Loan Facility (the “Term Loan Facility”) and a $ 125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).

Subject to the terms of the Credit Agreement, the Revolving Credit Facility includes a $ 10 million swing line sublimit and a $ 10 million letter of credit sublimit.

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.

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.

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.

All other key provisions, including the $ 75 million accordion, acquisition holiday, and other baskets remain unchanged.

The Credit Facilities mature on May 12, 2027 (the “Maturity Date”).

The Amendment resulted in a loss on extinguishment of debt of $ 0.9 million, including $ 0.6 million non-cash write off relating to deferred financing costs and unamortized discount of the Term Loan Facility and $ 0.3 million of other fees associated with the Amendment, recorded in our Consolidated Statements of Operations for the twelve months ended December 31, 2022.

At September 30, 2023, we had $ 5.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 143.8 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 8.2 million, total consolidated availability was $ 152.0 million at September 30, 2023.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 1.1 million and $ 1.3 million as of September 30, 2023 and December 31, 2022, respectively, are being amortized over the remaining life of the Credit Agreement.

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.

At March 31, 2024, we had $ 17.5 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.1 million and availability of $ 131.4 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 11.1 million, total consolidated availability was $ 142.5 million at March 31, 2024.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 0.9 million and $ 1.0 million as of March 31, 2024 and December 31, 2023, respectively, are being amortized over the remaining life of the Credit Agreement.

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

Interest rates and fees

Amounts outstanding under the Credit Facilities and the commitment fee payable in connection with the Credit Facilities accrue interest at a per annum rate equal to (at the Company’s option) the base rate or the Term Secured Overnight Financing Rate ("SOFR"), including a credit spread adjustment, plus a rate which will vary according to the Consolidated Total Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent, as set out in the following table:

Pricing Tier Consolidated Total

Leverage Ratio Commitment Fee Letter of Credit Fee Term SOFR Loans Base Rate Loans

I > 3.50 to 1.00

0.35 % 2.75 % 2.75 % 1.75 %

II < 3.50 to 1.00 but

> 2.75 to 1.00

0.30 % 2.50 % 2.50 % 1.50 %

III < 2.75 to 1.00 but

> 2.00 to 1.00

0.25 % 2.25 % 2.25 % 1.25 %

IV < 2.00 to 1.00 but

> 1.50 to 1.00

0.20 % 2.00 % 2.00 % 1.00 %

V < 1.50 to 1.00

0.15 % 1.75 % 1.75 % 0.75 %

Guarantee and Security

All obligations under the Credit Agreement and related documents are unconditionally guaranteed by each of the Company’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions (the “Guarantors”).

All obligations of the Company under the Credit Agreement and the guarantees of those obligations are secured by a first priority pledge of substantially all of the assets of the Company and of the Guarantors, subject to certain exceptions.

The property pledged by the Company and the Guarantors includes a first priority pledge of all of the equity interests owned by the Company and the Guarantors in their respective domestic subsidiaries and a first priority pledge of the equity interests owned by the Company and the Guarantors in certain foreign subsidiaries, in each case, subject to certain exceptions.

Covenants and other terms

The Credit Agreement contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees;

grant certain liens on assets;

pay dividends or make certain other distributions;

make certain investments or acquisitions;

dispose of certain assets;

make payments on certain indebtedness;

merge, combine with any other person or liquidate;

amend organizational documents;

make material changes in accounting treatment or reporting practices;

enter into certain restrictive agreements;

enter into certain hedging agreements;

engage in transactions with affiliates;

enter into certain employee benefit plans;

make acquisitions;

and other matters customarily included in senior secured loan agreements.

The Credit Agreement also contains customary reporting and other affirmative covenants, as well as customary events of default, including, without limitation, nonpayment of obligations under the Credit Facilities when due;

material inaccuracy of representations and warranties;

violation of covenants in the Credit Agreement and certain other documents executed in connection therewith;

breach or default of agreements related to material debt;

revocation or attempted revocation of guarantees;

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

certain material judgments;

certain events of bankruptcy or insolvency;

certain Employee Retirement Income Securities Act events;

and a change in control of the Company.

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 was subject to step-down 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;

and to 3.00 :1.0 for any fiscal quarter ending thereafter, including the quarter ended September 30, 2023).

We were in compliance with these covenants as of September 30, 2023.

and to 3.00 :1.0 for each fiscal quarter ending on and after September 30, 2023).

We were in compliance with these covenants as of March 31, 2024.

Repayment and prepayment

3 unchanged sentences

See Note 15, Commitments and Contingencies, for the future minimum principal payments due on long-term debt for the next five years.

The Credit Agreement requires mandatory prepayments from the receipt of proceeds of dispositions or debt issuance, subject to certain exceptions and the Company's ability to re-invest and use proceeds towards acquisitions permitted by the Credit Agreement.

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

Foreign Facility

In the quarter ended March 31, 2023, we established a credit facility in China with availability of approximately $ 12.3 million (denominated in the local currency) consisting of a line of credit which is subject to annual renewal (the "China Credit 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 $ 4.1 million and $ 0.0 million outstanding under the China Credit Facility as of September 30, 2023 and December 31, 2022, respectively, which are included in current portion of long-term debt and short-term debt on the Condensed Consolidated Balance Sheets.

At September 30, 2023, we had $ 8.2 million of availability under the China Credit Facility.

We had no outstanding borrowings under the China Credit Facility as of March 31, 2024 and December 31, 2023.

At March 31, 2024, we had $ 11.1 million (denominated in the local currency and this amount varies based on the currency conversion rate) of availability under the China Credit Facility.

Cash Paid for Interest

For the nine months ended September 30, 2023 and 2022, cash payments for interest were $ 9.9 million and $ 6.2 million, respectively.

For the three months ended March 31, 2024 and 2023, cash payments for interest were $ 2.9 million and $ 3.2 million, respectively.

Intangible Assets

Our definite-lived intangible assets were comprised of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amount Accumulated

7 unchanged sentences

$ 28,096 $ ( 19,643 ) $ 8,453 $ 35,737 $ ( 24,515 ) $ 11,222

The aggregate intangible asset amortization expense was $ 0.8 million for the three months ended September 30, 2023 and $ 0.9 million for the nine months ended September 30, 2022.

The aggregate intangible asset amortization expense was $ 2.5 million for the nine months ended September 30, 2023 and $ 2.6 million for the nine months ended September 30, 2022 .

The aggregate intangible asset amortization expense was $ 0.8 million for the three months ended March 31, 2024 and 2023.

Fair Value Measurement

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Fair value is estimated by applying the following hierarchy, which

prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.

10 unchanged sentences

The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled.

As of September 30, 2023, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments;

As of March 31, 2024, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments;

therefore, they are marked-to-market and the fair value of agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.

5 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

Foreign exchange contracts $ 1,748 $ — $ 1,748 $ — $ — $ — $ — $ —

Foreign exchange contract designated as hedging instruments $ 3,573 $ — $ 3,573 $ — $ 1,318 $ — $ 1,318 $ —

Interest rate swap agreement $ 1,884 $ — $ 1,884 $ — $ 1,073 $ — $ 1,073 $ —

Foreign exchange contracts $ — $ — $ — $ — $ 356 $ — $ 356 $ —

Foreign exchange contract not designated as hedging instruments $ 513 $ — $ 513 $ — $ 304 $ — $ 304 $ —

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Equivalent U.S.

1 unchanged sentence

Equivalent U.S.

Commitments to buy or sell currencies $ 13,367 $ 15,121 $ 55,220 $ 53,847

Commitments to buy or sell currencies - Foreign exchange contract designated as hedging instruments $ 70,607 $ 72,435 $ 56,741 $ 58,094

Commitments to buy or sell currencies - Foreign exchange contract not designated as hedging instruments $ 17,800 $ 18,442 $ 16,608 $ 16,806

The following table summarizes the fair value and presentation of derivatives in the Condensed Consolidated Balance Sheets:

2 unchanged sentences

Location Fair Value

September 30, 2023 December 31, 2022

Foreign exchange contracts Other current assets $ 1,748 $ —

Interest rate swap agreement Other current assets $ 2,938 $ 1,849

March 31, 2024 December 31, 2023

Foreign exchange contract designated as hedging instruments Other current assets $ 3,244 $ 1,179

Foreign exchange contract designated as hedging instruments Other assets, net $ 329 $ 139

Interest rate swap agreement Other assets, net $ 1,884 $ 1,073

Derivative Liability

1 unchanged sentence

Location Fair Value

September 30, 2023 December 31, 2022

Foreign exchange contracts Accrued liabilities and other $ — $ 356

March 31, 2024 December 31, 2023

Foreign exchange contracts not designated as hedging instruments Accrued liabilities and other $ 470 $ 304

Foreign exchange contracts not designated as hedging instruments Other long-term liabilities $ 43 $ —

Derivative Equity

1 unchanged sentence

Location Fair Value

September 30, 2023 December 31, 2022

Derivative instruments Accumulated other comprehensive income $ 6,545 $ 3,777

March 31, 2024 December 31, 2023

Foreign exchange contracts designated as hedging instruments Accumulated other comprehensive loss $ 2,997 $ 1,354

Interest rate swap agreements Accumulated other comprehensive loss $ 3,874 $ 3,484

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Location of Gain (Loss) on Derivatives

Recognized in Income (Loss) Amount of Gain (Loss) on Derivatives

Recognized in Income (Loss)

Foreign exchange contracts Cost of revenues $ 1,973 $ 776 $ 3,666 $ 2,076

Interest rate swap agreement Interest and other expense $ 604 $ ( 67 ) $ 1,611 $ ( 344 )

Foreign exchange contracts designated as hedging instruments Cost of revenues $ 89 $ 451

Interest rate swap agreement Interest expense $ 416 $ 265

Interest rate swap agreement settled in 2022 Interest expense $ 189 $ 189

Foreign exchange contracts Other (income) expense $ ( 206 ) $ 469

4 unchanged sentences

The carrying amounts and fair values of our long-term debt obligations are as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amount Fair Value Carrying

3 unchanged sentences

Revolving credit facility $ 17,500 $ 17,500 $ — $ —

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 14.2 million and long-term debt of $ 135.6 million as of September 30, 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.

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 16.4 million and long-term debt of $ 139.3 million as of March 31, 2024 and current portion of long-term debt of $ 15.3 million and long-term debt of $ 126.2 million as of December 31, 2023.

The components of lease expense are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Operating lease cost

2 unchanged sentences

Short-term lease cost

1,324 1,470 5,249 3,908

Total lease expense $ 3,640 $ 4,326

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location September 30, 2023 December 31, 2022

Balance Sheet Location March 31, 2024 December 31, 2023

Operating Leases

8 unchanged sentences

Total finance lease liabilities $ 184 $ 215

Cash payments on operating leases were $ 7.5 million for the nine months ended September 30, 2023 and 2022.

Cash payments on operating leases were $ 2.7 million for the three months ended March 31, 2024 and 2023.

Anticipated future lease costs, which are based in part on certain assumptions to approximate annual rental commitments under non-cancelable leases, are as follows:

9 unchanged sentences

Present value of lease liabilities $ 31,315 $ 184 $ 31,499

We recorded a $ 2.2 million tax provision, or 23 % effective tax rate for the three months ended September 30, 2023, and $ 8.1 million tax provision, or 24 % effective tax rate for the nine months ended September 30, 2023, compared to a $ 1.3 million and $ 3.5 million tax provision for the three and nine months ended September 30, 2022, respectively, or approximately 26 % effective tax rate for each period.

For three months ended March 31, 2024, we recorded a $ 1.2 million tax provision, or 28 % effective tax rate for the period, compared to a $ 3.3 million, or 27 % effective tax rate for the three months ended March 31, 2023.

Income tax expense is based on an estimated annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss.

1 unchanged sentence

To the extent that actual 2024 pretax results for U.S.

and foreign income or loss vary from estimates, the actual income tax expense recognized in 2023 could be different from the forecasted amount used to estimate the income tax expense for the three and nine months ended September 30, 2023.

We have recorded valuation allowances in prior years related to U.S.

deferred tax assets due to multiple year cumulative losses.

Given the current earnings and anticipated future earnings of our U.S.

jurisdiction,we will continue to assess if there is sufficient positive evidence to allow us to reach a conclusion that the VA on US deferred taxes will no longer be needed.

Releasing the valuation allowance would result in the recognition of previously unrecognized deferred tax assets and a decrease

to income tax expense for the period the release is recorded.

However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

For the nine months ended September 30, 2023 and 2022, cash paid for taxes, net of refunds received, were $ 9.2 million and $ 4.2 million, respectively.

and foreign income or loss vary from estimates, the actual income tax

expense recognized in 2024 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2024.

For the three months ended March 31, 2024 and 2023, cash paid for taxes, net of refunds received, were $ 1.9 million and $ 2.0 million, respectively.

Pension and Other Post-Retirement Benefit Plans

The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:

Three Months Ended September 30,

Interest cost $ 359 $ 187

Expected return on plan assets ( 310 ) ( 244 )

Amortization of prior service cost 11 11

Recognized actuarial loss 192 142

Net cost $ 252 $ 96

Nine months ended September 30,

Three Months Ended March 31,

Interest cost $ 349 $ 347

3 unchanged sentences

Net cost $ 245 $ 249

Net periodic (benefit) cost components, not inclusive of service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations.

Net periodic cost components, not inclusive of service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations.

Performance Awards

1 unchanged sentence

Adjusted Award Value at December 31, 2023 $ 1,901

New grants 2,180

Forfeitures —

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Payments ( 324 )

Adjusted Award Value at September 30, 2023 $ 2,295

Unrecognized compensation expense was $ 2.8 million and $ 2.0 million as of September 30, 2023 and 2022, respectively.

Adjusted Award Value at March 31, 2024 $ 1,588

Unrecognized compensation expense was $ 4.2 million and $ 5.0 million as of March 31, 2024 and 2023, respectively.

Share-Based Compensation

The company's outstanding share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock.

As of September 30, 2023, there was approximately $ 3.1 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

As of March 31, 2024, there was approximately $ 7.8 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.

A summary of the status of our restricted stock awards as of September 30, 2023 and changes during the nine months ended September 30, 2023, are presented below:

A summary of the status of our restricted stock awards as of March 31, 2024 and changes during the three months ended March 31, 2024, are presented below:

(in thousands) Weighted-

Nonvested - December 31, 2023 591 $ 7.66

Granted 660 7.51

Vested ( 5 ) 9.94

Forfeited ( 27 ) 6.88

Nonvested - September 30, 2023 598 $ 7.88

As of September 30, 2023, a total of 2.5 million shares were available for future grants from the shares authorized for award under our 2020 Equity Incentive Plan, including cumulative forfeitures.

Nonvested - March 31, 2024 559 $ 7.67

As of March 31, 2024, a total of 2.0 million shares were available for future grants from the shares authorized for award under our 2020 Equity Incentive Plan, including cumulative forfeitures.

Stockholders’ Equity

Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $ 0.01 per share;

of which, 33,108,989 and 32,826,852 shares were issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $ 0.01 per share, with no preferred shares outstanding as of September 30, 2023 and December 31, 2022.

of which, 33,325,973 and 33,322,535 shares were issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

Earnings (Loss) Per Share - Basic earnings (loss) per share is determined by dividing net income by the weighted average number of common shares outstanding during the year.

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Potential common shares are included in the diluted earnings per share calculation when dilutive.

Diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Diluted earnings per share for the three months ended March 31, 2024 and 2023 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended March 31,

Net income $ 2,939 $ 8,700

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Diluted earnings per share $ 0.09 $ 0.26

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2023 and eight thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2022.

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2023 and 10 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2022.

There were 408 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2024 and 134 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2023.

Other Comprehensive Income (Loss)

7 unchanged sentences

Net current period change ( 2,559 ) ( 712 ) 2,726 ( 545 )

Derivative instruments — — 1,772 1,772

Balance - September 30, 2023 $ ( 26,757 ) $ ( 12,418 ) $ 6,545 $ ( 32,630 )

Amounts reclassified into earnings — 245 ( 694 ) ( 449 )

Balance - March 31, 2024 $ ( 25,786 ) $ ( 12,363 ) $ 6,871 $ ( 31,278 )

currency translation adjustment Pension and

5 unchanged sentences

Net current period change 2,557 ( 109 ) ( 905 ) 1,543

Derivative instruments — — 4,011 4,011

Balance - September 30, 2022 $ ( 30,134 ) $ ( 21,665 ) $ 4,768 $ ( 47,031 )

Amounts reclassified into earnings — 249 2,248 2,497

Balance - March 31, 2023 $ ( 22,254 ) $ ( 11,372 ) $ 6,116 $ ( 27,510 )

The related tax effects allocated to each component of other comprehensive income (loss) are as follows:

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Amount Tax Expense After Tax Amount Before Tax

Three Months Ended March 31, 2024

Amount Tax Expense After Tax Amount

Net current period change

Cumulative translation adjustment $ ( 2,559 ) $ — $ ( 2,559 )

Amortization of actuarial gain (loss) ( 900 ) 1 ( 899 ) ( 908 ) 2 ( 906 )

Net actuarial gain and prior service credit ( 713 ) 1 ( 712 )

Derivative instruments 3,748 ( 1,022 ) 2,726

Net unrealized gain (loss) 476 ( 1,021 ) ( 545 )

Amounts reclassified into earnings:

Actuarial loss and prior service cost 245 — 245

Derivative instruments ( 875 ) 181 ( 694 )

Net realized gain (loss) $ ( 630 ) $ 181 $ ( 449 )

Total other comprehensive income (loss) $ ( 154 ) $ ( 840 ) $ ( 994 )

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Amount Tax Expense After Tax

Amount Before Tax

Three Months Ended March 31, 2023

Amount Tax Expense After Tax

Net current period change

Cumulative translation adjustment $ 2,557 $ — $ 2,557

Amortization of actuarial gain ( 396 ) 34 ( 362 ) 989 96 1,085

Net actuarial gain and prior service credit ( 112 ) 3 ( 109 )

Derivative instruments ( 1,222 ) 317 ( 905 )

Net unrealized gain (loss) 1,223 320 1,543

Amounts reclassified into earnings:

Actuarial loss and prior service cost 249 — 249

Derivative instruments 3,037 ( 789 ) 2,248

Net realized gain (loss) $ 3,286 $ ( 789 ) $ 2,497

Total other comprehensive income (loss) $ 4,509 $ ( 469 ) $ 4,040

As of March 31, 2024, the Company estimates that net pre-tax derivative gains of $ 5.5 million included in Accumulated other

comprehensive income (loss) will be reclassified into earnings within the next 12 months.

Cost Reduction and Manufacturing Capacity Rationalization

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March 31, 2024 $ 128 $ — $ — $ — $ 607 $ 735

New charges 340 — — 378 — 718

Payments and other adjustments ( 340 ) — — ( 391 ) — ( 731 )

June 30, 2023 $ — $ — $ — $ 698 $ — $ 698

New charges — — — 70 — 70

Payments and other adjustments — — — ( 70 ) — ( 70 )

September 30, 2023 $ — $ — $ — $ 698 $ — $ 698

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Corporate/Other Total

3 unchanged sentences

March 31, 2023 $ — $ — $ — $ 711 $ — $ 711

New charges — 571 560 314 306 1,751

Payments and other adjustments ( 91 ) ( 571 ) ( 560 ) ( 311 ) ( 444 ) ( 1,977 )

June 30, 2022 $ 34 $ — $ — $ — $ 123 $ 157

New charges $ 66 $ — $ 445 $ 136 $ — $ 647

Payments and other adjustments $ ( 90 ) $ ( 445 ) $ ( 46 ) $ ( 123 ) $ ( 704 )

September 30, 2022 $ 10 $ — $ — $ 90 $ — $ 100

The $ 0.1 million costs incurred in the three months ended September 30, 2023 primarily related to headcount reductions and were recorded in cost of revenues.

Of the $ 1.5 million costs incurred in the nine months ended September 30, 2023, $ 0.6 million primarily related to headcount reductions and $ 0.9 million related to facility exit and other costs.

Substantially all costs incurred were recorded in cost of revenues.

Of the $ 1.9 million costs incurred in the three months ended March 31, 2024 for restructuring, $ 1.5 million related to headcount reductions and $ 0.4 million related to facility exit and other;

$ 1.7 million were recorded in cost of revenue and $ 0.2 million were recorded in selling, general and administrative expenses.

Commitments and Contingencies

Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and 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.

As of September 30, 2023, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

As of March 31, 2024, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The most likely cost to be incurred is accrued based on an evaluation of available facts;

amount within a range of estimates is more likely, the minimum is accrued.

As of September 30, 2023 and 2022, we had no such guarantees.

where no amount within a range of estimates is more likely, the minimum is accrued.

As of March 31, 2024 and 2023, we had no such guarantees.

Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to product liability claims, customer and supplier disputes, service provider disputes, examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our businesses.

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Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims.

These amounts, as they relate to the periods ended September 30, 2023 and December 31, 2022, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

These amounts, as they relate to the periods ended March 31, 2024 and December 31, 2023, are included within accrued liabilities and other in the accompanying Condensed 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.

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 nine months ended September 30, 2023:

The following presents a summary of the warranty provision for the three months ended March 31, 2024:

Balance - December 31, 2023 $ 1,458

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Deduction for payments made and other adjustments ( 494 )

Balance - September 30, 2023 $ 1,573

Balance - March 31, 2024 $ 1,326

Debt Payments - As disclosed in Note 4, Debt, the Credit Agreement requires the Company to repay a fixed amount of principal on a quarterly basis and make voluntary prepayments that coincide with certain events.

6 unchanged sentences

2027 $ 100,000

2027 $ 87,500

Thereafter $ —

Segment Reporting

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 Interim President and Chief Executive Officer.

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.

Each of these segments consists of a number of manufacturing facilities.

4 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;

and Cab structures for the North American medium-duty/heavy-duty ("MD/HD") truck market.

• 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.

The Electrical Systems segment designs, manufactures and sells the following products:

• 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:

• Seats and components sold into the commercial vehicle channels that provide repair and refurbishing.

These channels include Original Equipment Service ("OES") centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.

These channels include OES centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.

• Commercial vehicle accessories including wipers, mirrors, and sensors.

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The following tables present financial information for the Company's reportable segments for the periods indicated:

Three Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Corporate/Other Total

Revenues $ 145,393 $ 53,862 $ 34,412 $ 13,020 $ — $ 246,687

Gross profit 17,661 7,881 6,605 1,777 — 33,924

Selling, general & administrative expenses 6,761 2,018 2,104 1,087 9,506 21,476

Operating income (loss) $ 10,900 $ 5,863 $ 4,501 $ 690 $ ( 9,506 ) $ 12,448

Three Months Ended September 30, 2022

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Corporate/Other Total

Revenues $ 154,024 $ 46,129 $ 37,143 $ 14,116 $ — $ 251,412

Gross profit 13,839 6,210 6,389 404 — 26,842

Selling, general & administrative expenses

4,279 1,055 1,436 1,371 9,163 17,304

Operating income (loss) $ 9,560 $ 5,155 $ 4,953 $ ( 967 ) $ ( 9,163 ) $ 9,538

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Corporate/Other Total

3 unchanged sentences

Operating income (loss) $ 10,352 $ 2,011 $ 4,532 $ ( 1,995 ) $ ( 8,328 ) $ 6,572

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Corporate/Other Total

6 unchanged sentences

Items reported in inventories consisted of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Raw materials $ 98,174 $ 98,371

3 unchanged sentences

Items reported in property, plant, and equipment, net consisted of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Land and buildings $ 34,257 $ 34,072

5 unchanged sentences

Items reported in accrued expenses and other liabilities consisted of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Compensation and benefits $ 17,925 $ 23,659

2 unchanged sentences

Accrued freight 2,716 2,679

Accrued legal and professional fees 2,015 1,535

Warranty costs 1,326 1,458

2 unchanged sentences

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-Q

Item 1. Financial Statements