| Ohio | | 34-1598949 | |
| (State or other jurisdiction of | | (I.R.S. Employer | |
| incorporation or organization) | | Identification No.) | |
| | | | |
| 9400 East Market Street, Warren, Ohio | | 44484 | |
| (Address of principal executive offices) | | (Zip Code) | |
| (330) 856-2443 | |
| Registrant's telephone number, including area code | |
Large accelerated filer ¨ | Accelerated filer x | Non-accelerated filer ¨ | Smaller reporting company ¨ |
| | (Do not check if a smaller reporting company) | |
INDEX | | | | Page |
PART IFINANCIAL INFORMATION | | | ||
| | | | |
Item 1. | Financial Statements | | | |
| Condensed Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012 | | 2 | |
| Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2013 and 2012 | | 3 | |
| Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Six Months Ended June 30, 2013 and 2012 | | 4 | |
| Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2013 and 2012 | | 5 | |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | | 6 | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | | 21 | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | 32 | |
Controls and Procedures | | 32 | ||
| | | | |
PART IIOTHER INFORMATION | | | ||
| | | | |
Item 1. | Legal Proceedings | | 32 | |
Item 1A. | Risk Factors | | 32 | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | 32 | |
Item 3. | Defaults Upon Senior Securities | | 32 | |
Item 4. | Mine Safety Disclosure | | 33 | |
Item 5. | Other Information | | 33 | |
Item 6. | Exhibits | | 33 | |
| | | | |
Signatures | | 33 | ||
Index to Exhibits | | 34 | ||
EX 31.1 | | | | |
EX 31.2 | | | | |
EX 32.1 | | | | |
EX 32.2 | | | | |
| | | | |
101 | XBRL Exhibits : | | | |
101.INS | XBRL Instance Document | | | |
101.SCH | XBRL Schema Document | | | |
101.CAL | XBRL Calculation Linkbase Document | | | |
101.DEF | XBRL Definition Linkbase Document | | | |
101.LAB | XBRL Labels Linkbase Document | | | |
101.PRE | XBRL Presentation Linkbase Document | | |
| | June 30, | | December 31, | | ||
(in thousands) | | 2013 | | 2012 | | ||
| | (Unaudited) | | | | | |
ASSETS | | | | | | | |
| | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 37,023 | | $ | 44,555 | |
Accounts receivable, less reserves of $3,411 and $3,394, respectively | | | 158,371 | | | 141,503 | |
Inventories, net | | | 109,812 | | | 96,032 | |
Prepaid expenses and other current assets | | | 30,293 | | | 28,964 | |
Total current assets | | | 335,499 | | | 311,054 | |
| | | | | | | |
Long-term assets: | | | | | | | |
Property, plant and equipment, net | | | 112,236 | | | 119,147 | |
Other assets: | | | | | | | |
Intangible assets, net | | | 75,189 | | | 84,397 | |
Goodwill | | | 61,578 | | | 66,381 | |
Investments and other long-term assets, net | | | 9,904 | | | 11,712 | |
Total long-term assets | | | 258,907 | | | 281,637 | |
Total assets | | $ | 594,406 | | $ | 592,691 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
| | | | | | | |
Current liabilities: | | | | | | | |
Current portion of debt | | $ | 10,858 | | $ | 18,925 | |
Revolving credit facilities | | | - | | | 1,160 | |
Accounts payable | | | 85,759 | | | 76,303 | |
Accrued expenses and other current liabilities | | | 60,345 | | | 57,081 | |
Total current liabilities | | | 156,962 | | | 153,469 | |
| | | | | | | |
Long-term liabilities: | | | | | | | |
Long-term debt, net | | | 188,429 | | | 181,311 | |
Deferred income taxes | | | 56,554 | | | 59,819 | |
Other long-term liabilities | | | 4,369 | | | 4,258 | |
Total long-term liabilities | | | 249,352 | | | 245,388 | |
| | | | | | | |
Shareholders' equity: | | | | | | | |
Preferred Shares, without par value, authorized 5,000 shares, none issued | | | - | | | - | |
Common Shares, without par value, authorized 60,000 shares, issued 28,803 and | | | | | | | |
28,433 shares and outstanding 28,487 and 27,913 shares at June 30, 2013 and | | | | | | | |
December 31, 2012, respectively, with no stated value | | | - | | | - | |
Additional paid-in capital | | | 185,498 | | | 184,822 | |
Common Shares held in treasury, 316 and 520 shares at June 30, 2013 and | | | | | | | |
December 31, 2012, respectively, at no cost | | | (519) | | | (1,885) | |
Accumulated deficit | | | (13,022) | | | (22,902) | |
Accumulated other comprehensive loss | | | (25,074) | | | (10,282) | |
Total Stoneridge Inc. shareholders' equity | | | 146,883 | | | 149,753 | |
Noncontrolling interest | | | 41,209 | | | 44,081 | |
Total shareholders' equity | | | 188,092 | | | 193,834 | |
Total liabilities and shareholders' equity | | $ | 594,406 | | $ | 592,691 | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
(in thousands, except per share data) | | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Net sales | | $ | 242,785 | | $ | 234,265 | | $ | 478,495 | | $ | 496,532 | |
| | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | |
Cost of goods sold | | | 182,565 | | | 180,606 | | | 359,546 | | | 377,735 | |
Selling, general and administrative | | | 48,395 | | | 52,042 | | | 96,832 | | | 105,331 | |
| | | | | | | | | | | | | |
Operating income | | | 11,825 | | | 1,617 | | | 22,117 | | | 13,466 | |
| | | | | | | | | | | | | |
Interest expense, net | | | 4,575 | | | 5,162 | | | 9,149 | | | 10,517 | |
Equity in earnings of investees | | | (96) | | | (97) | | | (297) | | | (236) | |
Other expense (income), net | | | (170) | | | 2,734 | | | 447 | | | 2,403 | |
| | | | | | | | | | | | | |
Income (loss) before income taxes | | | 7,516 | | | (6,182) | | | 12,818 | | | 782 | |
| | | | | | | | | | | | | |
Provision (benefit) for income taxes | | | 1,125 | | | (884) | | | 2,144 | | | 334 | |
| | | | | | | | | | | | | |
Net income (loss) | | | 6,391 | | | (5,298) | | | 10,674 | | | 448 | |
| | | | | | | | | | | | | |
Net income (loss) attributable to noncontrolling interest | | | 634 | | | (1,740) | | | 794 | | | (1,873) | |
| | | | | | | | | | | | | |
Net income (loss) attributable to Stoneridge, Inc. | | $ | 5,757 | | $ | (3,558) | | $ | 9,880 | | $ | 2,321 | |
| | | | | | | | | | | | | |
Earnings (loss) per share attributable to Stoneridge, Inc.: | | | | | | | | | | | | | |
Basic | | $ | 0.22 | | $ | (0.13) | | $ | 0.37 | | $ | 0.09 | |
Diluted | | $ | 0.21 | | $ | (0.13) | | $ | 0.36 | | $ | 0.09 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Basic | | | 26,692 | | | 26,424 | | | 26,649 | | | 26,322 | |
Diluted | | | 27,348 | | | 26,424 | | | 27,358 | | | 26,999 | |
| | Three months ended | | Six months ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
(in thousands) | | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Net income (loss) | | $ | 6,391 | | $ | (5,298) | | $ | 10,674 | | $ | 448 | |
Other comprehensive income (loss), net of tax: | | | | | | | | | | | | | |
Foreign currency translation adjustments | | | (14,359) | | | (17,456) | | | (12,114) | | | (10,345) | |
Unrealized gain (loss) on derivatives | | | (2,937) | | | (1,771) | | | (2,678) | | | 5,485 | |
Other comprehensive loss | | | (17,296) | | | (19,227) | | | (14,792) | | | (4,860) | |
Consolidated comprehensive loss | | | (10,905) | | | (24,525) | | | (4,118) | | | (4,412) | |
Income (loss) attributable to noncontrolling interest | | | 634 | | | (1,740) | | | 794 | | | (1,873) | |
Comprehensive loss attributable to Stoneridge, Inc. | | $ | (11,539) | | $ | (22,785) | | $ | (4,912) | | $ | (2,539) | |
Six months ended June 30 (in thousands) | | 2013 | | | 2012 | | |
| | | | | | | |
OPERATING ACTIVITIES: | | | | | | | |
Net income | | $ | 10,674 | | $ | 448 | |
Adjustments to reconcile net income to net cash provided by | | | | | | | |
operating activities: | | | | | | | |
Depreciation | | | 14,588 | | | 14,337 | |
Amortization, including accretion of debt discount | | | 3,424 | | | 3,703 | |
Deferred income taxes | | | (1,836) | | | (309) | |
Earnings of equity method investees | | | (297) | | | (236) | |
Gain on sale of fixed assets | | | - | | | (57) | |
Share-based compensation expense | | | 2,723 | | | 2,461 | |
Changes in operating assets and liabilities - | | | | | | | |
Accounts receivable, net | | | (20,358) | | | (827) | |
Inventories, net | | | (17,607) | | | 422 | |
Prepaid expenses and other | | | (3,454) | | | (4,382) | |
Accounts payable | | | 10,745 | | | 2,216 | |
Accrued expenses and other | | | 4,641 | | | (2,460) | |
Net cash provided by operating activities | | | 3,243 | | | 15,316 | |
| | | | | | | |
INVESTING ACTIVITIES: | | | | | | | |
Capital expenditures | | | (10,701) | | | (14,370) | |
Proceeds from sale of fixed assets | | | 83 | | | 301 | |
Payment for additional interest in PST | | | - | | | (19,779) | |
Net cash used for investing activities | | | (10,618) | | | (33,848) | |
| | | | | | | |
FINANCING ACTIVITIES: | | | | | | | |
Revolving credit facility borrowings | | | - | | | 11,310 | |
Revolving credit facility payments | | | (1,160) | | | (24,426) | |
Proceeds from issuance of other debt | | | 19,234 | | | 18,871 | |
Repayments of other debt | | | (16,953) | | | (26,124) | |
Other financing costs | | | - | | | (111) | |
Repurchase of Common Shares to satisfy employee tax withholding | | | (670) | | | (1,119) | |
Net cash provided by (used for) financing activities | | | 451 | | | (21,599) | |
| | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | | (608) | | | 564 | |
| | | | | | | |
Net change in cash and cash equivalents | | | (7,532) | | | (39,567) | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | | 44,555 | | | 78,731 | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 37,023 | | $ | 39,164 | |
| | | | | | | |
Supplemental disclosure of non-cash financing activities: | | | | | | | |
Change in fair value of interest rate swap | | $ | (1,394) | | $ | 754 | |
Issuance of Common Shares for acquisition of additional PST interest | | $ | - | | $ | 10,197 | |
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | | | | | | |
Raw materials | | $ | 69,393 | | $ | 64,340 | |
Work-in-progress | | | 16,708 | | | 13,621 | |
Finished goods | | | 23,711 | | | 18,071 | |
Total inventories, net | | $ | 109,812 | | $ | 96,032 | |
| $24,250 | Period from July 2013 through December 2013 |
| $45,000 | Period from January 2014 through December 2014 |
| 1,653 pounds | Period from July 2013 through December 2013 |
| 1,174 pounds | Period from January 2014 through December 2014 |
| | | | | | | | Prepaid expenses and other | | | | | | | | ||||
| | | | | | | | current assets / other | | Accrued expenses and other | | ||||||||
| | Notional amounts (A) | | long-term assets | | current liabilities | | ||||||||||||
| | June 30, | | December 31, | | June 30, | | December 31, | | June 30, | | December 31, | | ||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | 2013 | | 2012 | | ||||||
Derivatives designated as hedging instruments: | | | | | | | | | | | | | | | | | | | |
Cash Flow Hedge: | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | | $ | 69,250 | | $ | 36,500 | | $ | 573 | | $ | 1,800 | | $ | - | | $ | - | |
Fixed price commodity contracts | | | 2,827 | | | 2,436 | | | - | | | 340 | | | 1,111 | | | - | |
| | | | | | | | | | | | | | | | | | | |
Fair Value Hedge: | | | | | | | | | | | | | | | | | | | |
Interest rate swap contract | | | 45,000 | | | 45,000 | | | 818 | | | 2,212 | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | |
Derivatives not designated as hedging instruments: | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | | | 12,625 | | | 12,643 | | | - | | | - | | | 16 | | | 191 | |
(A) | Notional amounts represent the gross contract / notional amount of the derivatives outstanding. The fixed price commodity notional amounts are in pounds. |
| | Gain (loss) recorded in other comprehensive loss | | Gain (loss) reclassified from other comprehensive loss into net income (loss) | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Derivatives designated as cash flow hedges: | | | | | | | | | | | | | |
Forward currency contracts | | $ | (1,430) | | $ | (1,497) | | $ | 863 | | $ | (476) | |
Fixed price commodity contracts | | | (988) | | | (1,491) | | | (344) | | | (741) | |
Total derivatives designated as cash flow hedges | | $ | (2,418) | | $ | (2,988) | | $ | 519 | | $ | (1,217) | |
| | Gain (loss) recorded in other comprehensive loss | | Gain (loss) reclassified from other comprehensive loss into net income | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Derivatives designated as cash flow hedges: | | | | | | | | | | | | | |
Forward currency contracts | | $ | 311 | | $ | 3,051 | | $ | 1,538 | | $ | (500) | |
Fixed price commodity contracts | | | (1,734) | | | 841 | | | (283) | | | (1,093) | |
Total derivatives designated as cash flow hedges | | $ | (1,423) | | $ | 3,892 | | $ | 1,255 | | $ | (1,593) | |
| | June 30, | | December 31, | | |||||||||||
| | 2013 | | 2012 | | |||||||||||
| | Fair values estimated using | | | | | ||||||||||
| | | | | Level 1 | | Level 2 | | Level 3 | | | | | |||
| | Fair value | | inputs (A) | | inputs (B) | | inputs (C) | | Fair value | | |||||
| | | | | | | | | | | | | | | | |
Financial assets carried at fair value: | | | | | | | | | | | | | | | | |
Interest rate swap contract | | $ | 818 | | $ | - | | $ | 818 | | $ | - | | $ | 2,212 | |
Forward currency contracts | | | 573 | | | - | | | 573 | | | - | | | 1,800 | |
Fixed price commodity contracts | | | - | | | - | | | - | | | | | | 340 | |
| | | | | | | | | | | | | | | | |
Total financial assets carried at fair value | | $ | 1,391 | | $ | - | | $ | 1,391 | | $ | - | | $ | 4,352 | |
| | | | | | | | | | | | | | | | |
Financial liabilities carried at fair value: | | | | | | | | | | | | | | | | |
Forward currency contracts | | $ | 16 | | $ | - | | $ | 16 | | $ | - | | $ | 191 | |
Fixed price commodity contracts | | | 1,111 | | | - | | | 1,111 | | | - | | | - | |
| | | | | | | | | | | | | | | | |
Total financial liabilities carried at fair value | | $ | 1,127 | | $ | - | | $ | 1,127 | | $ | - | | $ | 191 | |
(A) | Fair values estimated using Level 1 inputs, which consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The Company did not have any fair value estimates using Level 1 inputs at June 30, 2013 or December 31, 2012. |
| |
(B) | Fair values estimated using Level 2 inputs, other than quoted prices, that are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward currency, fixed price commodity and interest rate swap contracts, inputs include foreign currency exchange rates, commodity indexes and the six-month forward LIBOR. |
| |
(C) | Fair values estimated using Level 3 inputs consist of significant unobservable inputs. The Company did not have any fair value estimates using Level 3 inputs at June 30, 2013 or December 31, 2012. |
| | Principal Outstanding at | | Weighted Average | | | | ||||
| | June 30, | | December 31, | | Interest as of | | | | ||
| | 2013 | | 2012 | | June 30, 2013 | | Maturity | | ||
Revolving Credit Facilities | | | | | | | | | | | |
Asset-based credit facility | | $ | - | | $ | - | | N/A | | Dec - 2016 | |
BCS revolver | | | - | | | 1,160 | | N/A | | Feb - 2013 | |
Total revolving credit facilities | | $ | - | | $ | 1,160 | | | | | |
| | | | | | | | | | | |
Debt | | | | | | | | | | | |
Senior secured notes, net of discount | | | | | | | | | | | |
and swap fair value adjustment (A) | | $ | 172,796 | | $ | 173,916 | | 9.50% | | Oct - 2017 | |
PST short-term notes | | | 6,098 | | | 16,161 | | 3.13% - 9.48% | | Various 2013 | |
PST long-term notes | | | 18,552 | | | 8,155 | | 4.00% - 5.50% | | 2014 - 2019 | |
Suzhou note | | | 1,466 | | | 1,445 | | 7.50% | | Aug - 2013 | |
Other | | | 375 | | | 559 | | | | | |
Total | | | 199,287 | | | 200,236 | | | | | |
Less: current portion | | | (10,858) | | | (18,925) | | | | | |
Total long-term debt, net | | $ | 188,429 | | $ | 181,311 | | | | | |
(A) | Weighted average interest rate excludes the effect of the Company's interest rate swap and the accretion of debt discount. |
| | Three months ended | | Six months ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Basic weighted-average shares outstanding | | | 26,691,895 | | | 26,424,331 | | | 26,649,005 | | | 26,322,277 | |
Effect of dilutive shares | | | 656,444 | | | - | | | 709,435 | | | 676,225 | |
Diluted weighted-average shares outstanding | | | 27,348,339 | | | 26,424,331 | | | 27,358,440 | | | 26,998,502 | |
| | Foreign | | Unrealized | | Post | | | | | |||
| | currency | | gain (loss) on | | employment | | | | | |||
| | translation | | derivatives | | benefit liability | | Total | | ||||
Balance at March 31, 2013 | | $ | (10,165) | | $ | 2,399 | | $ | (12) | | $ | (7,778) | |
| | | | | | | | | | | | | |
Other comprehensive loss before reclassifications | | | (14,359) | | | (2,418) | | | - | | | (16,777) | |
Amounts reclassified from accumulated other | | | | | | | | | | | | | |
comprehensive loss | | | - | | | 519 | | | - | | | 519 | |
Net other comprehensive loss, net of tax | | | (14,359) | | | (2,937) | | | - | | | (17,296) | |
| | | | | | | | | | | | | |
Balance at June 30, 2013 | | $ | (24,524) | | $ | (538) | | $ | (12) | | $ | (25,074) | |
| | | | | | | | | | | | | |
Balance at March 31, 2012 | | $ | 5,203 | | $ | (466) | | $ | 15 | | $ | 4,752 | |
| | | | | | | | | | | | | |
Other comprehensive loss before reclassifications | | | (17,456) | | | (2,988) | | | - | | | (20,444) | |
Amounts reclassified from accumulated other | | | | | | | | | | | | | |
comprehensive loss | | | - | | | (1,217) | | | - | | | (1,217) | |
Net other comprehensive loss, net of tax | | | (17,456) | | | (1,771) | | | - | | | (19,227) | |
| | | | | | | | | | | | | |
Balance at June 30, 2012 | | $ | (12,253) | | $ | (2,237) | | $ | 15 | | $ | (14,475) | |
| | Foreign | | Unrealized | | | Post | | | | | ||
| | currency | | gain (loss) on | | employment | | | | | |||
| | translation | | derivatives | | benefit liability | | Total | | ||||
Balance at January 1, 2013 | | $ | (12,410) | | $ | 2,140 | | $ | (12) | | $ | (10,282) | |
| | | | | | | | | | | | | |
Other comprehensive loss before reclassifications | | | (12,114) | | | (1,423) | | | - | | | (13,537) | |
Amounts reclassified from accumulated other | | | | | | | | | | | | | |
comprehensive loss | | | - | | | 1,255 | | | - | | | 1,255 | |
Net other comprehensive loss, net of tax | | | (12,114) | | | (2,678) | | | - | | | (14,792) | |
| | | | | | | | | | | | | |
Balance at June 30, 2013 | | $ | (24,524) | | $ | (538) | | $ | (12) | | $ | (25,074) | |
| | | | | | | | | | | | | |
Balance at January 1, 2012 | | $ | (1,908) | | $ | (7,722) | | $ | 15 | | $ | (9,615) | |
| | | | | | | | | | | | | |
Other comprehensive income (loss) before reclassifications | | | (10,345) | | | 3,892 | | | - | | | (6,453) | |
Amounts reclassified from accumulated other | | | | | | | | | | | | | |
comprehensive loss | | | - | | | (1,593) | | | - | | | (1,593) | |
Net other comprehensive income (loss), net of tax | | | (10,345) | | | 5,485 | | | - | | | (4,860) | |
| | | | | | | | | | | | | |
Balance at June 30, 2012 | | $ | (12,253) | | $ | (2,237) | | $ | 15 | | $ | (14,475) | |
Six months ended June 30 | | 2013 | | 2012 | | ||
| | | | | | | |
Product warranty and recall at beginning of period | | $ | 6,107 | | $ | 5,301 | |
Accruals for products shipped during period | | | 2,215 | | | 594 | |
Aggregate changes in pre-existing liabilities due to claim developments | | | 1,229 | | | 251 | |
Settlements made during the period (in cash or in kind) | | | (3,369) | | | (1,313) | |
Product warranty and recall at end of period | | $ | 6,182 | | $ | 4,833 | |
| | Three months ended | | Six months ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net Sales: | | | | | | | | | | | | | |
Electronics | | $ | 48,684 | | $ | 41,504 | | $ | 93,204 | | $ | 84,932 | |
Inter-segment sales | | | 10,849 | | | 13,905 | | | 21,715 | | | 29,228 | |
Electronics net sales | | | 59,533 | | | 55,409 | | | 114,919 | | | 114,160 | |
Wiring | | | 72,952 | | | 85,723 | | | 149,800 | | | 180,475 | |
Inter-segment sales | | | 2,198 | | | 1,763 | | | 3,801 | | | 2,106 | |
Wiring net sales | | | 75,150 | | | 87,486 | | | 153,601 | | | 182,581 | |
Control Devices | | | 74,434 | | | 68,564 | | | 146,347 | | | 138,960 | |
Inter-segment sales | | | 774 | | | 853 | | | 1,570 | | | 1,978 | |
Control Devices net sales | | | 75,208 | | | 69,417 | | | 147,917 | | | 140,938 | |
PST | | | 46,715 | | | 38,474 | | | 89,144 | | | 92,165 | |
Inter-segment sales | | | - | | | - | | | - | | | - | |
PST net sales | | | 46,715 | | | 38,474 | | | 89,144 | | | 92,164 | |
Eliminations | | | (13,821) | | | (16,521) | | | (27,086) | | | (33,312) | |
Total net sales | | $ | 242,785 | | $ | 234,265 | | $ | 478,495 | | $ | 496,532 | |
Income (Loss) Before Income Taxes: | | | | | | | | | | | | | |
Electronics | | $ | 3,913 | | $ | 1,825 | | $ | 7,695 | | $ | 5,871 | |
Wiring | | | (1,543) | | | 529 | | | (1,970) | | | 3,173 | |
Control Devices | | | 7,613 | | | 3,829 | | | 13,880 | | | 7,901 | |
PST | | | 2,539 | | | (8,124) | | | 3,022 | | | (8,456) | |
Other corporate activities | | | (1,002) | | | (259) | | | (1,866) | | | 239 | |
Corporate interest expense | | | (4,004) | | | (3,982) | | | (7,943) | | | (7,946) | |
Total income (loss) before income taxes | | $ | 7,516 | | $ | (6,182) | | $ | 12,818 | | $ | 782 | |
Depreciation and Amortization: | | | | | | | | | | | | | |
Electronics | | $ | 1,242 | | $ | 1,087 | | $ | 2,521 | | $ | 2,155 | |
Wiring | | | 1,196 | | | 1,262 | | | 2,407 | | | 2,532 | |
Control Devices | | | 2,470 | | | 2,317 | | | 5,005 | | | 4,748 | |
PST | | | 3,654 | | | 4,124 | | | 7,486 | | | 8,077 | |
Corporate | | | 46 | | | 47 | | | 94 | | | 95 | |
Total depreciation and amortization (A) | | $ | 8,608 | | $ | 8,837 | | $ | 17,513 | | $ | 17,607 | |
Interest Expense, net: | | | | | | | | | | | | | |
Electronics | | $ | 186 | | $ | 393 | | $ | 373 | | $ | 786 | |
Wiring | | | 71 | | | 44 | | | 195 | | | 73 | |
Control Devices | | | 32 | | | 57 | | | 79 | | | 114 | |
PST (A) | | | 282 | | | 686 | | | 559 | | | 1,598 | |
Corporate | | | 4,004 | | | 3,982 | | | 7,943 | | | 7,946 | |
Total interest expense, net | | $ | 4,575 | | $ | 5,162 | | $ | 9,149 | | $ | 10,517 | |
Capital Expenditures: | | | | | | | | | | | | | |
Electronics | | $ | 519 | | $ | 712 | | $ | 988 | | $ | 1,466 | |
Wiring | | | 988 | | | 691 | | | 1,504 | | | 1,486 | |
Control Devices | | | 1,657 | | | 1,962 | | | 4,897 | | | 4,032 | |
PST | | | 1,626 | | | 2,985 | | | 3,092 | | | 5,406 | |
Corporate | | | 93 | | | 1,172 | | | 220 | | | 1,980 | |
Total capital expenditures | | $ | 4,883 | | $ | 7,522 | | $ | 10,701 | | $ | 14,370 | |
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | | | | | | |
Total Assets: | | | | | | | |
Electronics | | $ | 93,321 | | $ | 84,772 | |
Wiring | | | 107,286 | | | 99,755 | |
Control Devices | | | 112,924 | | | 100,351 | |
PST | | | 251,937 | | | 267,687 | |
Corporate (B) | | | 298,825 | | | 308,969 | |
Eliminations | | | (269,887) | | | (268,843) | |
Total assets | | $ | 594,406 | | $ | 592,691 | |
(A) | These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets. |
(B) | Assets located at Corporate consist primarily of cash, intercompany loan receivables and equity investments. |
| | Three months ended | | Six months ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net Sales: | | | | | | | | | | | | | |
North America | | $ | 151,366 | | $ | 159,216 | | $ | 304,465 | | $ | 329,339 | |
South America | | | 46,715 | | | 38,474 | | | 89,144 | | | 92,165 | |
Europe and Other | | | 44,704 | | | 36,575 | | | 84,886 | | | 75,028 | |
Total net sales | | $ | 242,785 | | $ | 234,265 | | $ | 478,495 | | $ | 496,532 | |
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | | | | | | |
Long-term Assets: | | | | | | | |
North America | | $ | 78,732 | | $ | 82,777 | |
South America | | | 166,681 | | | 185,109 | |
Europe and Other | | | 13,494 | | | 13,751 | |
Total long-term assets | | $ | 258,907 | | $ | 281,637 | |
| | | | | | | | | | | | | | Dollar | | |||||
| | | | | | | | | | | | | | increase / | | |||||
Three months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | |||||
Net sales | | $ | 242,785 | | | | 100.0 | % | | $ | 234,265 | | | | 100.0 | % | | $ | 8,520 | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | |
Cost of goods sold | | | 182,565 | | | | 75.2 | | | | 180,606 | | | | 77.1 | | | | 1,959 | |
Selling, general and administrative | | | 48,395 | | | | 19.9 | | | | 52,042 | | | | 22.2 | | | | (3,647) | |
Operating income | | | 11,825 | | | | 4.9 | | | | 1,617 | | | | 0.7 | | | | 10,208 | |
Interest expense, net | | | 4,575 | | | | 1.9 | | | | 5,162 | | | | 2.2 | | | | (587) | |
Equity in earnings of investees | | | (96) | | | | - | | | | (97) | | | | - | | | | 1 | |
Other expense (income), net | | | (170) | | | | (0.1) | | | | 2,734 | | | | 1.2 | | | | (2,904) | |
Income (loss) before income taxes | | | 7,516 | | | | 3.1 | | | | (6,182) | | | | (2.7) | | | | 13,698 | |
Provision (benefit) for income taxes | | | 1,125 | | | | 0.5 | | | | (884) | | | | (0.4) | | | | 2,009 | |
Net income (loss) | | | 6,391 | | | | 2.6 | | | | (5,298) | | | | (2.3) | | | | 11,689 | |
Net income (loss) attributable to | | | | | | | | | | | | | | | | | | | | |
noncontrolling interest | | | 634 | | | | 0.2 | | | | (1,740) | | | | (0.7) | | | | 2,374 | |
Net income (loss) attributable to Stoneridge, Inc. | | $ | 5,757 | | | | 2.4 | % | | $ | (3,558) | | | | (1.6) | % | | $ | 9,315 | |
| | | | | | | | | | | | | | Dollar | | | Percent | | ||||||
| | | | | | | | | | | | | | increase / | | | increase / | | ||||||
Three months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Electronics | | $ | 48,684 | | | | 20.1 | % | | $ | 41,504 | | | | 17.7 | % | | $ | 7,180 | | | | 17.3 | % |
Wiring | | | 72,952 | | | | 30.0 | | | | 85,723 | | | | 36.6 | | | | (12,771) | | | | (14.9) | % |
Control Devices | | | 74,434 | | | | 30.7 | | | | 68,564 | | | | 29.3 | | | | 5,870 | | | | 8.6 | % |
PST | | | 46,715 | | | | 19.2 | | | | 38,474 | | | | 16.4 | | | | 8,241 | | | | 21.4 | % |
Total net sales | | $ | 242,785 | | | | 100.0 | % | | $ | 234,265 | | | | 100.0 | % | | $ | 8,520 | | | | 3.6 | % |
| | | | | | | | | | | | | | Dollar | | | Percent | | ||||||
| | | | | | | | | | | | | | increase / | | | increase / | | ||||||
Three months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
North America | | $ | 151,366 | | | | 62.4 | % | | $ | 159,216 | | | | 68.0 | % | | $ | (7,850) | | | | (4.9) | % |
South America | | | 46,715 | | | | 19.2 | | | | 38,474 | | | | 16.4 | | | | 8,241 | | | | 21.4 | % |
Europe and Other | | | 44,704 | | | | 18.4 | | | | 36,575 | | | | 15.6 | | | | 8,129 | | | | 22.2 | % |
Total net sales | | $ | 242,785 | | | | 100.0 | % | | $ | 234,265 | | | | 100.0 | % | | $ | 8,520 | | | | 3.6 | % |
| | | | | | | | Dollar | | | Percent | | ||||
| | | | | | | | increase / | | | increase / | | ||||
Three months ended June 30 | | 2013 | | | 2012 | | | (decrease) | | | (decrease) | | ||||
| | | | | | | | | | | | | ||||
Electronics | | $ | 3,913 | | | $ | 1,825 | | | $ | 2,088 | | | | 114.4 | % |
Wiring | | | (1,543) | | | | 529 | | | | (2,072) | | | | NM | |
Control Devices | | | 7,613 | | | | 3,829 | | | | 3,784 | | | | 98.8 | % |
PST | | | 2,539 | | | | (8,124) | | | | 10,663 | | | | NM | |
Other corporate activities | | | (1,002) | | | | (259) | | | | (743) | | | | (286.9) | % |
Corporate interest expense | | | (4,004) | | | | (3,982) | | | | (22) | | | | (0.6) | % |
Income (loss) before income taxes | | $ | 7,516 | | | $ | (6,182) | | | $ | 13,698 | | | | 221.6 | % |
| | | | | | | | | | | | | | Dollar | | | Percent | | ||||||
| | | | | | | | | | | | | | increase / | | | increase / | | ||||||
Three months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
| | | | | | | | | | | | | | | | | | | ||||||
North America | | $ | 2,028 | | | | 27.0 | % | | $ | 2,338 | | | | (37.8) | % | | $ | (310) | | | | (13.3) | % |
South America | | | 2,539 | | | | 33.8 | | | | (8,124) | | | | 131.4 | | | | 10,663 | | | | NM | |
Europe and Other | | | 2,949 | | | | 39.2 | | | | (396) | | | | 6.4 | | | | 3,345 | | | | NM | |
Income (loss) before income taxes | | $ | 7,516 | | | | 100.0 | % | | $ | (6,182) | | | | 100.0 | % | | $ | 13,698 | | | | 221.6 | % |
| | | | | | | | | | | | | | | | |||||
| | | | | | | | | | | | | | Dollar | | |||||
| | | | | | | | | | | | | | increase / | | |||||
Six months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | |||||
| | | | | | | | | | | | | | | | |||||
Net sales | | $ | 478,495 | | | | 100.0 | % | | $ | 496,532 | | | | 100.0 | % | | $ | (18,037) | |
| | | | | | | | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | |
Cost of goods sold | | | 359,546 | | | | 75.1 | | | | 377,735 | | | | 76.1 | | | | (18,189) | |
Selling, general and administrative | | | 96,832 | | | | 20.3 | | | | 105,331 | | | | 21.2 | | | | (8,499) | |
| | | | | | | | | | | | | | | | | | | | |
Operating income | | | 22,117 | | | | 4.6 | | | | 13,466 | | | | 2.7 | | | | 8,651 | |
| | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | 9,149 | | | | 1.9 | | | | 10,517 | | | | 2.1 | | | | (1,368) | |
Equity in earnings of investees | | | (297) | | | | (0.1) | | | | (236) | | | | (0.1) | | | | (61) | |
Other expense, net | | | 447 | | | | 0.1 | | | | 2,403 | | | | 0.5 | | | | (1,956) | |
| | | | | | | | | | | | | | | | | | | | |
Income before income taxes | | | 12,818 | | | | 2.7 | | | | 782 | | | | 0.2 | | | | 12,036 | |
| | | | | | | | | | | | | | | | | | | | |
Provision for income taxes | | | 2,144 | | | | 0.4 | | | | 334 | | | | 0.1 | | | | 1,810 | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | 10,674 | | | | 2.3 | | | | 448 | | | | 0.1 | | | | 10,226 | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to noncontrolling interest | | | 794 | | | | 0.2 | | | | (1,873) | | | | (0.4) | | | | 2,667 | |
| | | | | | | | | | | | | | | | | | | | |
Net income attributable to Stoneridge, Inc. | | $ | 9,880 | | | | 2.1 | % | | $ | 2,321 | | | | 0.5 | % | | $ | 7,559 | |
| | | | | Dollar | | | Percent | | |||||||||||||||
| | | | | | | | | | | | | | increase / | | | increase / | | ||||||
Six months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
| | | | | | | | | | | | | | | | | | | ||||||
Electronics | | $ | 93,204 | | | | 19.5 | % | | $ | 84,932 | | | | 17.1 | % | | $ | 8,272 | | | | 9.7 | % |
Wiring | | | 149,800 | | | | 31.3 | | | | 180,475 | | | | 36.3 | | | | (30,675) | | | | (17.0) | % |
Control Devices | | | 146,347 | | | | 30.6 | | | | 138,960 | | | | 28.0 | | | | 7,387 | | | | 5.3 | % |
PST | | | 89,144 | | | | 18.6 | | | | 92,165 | | | | 18.6 | | | | (3,021) | | | | (3.3) | % |
Total net sales | | $ | 478,495 | | | | 100.0 | % | | $ | 496,532 | | | | 100.0 | % | | $ | (18,037) | | | | (3.6) | % |
| | | | | Dollar | | | Percent | | |||||||||||||||
| | | | | increase / | | | increase / | | |||||||||||||||
Six months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
North America | | $ | 304,465 | | | | 63.6 | % | | $ | 329,339 | | | | 66.3 | % | | $ | (24,874) | | | | (7.6) | % |
South America | | | 89,144 | | | | 18.6 | | | | 92,165 | | | | 18.6 | | | | (3,021) | | | | (3.3) | % |
Europe and Other | | | 84,886 | | | | 17.8 | | | | 75,028 | | | | 15.1 | | | | 9,858 | | | | 13.1 | % |
Total net sales | | $ | 478,495 | | | | 100.0 | % | | $ | 496,532 | | | | 100.0 | % | | $ | (18,037) | | | | (3.6) | % |
| | | | | | | | Dollar | | | Percent | | ||||
| | | | | | | | increase / | | | increase / | | ||||
Six months ended June 30 | | 2013 | | | 2012 | | | (decrease) | | | (decrease) | | ||||
| | | | | | | | | | | | | ||||
Electronics | | $ | 7,695 | | | $ | 5,871 | | | $ | 1,824 | | | | 31.1 | % |
Wiring | | | (1,970) | | | | 3,173 | | | | (5,143) | | | | NM | |
Control Devices | | | 13,880 | | | | 7,901 | | | | 5,979 | | | | 75.7 | % |
PST | | | 3,022 | | | | (8,456) | | | | 11,478 | | | | NM | |
Other corporate activities | | | (1,866) | | | | 239 | | | | (2,105) | | | | NM | |
Corporate interest expense | | | (7,943) | | | | (7,946) | | | | 3 | | | | 0.0 | % |
Income before income taxes | | $ | 12,818 | | | $ | 782 | | | $ | 12,036 | | | | 1,539.1 | % |
| | | | | | | | | | | | | | Dollar | | | Percent | | ||||||
| | | | | | | | | | | | | | increase / | | | increase / | | ||||||
Six months ended June 30 | | | | | 2013 | | | | | | 2012 | | | (decrease) | | | (decrease) | | ||||||
| | | | | | | | | | | | | | | | | | | ||||||
North America | | $ | 4,708 | | | | 36.7 | % | | $ | 8,044 | | | | 1,028.6 | % | | $ | (3,336) | | | | (41.5) | % |
South America | | | 3,022 | | | | 23.6 | | | | (8,456) | | | | (1,081.3) | | | | 11,478 | | | | NM | |
Europe and Other | | | 5,088 | | | | 39.7 | | | | 1,194 | | | | 152.7 | | | | 3,894 | | | | 326.1 | % |
Income before income taxes | | $ | 12,818 | | | | 100.0 | % | | $ | 782 | | | | 100.0 | % | | $ | 12,036 | | | | 1,539.1 | % |
| | | | | | | | Dollar | | |||
| | | | | increase / | | ||||||
Six months ended June 30 | | 2013 | | | 2012 | | | (decrease) | | |||
| | | | | | | | | | |||
Net cash provided by (used for): | | | | | | | | | | | | |
Operating activities | | $ | 3,243 | | | $ | 15,316 | | | $ | (12,073) | |
Investing activities | | | (10,618) | | | | (33,848) | | | | 23,230 | |
Financing activities | | | 451 | | | | (21,599) | | | | 22,050 | |
Effect of exchange rate changes on cash and cash equivalents | | | (608) | | | | 564 | | | | (1,172) | |
Net change in cash and cash equivalents | | $ | (7,532) | | | $ | (39,567) | | | $ | 32,035 | |
⋅ | the reduced purchases, loss or bankruptcy of a major customer; |
⋅ | the costs and timing of facility closures, business realignment, or similar actions; |
⋅ | a significant change in commercial, automotive, agricultural, motorcycle or off-highway vehicle production; |
⋅ | competitive market conditions and resulting effects on sales and pricing; |
⋅ | the impact on changes in foreign currency exchange rates on sales, costs and results, particularly the Brazilian real, Mexican peso and euro; |
⋅ | our ability to achieve cost reductions that offset or exceed certain customer-mandated selling price reductions; |
⋅ | a significant change in general economic conditions in any of the various countries in which we operate; |
⋅ | labor disruptions at our facilities or at any of our significant customers or suppliers; |
⋅ | the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis; |
⋅ | the amount of our indebtedness and the restrictive covenants contained in the agreements governing our indebtedness, including our credit facility and the senior secured notes; |
⋅ | customer acceptance of new products; |
⋅ | capital availability or costs, including changes in interest rates or market perceptions; |
⋅ | the failure to achieve the successful integration of any acquired company or business; and |
⋅ | those items described in Part I, Item IA ("Risk Factors") of the Company's 2012 Form 10-K. |
STONERIDGE, INC. | |
Date: August 2, 2013 | /s/ John C. Corey |
John C. Corey President and Chief Executive Officer | |
(Principal Executive Officer) | |
Date: August 2, 2013 | /s/ George E. Strickler |
George E. Strickler | |
Executive Vice President, Chief Financial Officer and Treasurer | |
(Principal Financial and Accounting Officer) |
Exhibit Number | Exhibit | |
10.1 | First Amendment to the Stoneridge, Inc. Amended and Restated Long-Term Incentive Plan, as amended (approved by the Company’s shareholders on May 6, 2013). 1 | |
10.2 | First Amendment to the Stoneridge, Inc. Amended Directors Restricted Shares Plan (approved by the Company’s shareholders on May 6, 2013). 1 | |
31.1 | Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | |
31.2 | Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | |
32.1 | Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. | |
32.2 | Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
/s/ John C. Corey | |
John C. Corey, President and Chief Executive Officer | |
August 2, 2013 | |
/s/ George E. Strickler | |
George E. Strickler, Executive Vice President, Chief Financial Officer and Treasurer | |
August 2, 2013 | |
/s/ John C. Corey | |
John C. Corey, President and Chief Executive Officer | |
August 2, 2013 | |
/s/ George E. Strickler | |
George E. Strickler, Executive Vice President, Chief Financial Officer and Treasurer | |
August 2, 2013 | |
Income Taxes
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | (11) Income Taxes The Company recognized a provision (benefit) for income taxes of $1,125, or 15.0% and $(884), or (14.3)% of income (loss) before income taxes, for federal, state and foreign income taxes for the three months ended June 30, 2013 and 2012, respectively. The increase in the tax provision as well as the effective tax rate was primarily due to generating income before income taxes in the current period compared to a loss before income taxes for the same period of 2012 as well as the impact of the decline in the performance of our U.S. operations. The Company recognized a provision for income taxes of $2,144, or 16.7% and $334, or 42.7% of income before income taxes, for federal, state and foreign income taxes for the six months ended June 30, 2013 and 2012, respectively. The increase in the tax provision was primarily due to higher income before income taxes compared to the same period in 2012. The decrease in the effective tax rate for the six months ended June 30, 2013 compared to the same period for 2012 was primarily attributable to the improved performance of PST, which was partially offset by the decline in the performance of the North American operations. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Net sales | $ 242,785 | $ 234,265 | $ 478,495 | $ 496,532 |
Costs and expenses: | ||||
Cost of goods sold | 182,565 | 180,606 | 359,546 | 377,735 |
Selling, general and administrative | 48,395 | 52,042 | 96,832 | 105,331 |
Operating income | 11,825 | 1,617 | 22,117 | 13,466 |
Interest expense, net | 4,575 | 5,162 | 9,149 | 10,517 |
Equity in earnings of investees | (96) | (97) | (297) | (236) |
Other expense (income), net | (170) | 2,734 | 447 | 2,403 |
Income (loss) before income taxes | 7,516 | (6,182) | 12,818 | 782 |
Provision (benefit) for income taxes | 1,125 | (884) | 2,144 | 334 |
Net income (loss) | 6,391 | (5,298) | 10,674 | 448 |
Net income (loss) attributable to noncontrolling interest | 634 | (1,740) | 794 | (1,873) |
Net income (loss) attributable to Stoneridge, Inc. | $ 5,757 | $ (3,558) | $ 9,880 | $ 2,321 |
Earnings (loss) per share attributable to Stoneridge, Inc.: | ||||
Basic (in dollars per share) | $ 0.22 | $ (0.13) | $ 0.37 | $ 0.09 |
Diluted (in dollars per share) | $ 0.21 | $ (0.13) | $ 0.36 | $ 0.09 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 26,692 | 26,424 | 26,649 | 26,322 |
Diluted (in shares) | 27,348 | 26,424 | 27,358 | 26,999 |
Share-Based Compensation
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure Of Compensation Related Costs Share Based Payments [Text Block] | (4) Share-Based Compensation Total compensation expense for share-based compensation arrangements recognized in the condensed consolidated statements of operations as a component of selling, general and administrative expenses was $1,336 and $1,111 for the three months ended June 30, 2013 and 2012, respectively. Of these amounts, $(2) and $(155) for the three months ended June 30, 2013 and 2012, respectively, were related to the Long-Term Cash Incentive Plan "Phantom Shares" discussed in Note 10. For the six months ended June 30, 2013 and 2012, total compensation expense recognized in the condensed consolidated statements of operations for share-based compensation arrangements was $2,723 and $2,461, respectively. Of these amounts, $154 and $70 for the six months ended June 30, 2013 and 2012, respectively, were related to the Long-Term Cash Incentive Plan "Phantom Shares" discussed in Note 10. |
Net Income (Loss) Per Share (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares [Table Text Block] | Actual weighted-average Common Shares outstanding used in calculating basic and diluted net income per share were as follows:
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Segment Reporting
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | (12) Segment Reporting Operating segments are defined as components of an enterprise that are evaluated regularly by the Company's chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker is the chief executive officer. During the fourth quarter of 2012, the Company changed its reportable segments in accordance with changes in financial information received and reviewed by the Company's chief operating decision maker. As a result, the Company's Wiring business unit is an operating segment for financial reporting purposes. Historically, the Wiring business unit was included in the Electronics operating segment. The Company has revised the consolidated segment information for 2012 to reflect this presentation. The Company has four reportable segments: Electronics, Wiring, Control Devices and PST which also represents its operating segments. The Electronics reportable segment produces electronic instrument clusters, electronic control units and driver information systems. The Wiring reportable segment produces electrical power and signal distribution systems, primarily wiring harnesses and connectors and assembles instrument panels. The Control Devices reportable segment produces sensors, switches, valves and actuators. The PST reportable segment design s and manufactures electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services and in-vehicle audio and video devices. The accounting policies of the Company's reportable segments are the same as those described in Note 2, "Summary of Significant Accounting Policies" of the Company's December 31, 2012 Form 10-K. The Company's management evaluates the performance of its reportable segments based primarily on revenues from external customers, capital expenditures and income before income taxes. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation. A summary of financial information by reportable segment is as follows:
The following table presents net sales and long -term assets for each of the geographic areas in which the Company operates:
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Net Income (Loss) Per Share (Details Textual) (USD $)
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6 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Equity Option [Member]
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||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,000 | 65,000 |
Antidilutive Shares Outstanding Weighted Average Exercise Price | $ 15.73 | $ 12.03 |
Restricted Stock [Member]
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Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 663,750 | 696,300 |
Segment Reporting (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | A summary of financial information by reportable segment is as follows:
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The following table presents net sales and long -term assets for each of the geographic areas in which the Company operates:
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Commitments and Contingencies (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The following provides a reconciliation of changes in product warranty and recall liability:
|
Segment Reporting (Details 1) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
|
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Net Sales: | |||||
Total net sales | $ 242,785 | $ 234,265 | $ 478,495 | $ 496,532 | |
Non-Current Assets: | |||||
Total non-current assets | 258,907 | 258,907 | 281,637 | ||
North America [Member]
|
|||||
Net Sales: | |||||
Total net sales | 151,366 | 159,216 | 304,465 | 329,339 | |
Non-Current Assets: | |||||
Total non-current assets | 78,732 | 78,732 | 82,777 | ||
South America [Member]
|
|||||
Net Sales: | |||||
Total net sales | 46,715 | 38,474 | 89,144 | 92,165 | |
Non-Current Assets: | |||||
Total non-current assets | 166,681 | 166,681 | 185,109 | ||
Europe and Other [Member]
|
|||||
Net Sales: | |||||
Total net sales | 44,704 | 36,575 | 84,886 | 75,028 | |
Non-Current Assets: | |||||
Total non-current assets | $ 13,494 | $ 13,494 | $ 13,751 |
Share-Based Compensation (Details Textual) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Allocated Share-based Compensation Expense | $ 2,723 | $ 2,461 | ||
Long Term Cash Incentive Plan [Member]
|
||||
Allocated Share-based Compensation Expense | (2) | (155) | 154 | 70 |
Selling, General and Administrative Expenses [Member]
|
||||
Allocated Share-based Compensation Expense | $ 1,336 | $ 1,111 |
Restructuring and Business Realignment Charges (Details Textual) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
Pst Segment [Member]
|
Jun. 30, 2012
Pst Segment [Member]
|
Jun. 30, 2013
Other Liabilities [Member]
|
Dec. 31, 2012
Other Liabilities [Member]
|
Jun. 30, 2013
Facility Closing [Member]
|
Dec. 31, 2012
Facility Closing [Member]
|
Jun. 30, 2013
Selling, General and Administrative Expenses [Member]
Electronics [Member]
|
Jun. 30, 2012
Selling, General and Administrative Expenses [Member]
Electronics [Member]
|
Jun. 30, 2013
Selling, General and Administrative Expenses [Member]
Electronics [Member]
|
Jun. 30, 2012
Selling, General and Administrative Expenses [Member]
Electronics [Member]
|
Jun. 30, 2012
Cost of Sales [Member]
Pst Segment [Member]
|
Jun. 30, 2012
Cost of Sales [Member]
Pst Segment [Member]
|
|
Restructuring and Related Cost, Incurred Cost | $ 116 | $ 45 | $ 232 | $ 70 | ||||||||
Restructuring Reserve | 392 | 419 | 716 | 765 | ||||||||
Business Realignment Charges | $ 1,322 | $ 1,636 | $ 623 | $ 729 |
Financial Instruments and Fair Value Measurements (Details 1) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Derivatives designated as cash flow hedges: | ||||
Gain (loss) recorded in other comprehensive loss | $ (2,418) | $ (2,988) | $ (1,423) | $ 3,892 |
Gain(loss) reclassified from other comprehensive income into net income | 519 | (1,217) | 1,255 | (1,593) |
Forward Contracts [Member]
|
||||
Derivatives designated as cash flow hedges: | ||||
Gain (loss) recorded in other comprehensive loss | (1,430) | (1,497) | 311 | 3,051 |
Gain(loss) reclassified from other comprehensive income into net income | 863 | (476) | 1,538 | (500) |
Commodity Contract [Member]
|
||||
Derivatives designated as cash flow hedges: | ||||
Gain (loss) recorded in other comprehensive loss | (988) | (1,491) | (1,734) | 841 |
Gain(loss) reclassified from other comprehensive income into net income | $ (344) | $ (741) | $ (283) | $ (1,093) |
Employee Benefit Plans (Details Textual) (Long Term Cash Incentive Plan [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
---|---|
Long Term Cash Incentive Plan [Member]
|
|
Deferred Compensation Liability, Current | $ 606 |
Changes in Accumulated Other Comprehensive Loss by Component (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Statement of Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Changes in accumulated other comprehensive loss for the three months ended June 30, 2013 and 2012 were as follows:
Changes in accumulated other comprehensive loss for the six months ended June 30, 2013 and 2012 were as follows:
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Inventories
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Jun. 30, 2013
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Text Block] | (2) Inventories Inventories are valued at the lower of cost (using either the first-in, first-out ("FIFO") or average cost methods) or market. The Company evaluates and adjusts as necessary its excess and obsolescence reserve at a minimum on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consisted of the following:
Inventory valued using the FIFO method was $67,715 and $57,004 at June 30, 2013 and December 31, 2012, respectively. Inventory valued using the average cost method was $42,097 and $39,028 at June 30, 2013 and December 31, 2012, respectively. |
Debt
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Jun. 30, 2013
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | (5) Debt
Revolving Credit Facilities On November 2, 2007, the Company entered into an asset-based credit facility (the "Credit Facility"), which permits borrowing up to a maximum level of $100,000. The Company entered into an Amended and Restated Credit and Security Agreement and a Second Amended and Restated Credit and Security Agreement (the "Second Amended and Restated Agreement") on September 20, 2010 and December 1, 2011, respectively. The Second Amended and Restated Agreement extended the termination date of the Credit Facility to December 1, 2016, increased the borrowing base by increasing the sublimit on eligible inventory located at Mexican facilities and made changes to certain covenants relating to, among other things, guarantees, investments, capital expenditures and permitted indebtedness. The Credit Facility requires a commitment fee of 0.375% on the unused balance. Interest is payable quarterly at either (i) the higher of the prime rate or the Federal Funds rate plus 0.50%, plus a margin of 0.00% to 0.25% or (ii) LIBOR plus a margin of 1.00% to 1.75%, depending upon the Company's undrawn availability, as defined. The available borrowing capacity on the Credit Facility is based on eligible current assets, as defined. At June 30, 2013 and December 31, 2012, the Company had undrawn borrowing capacity of approximately $83,891 and $74,060, respectively. The Credit Facility contains financial performance covenants which would only constrain the Company’s borrowing capacity if our undrawn availability falls below $20,000. Other restrictions include limits on capital expenditures, operating leases, dividends and investment activities in negative covenants which limit investment activities to $15,000 minus certain guarantees and obligations. The Company was in compliance with all Credit Facility covenants at June 30, 2013 and December 31, 2012. On October 13, 2009, the Company's consolidated subsidiary, BCS, entered into a master revolving note (the "BCS Revolver"), subject to an annual renewal, which permitted borrowing up to a maximum level of $3,000. The BCS Revolver was paid off and the agreement was terminated in February 2013. Debt On October 4, 2010, the Company issued $175,000 of senior secured notes which are included as a component of long-term debt, net on the condensed consolidated balance sheets. These senior secured notes bear interest at an annual rate of 9.5% and mature on October 15, 2017. The senior secured notes were issued to the original purchasers at a 2.5% discount for which the remaining balance at June 30, 2013 and December 31, 2012 was $3,022 and $3,296, respectively. The senior secured notes are redeemable in full, at the Company's option, beginning October 15, 2014 at 104.75%. Interest payments are payable on April 15 and October 15 of each year. The senior secured notes indenture limits the amount of the Company and its restricted subsidiaries' indebtedness, restricts certain payments and includes various other non-financial restrictive covenants. The senior secured notes are guaranteed by all of the Company's existing domestic restricted subsidiaries. All other restricted subsidiaries that may guarantee any indebtedness of the Company or the guarantors will also guarantee the senior secured notes. The Company was in compliance with all note covenants at June 30, 2013 and December 31, 2012. Our consolidated subsidiary PST Eletrônica Ltda. ("PST") maintains several term notes used for working capital purposes including a new term loan (the "PST note") entered into on March 19, 2013 for 25,000 Brazilian rea l whose U.S. dollar equivalent outstanding balance was $11,309 at June 30, 2013. The PST note matures on February 2, 2016 with interest payable monthly at a fixed interest rate of 5.5%. PST's other short-term and long-term notes also have fixed interest rates. Depending on the specific note, interest is payable either monthly or annually. The noncurrent portion of the PST long-term notes at June 30, 2013 is $15,597 and mature as follows ; $3,400 in 2014, $6,786 in 2015, $2,060 in 2016 and $1,117 annually in 2017 through 2019. As of June 30, 2013 and December 31, 2012, PST was in compliance with all loan covenants. On September 2, 2011, the Company's wholly-owned subsidiary located in Suzhou, China entered into a term loan for 9,000 Chinese yuan which matured in August 2012. On August 29, 2012, the subsidiary entered into a new term loan for 9,000 Chinese yuan (the "Suzhou note") whose U.S. dollar equivalent outstanding balance was $1,466 and $1,445 at June 30, 2013 and December 31, 2012, respectively. The Suzhou note is included on the condensed consolidated balance sheets as a component of current portion of long-term debt. Interest is payable quarterly at 125.0% of the one-year lending rate published by The People's Bank of China. The Company's wholly-owned subsidiary located in Stockholm, Sweden, has an overdraft credit line which allows overdrafts on the subsidiary's bank account up to a maximum level of 20,000 Swedish krona, or $2,985 and $3,075, at June 30, 2013 and December 31, 2012, respectively. At June 30, 2013 and December 31, 2012, there was no balance outstanding on the overdraft credit line. |
Financial Instruments and Fair Value Measurements
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | (3) Financial Instruments and Fair Value Measurements Financial Instruments A financial instrument is cash or a contract that imposes an obligation to deliver, or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The estimated fair value of the Company's senior secured notes with a face value of $175,000 (fixed rate debt) at June 30, 2013 and December 31, 2012 was $191,853 and $188,895, respectively, and was determined using market quotes classified as Level 2 input within the fair value hierarchy. Derivative Instruments and Hedging Activities On June 30, 2013, the Company had open foreign currency forward contracts, fixed price commodity contracts and an interest rate swap. These contracts are used solely for hedging and not for speculative purposes. Management believes that its use of these instruments to reduce risk is in the Company's best interest. The counterparties to these financial instruments are financial institutions with investment grade credit ratings. Foreign Currency Exchange Rate Risk The Company conducts business internationally and therefore is exposed to foreign currency exchange rate risk. The Company uses derivative financial instruments as cash flow and fair value hedges to mitigate its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated transactions and exposures. The currencies hedged by the Company during 2013 and 2012 include the euro, Swedish krona and Mexican peso. In certain instances, the foreign currency forward contracts do not qualify for hedge accounting and are marked to market, with gains and losses recognized in the Company's condensed consolidated statement of operations as a component of other expense (income), net. The Company's foreign currency forward contracts offset some of the gains and losses on the underlying foreign currency denominated transactions as follows: Euro-denominated and Swedish krona-denominated Foreign Currency Forward Contracts As of June 30, 2013, the Company held a foreign currency forward contract with an underlying notional amount of $12,625 to reduce the exposure related to the Company's euro-denominated intercompany loans. This contract expires in September 2013. During 2012, the Company also held a foreign currency forward contract to reduce the exposure related to the Company's Swedish krona-denominated intercompany loan. This contract expired on November 30, 2012. Due to their short term nature, the euro-denominated and Swedish krona-denominated foreign currency forward contracts have not been designated as hedging instruments. For the three and six months ended June 30, 2013 the Company recognized a loss of $278 and a gain of $85, respectively, in the condensed consolidated statement of operations as a component of other expense (income), net related to the euro-denominated contracts. For the three and six months ended June 30, 2012, the Company recognized a gain of $1,435 and $558, respectively, related to these contracts. Mexican peso-denominated Foreign Currency Forward Contracts Cash Flow Hedge The Company holds foreign currency forward contracts with underlying notional amounts at June 30, 2013 totaling $69,250 compared to $36,500 at December 31, 2012. These cash flow hedges expire ratably on a monthly basis as follows:
These contracts were executed to hedge forecasted transactions and are accounted for as cash flow hedges. As such, the effective portion of the unrealized gain or loss is deferred and reported in the Company's condensed consolidated balance sheets as a component of accumulated other comprehensive loss. The Company's expectation is that the cash flow hedges will be highly effective in the future. The effectiveness of the transactions has been and will be measured on an ongoing basis using regression analysis and forecasted future Mexican peso purchases. Commodity Price Risk - Cash Flow Hedge As copper is a significant raw material, the Company entered into fixed price commodity contracts with a financial institution to fix the cost of a portion of the Company's copper purchases to mitigate the risk of future price volatility and, consequently, fluctuations in gross margins. The Company has fixed price commodity contracts at June 30, 2013 with an aggregate notional amount of 2,827 pounds compared to an aggregate notional amount of 2,436 pounds at December 31, 2012. These cash flow hedges expire ratably on a monthly basis as follows:
All of these contracts represent a portion of the Company's forecasted copper purchases. These contracts were executed to hedge a portion of forecasted transactions and the contracts are accounted for as cash flow hedges. The unrealized gain or loss for the effective portion of the hedges is deferred and reported in the Company's condensed consolidated balance sheets as a component of accumulated other comprehensive loss while the ineffective portion is reported in the condensed consolidated statements of operations. The effectiveness of the transactions is measured on an ongoing basis using regression analysis and forecasted future copper purchases. Based upon the results of the regression analysis, the Company has concluded that these cash flow hedges are highly effective. Interest Rate Risk - Fair Value Hedge The Company has a fixed-to-floating interest rate swap agreement (the "Swap") with a notional amount of $45,000 to hedge its exposure to fair value fluctuations on a portion of its senior secured notes. The Swap was designated as a fair value hedge of the fixed interest rate obligation under the Company's $175,000 9.5% senior secured notes due October 15, 2017. The critical terms of the Swap are aligned with the terms of the senior secured notes, including maturity of October 15, 2017, resulting in no hedge ineffectiveness. The unrealized gain or loss for the effective portion of the hedge is deferred and reported in the Company's condensed consolidated balance sheets as an asset or liability as applicable, with the offset to the carrying value of the senior secured notes. Under the Swap, the Company pays a variable interest rate equal to the six-month London Interbank Offered Rate ("LIBOR") plus 7.2% and it receives a fixed interest rate of 9.5%. The Swap requires semi-annual settlements on April 15 and October 15. The difference between amounts to be received and paid under the Swap is recognized as a component of interest expense, net on the condensed consolidated statements of operations. The Swap reduced interest expense by $191 and $168 for the three months ended June 30, 2013 and 2012, respectively, and by $422 and $393 for the six months ended June 30, 2013 and 2012, respectively. The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets are as follows:
Amounts recorded for the cash flow hedges in other comprehensive loss and in net income (loss) for the three months ended June 30 , 2013 and 2012 are as follows:
Amounts recorded for the cash flow hedges in other comprehensive loss and in net income for the six months ended June 30, 2013 and 2012 are as follows:
Gains and losses reclassified from other comprehensive loss into net income (loss) were recognized in cost of goods sold in the Company's condensed consolidated statements of operations. The net deferred losses of $538 on the cash flow hedge derivatives will be reclassified from other comprehensive loss to the condensed consolidated statements of operations through December 2014. The Company has measured the ineffectiveness of the forward currency and commodity contracts and any amounts recognized in the condensed consolidated financial statements were immaterial for the three and six months ended June 30, 2013 and 2012. Fair Value Measurements The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
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Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Product warranty and recall at beginning of period | $ 6,107 | $ 5,301 |
Accruals for products shipped during period | 2,215 | 594 |
Aggregate changes in pre-existing liabilities due to claim developments | 1,229 | 251 |
Settlements made during the period (in cash or in kind) | (3,369) | (1,313) |
Product warranty and recall at end of period | $ 6,182 | $ 4,833 |
Inventories (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Raw materials | $ 69,393 | $ 64,340 |
Work-in-progress | 16,708 | 13,621 |
Finished goods | 23,711 | 18,071 |
Total inventories, net | $ 109,812 | $ 96,032 |
Financial Instruments and Fair Value Measurements (Details 2) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Financial assets carried at fair value: | |||||||||
Interest rate swap contract | $ 818 | $ 2,212 | |||||||
Forward currency contracts | 573 | 1,800 | |||||||
Fixed price commodity contracts | 0 | 340 | |||||||
Total financial assets carried at fair value | 1,391 | 4,352 | |||||||
Financial liabilities carried at fair value: | |||||||||
Forward currency contracts | 16 | 191 | |||||||
Fixed price commodity contracts | 1,111 | 0 | |||||||
Total financial liabilities carried at fair value | 1,127 | 191 | |||||||
Fair Value, Inputs, Level 1 [Member]
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Financial assets carried at fair value: | |||||||||
Interest rate swap contract | 0 | [1] | |||||||
Forward currency contracts | 0 | [1] | |||||||
Fixed price commodity contracts | 0 | [1] | |||||||
Total financial assets carried at fair value | 0 | [1] | |||||||
Financial liabilities carried at fair value: | |||||||||
Forward currency contracts | 0 | [1] | |||||||
Fixed price commodity contracts | 0 | [1] | |||||||
Total financial liabilities carried at fair value | 0 | [1] | |||||||
Fair Value, Inputs, Level 2 [Member]
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Financial assets carried at fair value: | |||||||||
Interest rate swap contract | 818 | [2] | |||||||
Forward currency contracts | 573 | [2] | |||||||
Fixed price commodity contracts | 0 | [2] | |||||||
Total financial assets carried at fair value | 1,391 | [2] | |||||||
Financial liabilities carried at fair value: | |||||||||
Forward currency contracts | 16 | [2] | |||||||
Fixed price commodity contracts | 1,111 | [2] | |||||||
Total financial liabilities carried at fair value | 1,127 | [2] | |||||||
Fair Value, Inputs, Level 3 [Member]
|
|||||||||
Financial assets carried at fair value: | |||||||||
Interest rate swap contract | 0 | [3] | |||||||
Forward currency contracts | 0 | [3] | |||||||
Total financial assets carried at fair value | 0 | [3] | |||||||
Financial liabilities carried at fair value: | |||||||||
Forward currency contracts | 0 | [3] | |||||||
Fixed price commodity contracts | 0 | [3] | |||||||
Total financial liabilities carried at fair value | $ 0 | [3] | |||||||
|
Net Income (Loss) Per Share (Details)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Basic weighted-average shares outstanding | 26,692,000 | 26,424,000 | 26,649,000 | 26,322,000 |
Effect of dilutive shares | 656,444 | 0 | 709,435 | 676,225 |
Diluted weighted-average shares outstanding | 27,348,000 | 26,424,000 | 27,358,000 | 26,999,000 |
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