What changed in this filing

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Item 1. Financial Statements

2023-09-28 compared with 2023-08-14 · 104 added, 102 removed, 432 unchanged (32% of the section changed)

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

4 unchanged sentences

Amortization of intangible assets 63 62 187 252

Loss (gain) on disposal of operating assets 14 ( 2 ) 3 ( 2 )

Operating loss ( 2,206 ) ( 1,284 ) ( 4,275 ) ( 4,936 )

Gain on disposal of operating assets ( 3 ) — — ( 2 )

Operating income (loss) 30 ( 2,509 ) ( 4,245 ) ( 7,445 )

Interest expense, net 305 146 919 453

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

Foreign currency exchange loss, net 12 3 9 9

Other income, net ( 218 ) ( 36 ) ( 35 ) ( 68 )

(Loss) income before income tax expense (benefit) ( 2,339 ) 3,662 ( 4,863 ) ( 78 )

Foreign currency exchange loss (gain), net 1 ( 7 ) 11 2

Other expense (income), net 323 23 287 ( 45 )

Loss before income tax benefit ( 599 ) ( 2,671 ) ( 5,462 ) ( 2,749 )

Income tax expense (benefit) 35 ( 3 ) 128 ( 29 )

Net (loss) income $ ( 2,367 ) $ 3,639 $ ( 4,956 ) $ ( 52 )

Net (loss) income per share

Net loss $ ( 634 ) $ ( 2,668 ) $ ( 5,590 ) $ ( 2,720 )

Net loss per share

Basic $ ( 0.11 ) $ ( 0.46 ) $ ( 0.94 ) $ ( 0.47 )

8 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

Net (loss) income $ ( 2,367 ) $ 3,639 $ ( 4,956 ) $ ( 52 )

Other comprehensive (loss) income:

Net loss $ ( 634 ) $ ( 2,668 ) $ ( 5,590 ) $ ( 2,720 )

Other comprehensive loss:

Foreign currency translation adjustment, net of tax 20 ( 304 ) 436 ( 563 )

1 unchanged sentence

Other — — 1 —

Comprehensive (loss) income $ ( 2,219 ) $ 3,622 $ ( 4,387 ) $ ( 73 )

Comprehensive loss $ ( 461 ) $ ( 2,784 ) $ ( 4,848 ) $ ( 2,857 )

See notes to unaudited consolidated condensed financial statements.

35 unchanged sentences

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

issued and outstanding shares 6,108 at March 31, 2023 and 6,040 at September 30, 2022

issued and outstanding shares 6,107 at June 30, 2023 and 6,040 at September 30, 2022

Additional paid-in capital 11,541 11,387

8 unchanged sentences

(Unaudited, Amounts in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net loss $ ( 5,590 ) $ ( 2,720 )

Adjustments to reconcile net loss to net cash used for operating activities:

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

Depreciation and amortization 4,821 4,800

Amortization of debt issuance costs 30 30

Loss (gain) on disposal of operating assets 3 ( 2 )

Gain on disposal of operating assets — ( 2 )

Loss on insurance proceeds received for non-property claim 60 —

LIFO effect ( 272 ) 586

Share transactions under company stock plan 136 199

Share transactions under company stock plan, net 221 203

Inventory valuation accounts ( 1,793 ) 332

11 unchanged sentences

Accrued income and other taxes 252 ( 25 )

Net cash used for operating activities ( 373 ) ( 3,196 )

Net cash (used for) provided by operating activities ( 2,270 ) 697

Cash flows from investing activities:

24 unchanged sentences

(Unaudited, Amounts in thousands )

Six Months Ended

March 31, 2023

Nine Months Ended

June 30, 2023

Common Additional

8 unchanged sentences

Share transactions under equity-based plans 67 67 ( 138 ) — — ( 71 )

Balance - March 31, 2023 6,108 $ 6,108 $ 11,455 $ 27,000 $ ( 8,124 ) $ 36,439

Balance - June 30, 2023 6,107 $ 6,107 $ 11,541 $ 26,366 $ ( 7,951 ) $ 36,063

Three Months Ended

March 31, 2023

June 30, 2023

Common Additional

4 unchanged sentences

Shares Amount

Balance - December 31, 2022 6,072 $ 6,072 $ 11,406 $ 29,367 $ ( 8,272 ) $ 38,573

Balance - March 31, 2023 6,108 $ 6,108 $ 11,455 $ 27,000 $ ( 8,124 ) $ 36,439

Comprehensive (loss) income — — — ( 634 ) 173 ( 461 )

1 unchanged sentence

Share transactions under equity-based plans ( 1 ) ( 1 ) — — — ( 1 )

Balance - March 31, 2023 6,108 $ 6,108 $ 11,455 $ 27,000 $ ( 8,124 ) $ 36,439

Six Months Ended

March 31, 2022

Balance - June 30, 2023 6,107 $ 6,107 $ 11,541 $ 26,366 $ ( 7,951 ) $ 36,063

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

Comprehensive income (loss) — — — 3,639 ( 17 ) 3,622

Performance and restricted share expense — — 145 — — 145

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

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

Performance and restricted share expense — — 4 — — 4

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

See notes to unaudited consolidated condensed financial statements.

9 unchanged sentences

dollar is the functional currency for all of the Company’s operations in the United States ("U.S.") and its non-operating subsidiaries.

For these operations, all gains and losses from completed currency transactions are included in income.

The functional currency for the Company's other non-U.S.

For these operations, all gains and losses from completed currency transactions are included in income (loss).

The functional currency for the Company's non-U.S.

subsidiaries is the Euro.

Assets and liabilities are translated into U.S.

dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period.

dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period which approximate the rates in effect at the date of the transaction.

Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements.

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2022 Annual Report on Form 10-K.

The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the U.S.

The year-end consolidated condensed balance sheet contained in these financial statements was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the U.S.

The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year.

1 unchanged sentence

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, 2022.

Net (Loss) Income per Share

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

Net Loss per Share

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

During a period of net loss, zero restricted and performance shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive.

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

Net (loss) income $ ( 2,367 ) $ 3,639 $ ( 4,956 ) $ ( 52 )

Net loss $ ( 634 ) $ ( 2,668 ) $ ( 5,590 ) $ ( 2,720 )

Weighted-average common shares outstanding (basic and diluted) 5,940 5,840 5,925 5,827

3 unchanged sentences

Weighted-average common shares outstanding (diluted) 5,940 5,840 5,925 5,827

Net (loss) income per share – basic:

Net loss per share – basic:

$ ( 0.11 ) $ ( 0.46 ) $ ( 0.94 ) $ ( 0.47 )

Net (loss) income per share – diluted:

Net loss per share – diluted:

$ ( 0.11 ) $ ( 0.46 ) $ ( 0.94 ) $ ( 0.47 )

6 unchanged sentences

The Company is evaluating available financial alternatives, including obtaining acceptable alternative financing.

The Company cannot provide assurances that it will be able to provide the post closing deliverables as established under the Seventh Amendment of the Credit Agreement or be successful in restructuring of existing debt obligations, obtaining capital or entering into a strategic alternative transaction which provides sufficient funding for the refinancing of its outstanding indebtedness prior to the maturity date of its obligations under the Credit Agreements.

The Company cannot provide assurances that it will be able to provide the remaining post closing deliverable as established under the Seventh Amendment of the Credit Agreement discussed in Note 7, Debt and Subsequent Event or be successful in restructuring of existing debt obligations, obtaining capital or entering into a strategic alternative transaction which provides sufficient funding for the refinancing of its outstanding indebtedness prior to the maturity date of its obligations under the Credit Agreements.

The consolidated condensed financial statements do not include any adjustments to the carrying amount and classification of assets, liabilities, and reported expense that may be necessary if the Company was unable to continue as a going concern.

14 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 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.

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.

Employee Retention Credit

Under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Employee Retention Credit ("ERC") is a refundable payroll tax credit for businesses and tax-exempt organizations that were affected during the COVID-19 pandemic.

Eligible businesses, both for-profit and not-for-profit, that experienced a full or partial government-ordered suspension of operations or a "significant" decline in gross receipts in any quarter (more than 50% decrease in 2020 from 2019, and more than 20% in 2021) could receive a quarterly refundable payroll tax credit.

The Company, with reasonably assured qualification, submitted and received approval for refunds under the ERC program.

As no authoritative guidance exists under U.S.

GAAP for reporting ERCs, the Company adopted International Accounting Standards (“IAS”) 20 – Accounting for Government Grants and Disclosure of Government Assistance which permits the recording and presentation of either the gross amount as other income or netting the credit against related expense.

The Company recorded a gross benefit of $ 1,772 , which represented $ 1,688 claimed as refund and $ 84 in interest income.

The ERC was recognized as a reduction in other manufacturing and selling, general and administrative expenses and allocated to the financial statement categories from which the payroll taxes were originally incurred.

The Company recorded benefits to cost of goods sold of $ 1,452 , selling, general and administrative expense of $ 236 and interest income $ 84 , respectively and recorded selling, general and administrative expense of $ 354 for professional fees related to the tax credit in the consolidated condensed statements of operations during the three and nine months ended June 30, 2023.

The Company received $ 1,246 of refunds on May 9, 2023 and recorded $ 526 in accounts receivable on the consolidated condensed balance sheets as of June 30, 2023.

Reclassification

Certain amounts in prior years have been reclassified to conform to the fiscal 2023 consolidated condensed statement presentation.

In fiscal 2023, the Company revised its classification within the consolidated condensed statement of cash flows by moving a prior year amount of $ 189 of inventories from changes in operating assets and liabilities to adjustments to reconcile net loss to net cash used for operating activities to conform to current period presentation.

In fiscal 2023, the Company revised its classification within the consolidated condensed statement of cash flows by moving a prior year amount of $ 332 of inventories from changes in operating assets and liabilities to inventory valuation accounts adjustment to reconcile net loss to net cash used for operating activities to conform to current period 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 21 % and 42 % of the Company’s inventories at March 31, 2023 and September 30, 2022, respectively, use the LIFO method.

Approximately 19 % and 42 % of the Company’s inventories at June 30, 2023 and September 30, 2022, 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 ("NRV").

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 9,741 and $ 9,939 higher than reported at March 31, 2023 and September 30, 2022, respectively.

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 9,668 and $ 9,939 higher than reported at June 30, 2023 and September 30, 2022, respectively.

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation.

The Company estimates net realizable value, excess and obsolescence and shrink reserves for its inventory based upon historical experience, historical and projected sales trends and the age of inventory on hand.

As of March 31, 2023 and September 30, 2022, our inventory valuation allowances were $ 3,753 and $ 5,084 , respectively.

As of June 30, 2023 and September 30, 2022, our inventory valuation allowances were $ 3,857 and $ 5,084 , respectively.

Long-lived Assets

3 unchanged sentences

The Company continuously monitors for indicators of impairment to determine if further testing is necessary.

In the second quarter, the Company evaluated triggering events and did not identify any indicators that the asset groups might be impaired.

In the third quarter, the Company evaluated potential triggering events and did not identify any indicators that the asset groups might be impaired.

The Company tests its goodwill for impairment in the fourth fiscal quarter, and in interim periods if certain events occur indicating that the carrying amount of goodwill may be impaired.

In the second quarter, the Company evaluated triggering events and determined interim testing was not required.

In the third quarter, the Company evaluated potential triggering events and determined interim testing was not required.

Accumulated Other Comprehensive Loss

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

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,

2023 September 30,

10 unchanged sentences

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

2023 March 31,

2023 June 30,

Other Information

12 unchanged sentences

Operating leases 5.9 % 5.9 %

Future minimum lease payments under non-cancellable leases at March 31, 2023 were as follows:

Future minimum lease payments under non-cancellable leases at June 30, 2023 were as follows:

Finance Leases Operating Leases

Year ending September 30,

2023 (excluding the six months ended March 31, 2023) $ 35 $ 833

2023 (excluding the nine months ended June 30, 2023) $ 18 $ 417

2024 68 1,686

19 unchanged sentences

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

The total collateral at March 31, 2023 and September 30, 2022 was $ 21,304 and $ 22,711 , respectively, and the revolving commitment was $ 35,000 for both periods.

Total availability at March 31, 2023 and September 30, 2022 was $ 2,524 and $ 9,403 , respectively, which exceeds both the collateral and total commitment threshold.

The total collateral at June 30, 2023 and September 30, 2022 was $ 19,567 and $ 22,711 , respectively, and the revolving commitment was $ 35,000 for both periods.

Total availability at June 30, 2023 and September 30, 2022 was $ 2,649 and $ 9,403 , respectively, which exceeds both the collateral and total commitment threshold.

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

As of March 31, 2023, the Company was not in compliance with covenant requirements as a result of the Event of Default described below.

The Company has a letter of credit balance of $ 1,970 as of March 31, 2023 and September 30, 2022, respectively.

As of June 30, 2023, the Company was not in compliance with covenant requirements as a result of the Event of Default described below.

The Company has a letter of credit balance of $ 1,970 as of June 30, 2023 and September 30, 2022, respectively.

The Credit Agreement under the Sixth Amendment had a maturity date of February 19, 2024.

The maturity is modified to December 31, 2023 under the Seventh Amendment (the "Seventh Amendment") to the Credit Agreement, which is discussed below.

The maturity is modified to December 31, 2023 under the Seventh Amendment (the "Seventh Amendment") to the Credit Agreement, which is discussed in additional detail below.

The Sixth Amendment amended the Credit Agreement to, among other things, (i) revise the fixed charge coverage ratio ("FCCR") 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 revolving credit agreement (or "revolver"), as amended, has a rate based on SOFR plus a 2.25 % spread, which was 7.0 % at March 31, 2023 and a rate based on LIBOR plus a 2.25 % spread, which was 4.9 % at September 30, 2022.

The Export Credit Agreement as amended has a rate based on SOFR plus a 1.75 % spread, which was 6.5 % at March 31, 2023 and a rate based on LIBOR plus a 1.75 % spread, which was 4.4 % at September 30, 2022.

The revolving credit agreement (or "revolver"), as amended, has a rate based on SOFR plus a 2.25 % spread, which was 7.5 % at June 30, 2023 and a rate based on LIBOR plus a 2.25 % spread, which was 4.9 % at September 30, 2022.

The Export Credit Agreement as amended has a rate based on SOFR plus a 1.75 % spread, which was 7.0 % at June 30, 2023 and a rate based on LIBOR plus a 1.75 % spread, which was 4.4 % at September 30, 2022.

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.

18 unchanged sentences

(v) the Reserves under the Borrowing Base in the ABL Credit Agreement are reduced to $ 1,500 through September 30, 2023 and $ 2,000 thereafter.

The Second Amendment amends the Export Credit Agreement to (i) modify the loan maturity date to December 31, 2023 and (ii) provides waiver of Existing Defaults and concludes the forbearance period as described under the Forbearance Agreement dated April 28, 2023.

The Third Amendment amends the Export Credit Agreement to (i) modify the loan maturity date to December 31, 2023 and (ii) provides waiver of Existing Defaults and concludes the forbearance period as described under the Forbearance Agreement dated April 28, 2023.

Lender’s agreement is subject to satisfaction of certain post closing deliverables, including:

(i) one or more proposed term sheets which provide for the refinancing of all of the Obligations, in each case in an amount sufficient to repay the Obligations in full, by no later than September 19, 2023;

(ii) a Confidential Information Memorandum, by no later than September 20, 2023;

(ii) a Confidential Information Memorandum ("CIM"), by no later than September 20, 2023;

and (iii) a duly executed term sheet providing for the refinancing of all of the Obligations in an amount sufficient to repay the Obligations in full, by no later than October 8, 2023.

The Company has provided to its lender one or more proposed term sheets which provide for the refinancing of all of the Obligations and a CIM as required under the terms of the Seventh Amendment on or before the requisite due dates.

Foreign subsidiary borrowings in USD

9 unchanged sentences

Interest rates on foreign borrowings are based on Euribor rates, which range from 0.5 % to 7.6 %.

The Company's 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 are included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 60 and $ 46 at March 31, 2023 and September 30, 2022, 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 $ 67 and $ 46 at June 30, 2023 and September 30, 2022, respectively.

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

3 unchanged sentences

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

As of March 31, 2023 and September 30, 2022 the PPP loan balance was $ 0 .

As of June 30, 2023 and September 30, 2022 the PPP loan balance was $ 0 .

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 2023 was ( 1.9 )%, compared with 33.3 % for the same period of fiscal 2022.

The Company’s effective tax rate through the first nine months of fiscal 2023 was ( 2.3 )%, compared with 1 % for the same period of fiscal 2022.

The decrease in the effective rate was primarily attributable to changes in jurisdictional mix of income in fiscal 2023 compared with the same period of fiscal 2022.

9 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

3 unchanged sentences

Amortization of net loss 77 119 230 357

Settlement cost 78 69 78 69

Net periodic pension cost (benefit) $ 158 $ 36 $ 319 $ ( 29 )

During the six months ended March 31, 2023 and 2022, the Company made $ 13 and $ 0 in contributions, respectively, to its defined benefit pension plans.

During the nine months ended June 30, 2023 and 2022, the Company made $ 13 and $ 12 in contributions, respectively, to its defined benefit pension plans.

The Company anticipates making $ 43 in cash contributions to fund its defined benefit pension plans for the balance of fiscal 2023, 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 2023.

3 unchanged sentences

The Company has outstanding equity awards under the Company's 2007 Long-Term Incentive Plan (the "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 the first six months of fiscal 2023, the Company granted 86 shares under the 2016 Plan to certain key employees.

The awards were split into two tranches, comprised of 27 performance-based shares and 59 time-based restricted shares, with a grant date fair value of $ 2.84 per share.

In the first nine months of fiscal 2023, the Company granted 86 shares under the 2016 Plan to certain key employees.

The awards were split into two tranches, comprised of 27 performance-based shares and 59 time-based restricted shares, with a

grant date fair value of $ 2.84 per share.

The awards vest over three years .

There were 3 shares forfeited during the six month period ended March 31, 2023.

In the first six months of fiscal 2023, the Company granted its non-employee directors 38 restricted shares under the 2016 Plan, with a grant date fair value of $ 3.48 per share, which vest over one year .

There were 3 shares forfeited during the nine month period ended June 30, 2023.

In the first nine months of fiscal 2023, the Company granted its non-employee directors 38 restricted shares under the 2016 Plan, with a grant date fair value of $ 3.48 per share, which vest over one year .

One award for 42 restricted shares vested in January 2023.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 300 shares that remain available for award at March 31, 2023.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 300 shares that remain available for award at June 30, 2023.

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 150 % of such target, then a fewer number of shares would be available for award.

Stock-based compensation under the 2016 Plan was $ 207 and $ 306 during the first six months of fiscal 2023 and 2022, respectively.

As of March 31, 2023, there was $ 436 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 $ 292 and $ 309 during the first nine months of fiscal 2023 and 2022, respectively.

As of June 30, 2023, there was $ 348 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 1.2 years.

17 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

4 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2023 2022 2023 2022

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

Net Sales 2023 2022 2023 2022

2 unchanged sentences

Total $ 21,853 $ 21,454 $ 62,394 $ 65,269

In addition to the disaggregated revenue information provided above, approximately 49 % and 62 % of total net sales for the six months ended March 31, 2023 and 2022, 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 47 % and 58 % of total net sales for the nine months ended June 30, 2023 and 2022, 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, 2023:

The following table contains a roll forward of contract assets and contract liabilities for the period ended June 30, 2023:

Contract assets - Beginning balance, October 1, 2022 $ 10,172

1 unchanged sentence

Less amounts billed to the customers ( 30,108 )

Contract assets - Ending balance, March 31, 2023 $ 10,636

Contract assets - Ending balance, June 30, 2023 $ 9,019

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2022 $ ( 807 )

1 unchanged sentence

Performance obligations satisfied 1,435

Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2023 $ ( 1,216 )

There were no impairment losses recorded on contract assets as of March 31, 2023 and September 30, 2022.

Contract liabilities (included within Accrued liabilities) - Ending balance, June 30, 2023 $ ( 903 )

There were no impairment losses recorded on contract assets as of June 30, 2023 and September 30, 2022.

Remaining performance obligations

As of March 31, 2023, the Company has $ 96,674 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

As of June 30, 2023, the Company has $ 122,826 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

Commitments and Contingencies

5 unchanged sentences

The Company maintains $ 3,000 of cybersecurity insurance coverage to limit our exposure to losses such as those related to the Cyber Incident.

The Company recorded costs in selling, general and administrative expense associated with the Cyber Incident of $ 1,000 during the three months ended March 31, 2023.

The Company recorded costs of $ 110 to other expense (income), net of $ 3,000 insurance recovery and $ 1,000 to selling, general and administrative expense in the six months ended March 31, 2023, resulting in net costs of $ 1,000 and $ 1,110 in the three and six months ended March 31, 2023, respectively.

The Company recorded costs in selling, general and administrative expense associated with the Cyber Incident of $ 232 and a benefit of $ 50 to other expense (income) due to reversal of insurance deductible accrual during the three months ended June 30, 2023.

The Company recorded costs of $ 60 to other expense (income), net of $ 3,000 insurance recovery and $ 1,209 to selling, general and administrative expense in the nine months ended June 30, 2023, resulting in net IT incident costs of $ 182 and $ 1,269 in the three and nine months ended June 30, 2023, respectively.

The Company received the $ 3,000 of insurance proceeds on February 20, 2023.

At March 31, 2023, the Company recorded $ 1,000 related to the Cyber Incident in accounts payable on the consolidated condensed balance sheets.

The Company has incurred, and may continue to incur, certain expenses related to this attack, including expenses associated with additional remediation measures and further investigation of this matter.

At June 30, 2023, the Company recorded $ 1,037 related to the Cyber Incident in accounts payable on the consolidated condensed balance sheets.

The Company has incurred, and may continue to incur, certain expenses related to this attack, including expenses associated with additional remediation measures.

The Company will accrue these costs as incurred.

Subsequent Events

The Company has evaluated subsequent events through August 14, 2023, the date the financial statements were available to be issued, and has determined that the following subsequent events require disclosure in the financial statements.

Forbearance Agreement

On April 28, 2023, the Company and its subsidiary guarantors entered into a Forbearance Agreement with J.P.

Morgan Chase Bank, N.A.

in respect to its Credit Agreement in response to the Notice of Event of Default and Reservation of Rights notice received on February 6, 2023.

See Note 7, Debt and Subsequent Event for more information.

Credit Agreement Amendment

The Company has evaluated subsequent events through September 28, 2023, the date the financial statements were available to be issued, and has determined that the following subsequent events require disclosure in the financial statements.

On August 9, 2023, the Company entered into the Seventh Amendment to the Credit Agreement and the Third Amendment to the Export Credit Agreement with its lender which waived the Event of Default, ended the forbearance period, and provided for further changes to the agreements.

See Note 7, Debt and Subsequent Event for more information.

The Company provided to its lender one or more proposed term sheets which provide for the refinancing of all of the Obligations and a CIM as required under the terms of the Seventh Amendment on or before the requisite due dates.

See Note 7, Debt and Subsequent Event for more information.

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