What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 209 added, 185 removed, 709 unchanged (36% of the section changed)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share data) 2021 2020 2021 2020

14 unchanged sentences

Share of net income from joint venture 842 1,136 3,456 1,792

Loss from continuing operations ( 5,391 ) ( 17,566 ) ( 10,304 ) ( 125,643 )

Loss from discontinued operations, net of tax (Note 2) — ( 4,182 ) — ( 144,296 )

Net loss $ ( 5,391 ) $ ( 21,748 ) $ ( 10,304 ) $ ( 269,939 )

Income (loss) from continuing operations ( 3,377 ) 1,640 ( 13,681 ) ( 124,003 )

Income (loss) from discontinued operations, net of tax (Note 2) — 20,330 — ( 123,966 )

Net income (loss) $ ( 3,377 ) $ 21,970 $ ( 13,681 ) $ ( 247,969 )

Other comprehensive income (loss):

2 unchanged sentences

Change in fair value, net of tax ( 176 ) 21 ( 176 ) ( 12,443 )

Reclassification adjustment for losses included in net loss, net of tax — 2,638 2,851 3,690

Reclassification adjustment for losses included in net income (loss), net of tax 22 3,148 2,873 6,838

Other comprehensive income (loss) $ ( 2,766 ) $ 9,881 $ 1,147 $ ( 12,241 )

Comprehensive loss $ ( 982 ) $ ( 19,371 ) $ ( 6,391 ) $ ( 292,061 )

Basic net loss per common share:

Loss from continuing operations per common share $ ( 0.17 ) $ ( 0.49 ) $ ( 0.62 ) $ ( 3.12 )

Loss from discontinued operations per common share — ( 0.10 ) — ( 3.43 )

Net loss per common share $ ( 0.17 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 6.55 )

Comprehensive income (loss) $ ( 6,143 ) $ 31,851 $ ( 12,534 ) $ ( 260,210 )

Basic net income (loss) per common share:

Income (loss) from continuing operations per common share $ ( 0.13 ) $ ( 0.04 ) $ ( 0.75 ) $ ( 3.16 )

Income (loss) from discontinued operations per common share — 0.49 — ( 2.94 )

Net income (loss) per common share $ ( 0.13 ) $ 0.45 $ ( 0.75 ) $ ( 6.10 )

Weighted average common shares outstanding 44,455 42,202 43,862 42,170

Diluted net loss per common share:

Loss from continuing operations per common share $ ( 0.17 ) $ ( 0.49 ) $ ( 0.62 ) $ ( 3.12 )

Loss from discontinued operations per common share — ( 0.10 ) — ( 3.43 )

Net loss per common share $ ( 0.17 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 6.55 )

Diluted net income (loss) per common share:

Income (loss) from continuing operations per common share $ ( 0.13 ) $ ( 0.04 ) $ ( 0.75 ) $ ( 3.16 )

Income (loss) from discontinued operations per common share — 0.49 — ( 2.94 )

Net income (loss) per common share $ ( 0.13 ) $ 0.45 $ ( 0.75 ) $ ( 6.10 )

Weighted average common shares outstanding 44,455 42,202 43,862 42,170

1 unchanged sentence

Condensed Consolidated Balance Sheets

(in thousands, except per share data) June 30, 2021 December 31, 2020

(in thousands, except per share data) September 30, 2021 December 31, 2020

Current assets:

27 unchanged sentences

Commitments and contingencies (Note 11)

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at June 30, 2021

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2021

Series B convertible preferred stock - $ 0.01 par value per share, 100 shares authorized, issued and outstanding at December 31, 2020

Stockholders' equity:

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 42,686 and 43,034 shares issued and outstanding at December 31, 2020 and June 30, 2021, respectively

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 42,686 and 43,034 shares issued and outstanding at December 31, 2020 and September 30, 2021, respectively

Additional paid-in capital 476,540 493,332

5 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended June 30, 2021 and 2020

Three Months Ended September 30, 2021 and 2020

Common Stock Accumulated deficit Accumulated other comprehensive income (loss)

2 unchanged sentences

capital Total

Balance, March 31, 2021 43,049 $ 430 $ 479,341 $ ( 210,788 ) $ ( 34,228 ) $ 234,755

Balance, June 30, 2021 43,034 $ 430 $ 477,923 $ ( 216,179 ) $ ( 29,819 ) $ 232,355

Net loss — — — ( 3,377 ) — ( 3,377 )

Dividends accrued for preferred stock — — ( 2,314 ) — — ( 2,314 )

Shares issued for option exercises 6 — 48 — — 48

Share-based compensation expense — — 931 — — 931

Restricted shares forgiven for taxes ( 2 ) — ( 18 ) — — ( 18 )

Change in estimate of share-based award vesting — — ( 337 ) — — ( 337 )

Foreign currency translation gain — — — — 4,409 4,409

Balance, June 30, 2021 43,034 $ 430 $ 477,923 $ ( 216,179 ) $ ( 29,819 ) $ 232,355

Change in fair value of interest rate swap, net of tax of $ 53

— — — — ( 176 ) ( 176 )

Reclassification of interest rate swap to net loss, net of tax of $ 7

— — — — 22 22

Foreign currency translation loss — — — — ( 2,612 ) ( 2,612 )

Balance, September 30, 2021 43,034 $ 430 $ 476,540 $ ( 219,556 ) $ ( 32,585 ) $ 224,829

Common Stock Accumulated deficit Accumulated other comprehensive income (loss)

2 unchanged sentences

capital Warrants Total

Balance, March 31, 2020 42,757 $ 428 $ 499,925 $ 1,076 $ ( 353,474 ) $ ( 69,053 ) $ 78,902

Net loss — — — — ( 21,748 ) — ( 21,748 )

Balance, June 30, 2020 42,747 $ 427 $ 498,294 $ 1,076 $ ( 375,222 ) $ ( 66,676 ) $ 57,899

Net income — — — — 21,970 — 21,970

Dividends accrued for preferred stock — — ( 3,139 ) — — — ( 3,139 )

Share-based compensation expense — — 1,435 — — — 1,435

Restricted shares forgiven for taxes ( 8 ) — ( 46 ) — — — ( 46 )

Change in estimate of share-based award vesting — — ( 577 ) — — — ( 577 )

Reclassification of warrants to liabilities — — — ( 1,076 ) — — ( 1,076 )

Change in fair value of interest rate swap, net of tax of $ 6

— — — — — 21 21

Reclassification of interest rate swap settlement to net loss, net of tax of $ 798

Reclassification of interest rate swap settlement to net income, net of tax of $ 952

— — — — — 3,148 3,148

Foreign currency translation gain — — — — — 6,712 6,712

Balance, June 30, 2020 42,747 $ 427 $ 498,294 $ 1,076 $ ( 375,222 ) $ ( 66,676 ) $ 57,899

Balance, September 30, 2020 42,739 $ 427 $ 495,967 $ — $ ( 353,252 ) $ ( 56,795 ) $ 86,347

See notes to condensed consolidated financial statements (unaudited).

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2021 and 2020

Nine Months Ended September 30, 2021 and 2020

Common Stock Accumulated deficit Accumulated other comprehensive income (loss)

9 unchanged sentences

Change in estimate of share-based award vesting — — ( 337 ) — — ( 337 )

Change in fair value of interest rate swap, net of tax of $ 53

— — — — ( 176 ) ( 176 )

Reclassification of interest rate swap to net loss, net of tax of $ 868

— — — — 2,873 2,873

Foreign currency translation gain — — — — 1,062 1,062

Balance, June 30, 2021 43,034 $ 430 $ 477,923 $ ( 216,179 ) $ ( 29,819 ) $ 232,355

Foreign currency translation loss — — — — ( 1,550 ) ( 1,550 )

Balance, September 30, 2021 43,034 $ 430 $ 476,540 $ ( 219,556 ) $ ( 32,585 ) $ 224,829

Common Stock Accumulated deficit Accumulated other comprehensive income (loss)

7 unchanged sentences

Restricted shares forgiven for taxes ( 16 ) — ( 76 ) — — — ( 76 )

Change in estimate of share-based award vesting — — ( 577 ) — — — ( 577 )

Reclassification of warrants to liabilities — — — ( 1,076 ) — — ( 1,076 )

Change in fair value of interest rate swap, net of tax of $ 3,764

3 unchanged sentences

Foreign currency translation loss — — — — — ( 6,636 ) ( 6,636 )

Balance, June 30, 2020 42,747 $ 427 $ 498,294 $ 1,076 $ ( 375,222 ) $ ( 66,676 ) $ 57,899

Balance, September 30, 2020 42,739 $ 427 $ 495,967 $ — $ ( 353,252 ) $ ( 56,795 ) $ 86,347

See notes to condensed consolidated financial statements (unaudited).

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2021 2020

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_______________________________

(1) Cash and cash equivalents include $ 12.2 million and $ 13.8 million of cash and cash equivalents that were included in current assets of discontinued operations as of June 30, 2020, and December 31, 2019, respectively.

(1) Cash and cash equivalents include $ 16.0 million and $ 13.8 million of cash and cash equivalents that were included in current assets of discontinued operations as of September 30, 2020, and December 31, 2019, respectively.

See notes to condensed consolidated financial statements (unaudited).

Notes to Condensed Consolidated Financial Statements

June 30, 2021

September 30, 2021

Interim Financial Statements

7 unchanged sentences

Historical periods presented reflect reclassifications for discontinued operations (see Note 2).

In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and six months ended June 30, 2021 and 2020;

financial position as of June 30, 2021, and December 31, 2020;

and cash flows for the six months ended June 30, 2021 and 2020, on a basis consistent with our audited consolidated financial statements other than the adoption of new accounting standards (see Accounting Standards Recently Adopted section below).

financial position as of September 30, 2021, and December 31, 2020;

and cash flows for the nine months ended September 30, 2021 and 2020, on a basis consistent with our audited consolidated financial statements other than the adoption of new accounting standards (see Accounting Standards Recently Adopted section below).

These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods.

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These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2020 Annual Report.

The results for the three and six months ended June 30, 2021, are not necessarily indicative of results for the year ending December 31, 2021, or any other future periods.

The results for the three and nine months ended September 30, 2021, are not necessarily indicative of results for the year ending December 31, 2021, or any other future periods.

Except for per share data or as otherwise indicated, all U.S.

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Further, for the diluted earnings-per-share calculation, the new guidance requires entities to use the if-converted method for all convertible instruments and generally requires entities to include the effect of share settlement for instruments that may be settled in cash or shares, among other things.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted.

Either the full or modified retrospective adoption method is allowed.

We are currently evaluating the impact on our consolidated financial statements and related disclosures.

freestanding equity-classified written call options that remain equity classified after modification or exchange.

Specifically, ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant as an exchange of the original warrant.

We plan to adopt ASU 2020-06 effective January 1, 2022 using the modified retrospective adoption method.

We do not anticipate that the adoption will have a material impact on our consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options , (“ASU 2021-04”) which clarifies the accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange.

Specifically,

ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant as an exchange of the original warrant.

The difference between the fair value of the modified warrant and the fair value of the warrant immediately before modification is then recognized as an issuance cost or discount of the related transaction.

7 unchanged sentences

The SPA includes a potential earnout payment of up to $ 70.0 million based on the performance of the Life Sciences business during the year ending December 31, 2022, measured by Adjusted EBITDA targets, as defined by the SPA.

After working capital and other closing adjustments, we received cash proceeds at closing of $ 757.2 million and paid $ 3.9 million to the buyer during the six months ended June 30, 2021, for post-closing adjustments.

After working capital and other closing adjustments, we received cash proceeds at closing of $ 757.2 million in 2020 and paid $ 3.9 million to the buyer during the nine months ended September 30, 2021, for post-closing adjustments.

Under the terms of a transition services agreement, we provided certain support services after the sale.

In accordance with the terms of the SPA, we agreed to indemnify the buyer for certain tax liabilities on its consolidated federal income tax return related to the Life Sciences business during the portion of the year ended December 31, 2020, prior to the change in ownership on October 6, 2020.

We estimate that the tax indemnification will result in a payment of approximately $ 1.2 million to the buyer during the year ending December 31, 2021, and we have recorded this estimated obligation in the “Other current liabilities” line item on the Condensed Consolidated Balance Sheets as of June 30, 2021, and December 31, 2020.

In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , the operating results of the Life Sciences business are classified as discontinued operations.

5 unchanged sentences

Three Months Ended

June 30, 2020 Six Months Ended

June 30, 2020

September 30, 2020 Nine Months Ended

September 30, 2020

Net sales $ 68,525 $ 223,944

3 unchanged sentences

Goodwill impairment — 146,757

Other operating income, net ( 6 ) ( 3 )

Income (loss) from operations 4,070 ( 137,153 )

Other operating expense, net 24 20

Loss from operations ( 137 ) ( 137,291 )

Interest expense 12,248 37,857

Other expense (income), net 334 ( 90 )

Loss on extinguishment of debt and write-off of debt issuance costs 1,388 1,388

Other income, net ( 234 ) ( 325 )

Loss from discontinued operations before costs of disposal and benefit for income taxes ( 13,539 ) ( 176,211 )

Benefit for income taxes 39,954 59,598

Loss from discontinued operations before costs of disposal ( 3,147 ) ( 143,029 )

Income (loss) from discontinued operations before costs of disposal 26,415 ( 116,613 )

Costs of disposal of discontinued operations (1) ( 6,598 ) ( 7,956 )

Benefit for income taxes on costs of disposal 513 603

Loss from discontinued operations, net of tax $ ( 4,182 ) $ ( 144,296 )

Income (loss) from discontinued operations, net of tax $ 20,330 $ ( 123,966 )

_______________________________

11 unchanged sentences

Three Months Ended

June 30, 2020 Six Months Ended

June 30, 2020

September 30, 2020 Nine Months Ended

September 30, 2020

Interest on debt $ 11,060 $ 34,410

3 unchanged sentences

The following table presents the significant noncash items and cash paid for capital expenditures of discontinued operations for the historical period presented.

Six Months Ended

June 30, 2020

Nine Months Ended

September 30, 2020

Depreciation and amortization $ 35,731

1 unchanged sentence

Amortization of debt issuance costs 3,692

Loss on extinguishment of debt and write-off of debt issuance costs 1,388

Acquisition of property, plant and equipment 7,626

10 unchanged sentences

See Note 2 for information regarding the sale of the Life Sciences business on October 6, 2020.

The results of the Life Sciences business are classified as discontinued operations for the three and six months ended June 30, 2020, and therefore are not included in the tabular presentation below.

The results of the Life Sciences business are classified as discontinued operations for the three and nine months ended September 30, 2020, and therefore are not included in the tabular presentation below.

The following tables present results of continuing operations by reportable segment.

2 unchanged sentences

Consolidations Total

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Net sales $ 68,586 $ 48,680 $ ( 22 ) (a) $ 117,244

1 unchanged sentence

Interest expense ( 3,578 )

Other ( 1,680 )

Loss from continuing operations before income taxes and share of net income from joint venture $ ( 3,844 )

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Net sales $ 70,371 $ 43,415 $ ( 25 ) (a) $ 113,761

5 unchanged sentences

Consolidations Total

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Net sales $ 220,248 $ 147,026 $ ( 69 ) (a) $ 367,205

3 unchanged sentences

Loss from continuing operations before income taxes and share of net income from joint venture $ ( 17,749 )

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Net sales $ 181,292 $ 127,307 $ ( 93 ) (a) $ 308,506

Goodwill impairment — 92,942 — 92,942

Loss from operations ( 4,328 ) ( 88,880 ) ( 21,819 ) $ ( 115,027 )

Income (loss) from operations 625 ( 87,737 ) ( 29,371 ) $ ( 116,483 )

Interest expense ( 17,036 )

3 unchanged sentences

(a) Includes elimination of intersegment transactions occurring during the ordinary course of business.

As of June 30, 2021, and December 31, 2020, one customer represented 11 % and 11 %, respectively, of consolidated accounts receivable.

Amounts due from this customer are primarily related to Mobile Solutions.

Inventories are comprised of the following amounts:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Raw materials $ 26,489 $ 22,589

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As a result of our analysis, we recorded an impairment loss on goodwill of $ 92.9 million to the “Goodwill impairment” line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

As of June 30, 2021, and December 31, 2020, there was no remaining goodwill balance.

As of September 30, 2021, and December 31, 2020, there was no remaining goodwill balance.

Intangible Assets, Net

4 unchanged sentences

Amortization ( 2,515 ) ( 8,245 ) ( 10,760 )

Balance as of June 30, 2021 $ 27,385 $ 68,506 $ 95,891

Balance as of September 30, 2021 $ 26,547 $ 65,758 $ 92,305

Intangible assets are tested for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable.

As of June 30, 2021, and December 31, 2020, there were no indicators of impairment.

As of September 30, 2021, and December 31, 2020, there were no indicators of impairment.

Investment in Joint Venture

6 unchanged sentences

Foreign currency translation gain 360

Balance as of June 30, 2021 $ 29,897

Our effective tax rate for continuing operations was 3.4 % and 7.1 % for the three and six months ended June 30, 2021, respectively, and ( 13.3 )% and ( 0.6 )% for the three and six months ended June 30, 2020, respectively.

The effective tax rate for the three and six months ended June 30, 2021, differs from the U.S.

Balance as of September 30, 2021 $ 30,799

Our effective tax rate for continuing operations was ( 9.8 )% and 3.5 % for the three and nine months ended September 30, 2021, respectively, and 106.1 % and 5.9 % for the three and nine months ended September 30, 2020, respectively.

The effective tax rate for the three and nine months ended September 30, 2021, differs from the U.S.

federal statutory tax rate of 21 % primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized.

2 unchanged sentences

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted.

The provisions of the legislation had a significant impact on our effective tax rate and income tax receivable as of and for the six months ended June 30, 2020.

The provisions of the legislation had a significant impact on our effective tax rate and income tax receivable as of and for the nine months ended September 30, 2020.

Under the CARES Act, NOLs arising in tax years beginning after December 31, 2017, were carried back to preceding tax years when the federal tax rate was 35% rather than the currently enacted 21%.

The effective tax rate for the three and six months ended June 30, 2020, was also adversely impacted by the effect of the non-deductible goodwill impairment on the estimated annual effective tax rate and the impact of the minimum GILTI tax, partially offset by impacts from the CARES Act.

The effective tax rate for the three and nine months ended September 30, 2020, was also adversely impacted by the effect of the non-deductible goodwill impairment on the estimated annual effective tax rate and the impact of the minimum GILTI tax, partially offset by impacts from the CARES Act.

On March 22, 2021, we entered into a new $ 150.0 million term loan facility (the “Term Loan Facility”) and a new $ 50.0 million asset backed credit facility (the “ABL Facility”).

2 unchanged sentences

No amounts were outstanding on the Senior Secured Revolver at the time of termination.

The following table presents debt balances as of June 30, 2021, and December 31, 2020.

June 30, 2021 December 31, 2020

The following table presents debt balances as of September 30, 2021, and December 31, 2020.

September 30, 2021 December 31, 2020

Term Loan Facility $ 149,250 $ —

8 unchanged sentences

_______________________________

(1) In addition to this amount, costs of $ 0.8 million related to the ABL Facility were recorded in other non-current assets as of June 30, 2021, and $ 1.8 million related to the Senior Secured Revolver were recorded in other non-current assets as of December 31, 2020.

We capitalized interest costs of $ 0.1 million and less than $ 0.1 million in the three months ended June 30, 2021 and 2020, respectively, and $ 0.1 million and $ 0.1 million in the six months ended June 30, 2021 and 2020, respectively, related to construction in progress.

(1) In addition to this amount, costs of $ 0.7 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2021, and $ 1.8 million related to the Senior Secured Revolver were recorded in other non-current assets as of December 31, 2020.

We capitalized interest costs of $ 0.2 million and $ 0.2 million in the nine months ended September 30, 2021 and 2020, respectively, related to construction in progress.

Term Loan Facility

Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month LIBOR (subject to a 1.000 % floor) plus an applicable margin of 6.875 % or 2) the greater of various benchmark rates plus an applicable margin of 5.875 %.

At June 30, 2021, the Term Loan Facility bore interest, based on one-month LIBOR, at 7.875 %.

At September 30, 2021, the Term Loan Facility bore interest, based on one-month LIBOR, at 7.875 %.

The Term Loan Facility requires quarterly principal payments of $ 0.4 million with the remaining unpaid principal amount due on the final maturity date of September 22, 2026.

1 unchanged sentence

The Term Loan Facility has a first lien on all assets other than accounts receivable and inventory and has a second lien on accounts receivable and inventory.

We were in compliance with all requirements under the Term Loan Facility as of June 30, 2021.

We were in compliance with all requirements under the Term Loan Facility as of September 30, 2021.

The Term Loan Facility was issued at a $ 3.8 million discount.

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Interest payments are due monthly on borrowings that utilize one-month LIBOR and quarterly on borrowings that utilize three-month or six-month LIBOR.

At June 30, 2021, using one-month LIBOR plus a 1.75 % spread, the weighted average interest rate on outstanding borrowings under the ABL Facility would have been 2.25 % if there had been any balance outstanding.

At September 30, 2021, using one-month LIBOR plus a 1.75 % spread, the weighted average interest rate on outstanding borrowings under the ABL Facility would have been 2.25 % if there had been any balance outstanding.

We pay a commitment fee of 0.375 % for unused capacity under the ABL Facility and a 1.875 % fee on the amount of letters of credit outstanding.

The final maturity date of the ABL Facility is March 22, 2026.

We had no outstanding borrowings under the ABL Facility at June 30, 2021.

Total capacity under the ABL Facility was $ 44.2 million as of June 30, 2021, of which $ 30.2 million was available for future borrowings after reductions for outstanding letters of credit as of June 30, 2021.

We had no outstanding borrowings under the ABL Facility at September 30, 2021.

Total capacity under the ABL Facility was $ 47.7 million as of September 30, 2021, of which $ 36.5 million was available for future borrowings after reductions for outstanding letters of credit as of September 30, 2021.

The ABL Facility has a first lien on accounts receivable and inventory.

We were in compliance with all requirements under the ABL Facility as of June 30, 2021.

We were in compliance with all requirements under the ABL Facility as of September 30, 2021.

We capitalized a total of $ 0.8 million in new debt issuance costs related to the ABL Facility.

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Debt Issuance Costs

We recognized a $ 2.4 million loss on extinguishment for unamortized debt issuance costs that were written off in the six months ended June 30, 2021, in connection with the termination of our previous credit facility.

Interest Rate Swap

A portion of the proceeds from the Term Loan Facility was used to settle and terminate our fixed-rate interest rate swap agreement with a cash payment of $ 13.7 million during the first quarter of 2021.

Refer to Note 17 for further discussion of the interest rate swap agreement.

On July 22, 2021, we entered into a new interest rate swap as discussed in Note 18.

We recognized a $ 2.4 million loss on extinguishment for unamortized debt issuance costs that were written off in the nine months ended September 30, 2021, in connection with the termination of our previous credit facility.

Interest Rate Swaps

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of the Term Loan Facility to a fixed rate of 1.291 %.

The interest rate swap has a notional amount of $ 60.0 million and a maturity date of July 31, 2024.

A portion of the proceeds from the Term Loan Facility was used to settle and terminate our previous fixed-rate interest rate swap agreement with a cash payment of $ 13.7 million during the first quarter of 2021.

Refer to Note 17 for further discussion of the interest rate swap agreements.

The following table contains supplemental cash flow information related to leases of continuing operations.

Six Months Ended

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

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Management believes the indemnification would include amounts owed for the tax, interest, and penalties related to this matter.

Accordingly, we don’t expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of June 30, 2021.

Securities Offering Matter

9 unchanged sentences

The complaint alleged that the Company’s sale of its Life Sciences business without obtaining the prior consent of the plaintiffs was a breach of the terms of the Series B Preferred Stock.

On May 13, 2021, Company entered into a cooperation agreement with Corre Partners.

On May 13, 2021, the Company entered into a cooperation agreement with Corre Partners.

In connection with the cooperation agreement, on May 13, 2021, the Company also entered into a settlement agreement with Corre Partners, which resolved the complaint.

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Note 17 discusses the accounting for these features.

As of June 30, 2021, the carrying value of the Series D Preferred Stock shares was $ 49.1 million which included $ 2.4 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the six months ended June 30, 2021.

Six Months Ended

June 30, 2021

As of September 30, 2021, the carrying value of the Series D Preferred Stock shares was $ 51.4 million, which included $ 4.7 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2021.

Nine Months Ended

September 30, 2021

Beginning balance $ —

13 unchanged sentences

At redemption on March 22, 2021, the carrying value of the Series B Preferred Stock shares included $ 14.3 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series B Preferred Stock carrying value during the six months ended June 30, 2021.

Six Months Ended

June 30, 2021

The following table presents the change in the Series B Preferred Stock carrying value during the nine months ended September 30, 2021.

Nine Months Ended

September 30, 2021

Beginning balance $ 105,086

10 unchanged sentences

The following tables summarize revenue by customer geographical region.

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Solutions Power

9 unchanged sentences

Total net sales $ 68,586 $ 48,680 $ ( 22 ) $ 117,244

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Solutions Power

9 unchanged sentences

Total net sales $ 70,371 $ 43,415 $ ( 25 ) $ 113,761

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Solutions Power

9 unchanged sentences

Total net sales $ 220,248 $ 147,026 $ ( 69 ) $ 367,205

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Solutions Power

10 unchanged sentences

The following tables summarize revenue by customer industry.

Our products in the automotive industry include high-precision components and assemblies for fuel systems, steering systems, electric motors, transmissions, moldings, stampings, sensors, and electrical contacts.

Our products in the general industrial industry include high-precision metal and plastic components for a variety of industrial applications including heating and cooling systems, fluid power systems, power tools, and more.

While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include electrical contact assemblies, precision stampings, welded contact assemblies, and specification plating and surface finishing.

Three Months Ended June 30, 2021

Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, moldings, stampings, sensors, and electrical contacts.

Our products in the general industrial industry include high-precision metal and plastic components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more.

While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, and specification plating and surface finishing.

Three Months Ended September 30, 2021

Solutions Power

6 unchanged sentences

Total net sales $ 68,586 $ 48,680 $ ( 22 ) $ 117,244

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Solutions Power

6 unchanged sentences

Total net sales $ 70,371 $ 43,415 $ ( 25 ) $ 113,761

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Solutions Power

6 unchanged sentences

Total net sales $ 220,248 $ 147,026 $ ( 69 ) $ 367,205

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Solutions Power

7 unchanged sentences

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30, 2021, unless our contracts meet one of the practical expedients.

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2021, unless our contracts meet one of the practical expedients.

Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

Sales Concentration

We recognized sales from a single customer of $ 13.2 million, or 11 % and $ 26.2 million, or 11 %, of consolidated net sales, during the three and six months ended June 30, 2021, respectively.

We recognized sales from this customer of $ 9.2 million, or 12 % of consolidated net sales, during the three months ended June 30, 2020.

We recognized sales from a single customer of $ 11.1 million, or 10 %, and $ 37.3 million, or 10 %, of consolidated net sales, during the three and nine months ended September 30, 2021, respectively.

Revenues from this customer are primarily in our Mobile Solutions segment.

Share-Based Compensation

Share-based compensation cost is recognized in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except for $ 0.2 million and $ 0.4 million, attributable to discontinued operations for the three and six months ended June 30, 2020, respectively.

Share-based compensation cost is recognized in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except for $( 0.2 ) million and $ 0.2 million, attributable to discontinued operations for the three and nine months ended September 30, 2020, respectively.

The following table lists the components of share-based compensation expense by type of award.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

8 unchanged sentences

S tock Options

The following table presents stock option activity for the six months ended June 30, 2021.

The following table presents stock option activity for the nine months ended September 30, 2021.

Number of Options

5 unchanged sentences

Forfeited or expired ( 118 ) 15.25

Outstanding at June 30, 2021 794 $ 12.32 3.6 years $ — (1)

Exercisable at June 30, 2021 698 $ 12.79 3.0 years $ — (1)

Outstanding at September 30, 2021 747 $ 11.99 3.6 years $ — (1)

Exercisable at September 30, 2021 651 $ 12.45 3.0 years $ — (1)

_______________________________

(1) The aggregate intrinsic value is the sum of intrinsic values for each exercisable individual option grant.

The intrinsic value is the amount by which the closing market price of our stock at June 30, 2021, was greater than the exercise price of any individual option grant.

The intrinsic value is the amount by which the closing market price of our stock at September 30, 2021, was greater than the exercise price of any individual option grant.

Restricted Stock

During the six months ended June 30, 2021, we granted 459 thousand shares of restricted stock to non-executive directors, officers and certain other key employees.

The shares of restricted stock granted during the six months ended June 30, 2021, vest pro-rata generally over three years for employees and over one year for non-executive directors.

During the nine months ended September 30, 2021, we granted 459 thousand shares of restricted stock to non-executive directors, officers and certain other key employees.

The shares of restricted stock granted during the nine months ended September 30, 2021, vest pro-rata generally over three years for employees and over one year for non-executive directors.

We determined the fair value of the shares awarded by using the closing price of our common stock as of the date of grant.

The weighted average grant date fair value of restricted stock granted in the six months ended June 30, 2021, was $ 6.84 per share.

Total grant date fair value of restricted stock that vested in the six months ended June 30, 2021, was $ 2.8 million.

The following table presents the status of unvested restricted stock awards as of June 30, 2021, and changes during the six months then ended.

The weighted average grant date fair value of restricted stock granted in the nine months ended September 30, 2021, was $ 6.84 per share.

Total grant date fair value of restricted stock that vested in the nine months ended September 30, 2021, was $ 2.8 million.

The following table presents the status of unvested restricted stock awards as of September 30, 2021, and changes during the nine months then ended.

(in thousands) Weighted

3 unchanged sentences

Forfeited ( 65 ) 7.20

Unvested at June 30, 2021 476 $ 7.28

Unvested at September 30, 2021 476 $ 7.28

Performance Share Units

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The ROIC Awards vest, if at all, upon our achieving a specified average return on invested capital during the performance periods.

Each performance period generally begins on January 1 of the year of grant and ends 36 months later on December 31.

Each performance period generally begins on January 1 of the year of grant and ends 3 years later on December 31.

We recognize compensation expense over the performance period in which the performance and market conditions are measured.

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We generally recognize an expense for ROIC Awards based on the Target Performance threshold of 100 % because, at the date of grant, the Target Performance is the probable level of performance achievement.

The following table presents the status of unvested PSUs as of June 30, 2021, and changes during the six months then ended.

The following table presents the status of unvested PSUs as of September 30, 2021, and changes during the nine months then ended.

Nonvested TSR Awards Nonvested ROIC Awards

5 unchanged sentences

Forfeited ( 61 ) 9.61 ( 71 ) 8.17

Nonvested at June 30, 2021 219 $ 9.55 261 $ 8.12

Nonvested at September 30, 2021 219 $ 9.55 261 $ 8.12

Change in Vesting Estimates

During the six months ended June 30, 2021, we recognized a decrease in share-based compensation expense in continuing operations of $ 0.3 million in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) to reverse cumulative expense for restricted stock and PSU awards that were forfeited upon termination of employment and were in excess of our estimated forfeiture rate.

During the nine months ended September 30, 2021, we recognized a decrease in share-based compensation expense in continuing operations of $ 0.3 million in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) to reverse cumulative expense for restricted stock and PSU awards that were forfeited upon termination of employment and were in excess of our estimated forfeiture rate.

Accumulated Other Comprehensive Income

The following tables present the components of accumulated other comprehensive income (“AOCI”).

The following tables present the components of accumulated other comprehensive income (loss) (“AOCI”).

Foreign Currency Translation Interest rate swap Income taxes (1) Total

Balance at March 31, 2021 $ ( 34,228 ) $ — $ — $ ( 34,228 )

Net other comprehensive income (loss) 4,409 — — 4,409

Balance at June 30, 2021 $ ( 29,819 ) $ — $ — $ ( 29,819 )

Balance at March 31, 2020 $ ( 49,501 ) $ ( 25,463 ) $ 5,911 $ ( 69,053 )

Other comprehensive income (loss) before reclassifications ( 2,612 ) ( 229 ) 53 ( 2,788 )

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Net other comprehensive income (loss) ( 2,612 ) ( 200 ) 46 ( 2,766 )

Balance at September 30, 2021 $ ( 32,431 ) $ ( 200 ) $ 46 $ ( 32,585 )

Balance at June 30, 2020 $ ( 48,507 ) $ ( 23,662 ) $ 5,493 $ ( 66,676 )

Other comprehensive income (loss) before reclassifications 6,712 27 ( 6 ) 6,733

Amounts reclassified from AOCI to interest expense (2) — 4,100 ( 952 ) 3,148

Net other comprehensive income (loss) 6,712 4,127 ( 958 ) 9,881

Balance at September 30, 2020 $ ( 41,795 ) $ ( 19,535 ) $ 4,535 $ ( 56,795 )

Foreign Currency Translation Interest rate swap Income taxes (1) Total

1 unchanged sentence

Other comprehensive income (loss) before reclassifications ( 1,550 ) ( 229 ) 53 ( 1,726 )

Amounts reclassified from AOCI to interest expense (2) — 29 ( 7 ) 22

Amounts reclassified from AOCI to loss on interest rate swap (3) — 3,712 ( 861 ) 2,851

Net current-period other comprehensive income (loss) ( 1,550 ) 3,512 ( 815 ) 1,147

Balance at June 30, 2021 $ ( 29,819 ) $ — $ — $ ( 29,819 )

Balance at September 30, 2021 $ ( 32,431 ) $ ( 200 ) $ 46 $ ( 32,585 )

Balance at December 31, 2019 $ ( 35,159 ) $ ( 12,234 ) $ 2,839 $ ( 44,554 )

2 unchanged sentences

Net current-period other comprehensive income (loss) ( 6,636 ) ( 7,301 ) 1,696 ( 12,241 )

Balance at June 30, 2020 $ ( 48,507 ) $ ( 23,662 ) $ 5,493 $ ( 66,676 )

Balance at September 30, 2020 $ ( 41,795 ) $ ( 19,535 ) $ 4,535 $ ( 56,795 )

_______________________

(1) Income tax effect of changes in interest rate swap.

(2) Represents settlements on the interest rate swap while the hedge was effective.

(2) Represents interest rate swap settlements of effective hedge.

(3) Represents reclassification of derivative loss and settlements after discontinuation of hedge accounting.

4 unchanged sentences

To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, warrants, and convertible preferred stock.

The following table summarizes the computation of basic and diluted net loss per common share.

The following table summarizes the computation of basic and diluted net income (loss) per common share.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Loss from continuing operations $ ( 5,391 ) $ ( 17,566 ) $ ( 10,304 ) $ ( 125,643 )

Income (loss) from continuing operations $ ( 3,377 ) $ 1,640 $ ( 13,681 ) $ ( 124,003 )

Preferred stock cumulative dividends and deemed dividends ( 2,314 ) ( 3,139 ) ( 19,054 ) ( 9,133 )

Numerator for basic and diluted loss from continuing operations per common share (1) ( 7,602 ) ( 20,609 ) ( 27,044 ) ( 131,637 )

Loss from discontinued operations, net of tax (Note 2) — ( 4,182 ) — ( 144,296 )

Numerator for basic and diluted income (loss) from continuing operations per common share (1) ( 5,691 ) ( 1,499 ) ( 32,735 ) ( 133,136 )

Income (loss) from discontinued operations, net of tax (Note 2) — 20,330 — ( 123,966 )

Numerator for basic and diluted undistributed net loss per common share (1) $ ( 5,691 ) $ 18,831 $ ( 32,735 ) $ ( 257,102 )

3 unchanged sentences

Shares used to calculate income (loss) per share, basic and diluted 44,455 42,202 43,862 42,170

Per common share net loss:

Per common share net income (loss):

Basic loss from continuing operations per common share $ ( 0.13 ) $ ( 0.04 ) $ ( 0.75 ) $ ( 3.16 )

Basic loss from discontinued operations per common share — ( 0.10 ) — ( 3.43 )

Basic net loss per common share $ ( 0.17 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 6.55 )

Basic income (loss) from discontinued operations per common share — 0.49 — ( 2.94 )

Basic income (loss) per common share $ ( 0.13 ) $ 0.45 $ ( 0.75 ) $ ( 6.10 )

Diluted loss from continuing operations per common share $ ( 0.13 ) $ ( 0.04 ) $ ( 0.75 ) $ ( 3.16 )

Diluted loss from discontinued operations per common share — ( 0.10 ) — ( 3.43 )

Diluted net loss per common share $ ( 0.17 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 6.55 )

Diluted income (loss) from discontinued operations per common share — 0.49 — ( 2.94 )

Diluted income (loss) per common share $ ( 0.13 ) $ 0.45 $ ( 0.75 ) $ ( 6.10 )

Cash dividends declared per common share $ — $ — $ — $ —

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

We have elected to allocate undistributed income to participating securities based on year-to-date results.

As there was no undistributed income for the three and six months ended June 30, 2021, no such allocation was necessary.

In addition, given the undistributed loss from continuing operations in the three and six months ended June 30, 2021 and 2020, options and the 2019 Warrants are considered anti-dilutive and were excluded from the calculation of diluted net loss per share.

Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $ 7.93 to $ 25.16 for the three months ended June 30, 2021, and $ 7.93 to $ 25.16 for three months ended June 30, 2020.

Stock options excluded from the

calculations of diluted net income (loss) per share had a per share exercise price ranging from $ 7.93 to $ 25.16 for the six months ended June 30, 2021, and $ 7.93 to $ 25.16 for six months ended June 30, 2020.

The 2019 Warrants excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2021, had a per share exercise price of $ 11.49 .

Series B Preferred Stock excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2020, was calculated on an as-converted basis.

As there was no undistributed income for the three and nine months ended September 30, 2021, no such allocation was necessary.

In addition, given the undistributed loss from continuing operations in the three and nine months ended September 30, 2021 and 2020, options and the 2019 Warrants are considered anti-dilutive and were excluded from the calculation of diluted net loss per share.

Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $ 7.93 to

$ 25.16 for the three months ended September 30, 2021, and $ 7.93 to $ 25.16 for three months ended September 30, 2020.

Stock options excluded from the calculations of diluted net income (loss) per share had a per share exercise price ranging from $ 7.93 to $ 25.16 for the nine months ended September 30, 2021, and $ 7.93 to $ 25.16 for nine months ended September 30, 2020.

The 2019 Warrants excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2021, had a per share exercise price of $ 11.49 .

Series B Preferred Stock excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2020, was calculated on an as-converted basis.

Fair Value Measurements

7 unchanged sentences

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives, and long-term debt.

As of June 30, 2021, the carrying values of these financial instruments approximated fair value.

As of September 30, 2021, the carrying values of these financial instruments approximated fair value.

Derivative Financial Instruments

10 unchanged sentences

Upon redemption of the Series B Preferred Stock in March 2021, we made a net cash distribution of $ 3.0 million to settle this withholding feature after effectively receiving a $ 1.0 million offset from the purchasers upon redemption of the Series B Preferred Stock.

The warrants issued with the Series B Preferred Stock (the “2019 Warrants”) are exercisable, in full or in part, at any time prior to December 11, 2026.

In conjunction with our placement of the Series B Preferred Stock, we issued detachable warrants to purchase up to 1.5 million shares of our common stock (the “2019 Warrants”), which are exercisable, in full or in part, at any time prior to December 11, 2026.

The original exercise price was $ 12.00 per share, subject to anti-dilution adjustments in the event of future below market issuances, stock splits, stock dividends, combinations or similar events.

5 unchanged sentences

The put feature is considered a redemption right at a premium and is not clearly and closely related to the debt host.

In conjunction with our placement of the Series D Preferred Stock, we issued detachable warrants to purchase up to 1.9 million shares of our common stock.

The 2021 Warrants are exercisable, in full or in part, at any time prior to March 22, 2027, at an exercise price of $ 0.01 per share, subject to anti-dilution adjustments in the event of certain future equity issuances, stock splits, stock dividends, combinations or similar events.

The following tables show the liabilities measured at fair value for the above derivatives as of June 30, 2021, and December 31, 2020.

Fair Value Measurements as of June 30, 2021

The following tables show the liabilities measured at fair value for the above derivatives as of September 30, 2021, and December 31, 2020.

Fair Value Measurements as of September 30, 2021

Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs

7 unchanged sentences

Total $ — $ — $ 3,117

The following table presents the change in the above derivatives during the six months ended June 30, 2021.

Six Months Ended June 30, 2021

The following table presents the change in the above derivatives during the nine months ended September 30, 2021.

Nine Months Ended September 30, 2021

Beginning balance $ 3,117

6 unchanged sentences

The fair value of the change-in-control put feature utilizes unobservable inputs based on the Company’s assessment of the probability of a change-in-control event occurring in a future period.

The probability of a change-in-control event ranged from 1 % to 10 % as of June 30, 2021.

The probability of a change-in-control event ranged from 1 % to 10 % as of September 30, 2021.

The leverage ratio put feature, the dividends withholding feature, and the contingent dividends feature utilized unobservable inputs based on the best information available to determine the probability of the Series B Preferred Stock remaining outstanding for future periods.

8 unchanged sentences

The fair value of the 2019 Warrants is determined using a valuation model that utilizes unobservable inputs to determine the probability that the 2019 Warrants will remain outstanding for future periods.

The probabilities resulted in a weighted average term of 4.2 years as of June 30, 2021, and 2.4 years as of December 31, 2020.

The probabilities resulted in a weighted average term of 3.6 years as of September 30, 2021, and 2.4 years as of December 31, 2020.

The fair value of the 2021 Warrants is determined using the observable market price of a share of our common stock, less the $ 0.01 per share exercise price.

Interest Rate Swap

Interest Rate Swaps

We manage our exposure to fluctuations in interest rates using a mix of fixed and variable rate debt.

We had a fixed-rate interest rate swap agreement that changed the LIBOR-based portion of the interest rate on a portion of our variable rate debt to a fixed rate of 2.4575 % (the “interest rate swap”).

On March 22, 2021, we terminated the interest rate swap agreement with a $ 13.7 million cash payment in connection with the extinguishment of our previously outstanding long-term variable-rate debt.

The interest rate swap was designated as a cash flow hedge at inception.

However, in the fourth quarter of 2020, the interest rate swap no longer qualified as an effective hedge, and subsequent changes in fair value of the interest rate swap were recognized in earnings.

Amounts recognized in earnings related to the interest rate swap are recorded in the “Loss on interest rate swap” line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except that cash settlements prior to termination are recognized in “Derivative payments on interest rate swap.” Cash settlements during 2021 are presented in investing activities on the Condensed Consolidated Statements of Cash Flows.

The following table presents the effect of the interest rate swap on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

We utilize fixed-rate interest rate swap agreements to change the variable interest rate to a fixed rate on a portion of our variable rate debt.

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291 % (the “2021 Swap”).

The 2021 Swap has a notional amount of $ 60.0 million and a maturity date of July 31, 2024.

The objective of the 2021 Swap is to eliminate the variability of cash flows in interest payments on the first $ 60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates.

The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term.

The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt.

We designated the 2021 Swap as a cash flow hedge at inception.

Cash settlements of the 2021 Swap are recognized in interest expense.

On February 8, 2019, we entered into a $ 700.0 million fixed-rate interest rate swap agreement that changed the LIBOR-based portion of the interest rate on a portion of our variable rate debt to a fixed rate of 2.4575 % (the “2019 Swap”).

On March 22, 2021, we terminated the 2019 Swap with a $ 13.7 million cash payment in connection with the extinguishment of our previously outstanding long-term variable-rate debt.

The 2019 Swap was designated as a cash flow hedge at inception.

However, in the fourth quarter of 2020, the 2019 Swap no longer qualified as an effective hedge, and subsequent changes in fair value of the 2019 Swap were recognized in earnings.

Amounts recognized in earnings related to the 2019 Swap are recorded in the “Loss on interest rate swap (2)” line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except that cash settlements prior to termination are recognized in “Derivative payments on interest rate swap.” Cash settlements during 2021 are presented in investing activities on the Condensed Consolidated Statements of Cash Flows.

The following table presents the effect of the interest rate swaps on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

2 unchanged sentences

Loss on interest rate swap (2) — — 2,033 —

The following table presents the liabilities measured at fair value on a recurring basis for the interest rate swap as of December 31, 2020.

_______________________________

(1) Represents settlements on the interest rate swaps while the hedges are effective.

(2) Represents settlements and changes in fair value on the 2019 Swap.

The following tables present the liabilities measured at fair value on a recurring basis for the interest rate swaps as of September 30, 2021, and December 31, 2020.

Fair Value Measurements as of September 30, 2021

Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs

Derivative liability - other current liabilities $ — $ 174 $ —

Derivative liability - other non-current liabilities — 23 —

Total $ — $ 197 $ —

Fair Value Measurements as of December 31, 2020

3 unchanged sentences

Total $ — $ 15,379 $ —

The inputs for determining fair value of the interest rate swap are classified as Level 2 inputs.

The inputs for determining fair value of the interest rate swaps are classified as Level 2 inputs.

Level 2 fair value is based on estimates using standard pricing models.

1 unchanged sentence

Counterparty to this derivative contract is a highly rated financial institution which we believe carries only a minimal risk of nonperformance.

On July 22, 2021, we entered into a new interest rate swap as discussed in Note 18.

Fixed Rate Debt

The fair value of our outstanding fixed-rate debt included in the “International lines of credit and other loans” line item within Note 9 to these Notes to Condensed Consolidated Financial Statements approximated carrying value as of June 30, 2021, and December 31, 2020, respectively.

The fair value of our outstanding fixed-rate debt included in the “International lines of credit and other loans” line item within Note 9 to these Notes to Condensed Consolidated Financial Statements approximated carrying value as of September 30, 2021, and December 31, 2020, respectively.

These fair values represent Level 2 under the three-tier hierarchy described above.

The carrying value of this fixed-rate debt was $ 12.2 million and $ 14.4 million as of June 30, 2021 and December 31, 2020, respectively.

Subsequent Event

Interest Rate Swap Agreement

On July 22, 2021, we entered into a new fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291 %.

The interest rate swap has a notional amount of $ 60.0 million and a maturity date of July 31, 2024.

The objective of the interest rate swap is to eliminate the variability of cash flows in interest payments on the first $ 60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates.

The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term.

The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt.

We designated the interest rate swap as a cash flow hedge at inception.

The carrying value of this fixed-rate debt was $ 11.4 million and $ 14.4 million as of September 30, 2021 and December 31, 2020, respectively.

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