What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-06 compared with 2021-02-05 · 145 added, 85 removed, 409 unchanged (36% of the section changed)

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2021 2020 2021 2020

Net sales $ 24,866 $ 30,537 $ 49,944 $ 56,744

3 unchanged sentences

Amortization of intangible assets 248 408 517 817

Loss on disposal of operating assets — 41 — 41

Gain on insurance recoveries — ( 1,000 ) ( 2,495 ) ( 1,000 )

1 unchanged sentence

Interest expense 169 262 335 513

Foreign currency exchange loss, net 7 1

Foreign currency exchange loss (income), net 14 ( 1 ) 21 —

Other loss (income), net 42 25 103 ( 84 )

Income (loss) before income tax benefit 2,088 ( 1,437 )

Income tax benefit ( 905 ) ( 95 )

Income (loss) before income tax expense (benefit) ( 1,326 ) 3,221 762 1,785

Income tax expense (benefit) 165 ( 39 ) ( 740 ) ( 134 )

Net income (loss) $ ( 1,491 ) $ 3,260 $ 1,502 $ 1,919

10 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2021 2020 2021 2020

Net income (loss) $ ( 1,491 ) $ 3,260 $ 1,502 $ 1,919

Other comprehensive income:

Foreign currency translation adjustment, net of tax $ 0 and $ 0 , respectively

Retirement plan liability adjustment, net of tax $ 0 and $ 0 , respectively

Foreign currency translation adjustment, net of tax $ 0 and $ 0 for the three months ended and net of tax $ 0 and $ 0 for the six months ended, respectively

( 303 ) ( 130 ) ( 17 ) 63

Retirement plan liability adjustment, net of tax $ 0 and $ 0 for the three months end and net of tax $ 0 and $ 0 for the six month ended, respectively

211 249 423 437

Comprehensive income (loss) $ ( 1,583 ) $ 3,379 $ 1,908 $ 2,419

10 unchanged sentences

Other receivables — 1,547

Contract asset 11,926 11,997

Contract assets 13,565 11,997

Inventories, net 15,568 15,569

24 unchanged sentences

Common shares, par value $ 1 per share, authorized 10,000 shares;

issued and outstanding shares 5,959 at December 31, 2020 and 5,916 at September 30, 2020

issued and outstanding shares 5,989 at March 31, 2021 and 5,916 at September 30, 2020

Additional paid-in capital 10,940 10,736

8 unchanged sentences

(Unaudited, Amounts in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net income (loss) $ 2,993 $ ( 1,342 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 1,502 $ 1,919

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Depreciation and amortization 3,730 3,731

Amortization of debt issuance cost 26 26

Amortization of debt issuance costs 52 52

Loss on disposal of operating assets — 41

Gain on insurance proceeds received ( 2,495 ) ( 1,000 )

17 unchanged sentences

Capital expenditures ( 5,416 ) ( 4,596 )

Net cash provided by (used for) investing activities ( 258 ) 1,197

Net cash used for investing activities ( 1,315 ) ( 96 )

Cash flows from financing activities:

Proceeds from long-term debt — 137

Payments on long-term debt ( 264 ) ( 568 )

1 unchanged sentence

Repayments of revolving credit agreement ( 49,794 ) ( 57,723 )

Payment of debt issuance costs ( 45 ) —

Short-term debt borrowings 2,471 1,542

Short-term debt repayments ( 1,631 ) ( 2,257 )

Net cash used for financing activities ( 2,137 ) ( 151 )

Increase in cash and cash equivalents 728 81

Net cash provided by (used for) financing activities ( 4,597 ) 503

Decrease in cash and cash equivalents ( 123 ) ( 7 )

Cash and cash equivalents at the beginning of the period 427 341

9 unchanged sentences

(Unaudited, Amounts in thousands )

Three Months Ended

December 31, 2020

Six Months Ended

March 31, 2021

Common Additional

8 unchanged sentences

Share transactions under equity based plans 73 73 ( 89 ) — — ( 16 )

Balance - December 31, 2020 5,959 $ 5,959 $ 10,820 $ 45,332 $ ( 12,970 ) $ 49,141

Balance - March 31, 2021 5,989 $ 5,989 $ 10,940 $ 43,841 $ ( 13,062 ) $ 47,708

Three Months Ended

December 31, 2019

March 31, 2021

Common Additional

4 unchanged sentences

Shares Amount

Balance - September 30, 2019 5,777 $ 5,777 $ 10,438 $ 33,148 $ ( 13,309 ) $ 36,054

Balance - December 31, 2020 5,959 $ 5,959 $ 10,820 $ 45,332 $ ( 12,970 ) $ 49,141

Comprehensive loss — — — ( 1,491 ) ( 92 ) ( 1,583 )

1 unchanged sentence

Share transactions under equity based plans 30 30 ( 30 ) — — —

Balance - March 31, 2021 5,989 $ 5,989 $ 10,940 $ 43,841 $ ( 13,062 ) $ 47,708

Six Months Ended

March 31, 2020

Common Additional

Capital Retained

Earnings Accumulated

Comprehensive

Shareholders’

Shares Amount

Balance - September 30, 2019 5,777 $ 5,777 $ 10,438 $ 33,148 $ ( 13,309 ) $ 36,054

Comprehensive income — — — 1,919 500 2,419

Performance and restricted share expense — — 225 — — 225

Share transactions under equity based plans 139 139 ( 147 ) — — ( 8 )

Balance - March 31, 2020 5,916 $ 5,916 $ 10,516 $ 35,067 $ ( 12,809 ) $ 38,690

Three Months Ended

March 31, 2020

Common Additional

Capital Retained

Earnings Accumulated

Comprehensive

Shareholders’

Shares Amount

Balance - December 31, 2019 5,863 $ 5,863 $ 10,503 $ 31,807 $ ( 12,928 ) $ 35,245

Comprehensive loss — — — 3,260 119 3,379

Performance and restricted share expense — — 70 — — 70

Share transactions under equity based plans 53 53 ( 57 ) — — ( 4 )

Balance - March 31, 2020 5,916 $ 5,916 $ 10,516 $ 35,067 $ ( 12,809 ) $ 38,690

See notes to unaudited consolidated condensed financial statements.

23 unchanged sentences

The Company’s net income and loss per basic share has been computed based on the weighted-average number of common shares outstanding.

Net income in the current period, per diluted share reflects the effect of the Company's outstanding restricted shares and performance shares under the treasury method.

In the prior period, due to the net loss, zero restricted shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive.

Net income per diluted share reflects the effect of the Company's outstanding restricted shares and performance shares under the treasury method.

In the three months ended March 31, 2021, due to the net loss, zero restricted shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive.

The dilutive effect is as follows:

Three Months Ended

March 31, Six Months Ended

2021 2020 2021 2020

Net Income (loss)

24 unchanged sentences

The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In December 2019, ASU 2019-12, " Income Taxes (Topic 740):

In December 2019, the FASB issued ASU 2019-12, " Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance.

1 unchanged sentence

The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which is intended to provide temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022.

The Company is currently evaluating these standards to determine whether it will apply the optional expedients and exceptions.

Inventories consist of:

5 unchanged sentences

For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method.

Approximately 48 % and 47 % of the Company’s inventories at December 31, 2020 and September 30, 2020, respectively, use the LIFO method.

Approximately 49 % and 47 % of the Company’s inventories at March 31, 2021 and September 30, 2020, respectively, use the LIFO method.

An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs existing at that time.

Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs.

Because the actual results may vary from these estimates, calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results.

Because the actual results may vary from these estimates, calculations are subject to many factors beyond management’s control, and annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results.

The first-in, first-out (“FIFO”) method is used for the remainder of the inventories, which are stated at the lower of cost or net realizable value.

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 8,414 and $ 8,286 higher than reported at December 31, 2020 and September 30, 2020, respectively.

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 8,621 and $ 8,286 higher than reported at March 31, 2021 and September 30, 2020, respectively.

Accumulated Other Comprehensive Loss

6 unchanged sentences

Three Months Ended

December 31, 2020 Three Months Ended

December 31, 2019

March 31, Six Months Ended

2021 2020 2021 2020

Finance lease expense:

2 unchanged sentences

Operating lease expense:

540 543 1,092 1,079

Variable lease cost:

1 unchanged sentence

The following table presents the impact of leasing on the consolidated condensed balance sheet.

Classification to the consolidated condensed balance sheets December 31,

Classification in the consolidated condensed balance sheets March 31,

2021 September 30,

10 unchanged sentences

Supplemental cash flow and other information related to leases were as follows:

2020 December 31,

2021 March 31,

Other Information

12 unchanged sentences

Operating leases 5.9 % 5.9 %

Future minimum lease under non-cancellable leases at December 31, 2020 were as follows:

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

Finance Leases Operating Leases

Year ending September 30,

2021 (excluding the three months ended December 31, 2020) 46 1,392

2021 (excluding the six months ended March 31, 2021) $ 27 $ 852

2022 21 1,696

12 unchanged sentences

Total long-term debt $ 2,542 $ 4,606

Credit Agreement and Security Agreement of 2018

The Company's asset-based Credit Agreement ("Credit Agreement"), Security Agreement (“Security Agreement”) and Export Credit Agreement (the "Export Credit Agreement") are secured by substantially all the assets of the Company and its U.S.

Credit Agreement and Security Agreement

The Company's asset-based Credit Agreement (as amended, the "Credit Agreement"), Security Agreement (“Security Agreement”) and Export Credit Agreement (as amended, the "Export Credit Agreement") are secured by substantially all the assets of the Company and its U.S.

subsidiaries and a pledge of 66.67 % of the stock of its first-tier non-U.S.

subsidiaries.

The $ 35,000 Credit Agreement consists of (i) a senior secured revolving credit facility with a maximum borrowing of $ 30,000 , and (ii) a revolving commitment through the Export Credit Agreement of $ 5,000 which lends amounts to the Company on foreign receivables.

The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $ 10,000 upon consent of the lender under the Credit Agreement (the "Lender") or upon additional lenders joining the Credit Agreement.

The Credit Agreement matures on August 6, 2021.

The Credit Agreement (as amended by Fifth Amendment (the "Fifth Amendment") described below), consists of a senior secured revolving credit facility with a maximum borrowing of $ 28,000 .

The revolving commitment through the Export Credit Agreement, as amended, which lends amounts to the Company on foreign receivables is $ 7,000 .

The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $ 10,000 upon consent of the Lender (as defined below) or upon additional lenders joining the Credit Agreement.

The Credit Agreement and the Export Agreement were amended on February 19, 2021, when the Company and certain of its subsidiaries (collectively, the "borrowers") entered into the Fifth Amendment to the Credit Agreement and the First Amendment (the "First Amendment") to the Export Credit Agreement, in each case, with JPMorgan Chase Bank, N.A., a national banking association, (the "Lender").

The combined maximum borrowings remain unchanged at $ 35,000 ;

however the maximum borrowing under the Credit Agreement was decreased to $ 28,000 (from $ 30,000 ) and the revolving commitment through the Export Agreement was

increased to $ 7,000 (from $ 5,000 ).

The Fifth Amendment, among other things, extends the maturity date from August 6, 2021 to February 19, 2024.

The Credit Agreement contains affirmative and negative covenants and events of defaults.

As set forth in the Credit Agreement, the Company is required to maintain a fixed charge coverage ratio ("FCCR") of 1.1 :1.0 any time the availability is equal to or less than 12.5 % of the revolving commitment.

Prior to the Fifth Amendment, the Credit Agreement required the Company to maintain a fixed charge coverage ratio ("FCCR") of 1.1 :1.0 any time the availability is equal to or less than 12.5 % of the revolving commitment.

However, the Fifth Amendment provides that the Company will not permit the fixed charge coverage ratio to be less than 1.1 to 1.0 as of the last day of any calendar month;

provided that the fixed charge coverage ratio will not be tested unless (i) a default has occurred and is continuing, (ii) when the combined availability was less than or equal to the greater of (x) 10 % of the lesser of the combined commitments or (y) 10 % of the combined borrowing base, and $ 2,000 , for three or more business days in any consecutive 30 day period.

In the event of a default, the Company may not be able to access the revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities.

The total collateral at December 31, 2020 and September 30, 2020 was $ 26,724 and $ 26,964 , respectively and the revolving commitment was $ 35,000 for both periods.

Total availability at December 31, 2020 and September 30, 2020 was $ 16,767 and $ 13,284 , respectively, which exceed both the collateral and total commitment threshold.

Since the availability was greater than the 12.5 % of the revolving commitment as of December 31, 2020 and September 30, 2020, the FCCR calculation was not required.

Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Credit Agreement.

The revolver has a rate based on LIBOR plus 1.5 %, which was 1.7 % at December 31, 2020 and September 30, 2020, respectively, and the Export Credit Agreement has a rate based on LIBOR plus 1.00 % spread, which was 1.2 % at December 31, 2020 and September 30, 2020, respectively.

The Company also has a commitment fee of 0.25 % under the Credit Agreement to be incurred on the unused balance of the revolver.

The Company's Credit Agreement is set to mature in less than twelve months.

As such, the Company’s plan is to refinance.

However, there are no guarantees that the refinance will be with similar terms to the current Credit Agreement, and if the refinance does not occur, the Company would not be able to meet its debt obligations.

The total collateral at March 31, 2021 and September 30, 2020 was $ 26,619 and $ 26,964 , respectively and the revolving commitment was $ 35,000 for both periods.

Total availability at March 31, 2021 and September 30, 2020 was $ 18,067 and $ 13,284 , respectively, which exceed both the collateral and total commitment threshold.

Since the availability was greater than the 10.0 % of the revolving commitment as of March 31, 2021 and 12.5 % of the revolving commitment at September 30, 2020, the FCCR calculation was not required.

Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Fifth Amendment.

The revolver has a rate based on LIBOR plus 1.75 % spread, which was 1.87 % at March 31, 2021 and a rate based on LIBOR plus 1.5 % spread, which was 1.7 % September 30, 2020.

The Export Credit Agreement has a rate based on LIBOR plus 1.25 % spread, which was 1.4 % at March 31, 2021 and a rate based on LIBOR plus 1.0 % spread, which was 1.2 % at September 30, 2020, respectively.

The Company also has a commitment fee of 0.25 % under the Credit Agreement as amended to be incurred on the unused balance of the revolver.

Foreign subsidiary borrowings

12 unchanged sentences

Debt issuance costs

The Company incurred debt issuance costs as it pertains to the Credit Agreement in the amount of $ 212 , and incurred additional costs in fiscal 2019 of $ 75 related to the First and Second Amendments, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 229 and $ 205 at December 31, 2020 and September 30, 2020, respectively.

The Company incurred debt issuance costs as it pertains to the Fifth Amendment in the amount of $ 45 and combined the amount with the remaining unamortized debt issuance costs prior to the amendment for a total of $ 86 , which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 2 and $ 205 at March 31, 2021 and September 30, 2020, respectively.

On April 10, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP Loan”).

3 unchanged sentences

The promissory note evidencing the PPP Loan contains customary events of default.

The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owed from the Company, and/or filing suit and obtaining judgment against the Company.

The loan proceeds were received on April 10, 2020 and were used for payroll, interest on mortgage obligations, rents on leases and utility payments.

As of December 31, 2020 and September 30, 2020, the PPP loan balance was $ 4,764 .

The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owed from the Company,

and/or filing suit and obtaining judgment against the Company.

The loan proceeds were received on April 10, 2020 and were used for payroll payments.

As of March 31, 2021 and September 30, 2020, the PPP loan balance was $ 4,764 .

PPP Loan recipients can apply for and potentially be granted forgiveness for all or a portion of loans granted under the Paycheck Protection Program.

Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels.

Although the Company intends to file for forgiveness, no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

As of December 31, 2020, the Company continues to wait for further guidance regarding application for the forgiveness for all or a portion of the PPP loan.

Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs.

As of March 31, 2021, based on guidance from the U.S.

Department of Treasury, the Company is in the process of applying for forgiveness for the PPP Loan.

However, no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the "Appropriations Act") was enacted in response to the COVID-19 pandemic.

The Appropriations Act, among other things temporarily extends through December 31, 2025, certain expiring tax provisions.

The Appropriations Act, among other actions temporarily extends through December 31, 2025 certain expiring tax credit and other provisions.

Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), enacted on March 27, 2020.

The CARES Act included provisions relating to refundable payroll tax credits, deferral of certain payment requirements for the employer portion of Social Security taxes, net operating loss carryback periods and temporarily increasing the amount of net operating losses that corporations can use to offset income, alternative minimum tax ("AMT") credit refunds, modifications to the net

interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property.

The Appropriations Act and CARES Act did not materially affect the Company’s first quarter of fiscal 2021 income tax provision, deferred tax assets and liabilities, or related taxes payable.

The Appropriations Act and CARES Act did not materially affect the Company’s income tax provision, deferred tax assets and liabilities, or related taxes payable through the second quarter of fiscal 2021.

The Company will continue to assess the implications of these and any new relief provisions on its consolidated condensed financial statements but does not expect the impact to be material.

1 unchanged sentence

This estimated effective rate is used in providing for income taxes on a year-to-date basis.

The Company’s effective tax rate through the first three months of fiscal 2021 was ( 43 )%, compared with 7 % for the same period of fiscal 2020.

The decrease in the effective rate was primarily attributable to a discrete tax benefit recorded during the first three months of fiscal 2021 to adjust deferred taxes recorded in Italy, applied against year-to-date income.

Additionally, the effective tax rate decreased as a result of changes in jurisdictional mix of income in fiscal 2021 compared to the same period of fiscal 2020.

The Company’s effective tax rate through the first six months of fiscal 2021 was ( 97 )%, compared with ( 8 )% for the same period of fiscal 2020.

The decrease in the effective rate was primarily attributable to tax benefits from adjusting deferred taxes recorded in Italy recognized on a discrete basis, partially offset by changes in jurisdictional mix of income in fiscal 2021 compared to the same period of fiscal 2020.

The effective tax rate differs from the U.S.

5 unchanged sentences

As such, the Company has maintained a full valuation allowance on its U.S.

net deferred tax assets in the first quarter of fiscal 2021.

net deferred tax assets in the second quarter of fiscal 2021.

It is reasonably possible that sufficient positive evidence required to release all, or a portion of the valuation allowance in the U.S.

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2021 2020 2021 2020

Service cost $ 26 $ 85 $ 52 $ 170

3 unchanged sentences

Net periodic cost $ 57 $ 118 $ 114 $ 235

During the three months ended December 31, 2020 and 2019, the Company made $ 0 and $ 188 in contributions, respectively, to its defined benefit pension plans.

During the six months ended March 31, 2021 and 2020, the Company made $ 56 and $ 244 in contributions, respectively, to its defined benefit pension plans.

The Company anticipates making $ 141 additional cash contributions to fund its defined benefit pension plans for the balance of fiscal 2021 and will use carryover balances from previous periods that have been available for use as a credit to reduce the amount of cash contributions that the Company is required to make to certain defined benefit plans in fiscal 2021.

11 unchanged sentences

With respect to such performance shares, compensation expense is being accrued based on the probability of meeting the performance target.

The Company is currently recognizing compensation expense for one of its tranches of awards where it has concluded it is probable that the performance criteria for that award will be met, while the Company is not currently recognizing compensation expense for two tranches of awards where it had concluded that it is not probable that the performance criteria for those awards will be met.

The Company is currently recognizing compensation expense for two tranches of awards where it has concluded it is probable that the performance criteria for that award will be met, while the Company is currently not recognizing compensation expense for one tranche of awards where it had concluded that it is not probable that the performance criteria for those awards will be met.

During each future reporting period, such expense may be subject to adjustment based upon the Company's financial performance, which impacts the number of common shares that it expects to vest upon the completion of the performance period.

7 unchanged sentences

The awards vest over three years .

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 572 shares that remain available for award at December 31, 2020.

In fiscal 2021, the Company granted its non-employee directors 30 restricted shares under the 2016 Plan, with a grant date fair value of $ 9.08 , which vests over one year .

One award for 57 restricted shares vested.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 442 shares that remain available for award at March 31, 2021.

If any of the outstanding share awards are ultimately earned and vest at greater than the target number of shares, up to a maximum of 200 % or 150 % of such target, then a fewer number of shares would be available for award.

Stock-based compensation under the 2016 Plan was $ 143 and $ 155 during the first three months of fiscal 2021 and 2020, respectively.

As of December 31, 2020, there was $ 656 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan.

Stock-based compensation under the 2016 Plan was $ 293 and $ 225 during the first six months of fiscal 2021 and 2020, respectively and $ 150 and $ 70 during the three months of fiscal 2021 and 2020, respectively.

As of March 31, 2021, there was $ 778 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan.

The Company expects to recognize this cost over the next 1.5 years.

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2021 2020 2021 2020

Commercial revenue $ 9,247 $ 12,497 $ 20,000 $ 22,688

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

Net Sales 2021 2020 2021 2020

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

Net Sales 2021 2020 2021 2020

2 unchanged sentences

Total $ 24,866 $ 30,537 $ 49,944 $ 56,744

In addition to the disaggregated revenue information provided above, approximately 58 % and 61 % of total net sales as of December 31, 2020 and 2019, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time.

In addition to the disaggregated revenue information provided above, approximately 61 % and 63 % of total net sales as of March 31, 2021 and 2020, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time.

Contract Balances

The following table contains a roll forward of contract assets and contract liabilities for the period ended December 31, 2020:

The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2021:

Contract assets - Beginning balance, October 1, 2020 $ 11,997

1 unchanged sentence

Less amounts billed to the customers ( 28,860 )

Contract assets - Ending balance, December 31, 2020 $ 11,926

Contract assets - Ending balance, March 31, 2021 $ 13,565

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2020 $ ( 636 )

1 unchanged sentence

Performance obligations satisfied 754

Contract liabilities (included within Accrued liabilities) - Ending balance, December 31, 2020 $ ( 725 )

There were no impairment losses recorded on contract assets as of December 31, 2020 and September 30, 2020.

Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2021 $ ( 68 )

There were no impairment losses recorded on contract assets as of March 31, 2021 and September 30, 2020.

Remaining performance obligations

As of December 31, 2020, the Company has $ 81,533 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

As of March 31, 2021, the Company has $ 82,305 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

Commitments and Contingencies

12 unchanged sentences

Actual results may differ significantly from current estimates.

Given the current status of this matter, the Company has not recorded a charge, as the Company has not deemed it probable and does not have a reasonable basis on which to establish an estimate.

Given the current status of this matter, the Company has not accrued for any expected losses, as the Company has not deemed it probable and does not have a reasonable basis on which to establish an estimate.

The Company is a defendant in a purported class action lawsuit filed in the Superior Court of California, County of Orange, which was filed in August 2017, arising from employee wage-and-hour claims under California law for alleged meal period, rest break, hourly and overtime wage calculation, timely wage payment and necessary expenditure indemnification violations;

1 unchanged sentence

and unfair competition.

A settlement has been reached and the Company received preliminary court approval on July 13, 2020, following a brief delay caused by COVID-19 closures and restrictions.

A settlement has been reached and the Company received preliminary court approval on July 13, 2020.

Class action notices were sent at the end of September and there were no objections to the settlement.

On February 4, 2021, the court issued a tentative ruling to grant final approval.

The final approval hearing is scheduled for April 16, 2021.

The Company previously recorded an estimated loss of $ 315 , which was determined to be an adequate reserve to cover the settlement.

The final approval was granted and the previously recorded liability of $ 315 was paid on March 29, 2021.

During fiscal 2020, the Company received notice from the International Association of Machinists and Aerospace Workers Union that they were disclaiming all interest in representing certain hourly employees at the Company’s Cleveland facility.

3 unchanged sentences

In the first quarter of fiscal 2021, the insurance claim related to the fire on December 26, 2018 at the Orange location was finalized with the Company's insurance carrier.

The Company continues to work diligently to restore the final two of the six presses damaged in the fire, which both continue to be on track to be completed by the end of the second quarter of fiscal 2021;

The Company continues to work diligently to restore the final two of the six presses damaged in the fire.

Certain vendor delays and certification processes have extended the restoration of these presses.

They continue to be on track to be completed by the end of the third quarter of fiscal 2021;

however, no assurances can be made that the restoration will be completed within such timeframe.

Restoration of the building structure is nearly complete.

Having finalized the claim with its insurance carrier, proceeds in the amount of $ 3,148 was received in December 2020.

Having finalized the claim with its insurance carrier, proceeds in the amount of $ 3,148 were received in December 2020.

In addition, the Company received the remaining receivable balance from the landlord in January in the amount $ 648 , resulting in having received cash proceeds of $ 4,646 in fiscal 2021.

As noted in the table below, $ 3,099 was recognized within the consolidated condensed statements of operations and the balance was separately designated to the landlord for the continued restoration of the damaged building as prescribed under the lease arrangement.

6 unchanged sentences

Business interruption 546

December 31, 2020 $ 648

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the three months ended December 31, 2020 and 2019, respectively.

Three Months Ended

December 31, 2020

March 31, 2021 $ —

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended March 31, 2021 and 2020, respectively.

Six Months Ended

March 31, 2021

Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds

2 unchanged sentences

Income (loss) before income tax (benefit) expense $ ( 2,337 ) ( 3,099 ) $ 762

Three Months Ended

December 31, 2019

Six Months Ended

March 31, 2020

Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds

Cost of goods sold $ 49,430 ( 2,287 ) $ 47,143

Gain on insurance proceeds received $ — ( 1,000 ) $ ( 1,000 )

Income (loss) before income tax (benefit) expense $ ( 1,502 ) ( 3,287 ) $ 1,785

3 unchanged sentences

Business interruption 2,932

**$ 3,640 of total was directed to Landlord for the restoration of the building as prescribed by the lease arrangement .

**$ 3,640 of total was directed to the landlord of the property for the restoration of the building as prescribed by the lease arrangement .

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