Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information

CONSOLIDATED BALANCE SHEETS

(in thousands)	As of
	March 31,			June 30,			September 30,
	2018			2018			2018
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	2		$	2,014
Accounts receivable, net	58,870			70,324			71,639
Income tax receivable	1,018			1,018			1,018
Inventories, net	91,689			95,957			112,392
Prepaid expenses and other current assets	20,555			26,644			26,905
Total current assets	172,132			193,945			213,968
Property, plant and equipment, net	18,474			24,931			24,536
Intangible assets, net	23,175			21,854			20,534
Goodwill	29,835			29,835			29,835
Other noncurrent assets	4,957			3,552			3,818
TOTAL ASSETS	$	248,573		$	274,117		$	292,691
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	55,221		$	64,422		$	88,798
Revolving line of credit	36,662			54,334			52,491
Warrant liability	—			33,700			43,900
Other accrued liabilities	38,697			41,884			44,762
Total current liabilities	130,580			194,340			229,951
Deferred income taxes	427			495			616
Warrant liability	27,200			—			—
Long-term debt, net	54,575			54,604			54,781
Other noncurrent liabilities	15,311			15,753			16,612
TOTAL LIABILITIES	$	228,093		$	265,192		$	301,960
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock	$	—		$	—		$	—
Common stock	19			19			19
Additional paid-in capital	124,981			125,272			125,938
Accumulated deficit	(94,638		)	(106,443		)	(125,262		)
Treasury stock	(9,882		)	(9,923		)	(9,964		)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	20,480			8,925			(9,269		)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	248,573		$	274,117		$	292,691

POWER SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(As Revised)

(in thousands)	As of
	March 31,			June 30,			September 30,
	2017			2017			2017
ASSETS
Current assets:
Cash and cash equivalents	$	342		$	—		$	—
Accounts receivable, net	64,305			56,673			60,811
Income tax receivable	6,829			1,996			841
Inventories, net	97,286			103,335			113,074
Prepaid expenses and other current assets	15,291			12,453			14,536
Total current assets	184,053			174,457			189,262
Property, plant and equipment, net	19,230			19,050			18,974
Intangible assets, net	24,819			23,610			22,401
Goodwill	29,835			29,835			29,835
Other noncurrent assets	5,053			4,518			6,035
TOTAL ASSETS	$	262,990		$	251,470		$	266,507
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	67,167		$	55,610		$	54,195
Contingent consideration	30			29			20
Revolving line of credit	16,887			25,263			41,332
Other accrued liabilities*	28,809			30,110			37,295
Total current liabilities	112,893			111,012			132,842
Deferred income taxes	933			1,066			1,210
Warrant liability	20,700			21,500			23,200
Long-term debt, net	54,046			54,168			54,306
Other noncurrent liabilities*	19,753			17,707			17,410
TOTAL LIABILITIES	$	208,325		$	205,453		$	228,968
MEZZANINE EQUITY
Series B convertible preferred stock, net	$	24,617		$	27,807		$	31,410
STOCKHOLDERS’ EQUITY
Preferred stock	$	—		$	—		$	—
Common stock	14			14			14
Additional paid-in capital	100,686			96,543			91,737
Accumulated deficit	(59,070		)	(66,817		)	(76,018		)
Treasury stock	(11,582		)	(11,530		)	(9,604		)
TOTAL STOCKHOLDERS’ EQUITY	30,048			18,210			6,129
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY	$	262,990		$	251,470		$	266,507

* The Company recorded adjustments to reflect a portion of the accrued product warranty liability previously in Other accrued expenses at March 31, June 30 and September 30 to correct the presentation error and to conform to the current period presentation. See Note 1.Summary of Significant Accounting Policies and Other Information for additional discussion of the adjustment.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)	For the Quarter Ended
	March 31,			June 30,			September 30,			December 31,
	2018			2018			2018			2018
Net sales	$	94,413		$	127,073		$	136,318		$	138,234
Cost of sales	84,540			109,006			117,510			126,213
Gross profit	9,873			18,067			18,808			12,021
Operating expenses:
Research, development and engineering expenses	6,021			6,962			7,708			7,910
Selling, general and administrative expenses	13,254			13,276			16,374			16,727
Asset impairment charges	—			—			—			2,234
Amortization of intangible assets	1,045			1,321			1,321			1,321
Total operating expenses	20,320			21,559			25,403			28,192
Operating loss	(10,447		)	(3,492		)	(6,595		)	(16,171		)
Other expense (income):
Interest expense	1,623			1,828			1,974			2,203
Loss (gain) from change in fair value of warrants	2,500			6,500			10,200			(8,800		)
Other expense (income), net	(94		)	(95		)	(68		)	81
Total other expense (income)	4,029			8,233			12,106			(6,516		)
Loss before income taxes	(14,476		)	(11,725		)	(18,701		)	(9,655		)
Income tax (benefit) expense	(272		)	80			118			243
Net loss	$	(14,204	)	$	(11,805	)	$	(18,819	)	$	(9,898	)
Weighted-average common shares outstanding:
Basic	18,483			18,594			18,625			18,638
Diluted	18,483			18,594			18,625			22,360
Loss per common share:
Basic	$	(0.77	)	$	(0.63	)	$	(1.01	)	$	(0.53	)
Diluted	$	(0.77	)	$	(0.63	)	$	(1.01	)	$	(0.84	)

POWER SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)	For the Quarter Ended
	March 31,			June 30,			September 30,			December 31,
	2017			2017			2017			2017
Net sales	$	84,265		$	100,922		$	99,953		$	131,476
Cost of sales	74,497			88,443			86,702			115,981
Gross profit	9,768			12,479			13,251			15,495
Operating expenses:
Research, development and engineering expenses	3,950			3,848			5,687			6,459
Selling, general and administrative expenses	10,209			10,688			12,062			11,297
Asset impairment charges	—			—			—			1
Amortization of intangible assets	1,209			1,209			1,210			1,210
Total operating expenses	15,368			15,745			18,959			18,967
Operating loss	(5,600		)	(3,266		)	(5,708		)	(3,472		)
Other expense (income):
Interest expense	6,080			1,404			1,654			1,703
Loss from change in fair value of warrants	—			800			1,700			1,500
Loss on debt extinguishment and modifications	11,921			—			—			—
Other expense (income), net	455			2,142			(10		)	(226		)
Total other expense	18,456			4,346			3,344			2,977
Loss before income taxes	(24,056		)	(7,612		)	(9,052		)	(6,449		)
Income tax expense (benefit)	479			135			149			(320		)
Net loss	(24,535		)	(7,747		)	(9,201		)	(6,129		)
Deemed dividend on Series B convertible preferred stock	—			(3,190		)	(3,603		)	(31,067		)
Net loss available to common stockholders	$	(24,535	)	$	(10,937	)	$	(12,804	)	$	(37,196	)
Weighted-average common shares outstanding:
Basic	11,018			13,697			13,659			16,774
Diluted	11,018			13,697			13,659			16,774
Loss per common share:
Basic	$	(2.23	)	$	(0.80	)	$	(0.94	)	$	(2.22	)
Diluted	$	(2.23	)	$	(0.80	)	$	(0.94	)	$	(2.22	)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)	Common Stock		Additional Paid-in Capital			Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2017	$	19	$	123,838		$	(9,538	)	$	(82,147	)	$	32,172
Net loss	—		—			—			(14,204		)	(14,204		)
Stock-based compensation expense	—		1,143			(344		)	—			799
Cumulative Impact of ASC 606	—		—			—			1,713			1,713
Balance at March 31, 2018	$	19	$	124,981		$	(9,882	)	$	(94,638	)	$	20,480
Net loss	—		—			—			(11,805		)	(11,805		)
Stock-based compensation expense	—		660			(41		)	—			619
Payment of withholding taxes for net settlement of stock-based awards	—		(369		)	—			—			(369		)
Balance at June 30, 2018	$	19	$	125,272		$	(9,923	)	$	(106,443	)	$	8,925
Net loss	—		—			—			(18,819		)	(18,819		)
Stock-based compensation expense	—		586			(41		)	—			545
Payment of withholding taxes for net settlement of stock-based awards	—		80			—			—			80
Balance at September 30, 2018	$	19	$	125,938		$	(9,964	)	$	(125,262	)	$	(9,269	)
Net loss	—		—			—			(9,898		)	(9,898		)
Stock-based compensation expense	—		585			115			—			700
Payment of withholding taxes for net settlement of stock-based awards	—		(111		)	—			—			(111		)
Balance at December 31, 2018	$	19	$	126,412		$	(9,849	)	$	(135,160	)	$	(18,578	)

POWER SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(in thousands)	Preferred Stock			Common Stock		Additional Paid-in Capital			Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2016	$	—		$	12	$	86,764		$	(11,581	)	$	(34,535	)	$	40,660
Net loss	—			—		—			—			(24,535		)	(24,535		)
Stock-based compensation expense	—			—		(154		)	(1		)	—			(155		)
Issuance of common stock to Weichai, net of fees	—			2		14,076			—			—			14,078
Issuance of Series B convertible preferred stock, net of fees	24,617			—		—			—			—			—
Balance at March 31, 2017	$	24,617		$	14	$	100,686		$	(11,582	)	$	(59,070	)	$	30,048
Net loss	—			—		—			—			(7,747		)	(7,747		)
Settlement of equity-related acquisition consideration	—			—		(712		)	—			—			(712		)
Stock-based compensation expense	—			—		(214		)	52			—			(162		)
Payment of withholding taxes for net settlement of stock-based awards	—			—		(27		)	—			—			(27		)
Deemed dividend on Series B convertible preferred stock	3,190			—		(3,190		)	—			—			(3,190		)
Balance at June 30, 2017	$	27,807		$	14	$	96,543		$	(11,530	)	$	(66,817	)	$	18,210
Net loss	—			—		—			—			(9,201		)	(9,201		)
Stock-based compensation expense	—			—		(1,195		)	1,926			—			731
Payment of withholding taxes for net settlement of stock-based awards	—			—		(8		)	—			—			(8		)
Deemed dividend on Series B convertible preferred stock	3,603			—		(3,603		)	—			—			(3,603		)
Balance at September 30, 2017	$	31,410		$	14	$	91,737		$	(9,604	)	$	(76,018	)	$	6,129
Net loss	—			—		—			—			(6,129		)	(6,129		)
Stock-based compensation expense	—			—		705			66			—			771
Payment of withholding taxes for net settlement of stock-based awards	—			—		(9		)	—			—			(9		)
Deemed dividend on Series B convertible preferred stock	31,067			—		(31,067		)	—			—			(31,067		)
Conversion of Series B convertible preferred stock to common stock	(62,477		)	5		62,472			—			—			62,477
Balance at December 31, 2017	$	—		$	19	$	123,838		$	(9,538	)	$	(82,147	)	$	32,172

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)	For the Year to Date Period Ended
	March 31, 2018			June 30, 2018			September 30, 2018
Cash provided by (used in) operating activities
Net loss	$	(14,204	)	$	(26,009	)	$	(44,828	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets	1,045			2,366			3,687
Depreciation	1,196			2,524			3,849
Change in valuation of warrants	2,500			9,000			19,200
Stock compensation expense	799			1,418			1,963
Amortization of financing fees	341			659			947
Deferred income taxes	(276		)	(208		)	(87		)
Other non-cash adjustments, net	(350		)	325			1,661
Changes in operating assets and liabilities:
Trade accounts receivable, net	9,710			(1,739		)	(3,058		)
Inventories, net	(9,822		)	(14,825		)	(32,657		)
Prepaid expenses and other assets	(76		)	(4,815		)	(5,387		)
Trade accounts payable	3,748			13,200			37,355
Income taxes refundable	8			(2		)	7
Accrued expenses	4,757			7,914			10,773
Other noncurrent liabilities	2,902			2,000			2,901
Net cash provided by (used in) operating activities	2,278			(8,192		)	(3,674		)
Cash used in investing activities
Capital expenditures	(467		)	(1,588		)	(2,321		)
Asset acquisitions	(1,029		)	(6,595		)	(6,595		)
Net cash used in investing activities	(1,496		)	(8,183		)	(8,916		)
Cash (used in) provided by financing activities
Proceeds from revolving line of credit	106,216			240,698			372,557
Repayments of revolving line of credit	(106,608		)	(223,419		)	(357,121		)
Other uses, net	(390		)	(902		)	(832		)
Net cash (used in) provided by financing activities	(782		)	16,377			14,604
Net increase in cash and restricted cash	—			2			2,014
Cash at beginning of the year	—			—			—
Cash at end of the period	$	—		$	2		$	2,014

POWER SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(As Revised)

(in thousands)	For the Year to Date Period Ended
	March 31, 2017			June 30, 2017			September 30, 2017
Cash provided by (used in) operating activities
Net loss	$	(24,535	)	$	(32,282	)	$	(41,483	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets	1,209			2,419			3,628
Depreciation	1,172			2,342			3,502
Change in valuation of warrants	—			800			2,500
Stock compensation expense	(865		)	(1,028		)	(297		)
Amortization of financing fees	3,109			3,441			3,778
Deferred income taxes	469			602			746
Loss on extinguishment of debt	11,921			11,921			11,921
Provision for doubtful accounts	48			131			216
Provision for inventory obsolescence	146			539			882
Loss on disposal of fixed assets	10			66			115
Other non-cash adjustments, net	137			200			190
Changes in operating assets and liabilities:
Trade accounts receivable, net	(4,017		)	3,532			(691		)
Inventories, net	3,122			(3,326		)	(13,408		)
Prepaid expenses and other assets	(1,624		)	1,238			(1,359		)
Trade accounts payable	15,186			3,244			1,879
Income taxes refundable	298			5,135			6,293
Accrued expenses*	1,861			3,826			10,622
Other noncurrent liabilities*	450			(1,478		)	(2,576		)
Net cash provided by (used in) operating activities	8,097			1,322			(13,542		)
Cash used in investing activities
Capital expenditures	(1,896		)	(2,669		)	(3,856		)
Other sources, net	—			245			245
Net cash used in investing activities	(1,896		)	(2,424		)	(3,611		)
Cash (used in) provided by financing activities
Repayments of long-term debt	(71,400		)	(71,400		)	(71,400		)
Financing fees	(253		)	(928		)	(928		)
Net proceeds from stock offering and warrants	59,396			59,396			59,396
Proceeds from revolving line of credit	85,945			209,082			324,416
Repayments of revolving line of credit	(81,833		)	(196,593		)	(295,859		)
Acquisition of business contingent consideration payments	(6		)	(9		)	(19		)
Other uses, net	—			(738		)	(745		)
Net cash (used in) provided by financing activities	(8,151		)	(1,190		)	14,861
Net (decrease) in cash and restricted cash	(1,950		)	(2,292		)	(2,292		)
Cash at beginning of the year	2,292			2,292			2,292
Cash at end of the period	$	342		$	—		$	—