What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-06 · 98 added, 93 removed, 461 unchanged (29% of the section changed)

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

6 unchanged sentences

Gain on insurance recoveries — ( 1,683 ) ( 2,495 ) ( 2,683 )

Operating income (loss) ( 1,101 ) 3,507 1,221 2,214

Operating income 130 2,505 1,351 4,718

Interest expense 143 183 478 697

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

Foreign currency exchange loss, net 1 12 22 12

Other loss (income), net ( 232 ) 27 ( 129 ) ( 58 )

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

Income before income tax expense (benefit) 218 2,283 980 4,067

Income tax expense (benefit) ( 36 ) 33 ( 776 ) ( 101 )

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

Net income (loss) per share

Net income $ 254 $ 2,250 $ 1,756 $ 4,168

Net income per share

Basic $ 0.04 $ 0.40 $ 0.31 $ 0.74

8 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

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

Net income $ 254 $ 2,250 $ 1,756 $ 4,168

Other comprehensive income:

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

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

79 113 62 175

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

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

211 188 634 626

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

Comprehensive income $ 544 $ 2,551 $ 2,452 $ 4,969

See notes to unaudited consolidated condensed financial statements.

36 unchanged sentences

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

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

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

Additional paid-in capital 11,025 10,736

8 unchanged sentences

(Unaudited, Amounts in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net income $ 1,756 $ 4,168

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

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 5,710 5,576

4 unchanged sentences

Share transactions under company stock plan 362 253

Gain on extinguishment of debt ( 287 ) —

Other long-term liabilities 49 ( 291 )

10 unchanged sentences

Accrued income and other taxes 207 ( 30 )

Net cash provided by (used for) operating activities 5,789 ( 414 )

Net cash provided by operating activities 3,452 2,294

Cash flows from investing activities:

10 unchanged sentences

Short-term debt repayments ( 2,999 ) ( 3,319 )

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

Net cash used for financing activities ( 1,876 ) ( 1,099 )

Decrease in cash and cash equivalents ( 198 ) ( 63 )

10 unchanged sentences

(Unaudited, Amounts in thousands )

Six Months Ended

March 31, 2021

Nine Months Ended

June 30, 2021

Common Additional

8 unchanged sentences

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

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

Balance - June 30, 2021 5,989 $ 5,989 $ 11,025 $ 44,095 $ ( 12,772 ) $ 48,337

Three Months Ended

March 31, 2021

June 30, 2021

Common Additional

4 unchanged sentences

Shares Amount

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

Comprehensive loss — — — 254 290 544

Performance and restricted share expense — — 85 — — 85

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

Balance - June 30, 2021 5,989 $ 5,989 $ 11,025 $ 44,095 $ ( 12,772 ) $ 48,337

Nine Months Ended

June 30, 2020

Common Additional

6 unchanged sentences

Comprehensive income — — — 4,168 801 4,969

Other — 46 — — 46

Performance and restricted share expense — — 262 — — 262

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

Balance - June 30, 2020 5,916 $ 5,916 $ 10,599 $ 37,316 $ ( 12,508 ) $ 41,323

Three Months Ended

March 31, 2020

June 30, 2020

Common Additional

4 unchanged sentences

Shares Amount

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

Balance - March 31, 2020 5,916 $ 5,916 $ 10,516 $ 35,066 $ ( 12,809 ) $ 38,689

Comprehensive loss — — — 2,250 301 2,551

1 unchanged sentence

Share transactions under equity based plans — — 37 — — 37

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

Balance - June 30, 2020 5,916 $ 5,916 $ 10,599 $ 37,316 $ ( 12,508 ) $ 41,323

See notes to unaudited consolidated condensed financial statements.

21 unchanged sentences

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's fiscal 2020 Annual Report on Form 10-K.

Net Income/(Loss) per Share

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 per Share

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

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)

June 30, Nine Months Ended

2021 2020 2021 2020

Net Income $ 254 $ 2,250 $ 1,756 $ 4,168

Weighted-average common shares outstanding (basic and diluted) 5,779 5,676 5,753 5,656

3 unchanged sentences

Weighted-average common shares outstanding (basic and diluted) 6,006 5,807 5,960 5,768

Net income (loss) per share – basic:

Net income per share – basic:

$ 0.04 $ 0.40 $ 0.31 $ 0.74

Net income (loss) per share – diluted:

Net income per share – diluted:

$ 0.04 $ 0.39 $ 0.29 $ 0.72

11 unchanged sentences

ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that qualify as a smaller reporting company("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023.

1 unchanged sentence

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.

Simplifying the Accounting for Income Taxes" , which 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.

This ASU is effective beginning October 1, 2021.

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.

The Company continues to evaluate the effect that 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):

2 unchanged sentences

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.

ASU 2020-04 was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022.

The Company has not applied any optional expedients and exceptions to date, and will continue to evaluate the impact of the guidance and whether it will apply the optional expedients and exceptions.

In August 2018, the FASB issued ASU 2018-14, " Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20), " which adds the following disclosure requirements:

(1) the weighted-average interest crediting rates used in the Company's cash balance pension plans and other similar plans;

(2) a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period;

and (3) an explanation of any other significant changes in the benefit obligation or plan assets that are not otherwise apparent in the other disclosures required by Accounting Standards Codification ("ASC") Topic 715, " Compensation - Retirement Benefits.

" The ASU also clarifies the guidance included in ASC 715-20-50-3 on defined benefit plans disclosure requirements.

This ASU will be effective October 1, 2021 and the Company is currently assessing the impact that this standard will have on our consolidated condensed financial statements.

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

Approximately 37 % and 47 % of the Company’s inventories at June 30, 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.

2 unchanged sentences

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 $ 8,621 and $ 8,286 higher than reported at March 31, 2021 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 $ 8,868 and $ 8,286 higher than reported at June 30, 2021 and September 30, 2020, respectively.

Accumulated Other Comprehensive Loss

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

5 unchanged sentences

Variable lease cost:

34 39 104 118

Total lease expense $ 479 $ 718 $ 1,670 $ 1,906

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

Classification in the consolidated condensed balance sheets March 31,

Classification in the consolidated condensed balance sheets June 30,

2021 September 30,

10 unchanged sentences

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

2021 March 31,

2021 June 30,

Other Information

12 unchanged sentences

Operating leases 5.9 % 5.9 %

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

Future minimum lease under non-cancellable leases at June 30, 2021 were as follows:

Finance Leases Operating Leases

Year ending September 30,

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

2021 (excluding the nine months ended June 30, 2021) $ 15 $ 425

2022 21 1,697

21 unchanged sentences

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.

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, extended the maturity date from August 6, 2021 to February 19, 2024.

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

3 unchanged sentences

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 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.

The total collateral at June 30, 2021 and September 30, 2020 was $ 28,628 and $ 26,964 , respectively and the revolving commitment was $ 35,000 for both periods.

Total availability at June 30, 2021 and September 30, 2020 was $ 17,543 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 June 30, 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 revolver has a rate based on LIBOR plus 1.75 % spread, which was 1.84 % at June 30, 2021 and a rate based on LIBOR plus 1.5 % spread, which was 1.7 % at September 30, 2020.

The Export Credit Agreement has a rate based on LIBOR plus 1.25 % spread, which was 1.3 % at June 30, 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.

10 unchanged sentences

Interest rates on foreign borrowings are based on Euribor rates which range from 1.0 % to 4.2 %.

The Maniago, Italy ("Maniago") location obtained borrowings from two separate lenders in the third quarter of fiscal 2021.

The first loan was for $ 717 with repayment terms of 6.5 years, of which $ 287 was forgiven in the same period and was recorded in other income within the consolidated condensed statements of operations and treated as a gain in debt extinguishment.

A second loan with a five year term was obtained in the amount of $ 303 .

The proceeds of these loans were to be used for working capital purposes.

The Company factors receivables from one of its customers.

1 unchanged sentence

Debt issuance costs

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.

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 $ 10 and $ 205 at June 30, 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 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 .

As of June 30, 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.

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.

As of June 30, 2021, the Company has submitted the application for forgiveness to the Small Business Administration.

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

3 unchanged sentences

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 income tax provision, deferred tax assets and liabilities, or related taxes payable through the second quarter of fiscal 2021.

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 third 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 six months of fiscal 2021 was ( 97 )%, compared with ( 8 )% for the same period of fiscal 2020.

The Company’s effective tax rate through the first nine months of fiscal 2021 was ( 79 )%, compared with ( 2 )% 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.

6 unchanged sentences

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

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

net deferred tax assets in the third 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

June 30, Nine Months Ended

2021 2020 2021 2020

4 unchanged sentences

Net periodic cost $ 57 $ 118 $ 171 $ 353

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.

During the nine months ended June 30, 2021 and 2020, the Company made $ 67 and $ 604 in contributions, respectively, to its defined benefit pension plans.

The Company anticipates making no 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.

The Company's ability to elect to use such carryover balance will be determined based on the actual funded status of each defined benefit pension plan relative to the plan's minimum regulatory funding requirements.

8 unchanged sentences

The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 200 % of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives.

Beginning in fiscal 2020, the maximum share that may be achieved was reduced to 150 % of target.

Beginning in fiscal 2020, the maximum share amount that may be achieved was reduced to 150 % of target.

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 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.

The Company is currently recognizing compensation expense for two tranches of awards at 50 % of target where it has concluded it is probable that the performance criteria for those awards will be met, while the Company is currently not recognizing compensation expense for one tranche of awards where it has 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.

9 unchanged sentences

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 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 June 30, 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 $ 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.

Stock-based compensation under the 2016 Plan was $ 378 and $ 262 during the first nine months of fiscal 2021 and 2020, respectively and $ 85 and $ 37 during the three months of fiscal 2021 and 2020, respectively.

As of June 30, 2021, there was $ 505 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 1.3 years.

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

4 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2021 2020 2021 2020

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2021 2020 2021 2020

2 unchanged sentences

Total $ 25,330 $ 27,777 $ 75,274 $ 84,521

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.

In addition to the disaggregated revenue information provided above, approximately 65 % and 60 % of total net sales as of June 30, 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 March 31, 2021:

The following table contains a roll forward of contract assets and contract liabilities for the period ended June 30, 2021:

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

1 unchanged sentence

Less amounts billed to the customers ( 46,401 )

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

Contract assets - Ending balance, June 30, 2021 $ 14,666

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

1 unchanged sentence

Performance obligations satisfied 763

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.

Contract liabilities (included within Accrued liabilities) - Ending balance, June 30, 2021 $ ( 501 )

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

Remaining performance obligations

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.

As of June 30, 2021, the Company has $ 78,083 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

Commitments and Contingencies

25 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.

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.

In the third quarter of fiscal 2021, the Company completed the restoration of the final two of the six presses damaged in the fire.

Restoration of the building structure is nearly complete.

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.

The Company received the remaining balance from the landlord, resulting in 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

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

June 30, 2021 $ —

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the nine months ended June 30, 2021 and 2020, respectively.

Nine Months Ended

June 30, 2021

Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds

2 unchanged sentences

Income (loss) before income tax (benefit) expense $ ( 2,119 ) ( 3,099 ) $ 980

Six Months Ended

March 31, 2020

Nine Months Ended

June 30, 2020

Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements