What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-05 · 76 added, 66 removed, 363 unchanged (28% of the section changed)

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

9 unchanged sentences

Gain on debt extinguishment — ( 287 ) ( 5,106 ) ( 287 )

Foreign currency exchange loss, net 3 14 9 21

Other loss (income), net ( 36 ) 42 ( 68 ) 103

(Loss) income before income tax expense (benefit) 3,662 ( 1,326 ) ( 78 ) 762

Income tax expense (benefit) 23 165 ( 26 ) ( 740 )

Foreign currency exchange (gain) loss, net ( 7 ) 1 2 22

Other expense (income), net 23 55 ( 45 ) 158

(Loss) income before income tax benefit ( 2,671 ) 218 ( 2,749 ) 980

Income tax benefit ( 3 ) ( 36 ) ( 29 ) ( 776 )

Net (loss) income $ ( 2,668 ) $ 254 $ ( 2,720 ) $ 1,756

10 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

1 unchanged sentence

Other comprehensive (loss) 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

( 304 ) 79 ( 563 ) 62

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

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

188 211 426 634

37 unchanged sentences

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

issued and outstanding shares 6,040 at March 31, 2022 and 5,987 at September 30, 2021

issued and outstanding shares 6,040 at June 30, 2022 and 5,987 at September 30, 2021

Additional paid-in capital 11,268 11,118

8 unchanged sentences

(Unaudited, Amounts in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net (loss) income $ ( 2,720 ) $ 1,756

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

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

Depreciation and amortization 4,800 5,710

16 unchanged sentences

Accrued income and other taxes ( 25 ) 207

Net cash (used for) provided by operating activities ( 3,196 ) 5,789

Net cash provided by operating activities 697 3,452

Cash flows from investing activities:

24 unchanged sentences

(Unaudited, Amounts in thousands )

Six Months Ended

March 31, 2022

Nine Months Ended

June 30, 2022

Common Additional

8 unchanged sentences

Share transactions under equity based plans 53 53 ( 159 ) — — ( 106 )

Balance - March 31, 2022 6,040 $ 6,040 $ 11,264 $ 41,544 $ ( 9,100 ) $ 49,748

Balance - June 30, 2022 6,040 $ 6,040 $ 11,268 $ 38,876 $ ( 9,216 ) $ 46,968

Three Months Ended

March 31, 2022

June 30, 2022

Common Additional

4 unchanged sentences

Shares Amount

Balance - December 31, 2021 6,003 $ 6,003 $ 11,156 $ 37,905 $ ( 9,083 ) $ 45,981

Balance - March 31, 2022 6,040 $ 6,040 $ 11,264 $ 41,544 $ ( 9,100 ) $ 49,748

Comprehensive income — — — ( 2,668 ) ( 116 ) ( 2,784 )

Performance and restricted share expense — — 4 — — 4

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

Balance - March 31, 2022 6,040 $ 6,040 $ 11,264 $ 41,544 $ ( 9,100 ) $ 49,748

Six Months Ended

March 31, 2021

Balance - June 30, 2022 6,040 $ 6,040 $ 11,268 $ 38,876 $ ( 9,216 ) $ 46,968

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 income — — — 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

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

See notes to unaudited consolidated condensed financial statements.

19 unchanged sentences

Accounting Policies

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's Annual Report on From 10-K for the year ended September 30, 2021.

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's Annual Report on Form 10-K for the year ended September 30, 2021.

Net (Loss)/Income per Share

4 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

15 unchanged sentences

Adoption of the amendments in this ASU did not have an impact to the Company's results of operations and financial condition.

Asset Impairment

The Company reviews the carrying value of its long-lived assets ("asset groups"), including property, plant and equipment, when events and circumstances indicate a triggering event has occurred.

This review is performed using estimates of future undiscounted cash flows, which include proceeds from disposal of assets.

Under the Accounting Standard Codification ("ASC") 360 ("Topic 360"), if the carrying value of a long-lived asset is greater than the estimated undiscounted future cash flows, then the long-lived asset is considered impaired and an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.

The Company continuously monitors triggers to determine if further testing is necessary.

In the third quarter, certain qualitative factors, including operating results, at the Orange, California ("Orange") location, triggered a recoverability test.

The results indicated that the long-lived assets, right-of-use assets and definite lived intangible assets were recoverable and did not require further review for impairment.

The Company will continue to monitor the carrying value of its assets groups for indicators of impairment;

accordingly, there may be impairments in the future.

Reclassification

Certain amounts in prior years have been reclassified to conform to the 2022 consolidated condensed statement presentation.

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 43 % and 39 % of the Company’s inventories at March 31, 2022 and September 30, 2021, respectively, use the LIFO method.

Approximately 42 % and 39 % of the Company’s inventories at June 30, 2022 and September 30, 2021, 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, 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.

Because the actual results may vary from these estimates, and calculations are subject to many factors beyond management’s control, the 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 $ 9,593 and $ 9,210 higher than reported at March 31, 2022 and September 30, 2021, respectively.

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 9,796 and $ 9,210 higher than reported at June 30, 2022 and September 30, 2021, respectively.

Accumulated Other Comprehensive Loss

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

6 unchanged sentences

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,

2022 September 30,

10 unchanged sentences

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

2022 March 31,

2022 June 30,

Other Information

12 unchanged sentences

Operating leases 5.9 % 5.9 %

Future minimum lease under non-cancellable leases at March 31, 2022 were as follows:

Future minimum lease payments under non-cancellable leases at June 30, 2022 were as follows:

Finance Leases Operating Leases

Year ending September 30,

2022 (excluding the six months ended March 31, 2022) $ 5 $ 829

2022 (excluding the nine months ended June 30, 2022) $ 2 $ 406

Thereafter — 15,912

14 unchanged sentences

On March 23, 2022, the Company entered into the Sixth Amendment (the "Sixth Amendment") to the Credit Agreement (as previously amended, the "Credit Agreement") and the Second Amendment (the "Second Amendment") to the Export Credit Agreement (the "Export Credit Agreement") with its lender.

The total collateral at March 31, 2022 and September 30, 2021 was $ 26,126 and $ 25,370 , respectively, and the revolving commitment was $ 35,000 for both periods.

Total availability at March 31, 2022 and September 30, 2021 was $ 12,759 and $ 14,570 , 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, 2022 and September 30, 2021, no covenant calculations were required.

The Company has letter of credit balance of $ 1,800 as of March 31, 2022 and September 30, 2021, respectively.

The Sixth Amendment amends the Credit Agreement to, among other things, (i) revise the fixed coverage ratio to exclude the first $ 1,500 of unfunded capital expenditures through April 20, 2023, (ii) increase the letter of credit sub-limit from $ 2,000 to $ 3,000 , (iii) modify the reference rate from the London interbank offered rate ("LIBOR") to the secured overnight financing rate ("SOFR") under the Credit Agreement, and (iv) revise the property, plant and equipment component of the borrowing base under the Credit Agreement.

The total collateral at June 30, 2022 and September 30, 2021 was $ 25,215 and $ 25,370 , respectively, and the revolving commitment was $ 35,000 for both periods.

Total availability at June 30, 2022 and September 30, 2021 was $ 14,089 and $ 14,570 , respectively, which exceeds both the collateral and total commitment threshold.

Since the availability was greater than 10.0 % of the revolving commitment as of June 30, 2022 and September 30, 2021, no covenant calculations were required.

The Company has a letter of credit balance of $ 1,800 as of June 30, 2022 and September 30, 2021, respectively.

The Sixth Amendment amends the Credit Agreement to, among other things, (i) revise the fixed coverage ratio to exclude the first $ 1,500 of unfunded capital expenditures through April 20, 2023, (ii) increase the letter of credit sub-limit from $ 2,000 to $ 3,000 , (iii) modify the reference rate from the London interbank offered rate ("LIBOR") to the secured overnight financing rate ("SOFR") and (iv) revise the property, plant and equipment component of the borrowing base under the Credit Agreement.

The Second Amendment amends the Export Credit Agreement to replace the reference rate from LIBOR to SOFR under the Export Credit Agreement.

The revolver has a rate based on SOFR plus 2.0 % spread, which was 2.3 % at March 31, 2022 and a rate based on LIBOR plus 1.75 % spread, which was 1.8 % at September 30, 2021.

The Export Credit Agreement as amended has a rate based on SOFR plus 1.5 % spread, which was 1.8 % at March 31, 2022 and a rate based on LIBOR plus 1.25 % spread, which was 1.3 % at September 30, 2021, respectively.

The revolving credit agreement (or "revolver"), as amended, has a rate based on SOFR plus a 1.75 % spread, which was 2.9 % at June 30, 2022 and a rate based on LIBOR plus a 1.75 % spread, which was 1.8 % at September 30, 2021.

The Export Credit Agreement as amended has a rate based on SOFR plus a 1.5 % spread, which was 2.6 % at June 30, 2022 and a rate based on LIBOR plus a 1.25 % spread, which was 1.3 % at September 30, 2021, 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 1.5 % to 5.1 %.

The Maniago, Italy ("Maniago") location obtained borrowings from one lender in the first six months of fiscal 2022.

The Company's Maniago, Italy ("Maniago") location obtained borrowings from one lender in the first nine months of fiscal 2022.

The loan was for $ 1,141 with repayment terms of six years .

3 unchanged sentences

Debt issuance costs

The Company had debt issuance costs of $ 86 , which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 31 and $ 17 at March 31, 2022 and September 30, 2021, respectively.

As of March 31, 2022 and September 30, 2021, the Paycheck Protection Program loan (the "PPP Loan") balance was $ 0 and $ 4,764 , respectively.

The Company had debt issuance costs of $ 86 , which are included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 38 and $ 17 at June 30, 2022 and September 30, 2021, respectively.

As of June 30, 2022 and September 30, 2021, the Paycheck Protection Program loan (the "PPP Loan") balance was $ 0 and $ 4,764 , respectively.

The Company applied for forgiveness of the full amount of the PPP Loan to the Small Business Administration ("SBA") and was notified by the SBA in January 2022 that the full PPP Loan originating amount of $ 5,025 was forgiven.

2 unchanged sentences

As such, the Company derecognized the liability in the second quarter of fiscal 2022 when the loan was forgiven and the Company was legally released from the loan.

The gain on extinguishment of loan is included in the consolidated condensed statements of operations in the amount of $ 5,106 (includes $ 81 of interest forgiven).

The gain on extinguishment of loan is included in the consolidated condensed statements of operations in the amount of $ 5,106 (which includes $ 81 of interest forgiven).

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its operations.

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 2022 was 33 %, compared with ( 97 )% for the same period of fiscal 2021.

The Company’s effective tax rate through the first nine months of fiscal 2022 was 1 %, compared with ( 79 )% for the same period of fiscal 2021.

The increase in the effective rate was primarily attributable to tax benefits from adjusting deferred taxes recorded in Italy recognized on a discrete basis in fiscal 2021, which were non-recurring in fiscal 2022.

7 unchanged sentences

The Company and certain of its subsidiaries sponsor defined benefit pension plans covering some of its employees.

The components of net periodic benefit cost of the Company’s defined benefit plans are as follows:

The components of the net periodic benefit cost of the Company’s defined benefit plans are as follows:

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

3 unchanged sentences

Amortization of net loss 119 211 357 634

Settlement cost 69 — 69 —

Net periodic cost $ 36 $ 57 $ ( 29 ) $ 171

During the six months ended March 31, 2022 and 2021, the Company made $ 0 and $ 56 in contributions, respectively to its defined benefit pension plans.

During the nine months ended June 30, 2022 and 2021, the Company made $ 12 and $ 67 in contributions, respectively to its defined benefit pension plans.

The Company anticipates making $ 3 in cash contributions to fund its defined benefit pension plans for the balance of fiscal 2022 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 2022.

2 unchanged sentences

Stock-Based Compensation

The Company awards performance and restricted shares under the Company's 2007 Long-Term Incentive Plan ("2007 Plan") and the Company's 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (as further amended, the "2016 Plan").

The Company has outstanding equity awards under the Company's 2007 Long-Term Incentive Plan ("2007 Plan") and the Company's 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (as further amended, the "2016 Plan"), and awards performance and restricted shares under the 2016 Plan.

In fiscal 2022, the Company granted 74 shares under the 2016 Plan to certain key employees.

The awards were split into two tranches, 44 performance shares and 30 shares of time-based restricted shares, with a grant date fair value of $ 8.00 per share.

The awards were split into two tranches, comprised of 44 performance shares and 30 shares of time-based restricted shares, with a grant date fair value of $ 8.00 per share.

The awards vest over three years .

2 unchanged sentences

One award for 30 restricted shares vested in January 2022.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 433 shares that remain available for award at March 31, 2022.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 433 shares that remain available for award at June 30, 2022.

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 $ 306 and $ 293 during the first six months of fiscal 2022 and 2021, respectively and $ 145 and $ 150 during the three months ended of fiscal 2022 and 2021, respectively.

As of March 31, 2022, there was $ 847 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 $ 309 and $ 378 during the first nine months of fiscal 2022 and 2021, respectively, and $ 4 and $ 85 during the three months ended of fiscal 2022 and 2021, respectively.

As of June 30, 2022, there was $ 394 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 1.1 years.

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

2 unchanged sentences

Total $ 21,454 $ 25,330 $ 65,269 $ 75,274

The following table represents revenue by the various components:

The following table represents revenue by end market::

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2022 2021 2022 2021

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2022 2021 2022 2021

2 unchanged sentences

Total $ 21,454 $ 25,330 $ 65,269 $ 75,274

In addition to the disaggregated revenue information provided above, approximately 62 % and 61 % of total net sales as of March 31, 2022 and 2021, 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 58 % and 65 % of total net sales as of June 30, 2022 and 2021, 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, 2022:

The following table contains a roll forward of contract assets and contract liabilities for the period ended June 30, 2022:

Contract assets - Beginning balance, October 1, 2021 $ 12,874

1 unchanged sentence

Less amounts billed to the customers ( 38,674 )

Contract assets - Ending balance, March 31, 2022 $ 13,113

Contract assets - Ending balance, June 30, 2022 $ 11,936

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2021 $ ( 236 )

1 unchanged sentence

Performance obligations satisfied 1,128

Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2022 $ ( 276 )

There were no impairment losses recorded on contract assets as of March 31, 2022 and September 30, 2021.

Contract liabilities (included within Accrued liabilities) - Ending balance, June 30, 2022 $ ( 470 )

There were no impairment losses recorded on contract assets as of June 30, 2022 and September 30, 2021.

Remaining performance obligations

As of March 31, 2022, the Company has $ 72,045 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

As of June 30, 2022, the Company has $ 69,399 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

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