3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: $ 186,897,930
−Removed: $ 147,059,497
+Added: April 2, 2022
+Added: April 3, 2021
Cost of products sold
1 unchanged sentence
( 46,264,163 )
−Removed: ( 142,196,527 )
−Removed: ( 110,427,295 )
Product development expense
4 unchanged sentences
( 8,944,393 )
−Removed: ( 27,760,514 )
−Removed: ( 23,289,068 )
Operating profit
Interest expense
−Removed: ( 1,388,512 )
−Removed: ( 1,560,962 )
Income from continuing operations before income taxes
−Removed: ( 1,021,607 )
−Removed: ( 3,573,308 )
+Added: Income tax expense
( 1,767,552 )
1 unchanged sentence
Discontinued Operations (see note B )
−Removed: Gain (loss) from operations of discontinued units
−Removed: ( 5,054,259 )
−Removed: Gain (loss) on classification as held for sale
−Removed: ( 9,274,439 )
−Removed: Income tax (expense) benefit
−Removed: Gain (loss) on discontinued operations
−Removed: ( 4,926,248 )
−Removed: ( 3,886,914 )
+Added: Income from operations of discontinued operations
+Added: Income tax expense
+Added: Income from discontinued operations
Earnings per share from continuing operations:
−Removed: Earnings (loss) per share from discontinued operations:
+Added: Earnings per share from discontinued operations:
Total earnings per share:
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: Other comprehensive (loss) income:
+Added: April 2, 2022
+Added: April 3, 2021
+Added: Other comprehensive income (loss):
Change in foreign currency translation
−Removed: Change in fair value of interest rate swap, net of tax cost (benefit) of:
−Removed: 2021 - $ 31,759 and $ 188,753 respectively;
−Removed: 2020 - $( 35,587 ) and $ 547,087 respectively
+Added: Change in fair value of interest rate swap, net of tax cost of:
2022 - $ 333,635 ;
+Added: 2021 - $ 130,501
Change in pension and postretirement benefit costs, net of taxes of:
−Removed: 2021 - $ 107,962 and $ 308,117 respectively;
−Removed: 2020 - $ 81,144 and $ 243,429 respectively
−Removed: Total other comprehensive (loss) income
2022 - $ 92,235 ;
+Added: 2021 - $ 92,194
+Added: Total other comprehensive income
Comprehensive income
2 unchanged sentences
CONDENSED CONSOLIDATED BALANCE SHEETS
+Added: April 2, 2022
+Added: January 1, 2022
Current Assets
15 unchanged sentences
Right of Use Assets
−Removed: Long-term assets held for sale
Total Other Assets
4 unchanged sentences
CONDENSED CONSOLIDATED BALANCE SHEETS
+Added: April 2, 2022
+Added: January 1, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
11 unchanged sentences
Long-term debt, less current portion
−Removed: Accrued postretirement benefits
+Added: Accrued other postretirement benefits
Accrued pension cost
−Removed: Long-term liabilities held for sale
Total Liabilities
17 unchanged sentences
Foreign currency translation
−Removed: Unrealized loss on interest rate swap, net of tax
−Removed: ( 1,391,592 )
+Added: Unrealized gain (loss) on interest rate swap, net of tax
Unrecognized net pension and postretirement benefit costs, net of tax
11 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
−Removed: Nine Months Ended
+Added: Three Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Operating Activities
−Removed: Loss from discontinued operations
−Removed: ( 4,926,248 )
−Removed: ( 3,886,914 )
+Added: income from discontinued operations
Income from continuing operations
−Removed: Adjustments to reconcile net income to net cash provided
−Removed: by (used in) operating activities:
+Added: Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
Unrecognized pension and postretirement benefits
−Removed: ( 3,056,642 )
−Removed: ( 1,066,777 )
−Removed: Gain on sale of equipment and other assets
+Added: Loss (gain) on sale of equipment and other assets
( 1,601,812 )
5 unchanged sentences
( 3,942,502 )
+Added: ( 4,902,631 )
Prepaid expenses and other
3 unchanged sentences
( 1,858,898 )
−Removed: Other accrued expenses
( 1,116,703 )
−Removed: ( 1,587,475 )
+Added: Other accrued expenses
Net cash (used in) provided by operating activities
1 unchanged sentence
Investing Activities
−Removed: Marketable securities
−Removed: Business disposition
−Removed: ( 5,994,267 )
−Removed: Issuance of notes receivable
−Removed: ( 1,251,943 )
Payments received from notes receivable
1 unchanged sentence
Purchases of property, plant and equipment
−Removed: ( 2,112,990 )
−Removed: ( 1,531,082 )
−Removed: Net cash provided by (used in) investing activities
−Removed: ( 8,270,270 )
+Added: Net cash provided by investing activities
Financing Activities
+Added: Proceeds from short term borrowings (revolver)
Principal payments on long-term debt
4 unchanged sentences
Dividends paid
−Removed: ( 2,062,492 )
−Removed: ( 2,058,943 )
−Removed: Net cash used in financing activities
−Removed: ( 6,355,028 )
+Added: Net cash provided by (used in) financing activities
( 1,856,622 )
Discontinued Operations
−Removed: Cash provided by (used in) operating activities
−Removed: ( 2,744,115 )
+Added: Cash (used in) provided by operating activities
Cash used in investing activities
−Removed: Cash provided by (used in) discontinued operations
−Removed: ( 2,989,403 )
+Added: Cash (used in) provided by discontinued operations
Effect of exchange rate changes on cash
7 unchanged sentences
Lease liability
−Removed: ¹ includes cash from assets held for sale of $1.3 million as of October 2, 2021 and $1.8 million as of October 3, 2020
−Removed: See accompanying notes
+Added: ¹ includes cash from assets held for sale of $0.1 million as of April 2, 2022 and $1.5 million as of April 3, 2021
THE EASTERN COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
−Removed: October 2, 2021
+Added: April 2, 2022
Note A – Basis of Presentation
−Removed: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements.
+Added: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements.
Refer to the consolidated financial statements of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or our”) and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 1, 2022, filed with the Securities and Exchange Commission on March 17, 2022 (the “2021 Form 10-K”), for additional information.
5 unchanged sentences
The Company’s fiscal year is a 52-53-week fiscal year ending on the Saturday nearest to December 31.
−Removed: References to 2020 or the 2020 fiscal year mean the 53-week period ended on January 2, 2021 and references to 2021 or the 2021 fiscal year mean the 52-week period ending on January 1, 2022.
−Removed: In a 52-week fiscal year, each quarter is 13 weeks long.
−Removed: In a 53-week fiscal year, each of the first two fiscal quarters and the fourth quarter are 13 weeks long, and the third fiscal quarter is 14 weeks long.
−Removed: References to the third quarter of 2020, the third fiscal quarter of 2020 or the three months ended October 3, 2020 mean the period from June 28, 2020 to October 3, 2020.
−Removed: References to the third quarter of 2021, the third fiscal quarter of 2021 or the three months ended October 2, 2021 mean the 13-week period from July 4, 2021 to October 2, 2021.
−Removed: References to the nine months ended October 3, 2020 or the first nine months of fiscal 2020 mean the period from December 29, 2019 to October 3, 2020, and references to the nine months ended October 2, 2021 or the first nine months of fiscal 2021 mean the period from January 3, 2021 to October 2, 2021.
+Added: References to 2021 or the 2021 fiscal year mean the 52-week period ended on January 1, 2022, and references to 2022 or the 2022 fiscal year mean the 52-week period ending on December 31, 2022.
+Added: In a 52-week fiscal year, each quarter has 13 weeks.
+Added: References to the first quarter of 2021, the first fiscal quarter of 2021 or the three months ended April 3, 2021 mean the period from January 3, 2021 to April 3, 2021.
+Added: References to the first quarter of 2022, the first fiscal quarter of 2022 or the three months ended April 2, 2022, mean the 13-week period from January 2, 2022 to April 2, 2022.
Certain amounts in the 2021 financial statements have been reclassified to conform with the 2022 presentation with no impact or change to previously reported net income or shareholder’s equity.
−Removed: The Company now reports continuing operations as one segment – Engineered Solutions.
Note B – Discontinued Operations
−Removed: We have determined that the companies included in our Diversified Products segment no longer fit with our long-term strategy and we have initiated the process of selling the companies within the Diversified Products segment.
+Added: In the second quarter of 2021, the Company determined that the companies included in our former Diversified Products segment no longer fit with our long-term strategy and the Company initiated the process of selling the companies within the Diversified Products segment.
Selling the companies within this segment will allow management to focus on our core capabilities and offerings.
−Removed: The Diversified Products segment met the criteria to be held for sale and furthermore, we determined that the assets held for sale qualify for discontinued operations.
+Added: The former Diversified Products segment met the criteria to be held for sale and furthermore, we determined that the assets held for sale qualify for discontinued operations.
As such, the financial results of the Diversified Products segment are reflected in our unaudited condensed consolidated statements of operations as discontinued operations for all periods presented.
1 unchanged sentence
On November 3, 2021, the Company sold its Greenwald Industries, Inc.
−Removed: division (“Greenwald”) for a sales price of $8.0 million, subject to a final working capital adjustment.
−Removed: Greenwald, which is located in Chester, CT, is an OEM manufacturer offering a range of payment solutions from coin-vending products to smart card systems and payment applications.
+Added: division (“Greenwald”).
+Added: Greenwald, located in Chester, CT, is an OEM manufacturer offering a range of payment solutions from coin-vending products to smart card systems and payment applications.
+Added: On November 22, 2021, the Company sold its Frazer & Jones Company division (“Frazer & Jones”).
+Added: Frazer & Jones is a ductile and malleable iron foundry located in Syracuse, NY.
+Added: Eastern has exited the mining business to focus on our three core businesses.
Summarized Financial Information of Discontinued Operations
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Cost of products sold
1 unchanged sentence
( 9,904,720 )
−Removed: ( 29,793,971 )
−Removed: ( 29,929,876 )
Selling and administrative expenses
( 1,032,827 )
−Removed: ( 1,064,433 )
−Removed: ( 3,407,113 )
−Removed: ( 7,509,147 )
−Removed: Restructuring costs
−Removed: ( 9,274,439 )
−Removed: Operating income (loss)
−Removed: ( 5,980,071 )
−Removed: ( 4,533,938 )
+Added: Operating income
Interest expense
−Removed: Gain (Loss) from discontinued operations before income taxes
−Removed: ( 6,442,909 )
−Removed: ( 5,054,259 )
−Removed: Income tax (expense) benefit
−Removed: Income (loss) from discontinued operations, net of tax
−Removed: $ ( 170,940 )
−Removed: $ ( 4,926,248 )
−Removed: $ ( 3,886,914 )
+Added: Income from discontinued operations before income taxes
+Added: Income tax expense
+Added: Income from discontinued operations, net of tax
The following table represents the assets and liabilities from discontinued operations:
+Added: April 2, 2022
+Added: January 1, 2022
Accounts receivable
1 unchanged sentence
Property, plant and equipment, net
−Removed: Patents and other intangibles net of accumulated amortization
Right of use assets
Total assets of discontinued operations¹
−Removed: Current assets of discontinued operations¹
−Removed: Non-current assets of discontinued operations
−Removed: Total assets of discontinued operations
Accounts payable
3 unchanged sentences
Total liabilities of discontinued operations¹
−Removed: Current liabilities of discontinued operations¹
−Removed: Non-current liabilities of discontinued operations
−Removed: Total liabilities of discontinued operations
−Removed: ¹ The total assets and liabilities of discontinued operations are presented as current in the October 2, 2021 balance sheet
−Removed: as we expect to sell the discontinued operations and collect proceeds within one year.
+Added: ¹ The total assets and liabilities of discontinued operations are classified as current in the April 2, 2022 and
+Added: January 1, 2022 balance sheets, as we expect to sell the discontinued operations and collect proceeds within one year.
Note C – Earnings Per Share
−Removed: The denominators used to calculate earnings per share are as follow:
+Added: The denominators used to calculate earnings per share are as follows:
Three Months Ended
−Removed: Nine Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Weighted average shares outstanding
4 unchanged sentences
Inventories from continuing operations consist of the following components:
+Added: April 2, 2022
+Added: January 1, 2022
Raw material and component parts
3 unchanged sentences
Note E - Goodwill
−Removed: The aggregate carrying amount of goodwill from continuing operations is approximately $ 71.0 million as of October 2, 2021.
−Removed: A goodwill write-off of approximately $ 5.9 million was recognized in discontinued operations in the second quarter of 2021 when classifying the disposal group as held for sale.
−Removed: See Note B – Discontinued Operations for further discussion.
+Added: The aggregate carrying amount of goodwill from continuing operations is approximately $ 72.2 million as of April 2, 2022.
+Added: No impairment was recognized in the first quarter of 2022.
The Company tests its reporting units for impairment annually in December, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
10 unchanged sentences
The Company determines whether an arrangement is, or contains, a lease at contract inception.
−Removed: An arrangement contains a lease if the Company has the right to direct the use of and obtain substantially all of the economic benefits of an identified asset.
+Added: An arrangement contains a lease if the Company has the right to direct the use of and obtain substantially all the economic benefits of an identified asset.
ROU assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term.
3 unchanged sentences
The exercise of lease renewal options is at our sole discretion.
−Removed: The Company’s option to extend certain leases ranges from 1-110 months.
All options to extend, when it is reasonably certain the option will be exercised, have been included in the calculation of the ROU asset and lease liability.
−Removed: Currently, the Company has 28 operating leases and three finance leases with a lease liability of $ 11.9 million as of October 2, 2021.
+Added: Currently, the Company has 25 operating leases and three finance leases with a lease liability of $ 11.8 million as of April 2, 2022.
The finance lease arrangements are immaterial.
23 unchanged sentences
The revolving commitment portion has a maturity date of August 30, 2024.
−Removed: As of October 2, 2021, the Company has not borrowed any funds on the revolving commitment portion of the facility.
+Added: As of April 2, 2022, the Company has borrowed $ 5,000,000 on the revolving commitment portion of the facility at an interest rate of 1.71 %.
The term loan bears interest at a variable rate based on the LIBOR rate plus an applicable margin of 1.25 % to 2.25 %, depending on the Company’s senior net leverage ratio.
3 unchanged sentences
In addition, the Company is required to maintain a fixed charge coverage ratio to be not less than 1.25 to 1.
−Removed: The Company was in compliance with all of its covenants under the Credit Agreement at October 2, 2021 and through the date of filing this Form 10-Q.
−Removed: On August 30, 2019, the Company entered into an interest rate swap contract with Santander Bank, N.A., with an original notional amount of $ 50,000,000 , which was equal to 50% of the outstanding balance of the term loan on that date.
+Added: The Company was in compliance with all of its covenants under the Credit Agreement on April 2, 2022, and through the date of filing this Form 10-Q.
+Added: On August 30, 2019, the Company entered an interest rate swap contract with Santander Bank, N.A., with an original notional amount of $ 50,000,000 , which was equal to 50% of the outstanding balance of the term loan on that date.
The Company has a fixed interest rate of 1.44 % on the swap contract and will pay the difference between the fixed rate and LIBOR when LIBOR is below 1.44% and will receive interest when the LIBOR rate exceeds 1.44 %.
−Removed: On October 2, 2021, the interest rate for approximately half ($39.7 million) of the term portion was 1.83%, using a one-month LIBOR rate, and 3.19% on the remaining balance ($44.7 million) of the term loan based on a one-month LIBOR rate .
+Added: On April 2, 2022, the interest rate for approximately half ($ 26.8 million) of the term portion was 1.71%, using a one-month LIBOR rate, and 2.94 % on the remaining balance ($ 42.8 million) of the term loan based on a one-month LIBOR rate.
The interest rates under the Credit Agreement and the interest rate swap contract are susceptible to changes to the method of determining LIBOR rates and to the phasing out of LIBOR.
3 unchanged sentences
On March 5, 2021, the IBA released its feedback statement reporting the results of the market consultation.
−Removed: Pursuant to its feedback statement, the IBA intends to cease publication of all settings of non-US dollar LIBOR and only the one-week and two-month U.S.
+Added: Pursuant to its feedback statement, the IBA ceased publication of all settings of non-US dollar LIBOR and only the one-week and two-month U.S.
dollar LIBOR settings on December 31, 2021, with the publication of the remaining U.S.
−Removed: dollar LIBOR settings being discontinued after June 30, 2023.
+Added: dollar LIBOR settings scheduled to be discontinued after June 30, 2023.
The Alternative Reference Rates Committee (ARRC), a financial industry group convened by the Federal Reserve Board, has recommended the use of SOFR to replace LIBOR.
14 unchanged sentences
Under the 2020 Plan, non-qualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Board.
−Removed: During the first nine months of fiscal 2021, the Company granted 27,300 stock options that were subject to the meeting of performance measurements.
−Removed: The Company did not issue any stock options or restricted stock in the first nine months of fiscal 2020.
−Removed: For the first nine months of fiscal 2021, the Company used several assumptions which included an expected term of 4.0 years, volatility deviation between 47.25 % to 48.55 % and a risk-free rate between 0.18 % to 0.35 % for the purposes of measuring compensation under the Black Scholes Method.
+Added: During the first three months of fiscal 2022, the Company granted 36,200 stock awards that were subject to the meeting of performance measurements.
+Added: The Company granted 27,300 stock awards in the first three months of fiscal 2021.
+Added: For the first three months of fiscal 2022, the Company used an assumption which included an expected term of 4.0 years, volatility deviation of 47.15 % and a risk-free rate 2.04 % for the purposes of measuring compensation under the Black Scholes Method.
+Added: For the first three months of fiscal 2021, the Company used several assumptions which included an expected term of 4.0 years, volatility deviation between 47.25 % to 47.54 % and a risk-free rate between 0.18 % to 0.20 % for the purposes of measuring compensation under the Black Scholes Method.
The 2020 Plan also permits the issuance of Stock Appreciation Rights (“SARs”).
The SARs are in the form of an option with a cashless exercise price equal to the difference between the fair value of the Company’s common stock at the date of grant and the fair value as of the exercise date resulting in the issuance of the Company’s common stock.
−Removed: During the first nine months of fiscal 2021 the Company did not issue any SARs.
−Removed: During the first nine months of fiscal 2020 the company issued 44,000 SARs.
−Removed: For the first nine months of fiscal 2020, the Company used several assumptions which included an expected term of 4.0 years, volatility deviation of 38.62 % and a risk-free rate of 0.26 % for the purposes of measuring compensation under the Black Scholes Method.
−Removed: Stock-based compensation expense in connection with SARs previously granted to employees was approximately $ 102,000 and $ 85,000 in the third quarter of 2021 and the third quarter of 2020, respectively and was approximately $ 316,000 and $ 279,000 in the first nine months of fiscal years 2021 and 2020, respectively.
−Removed: As of October 2, 2021, there were 804,646 shares of Company common stock reserved and available for future grant under the 2020 Plan.
+Added: During the first three months of fiscal 2022 and 2021 the Company did not issue any SARs.
+Added: Stock-based compensation expense in connection with SARs previously granted to employees was approximately $ 113,000 and $ 113,000 in the first quarter of 2022 and the first quarter of 2021.
+Added: As of April 2, 2022, there were 763,968 shares of Company common stock reserved and available for future grant under the 2020 Plan.
The following tables set forth the outstanding SARs for the period specified:
−Removed: Nine Months Ended
−Removed: October 2, 2021
+Added: Three Months Ended
+Added: April 2, 2022
January 1, 2022
5 unchanged sentences
Range of Exercise Prices
−Removed: Outstanding as of October 2, 2021
+Added: Outstanding as of April 2, 2022
Weighted Average Remaining Contractual Life
Weighted Average Exercise Price
−Removed: Exercisable as of October 2, 2021
+Added: Exercisable as of April 2, 2022
Weighted Average Remaining Contractual Life
1 unchanged sentence
20.20 - $ 26.30
−Removed: The following tables set forth the outstanding stock grants for the period specified:
−Removed: Nine Months Ended
−Removed: October 2, 2021
+Added: The following tables set forth the outstanding stock awards for the period specified:
+Added: Three Months Ended
+Added: April 2, 2022
January 1, 2022
−Removed: Weighted Average Exercise Price
−Removed: Weighted Average Exercise Price
Outstanding at beginning of period
Outstanding at end of period
−Removed: As of October 2, 2021, outstanding SARs and grants had an intrinsic value of $ 1,764,000 .
+Added: As of April 2, 2022, outstanding SARs and stock awards had an intrinsic value of $ 1,722,000 .
Note I – Share Repurchase Program
−Removed: On May 2, 2018, the Company announced that the Board had authorized a new program to repurchase up to 200,000 shares of the Company’s common stock.
+Added: On May 2, 2018, the Company announced that the Board of Directors of the Company had authorized a new program to repurchase up to 200,000 shares of the Company’s common stock.
The Company’s share repurchase program does not obligate it to acquire the Company’s common stock at any specific cost per share.
Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
−Removed: The Company did not repurchase any shares under its share repurchase program during the third quarter of 2021.
+Added: Below is a summary of the Company’s share repurchases during the first quarter of 2022.
Total Number of Shares Purchased
2 unchanged sentences
Maximum Number of Shares that may yet be Purchased Under the Plans or Programs
−Removed: Balance as of July 3, 2021
−Removed: July 4, 2021 - October 2, 2021
−Removed: Balance as of October 2, 2021
+Added: Balance as of January 1, 2022
+Added: January 2, 2022 - April 2, 2022
+Added: Balance as of April 2, 2022
Note J – Revenue Recognition
The Company’s revenues result from the sale of goods and services and reflect the consideration to which the Company expects to be entitled.
−Removed: The Company records revenues based on a five-step model in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”.
+Added: The Company records revenues in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”.
The Company has defined purchase orders as contracts in accordance with ASC Topic 606.
12 unchanged sentences
income tax examinations by foreign tax authorities for years prior to 2015.
−Removed: In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes.
−Removed: The changes implemented in ASU 2019-12 include removing exceptions to incremental intraperiod tax allocation of losses and gains from different financial statement components, exceptions to the method of recognizing income taxes on interim period losses and exceptions to deferred tax liability recognition related to foreign subsidiary investments.
−Removed: In addition, ASU 2019-12 requires that entities recognize franchise tax based on an incremental method, requires an entity to evaluate the accounting for step-ups in the tax basis of goodwill as inside or outside of a business combination, and removes the requirement to allocate the current and deferred tax provision among entities in standalone financial statement reporting.
−Removed: The ASU also now requires that an entity reflect enacted changes in tax laws in the annual effective rate, and other codification adjustments have been made to employee stock ownership plans.
−Removed: The Company adopted ASU 2019-12 in the first quarter of 2021.
−Removed: On March 27, 2020, the $ 2 trillion bipartisan Coronavirus Aid, Relief, and Economic Security Act (H.R.
−Removed: 748) (the “CARES Act”) became law.
−Removed: For additional information on the impact of the CARES Act on the Company see Note 8 – Income Taxes in the 2020 Form 10-K.
−Removed: The Company will also continue to assess the effect of state level tax relief provisions as enacted, such as state net operating loss rule changes and conformity to the federal interest, depreciation and charitable contribution deduction changes.
−Removed: The total amount of unrecognized tax benefits could increase or decrease within the next 12 months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under FASB ASC Topic 740, “Income Taxes.” There have been no significant changes to the amount of unrecognized tax benefits during the nine months ended October 2, 2021.
+Added: The total amount of unrecognized tax benefits could increase or decrease within the next 12 months for several reasons, including the closure of federal, state, and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under FASB ASC Topic 740, “Income Taxes.” There have been no significant changes to the value of unrecognized tax benefits during the three months ended April 2, 2022.
The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months.
6 unchanged sentences
The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements.
−Removed: Significant disclosures relating to these benefit plans for the third quarter and the first nine months of fiscal years 2021 and 2020 are as follows:
+Added: Significant disclosures relating to these benefit plans for the first quarter of fiscal years 2022 and 2021 are as follows:
Pension Benefits
Three Months Ended
−Removed: Nine Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Interest cost
2 unchanged sentences
( 1,448,674 )
−Removed: ( 4,346,020 )
−Removed: ( 4,095,784 )
Amortization of prior service cost
3 unchanged sentences
$ ( 215,202 )
−Removed: $ ( 104,415 )
−Removed: Postretirement Benefits
−Removed: Postretirement Benefits
+Added: Other Postretirement Benefits
Three Months Ended
−Removed: Nine Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Interest cost
6 unchanged sentences
In fiscal year 2022, the Company expects to contribute $ 300,000 into its pension plans and $ 50,000 into its postretirement plan.
−Removed: The Company has reviewed the American Rescue Plan Act(ARPA) for applicable pension funding relief for the minimum required contributions and has adjusted accordingly, ARPA will continue to provide cashflow relief to pension for future years.
−Removed: As of October 2, 2021, the Company has made contributions of approximately $ 1,856,000 into its pension plans, has contributed $ 11,000 to its postretirement plan and expects to make the remaining contributions as required during the remainder of the fiscal year.
+Added: As of April 2, 2022, the Company has not made any contributions into its pension plans, has contributed $ 3,000 to its postretirement plan, and expects to make the remaining contributions as required during the remainder of the fiscal year.
The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) covering substantially all U.S.
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
+Added: April 2, 2022
+Added: April 3, 2021
Regular matching contribution
2 unchanged sentences
Total contributions for the period
−Removed: The non-discretionary contribution of $ 332,092 made in the nine months ended October 2, 2021 was accrued for and expensed in the prior fiscal year.
+Added: The non-discretionary contribution of $ 323,082 made in the three months ended April 2, 2022, was accrued for and expensed in the prior fiscal year.
Note M - Recent Accounting Pronouncements
10 unchanged sentences
The Company has established credit limits for customers and monitors their balances to mitigate the risk of loss.
−Removed: As of October 2, 2021, there was one significant concentration of credit risk with a customer, who has receivables representing 10 % of our total accounts receivable.
+Added: As of April 2, 2022, there was one significant concentration of credit risk with a customer, who has receivables representing 10 % of our total accounts receivable.
One single customer represented more than 11 % of the Company’s net accounts receivable as of January 1, 2022.
The maximum exposure to credit risk is primarily represented by the carrying amount of the Company’s accounts receivable.
+Added: The Company has deposits that exceed amounts up to $ 250,000 that are insured by the Federal Deposit Insurance Corporation (FDIC), but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution.
Interest Rate Risk
The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt, which bears interest at variable rates based on the LIBOR rate plus a margin spread of 1.25 % to 2.25 %.
−Removed: The Company has an interest rate swap with a notional amount of $ 44.7 million on October 2, 2021, to convert a portion of the borrowing under the Credit Agreement from variable to fixed rates.
+Added: The Company has an interest rate swap with a notional amount of $ 42.8 million on April 2, 2022, to convert a portion of the borrowing under the Credit Agreement from variable to fixed rates.
The valuation of this swap is determined using the one-month LIBOR rate index and mitigates the Company's exposure to interest rate risk.
Additionally, interest rates on the Company's debt are susceptible to changes to the method that LIBOR rates are determined and to the potential phasing out of LIBOR after 2021.
−Removed: The potential phasing out of LIBOR is discussed in greater detail in Note G — Debt hereof and under the heading “The phaseout of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates” in Part I, Item 8 of the 2020 Form 10-K.
+Added: The potential phasing out of LIBOR is discussed in greater detail in Note G — Debt hereof and under the heading “The phaseout of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates” in Part II, Item 8 of the 2021 Form 10-K.
Currency Exchange Rate Risk
2 unchanged sentences
As a result, the Company does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments.
−Removed: Note O – Business Acquisition
−Removed: Effective August 10, 2020 the Company acquired certain assets, including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights and rights existing under all sales and purchase agreements, and assumed certain liabilities, of Hallink, RSB Inc.
−Removed: These assets are held in our subsidiary, Hallink Moulds, Inc.
−Removed: (“Hallink Moulds”).
−Removed: Hallink Moulds produces injection blow mold tooling and is a supplier of blow molds and change parts to the food, beverage, healthcare and chemical industry.
−Removed: Hallink Moulds specializes in the design, development and manufacture of 2-step stretch blow molds, and related components for the stretch blow molding industry offering integrated turnkey solutions to its customers worldwide.
−Removed: Hallink Moulds is included in the Engineered Solutions segment of the Company from the date of the acquisition.
−Removed: The cost of the acquisition of Hallink Moulds was approximately $ 7,173,000 .
−Removed: The above acquisition was accounted for under ASU 2014-18, Business Combinations (Topic 805).
−Removed: The acquired business is included in the consolidated operating results of the Company from the effective date of the acquisition.
−Removed: The excess of the cost of Hallink Moulds over the fair market value of the net assets acquired of $ 2,302,000 has been recorded as goodwill.
−Removed: An independent third party was utilized to establish the fair market value of net assets acquired.
−Removed: In connection with the above acquisition, the Company recorded the following intangible assets:
−Removed: Asset Class/Description
−Removed: Weighted-Average Period in Years
−Removed: Patents, technology, and licenses
−Removed: Customer relationships
−Removed: Intellectual property
−Removed: Non-compete agreements
−Removed: There is no anticipated residual value relating to these intangible assets.
−Removed: Neither the actual results nor the pro forma effects of the acquisition of Hallink are material to the Company's financial statements.
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.