4 unchanged sentences
except share data)
−Removed: September 30, 2023 July 1, 2023
+Added: December 30, 2023 July 1, 2023
Current assets:
34 unchanged sentences
Retained earnings 84,405 82,986
−Removed: Accumulated other comprehensive (loss) ( 39 ) ( 97 )
+Added: Accumulated other comprehensive Income (loss) 191 ( 97 )
Total shareholders’ equity 132,435 130,617
3 unchanged sentences
CONSOLIDATED STATEMENTS OF INCOME
−Removed: (Unaudited, in thousands, except share and per share amounts)
−Removed: Three Months Ended
−Removed: September 30, 2023 October 1, 2022
+Added: (Unaudited, in thousands, except per share amounts)
+Added: Three Months Ended Six Months Ended
+Added: December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022
Net sales $ 145,417 $ 123,708 $ 293,180 $ 260,971
8 unchanged sentences
Income before income taxes 987 1,101 1,244 2,575
−Removed: Income tax provision ( 78 ) 322
+Added: Income tax provision (benefit) ( 97 ) 134 ( 175 ) 456
Net income $ 1,084 $ 967 $ 1,419 $ 2,119
7 unchanged sentences
(Unaudited, in thousands)
−Removed: Three Months Ended
−Removed: September 30, 2023 October 1, 2022
+Added: Three Months Ended Six Months Ended
+Added: December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022
Comprehensive income:
2 unchanged sentences
Unrealized gain (loss) on hedging instruments, net of tax 230 59 288 212
−Removed: Comprehensive income $ 393 $ 1,305
+Added: Comprehensive income (loss) $ 1,314 $ 1,026 $ 1,707 $ 2,331
+Added: Other comprehensive income (loss) for the three months ended December 30, 2023 and December 31, 2022, is reflected net of tax expense (benefit) of approximately $ 0.1 million and $ 0.0 million , respectively.
+Added: Other comprehensive income (loss) for the six months ended December 30, 2023 and December 31, 2022, is reflected net of tax expense (benefit) of approximately $ 0.1 million and $ 0.0 million, respectively.
See accompanying notes to consolidated financial statements.
2 unchanged sentences
(Unaudited, in thousands)
−Removed: Three Months Ended
−Removed: September 30, 2023 October 1, 2022
+Added: Six Months Ended
+Added: December 30, 2023 December 31, 2022
Operating activities:
8 unchanged sentences
Provision for doubtful accounts 49 22
−Removed: Loss (Gain) on disposal of assets — ( 123 )
+Added: Gain on disposal of assets ( 36 ) ( 123 )
Gain on insurance proceeds, net of losses ( 431 ) ( 3,644 )
13 unchanged sentences
Proceeds from insurance 2,249 3,500
−Removed: Cash provided by (used in) investing activities 1,722 ( 2,526 )
+Added: Cash used in investing activities ( 360 ) ( 359 )
Financing activities:
Payment of financing costs ( 625 ) —
+Added: Proceeds from issuance of long term debt 1,161 —
Repayments of long term debt ( 1,457 ) ( 1,089 )
3 unchanged sentences
Cash (used in) provided by financing activities ( 9,370 ) 9,493
−Removed: Net (decrease) increase in cash and cash equivalents ( 29 ) 426
+Added: Net decrease in cash and cash equivalents ( 650 ) ( 897 )
Cash and cash equivalents, beginning of period 3,603 1,707
Cash and cash equivalents, end of period $ 2,953 $ 810
−Removed: Non-cash investing activities:
Supplemental cash flow information:
2 unchanged sentences
Recognition of operating lease liabilities and right-of-use assets $ 3,575 $ 5,049
+Added: Recognition of financing lease liabilities and right-of-use assets $ — $ —
See accompanying notes to consolidated financial statements.
3 unchanged sentences
except share data)
−Removed: Three Months Ended
−Removed: September 30, 2023 October 1, 2022
+Added: Three Months Ended Six Months Ended
+Added: December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022
Total shareholders’ equity, beginning balances $ 131,069 $ 126,223 $ 130,617 $ 124,878
29 unchanged sentences
The Company’s reporting period is a 52/53 week fiscal year ending on the Saturday closest to June 30.
−Removed: The three month periods ended September 30, 2023 and October 1, 2022, were both 13 week periods.
+Added: The three month and six month periods ended December 30, 2023 and December 31, 2022, were both 13 week and 26 week periods.
Fiscal year 2024 will end on June 29, 2024, which is a 52 week year.
2 unchanged sentences
Historically, we have financed operations and met our capital expenditure requirements primarily through cash flows provided by operations and borrowings under our credit facilities.
−Removed: We generated operating and net income of $ 3.3 million and $ 0.3 million respectively, during the 3-month period ended September 30, 2023, and have positive working capital of $ 194.6 million as of September 30, 2023.
−Removed: Due to the timing between the procurement of raw materials, production cycle and payment from our customers, we have relied on borrowings on our credit facilities and cash from operations to fund operations as the Company increased its revenues and during the first three months of fiscal year 2024.
−Removed: Based on current projections, we anticipate generating cash from operations as revenue is expected to remain flat during the second quarter of fiscal year 2024 and decreasing working capital requirements as existing backlog is manufactured and shipped.
−Removed: As of September 30, 2023, approximately $ 9.5 million was available under the asset-based revolving credit facility.
+Added: We generated operating and net income of $ 3.9 million and $ 1.1 million respectively, during the 3-month period ended December 30, 2023, and have positive working capital of $ 193.9 million as of December 30, 2023.
+Added: Due to the timing between the procurement of raw materials, production cycle and payment from our customers, we have relied on borrowings on our credit facilities and cash from operations to fund operations of the Company.
+Added: Based on current projections, we anticipate generating cash from operations as revenue is expected to remain flat during the third quarter of fiscal year 2024 and decreasing working capital requirements as existing backlog is manufactured and shipped.
+Added: As of December 30, 2023, approximately $ 14.4 million was available under the asset-based revolving credit facility with Bank of America, and an additional $ 2.0 million was available under the asset-based line of credit with Banorte Financial Group.
We are also in discussions with multiple financial institutions to extend the borrowing capacity on our credit facility.
13 unchanged sentences
Diluted EPS is computed by dividing net income (loss) by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period using the treasury stock method.
−Removed: The computation assumes the proceeds from the exercise of stock options were used to repurchase common shares at the average market price during the period.
+Added: The computation assumes the proceeds from the exercise of equity awards were used to repurchase common shares at the average market price during the period.
The computation of diluted EPS does
1 unchanged sentence
Derivative Instruments and Hedging Activities
−Removed: The Company has previously entered into foreign currency forward contracts and an interest rate swap which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging.
+Added: The Company has entered into foreign currency forward contracts which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging.
The effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI) and is reclassified into earnings in the same period in which the underlying hedged transaction affects earnings.
The derivative’s effectiveness represents the change in fair value of the hedge that offsets the change in fair value of the hedged item.
−Removed: As of September 30, 2023, the Company did not have any outstanding foreign currency forward contracts.
−Removed: The Company occasionally uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities.
+Added: The Company uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities.
The foreign currency forward contracts have terms that are matched to the underlying transactions being hedged.
As a result, these transactions fully offset the hedged risk and no ineffectiveness has been recorded.
−Removed: The Company’s foreign currency forward contracts, where applicable, potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement.
+Added: The Company’s foreign currency forward contracts potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement.
The Company minimizes such risk by utilizing a counterparty with a strong credit rating.
−Removed: The Company’s counterparty to the foreign currency forward contracts was a major banking institution.
−Removed: This institution did not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote.
+Added: The Company’s counterparty to the foreign currency forward contracts is a major banking institution.
+Added: This institution does not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote.
The Company does not enter into derivative instruments for trading or speculative purposes.
14 unchanged sentences
taxing jurisdictions to which we are subject.
−Removed: Refer to Note 5 for further discussions related to income taxes.
+Added: Refer to Note 5 for further discussions.
Recently Issued Accounting Standards
+Added: 14, 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures.
+Added: The ASU requires entities to disclose more detailed information relating to their reconciliation of statutory tax rate to effective tax rate, income taxes paid by jurisdiction, pretax income (or loss) from continuing operations, and income tax expense (or benefit).
+Added: The ASU applies to the Company’s annual reporting period beginning in fiscal year 2026.
+Added: The Company does not anticipate early adoption of the new disclosure standards.
+Added: In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No.
+Added: 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50).
+Added: This standard requires disclosure of the key terms of outstanding supplier finance programs and a roll forward of the related obligations.
+Added: The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.
+Added: The ASU became effective for the Company July 2, 2023, except for the roll forward requirement, which becomes effective July 2, 2024.
+Added: This ASU, except for the
+Added: roll forward requirement, was adopted retrospectively as of July 2, 2023 and did not have a material impact on our consolidated financial statements.
+Added: In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-08 amending Business Combination:
+Added: (Topic 805), which was necessary due to 2014-09, Revenue from Contracts with Customers (Topic 606).
+Added: The FASB issued this Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer.
+Added: The Company adopted this amendment as of the effective date of July 2, 2023.
+Added: These amendments are to be applied prospectively to business combinations occurring on or after the effective date of the amendments.
+Added: The Company plans to apply the practical expedients as needed for any future acquisitions.
+Added: The practical expedients cover contracts that were modified prior to acquisition date as well as determining which date an acquirer would have to determine the standalone selling price of each performance obligation in an acquired contract.
+Added: This ASU did not have a material impact on our consolidated financial statements.
In March of 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which clarifies specific issues raised by stakeholders.
4 unchanged sentences
and 5) aligns the disclosure requirements for debt securities in ASC 320, Investments - Debt Securities, with the corresponding requirements for depository and lending institutions in ASC 942, Financial Services - Depository and Lending.
−Removed: The amendments in the ASU have various effective dates and transition requirements which are
−Removed: dependent on timing of adoption of ASU 2016-13.
+Added: The amendments in the ASU have various effective dates and transition requirements which are dependent on timing of adoption of ASU 2016-13.
The Company adopted this amendment as of the effective date of July 2, 2023.
6 unchanged sentences
This ASU did not have a material impact on our consolidated financial statements.
−Removed: In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-08 amending Business Combination:
−Removed: (Topic 805), which was necessary due to 2014-09, Revenue from Contracts with Customers (Topic 606).
−Removed: The FASB issued this Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer.
−Removed: The Company adopted this amendment as of the effective date of July 2, 2023.
−Removed: These amendments are to be applied prospectively to business combinations occurring on or after the effective date of the amendments.
−Removed: The Company plans to apply the practical expedients as needed for any future acquisitions.
−Removed: The practical expedients cover contracts that were modified prior to acquisition date as well as determining which date an acquirer would have to determine the standalone selling price of each performance obligation in an acquired contract.
−Removed: This ASU did not have a material impact on our consolidated financial statements.
−Removed: In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No.
−Removed: 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50).
−Removed: This standard requires disclosure of the key terms of outstanding supplier finance programs and a roll forward of the related obligations.
−Removed: The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.
−Removed: The ASU became effective for the Company July 2, 2023, except for the roll forward requirement, which becomes effective July 2, 2024.
−Removed: This ASU, except for the roll forward requirement, was adopted retrospectively as of July 2, 2023 and did not have a material impact on our consolidated financial statements.
−Removed: Inventories as of September 30, 2023 are $ 126.8 million compared to $ 137.9 million as of July 1, 2023.
+Added: Inventories as of December 30, 2023 are $ 124.1 million compared to $ 137.9 million as of July 1, 2023.
Substantially all of the Company’s inventory balances are raw materials.
4 unchanged sentences
On September 3, 2021, the Company entered into an amendment to the Company’s current loan agreement with Bank of America.
−Removed: The amendment increased the Company’s current credit facility of $ 93 million to $ 120 million, subject to the Company’s borrowing base, maturing on September 3, 2026.
+Added: The amendment increases the Company’s current credit facility to $ 120 million, subject to the Company’s borrowing base, maturing on September 3, 2026.
+Added: As of December 30, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $ 105.6 million, $ 0.3 million in outstanding letters of credit and $ 14.4 million available for future borrowings.
On August 26, 2022, the company entered into a third amendment to the loan agreement with Bank of America.
The amendment removed the cash flow leverage ratio covenant and increased the interest rate by 25 basis points.
−Removed: As of September 30, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $ 110.5 million, $ 0.3 million in outstanding letters of credit and $ 9.5 million available for future borrowings.
−Removed: In the third quarter of fiscal year 2023, the Company entered into equipment financing agreements with Ameris Bank dba Balboa Capital ("Balboa Capital") totaling $ 4.4 million related to the Company’s existing manufacturing equipment that bears an interest rate range of 6 % - 8 % and matures in the third quarter of fiscal 2029.
−Removed: Under these agreements, equal monthly payments of $ 75,000 commenced in the third quarter of fiscal year 2023 and will continue through the maturity of the equipment financing facility in the third quarter of fiscal 2029.
−Removed: The Company had an outstanding balance $ 4.0 million as of September 30, 2023.
−Removed: On August 14, 2020, the Company also entered into a $ 5.0 million equipment financing facility relating to the Company’s existing U.S.
−Removed: manufacturing equipment that bears interest at 4.85 % and matures on August 14, 2025.
−Removed: Under this loan agreement, equal monthly payments of approximately $ 94,000 commenced on September 14, 2020 and will continue through the maturity of the equipment financing facility on August 14, 2025.
−Removed: As of September 30, 2023, the Company had an outstanding balance of $ 2.1 million.
−Removed: As of July 1, 2023, the Company had an outstanding balance of $ 2.3 million under the Bank of America equipment term loan agreement.
+Added: As of July 1, 2023, the Company had an outstanding balance under the credit facility with Bank of America of $ 115.4 million, $ 0.3 million in outstanding letters of credit and $ 4.6 million available for future borrowings.
Generally, the interest rate applicable to loans under the Bank of America loan agreement will be, at the Company’s option:
−Removed: (i)(A) the base rate which is the highest of (a) the Prime Rate for such day, (b) the Federal Funds Rate for such day plus 0.50 %, or (c) Term SOFR for a one month interest period as of such day, plus 1.00 % (provided that in no event shall the base rate be less than zero), plus the applicable interest margin for base rate loans;
−Removed: and (B) SOFR rate for an applicable interest period, plus the applicable interest margin for SOFR rate loans.
+Added: (i)(A) the base rate which is the highest of (1) the prime rate for the applicable day (as such rate is determined from time to time by the Bank), (2) the federal funds rate for the applicable day plus 0.50 %, and (3) LIBOR for a 30-day interest period as of the
+Added: applicable day plus 1.00 % (provided that in no event shall the base rate be less than zero), plus the applicable interest margin for base rate loans;
+Added: and (B) LIBOR rate for an applicable interest period (provided that in no event shall the LIBOR rate be less than 0.50 %), plus the applicable interest margin for LIBOR rate loans.
Depending on average daily excess borrowing availability over applicable periods under the Credit Facility, applicable interest margins on:
(x) base rate loans will be 1.25 - 1.75 %;
−Removed: and (y) SOFR rate loans will be 2.50 - 3.00 %, resetting on a quarterly basis beginning in early 2021.
−Removed: If there is an event of default under the loan agreement, all loans and other obligations will bear interest as a rate of an additional 2.00 % on the otherwise applicable interest rates.
+Added: and (y) LIBOR rate loans will be 2.25 - 2.75 %, resetting on a quarterly basis beginning in early 2021.
+Added: If there is an event of default under the loan agreement, all loans and other obligations will bear interest at a rate of an additional 2.00 % on the otherwise applicable interest rates.
In addition to interest charges, the Company is required to pay a fee of 0.25 % per annum on the unused portion of the Credit Facility, monthly in arrears.
−Removed: On November 24, 2020, the Company entered into a $ 6.0 million financing facility related to the Company’s existing real estate located in Mexico that bears interest at 5.52 % and matures on April 24, 2026.
−Removed: Under this loan agreement, equal monthly payments of $ 100,000 commenced on May 24, 2021 and will continue through the maturity of the financing facility on April 24, 2026.
−Removed: As of September 30, 2023, the Company had an outstanding balance of $ 3.1 million.
+Added: Under the new loan agreement with Bank of America, the asset-based revolving credit facility bears interest at LIBOR plus 2.5 %, as elected by the Company.
+Added: On December 11, 2023, the Company entered into a loan agreement in Mexican peso with Banorte Financial Group.
+Added: The agreement provides for three-year asset-based secured line of credit up to $ 5.9 million, subject to the Company’s borrowing base, maturing on December 11, 2026.
+Added: The credit facility bears interest at Itercambaria de Equilibrio Interest Rate plus 2.75 %.
+Added: As of December 30, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $ 3.9 million and $ 2.0 million available for future borrowings.
+Added: On September 19, 2023, the Company entered into another $ 1.1 million equipment financing agreement with Ameris Bank dba Balboa Capital ("Balboa Capital").
+Added: Combining with agreements entered in the third quarter of fiscal year 2023, the total $ 5.5 million relates to the Company’s existing manufacturing equipment that bears an interest rate range of 6 % - 8 % and matures in the first quarter of fiscal 2030.
+Added: Under these agreements, equal monthly payments of $ 94,000 commenced in the second quarter of fiscal year 2024 and will continue through the maturity of the equipment financing facility in the first quarter of fiscal 2030.
+Added: The Company had an outstanding balance $ 4.9 million as of December 30, 2023.
+Added: On August 14, 2020, the Company also entered into a $ 5.0 million equipment financing facility relating to the Company’s existing U.S.
+Added: manufacturing equipment that bears interest at 4.85 % and matures on August 14, 2025.
+Added: Under this loan agreement, equal monthly payments of approximately $ 94,000 commenced on September 14, 2020 and will continue through the maturity of the equipment financing facility on August 14, 2025.
+Added: As of December 30, 2023, the Company had an outstanding balance of $ 1.8 million.
+Added: As of July 1, 2023, the Company had an outstanding balance of $ 2.3 million under the Bank of America equipment term loan agreement.
+Added: On November 24, 2020, the Company entered into a $ 6.0 million equipment financing facility related to the Company’s existing manufacturing equipment that bears interest at 5.52 % and matures on April 24, 2026.
+Added: Under this loan agreement, equal monthly payments of $ 100,000 commenced on May 24, 2021 and will continue through the maturity of the equipment financing facility on April 24, 2026.
+Added: As of December 30, 2023, the Company had an outstanding balance of $ 2.8 million.
As of July 1, 2023, the Company had an outstanding balance of $ 3.4 million.
−Removed: The interest rates on outstanding debt as of September 30, 2023 range from 4.85 % - 8.43 % compared to 4.85 % - 8.22 % as of July 1, 2023.
−Removed: Debt maturities as of September 30, 2023 for the next five years and thereafter are as follows (in thousands):
+Added: The interest rates on outstanding debt as of December 30, 2023 range from 4.85 % - 14.25 % compared to 4.85 % - 8.22 % as of July 1, 2023.
+Added: Debt maturities as of December 30, 2023 for the next five years and thereafter are as follows (in thousands):
Fiscal Years Ending Amount
−Removed: 2027 $ 111,315
2029 - Thereafter 816
2 unchanged sentences
Long-term debt, net of debt issuance costs $ 117,962
−Removed: (1) Represents scheduled payments for the remaining nine-month period ending June 29, 2024.
+Added: (1) Represents scheduled payments for the remaining six-month period ending June 29, 2024.
The Company must comply with certain financial covenants, including a fixed charge coverage ratio.
−Removed: The credit agreement requires the Company to grant certain inspection rights to Bank of America, limit or restrict the Company’s cash management;
−Removed: limit or restrict the ability of the Company to incur additional liens, make acquisitions or investments, incur additional indebtedness, engage in mergers, consolidations, liquidations, dissolutions, or dispositions, pay dividends or other restricted payments, prepay certain indebtedness, engage in transactions with affiliates, and use proceeds.
−Removed: Management believes the Company was in compliance with all financial covenants as of September 30, 2023.
+Added: The Company was in compliance with all financial covenants as of December 30, 2023.
The Company expects to repatriate a portion of its foreign earnings based on increased net sales growth driving additional capital requirements domestically, cash requirements for potential acquisitions and to implement certain tax strategies.
8 unchanged sentences
Withholding taxes would not apply to future repatriations from Mexico or Vietnam.
−Removed: The Company has available approximately $ 10.0 million of gross federal research and development tax credits as of September 30, 2023.
+Added: The Company has available approximately $ 10.0 million of gross federal research and development tax credits as of December 30, 2023.
ASC 740 requires the Company to recognize in its financial statements uncertainties in tax positions taken that may not be sustained upon examination by the taxing authorities.
−Removed: Accordingly, as of September 30, 2023, the Company has recorded $ 3.0 million of unrecognized tax benefits associated with these federal tax credits, resulting in a net deferred tax benefit of approximately $ 7.0 million.
+Added: Accordingly, as of December 30, 2023, the Company has recorded $ 3.1 million of unrecognized tax benefits associated with these federal tax credits, resulting in a net deferred tax benefit of approximately $ 6.9 million.
The Company evaluated tax law changes and regulatory guidance issued through the prior fiscal year.
11 unchanged sentences
(in thousands, except share and per share information)
−Removed: September 30, 2023 October 1, 2022
+Added: December 30, 2023 December 31, 2022
Net income $ 1,084 $ 967
5 unchanged sentences
Antidilutive SARs not included in diluted earnings per share 525 904
+Added: Six Months Ended
+Added: (in thousands, except per share information)
+Added: December 30, 2023 December 31, 2022
+Added: Net income $ 1,419 $ 2,119
+Added: Weighted average shares outstanding—basic 10,762 10,762
+Added: Effect of dilutive common stock awards 127 70
+Added: Weighted average shares outstanding—diluted 10,889 10,832
+Added: Net income per share—basic $ 0.13 $ 0.20
+Added: Net income per share—diluted $ 0.13 $ 0.20
+Added: Antidilutive SARs not included in diluted earnings per share 525 904
Share-based Compensation
12 unchanged sentences
Fair Value $ 2.09
−Removed: Total share-based compensation expense recognized during the three months ended September 30, 2023 and October 1, 2022 was approximately $ 59,000 and $ 40,000 , respectively.
−Removed: As of September 30, 2023, total unrecognized compensation expense related to unvested share-based compensation arrangements was approximately $ 0.3 million.
+Added: Total share-based compensation expense recognized during the three months ended December 30, 2023 and December 31, 2022 was approximately $ 52,297 and $ 62,000 , respectively.
+Added: Total share-based compensation expense recognized during the six months ended December 30, 2023 and December 31, 2022 was approximately $ 111,239 and $ 102,000 , respectively.
+Added: As of December 30, 2023, total unrecognized compensation expense related to unvested share-based compensation arrangements was approximately $ 0.2 million.
This expense is expected to be recognized over a weighted average period of 1.5 years.
−Removed: No SARs were exercised during the three months ended September 30, 2023 or October 1, 2022.
+Added: No SARs were exercised during the three or six months ended December 30, 2023 or December 31, 2022.
Commitments and Contingencies
6 unchanged sentences
If actual return rates and/or repair and replacement costs differ significantly from management’s estimates, adjustments to recognize additional cost of sales may be required in future periods.
−Removed: The Company’s warranty reserve was approximately $ 113,000 as of September 30, 2023 and $ 29,000 as of July 1, 2023, respectively.
+Added: The Company’s warranty reserve was approximately $ 107,000 as of December 30, 2023 and $ 29,000 as of July 1, 2023, respectively.
Gain from Insurance Recoveries, Net of Losses
Gain from insurance recoveries, net of losses, relate to losses incurred from storm damage to the Company’s Arkansas facility on July 29, 2022, as the result of a lightning strike.
−Removed: During the three months ended September 30, 2023, the Company recorded a gain from insurance recoveries, net of losses, of $ 0.4 million due to the storm event.
+Added: During the six months ended December 30, 2023, the Company recorded a gain from insurance recoveries, net of losses, of $ 0.4 million.
+Added: The Company did not record a gain during the three months ended December 30, 2023.
Derivative Financial Instruments
−Removed: As of September 30, 2023, the Company did not have any outstanding foreign currency forward contracts.
−Removed: For the three months ended September 30, 2023, the Company did not enter into or settle any foreign currency forward contracts.
−Removed: During the same period of the previous year, the Company did not enter into or settle any foreign currency forward contracts.
+Added: As of December 30, 2023, the Company had outstanding foreign currency forward contracts with a total notional amount of $ 3.4 million.
+Added: The maturity dates for these contracts extend through March 2024.
+Added: For the three months ended December 30, 2023, the Company entered into $ 6.5 million of foreign currency forward contracts and settled $ 3.2 million of contracts.
+Added: During the same period of the previous year, the Company did not enter or settle any foreign currency forward contracts.
+Added: For the six months ended December 30, 2023, the Company entered into $ 6.5 million of foreign currency forward contracts and settled $ 3.2 million of contracts.
+Added: During the same period of the previous year, the Company did not enter or settle any foreign currency forward contracts.
+Added: As of December 30, 2023, the aggregate notional amount of the Company’s outstanding foreign currency contracts along with their unrealized gain (losses) are expected to mature as summarized below (in thousands):
+Added: Quarter Ending Notional Contracts in MXN Notional Contracts in USD Estimated Fair Value
+Added: March 30, 2024 $ 61,775 $ 3,369 $ 247
On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of September 30, 2022, related to the borrowings outstanding under the term loan with Wells Fargo Bank.
This interest rate swap contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America.
−Removed: On the date of termination this interest rate swap was in a liability position of $ 148,400 , which will be amortized to interest expense over the original term of the swap.
+Added: On the date of termination this interest rate swap was in a liability position of $ 148,400 , which has been amortized to interest expense over the original term of the swap.
On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of November 1, 2023, related to the borrowings outstanding under the line of credit with Wells Fargo Bank.
1 unchanged sentence
On the date of termination this interest rate swap was in a liability position of $ 776,500 , which will be amortized to interest expense over the original term of the swap.
−Removed: The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended September 30, 2023 and October 1, 2022, respectively (in thousands):
+Added: The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 30, 2023 and December 31, 2022, respectively (in thousands):
Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance
−Removed: July 1, 2023 Effective
+Added: September 30, 2023 Effective
AOCI Effective Portion
1 unchanged sentence
Income AOCI Balance
−Removed: September 30, 2023
+Added: December 30, 2023
Forward contracts Cost of sales $ — $ 263 $ ( 72 ) $ 191
2 unchanged sentences
Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance
+Added: October 1, 2022 Effective
+Added: AOCI Effective Portion
+Added: Reclassified From
+Added: Income AOCI Balance
+Added: December 31, 2022
+Added: Forward contracts Cost of sales $ — $ — $ — $ —
+Added: Interest rate swap Interest expense ( 272 ) — 59 ( 213 )
+Added: Total $ ( 272 ) $ — $ 59 $ ( 213 )
+Added: The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 30, 2023 and December 31, 2022, respectively (in thousands):
+Added: Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance
+Added: Ju1y 1, 2023 Effective
+Added: AOCI Effective Portion
+Added: Reclassified From
+Added: Income AOCI Balance
+Added: December 30, 2023
+Added: Forward contracts Cost of sales $ — $ 263 $ ( 72 ) $ 191
+Added: Interest rate swap Interest expense ( 97 ) — 97 —
+Added: Total $ ( 97 ) $ 263 $ 25 $ 191
+Added: Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance
July 2, 2022 Effective
2 unchanged sentences
Income AOCI Balance
−Removed: October 1, 2022
+Added: December 31, 2022
Forward contracts Cost of sales $ ( 79 ) $ — $ 79 $ —
1 unchanged sentence
Total $ ( 425 ) $ — $ 212 $ ( 213 )
−Removed: As of September 30, 2023, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.
+Added: As of December 30, 2023, the net amount of unrealized gain expected to be reclassified into earnings within the next 3 months is approximately $ 0.2 million.
+Added: The Company does not have any foreign exchange contracts with credit-risk-related contingent features.
The Company is subject to the risk of fluctuating interest rates from our line of credit and foreign currency risk resulting from our China operations.
25 unchanged sentences
therefore, the primary performance obligation in the majority of our contracts is the delivery of a specific good through the purchase order submitted by our customer.
−Removed: The Company elected to not disclose information about remaining performance obligations as they are part of contracts that have expected durations of one year or less.
+Added: The Company elected not to disclose information about remaining performance obligations as they are part of contracts that that have expected durations of one year or less.
The Company has elected to expense costs to obtain contracts as incurred as these costs are immaterial to the financial statements.
−Removed: During the first three months of fiscal year 2024, no revenues were recognized from performance obligations satisfied or partially satisfied in previous periods.
+Added: During the first six months of fiscal year 2024, no revenues were recognized from performance obligations satisfied or partially satisfied in previous periods.
Contract Balances
1 unchanged sentence
Contract assets are classified separately on the condensed consolidated balance sheet and transferred to receivables when the right to payment becomes unconditional.
−Removed: The following table summarizes the activity in the Company’s contract assets during the three months ended September 30, 2023 (in thousands):
+Added: The following table summarizes the activity in the Company’s contract assets during the six months ended December 30, 2023 (in thousands):
Contract Assets
2 unchanged sentences
Amounts collected or invoiced ( 256,340 )
−Removed: Ending balance, September 30, 2023
+Added: Ending balance, December 30, 2023
Disaggregation of Revenue
−Removed: The following table presents the Company’s revenue disaggregated for the three months ended September 30, 2023 and October 1, 2022 (in thousands):
−Removed: Recognition Three Months Ended
−Removed: September 30, 2023 October 1, 2022
+Added: The following table presents the Company’s revenue disaggregated for the three and six months ended December 30, 2023 and December 31, 2022 (in thousands):
+Added: Recognition Three Months Ended Six Months Ended
+Added: December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022
Over-Time $ 124,205 $ 119,649 $ 254,185 $ 254,207
6 unchanged sentences
The weighted average discount rate is disclosed in the tables below.
−Removed: The components of lease cost for the three months ended September 30, 2023 and October 1, 2022 were (in thousands):
−Removed: Lease cost Classification September 30, 2023 October 1, 2022
+Added: The components of lease cost for the three months and six months ended December 30, 2023 and were (in thousands):
+Added: Three Months Ended Six Months Ended
+Added: December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022
+Added: Lease cost Classification
Operating lease cost Cost of sales $ 1,223 $ 2,441 $ 2,350 $ 3,775
6 unchanged sentences
Total lease cost $ 2,641 $ 4,744 $ 5,286 $ 7,200
−Removed: Amounts reported in the Consolidated Balance Sheet as of September 30, 2023 were (in thousands, except weighted average lease term and discount rate):
−Removed: September 30, 2023
+Added: Amounts reported in the Consolidated Balance Sheet as of December 30, 2023 were (in thousands, except weighted average lease term and discount rate):
+Added: December 30, 2023 July 1, 2023
Operating Leases:
1 unchanged sentence
Operating lease liabilities (1)
+Added: $ 18,104 $ 16,202
Weighted-average remaining lease term (in years)
12 unchanged sentences
The current portion of the total finance lease liabilities of $ 2.5 million is classified under Current portion of debt, net , resulting in $ 0.6 million classified in Other Long-term Liabilities section of the condensed consolidated balance sheet.
−Removed: Other information related to leases was as follows (in thousands):
−Removed: Three Months Ended
−Removed: September 30, 2023 October 1, 2022
−Removed: Cash paid for amounts included in the measurement of lease liabilities:
−Removed: Operating cash flows from operating leases $ 1,528 $ 1,847
−Removed: Financing cash flows used in financing leases $ 1,326 $ 1,022
−Removed: Future lease payments under non-cancellable leases as of September 30, 2023 are as follows (in thousands):
+Added: Future lease payments under non-cancellable leases as of December 30, 2023 are as follows (in thousands):
Fiscal Years Ending Operating Leases Finance Leases
2 unchanged sentences
2026 4,147 501
−Removed: 2027 $ 2,536 $ —
−Removed: 2028 $ 1,551 $ —
Thereafter 1,873 —
2 unchanged sentences
Total lease liabilities $ 18,104 $ 3,170
−Removed: (1) Represents estimated lease payments for the remaining nine-month period ending June 29, 2024.
+Added: (1) Represents estimated lease payments for the remaining six-month period ending June 29, 2024.
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.