0001171843-18-007821.txt : 20181109 0001171843-18-007821.hdr.sgml : 20181109 20181109090142 ACCESSION NUMBER: 0001171843-18-007821 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 70 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181109 DATE AS OF CHANGE: 20181109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UFP TECHNOLOGIES INC CENTRAL INDEX KEY: 0000914156 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 042314970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12648 FILM NUMBER: 181171533 BUSINESS ADDRESS: STREET 1: 100 HALE STREET CITY: NEWBURYPORT STATE: MA ZIP: 01950 BUSINESS PHONE: 978-352-2200 MAIL ADDRESS: STREET 1: 100 HALE STREET CITY: NEWBURYPORT STATE: MA ZIP: 01950 10-Q 1 f10q_110918p.htm FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

 

(Mark one)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended     SEPTEMBER 30, 2018    

OR

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

 

Commission File Number: 001-12648

 

UFP Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 04-2314970
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

100 Hale Street, Newburyport, MA 01950, USA

(Address of principal executive offices) (Zip Code)

 

(978) 352-2200

(Registrant's telephone number, including area code)

 

_________________________________________

(Former name, former address, and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X ; No ____

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes   X ; No ____

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer
Accelerated filer
Non–accelerated filer
Smaller reporting company
Emerging growth company

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ____; No X   

 

7,373,207 shares of registrant’s Common Stock, $0.01 par value, were outstanding as of November 2, 2018.

 

 

 

UFP Technologies, Inc.

 

Index

 

  Page
   
PART I - FINANCIAL INFORMATION 3
   
Item 1. Financial Statements 3
   
Condensed Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017 3
   
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2018 and September 30, 2017 (unaudited) 4
   
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and September 30, 2017 (unaudited) 5
   
Notes to Interim Condensed Consolidated Financial Statements 6
   
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18
   
Item 3. Quantitative and Qualitative Disclosures about Market Risk 23
   
Item 4. Controls and Procedures 23
   
PART II - OTHER INFORMATION 23
   
Item 1A. Risk Factors 23
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
   
Item 6. Exhibits 24
   
Signatures 24

 

 

 

PART I:FINANCIAL INFORMATION
ITEM 1:FINANCIAL STATEMENTS

 

UFP Technologies, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

   September 30,
2018
  December 31,
2017
Assets  (Unaudited)   
Current assets:          
Cash and cash equivalents  $5,088   $37,978 
Receivables, less allowance for doubtful accounts of $786 at September 30, 2018 and $652 at December 31, 2017   30,144    21,381 
Inventories   19,902    12,863 
Prepaid expenses   2,219    1,835 
Refundable income taxes   966    1,017 
Total current assets   58,319    75,074 
Property, plant and equipment   112,503    106,716 
Less accumulated depreciation and amortization   (54,044)   (53,064)
Net property, plant and equipment   58,459    53,652 
Goodwill   51,838    7,322 
Intangible assets, net   22,546    - 
Non-qualified deferred compensation plan   2,323    2,015 
Other assets   275    144 
Total assets  $193,760   $138,207 
           
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable  $7,970   $4,180 
Accrued expenses   6,569    5,466 
Deferred revenue   3,918    297 
Current portion of long-term debt   2,857    - 
Total current liabilities   21,314    9,943 
Long-term debt, excluding current portion   31,000    - 
Deferred income taxes   3,256    2,440 
Non-qualified deferred compensation plan   2,328    2,030 
Other liabilities   65    82 
Total liabilities   57,963    14,495 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock, $.01 par value, 1,000,000 shares authorized; zero shares issued or outstanding   -    - 
Common stock, $.01 par value, 20,000,000 shares authorized; 7,402,766 and 7,373,207 shares issued and outstanding, respectively at September 30, 2018; 7,309,909 and 7,280,350 shares issued and outstanding, respectively at December 31, 2017   74    73 
Additional paid-in capital   28,918    26,664 
Retained earnings   107,392    97,562 
Treasury stock at cost, 29,559 shares at both September 30, 2018 and December 31, 2017   (587)   (587)
Total stockholders’ equity   135,797    123,712 
Total liabilities and stockholders' equity  $193,760   $138,207 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 3 

 

UFP Technologies, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 

   Three Months Ended 
September 30,
  Nine Months Ended
September 30,
   2018  2017  2018  2017
Net sales  $47,808   $35,684   $139,758   $110,623 
Cost of sales   35,377    27,491    104,156    82,973 
Gross profit   12,431    8,193    35,602    27,650 
Selling, general & administrative expenses   6,541    5,693    20,550    18,070 
Acquisition-related costs   -    -    1,089    - 
Restructuring costs   -    -    -    63 
Material overcharge settlement   -    -    (104)   (121)
Loss (Gain) on sale of fixed assets   5    -    (51)   3 
Operating income   5,885    2,500    14,118    9,635 
Interest income   12    63    44    147 
Interest expense   (355)   (12)   (1,032)   (39)
Other income   85    -    137    - 
Income before income tax expense   5,627    2,551    13,267    9,743 
Income tax expense   1,493    856    3,366    3,248 
Net income  $4,134   $1,695   $9,901   $6,495 
                     
Net income per share:                    
Basic  $0.56   $0.23   $1.35   $0.90 
Diluted  $0.56   $0.23   $1.34   $0.89 
Weighted average common shares outstanding:                    
Basic   7,366    7,264    7,338    7,240 
Diluted   7,435    7,353    7,406    7,326 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 4 

 

UFP Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

   Nine Months Ended
September 30,
   2018  2017
Cash flows from operating activities:          
Net income  $9,901   $6,495 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   5,820    4,171 
(Gain) loss on sale of fixed assets   (51)   3 
Share-based compensation   963    842 
Deferred income taxes   1,007    254 
Changes in operating assets and liabilities:          
Receivables, net   (4,379)   (795)
Inventories   (2,621)   1,015 
Prepaid expenses   (262)   47 
Refundable income taxes   51    (172)
Other assets   (439)   (138)
Accounts payable   2,249    429 
Accrued expenses   (417)   554 
Deferred revenue   1,446    104 
Non-qualified deferred compensation plan and other liabilities   281    201 
Net cash provided by operating activities   13,549    13,010 
Cash flows from investing activities:          
Additions to property, plant, and equipment   (4,521)   (6,880)
Acquisition of Dielectrics, net of cash acquired   (76,978)   - 
Proceeds from sale of fixed assets   77    6 
Net cash used in investing activities   (81,422)   (6,874)
Cash flows from financing activities:          
Proceeds from advances on revolving line of credit   36,000    - 
Payments on revolving line of credit   (20,000)   - 
Proceeds from the issuance of long-term debt   20,000    - 
Principal repayments of long-term debt   (2,143)   (772)
Proceeds from exercise of stock options, net of shares presented for exercise   1,270    630 
Payment of statutory withholdings for stock options exercised and restricted stock units vested   (144)   (107)
Net cash provided by (used in) financing activities   34,983    (249)
Net (decrease) increase in cash and cash equivalents   (32,890)   5,887 
Cash and cash equivalents at beginning of period   37,978    31,359 
Cash and cash equivalents at end of period  $5,088   $37,246 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 5 

 

Notes to Interim Condensed Consolidated Financial Statements

 

(1)Basis of Presentation

 

The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2017, included in the Company's 2017 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission.

 

The condensed consolidated balance sheet as of September 30, 2018, the condensed consolidated statements of income for the three- and nine-month periods ended September 30, 2018 and 2017, and the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2018 and 2017 are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm, but does not include all of the information and footnotes required for complete annual financial statements.

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

The results of operations for the three- and nine-month periods ended September 30, 2018, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2018.

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which was subsequently updated (“Accounting Standards Codification (ASC) 606”). The Company adopted ASC 606 on January 1, 2018. See Note 2 for further details.

 

In February 2016, the FASB issued ASU No. 2016-02, “Leases (ASC 842),” and issued subsequent amendments to the initial guidance in January 2018 within ASU No. 2018-01 and in July 2018 within ASU Nos. 2018-10 and 2018-11. The standard requires lessees to recognize leases on the balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a short-term lease. The liability will be equal to the present value of the lease payments. The asset will be based on the liability, subject to adjustment. Currently, under existing U.S. generally accepted accounting principles, the Company does not recognize on the balance sheet a right-of-use asset or lease liability related to its operating leases. For income statement purposes, the leases will continue to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) and finance leases will result in a front-loaded expense pattern (similar to current capital leases). The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The standard allows an entity to elect to have a date of initial application as of the beginning of the period of adoption. The standard provides for the option to elect a package of practical expedients upon adoption. The Company intends to adopt the standard on January 1, 2019 and continues to assess its lease population and its option to elect certain practical expedients as defined in the new standard. The Company expects expanded financial statement note disclosure in addition to recognizing a right-of-use asset and lease liability for its operating leases on the balance sheet. The Company continues to evaluate the impacts of the pending adoption. As such, the Company’s preliminary assessments are subject to change.

 

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (ASC 350), Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test and eliminates the need to determine the fair value of individual assets and liabilities to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance will be applied prospectively, and is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed on testing dates after January 1, 2017. The Company does not believe adoption will have a material impact on its financial condition or results of operations.

 

 6 

 

Revisions

 

Certain revisions have been made to the December 31, 2017 Condensed Consolidated Balance Sheet to conform to the current year presentation relating to a reclassification of deferred revenue. The reclassification resulted in an increase in deferred revenue and a decrease in accrued expenses in the amount of approximately $297,000. In addition, certain revisions have been made to the Condensed Consolidated Statements of Cash Flows for the nine-month period ended September 30, 2017, also due to a reclassification of deferred revenue. The reclassification resulted in an increase to the change in deferred revenue and a decrease in the change in accrued expenses in the amount of approximately $104,000. These revisions had no impact on previously reported net income and are deemed immaterial to the previously issued financial statements.

 

(2)Revenue Recognition

 

On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective transition method. Under this method, the Company applied ASC 606 to contracts under which all performance obligations were not completed as of January 1, 2018 and recognized the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606. Prior period amounts are not adjusted and are reported in accordance with requirements in ASC 605, Revenue Recognition, which is also referred to herein as “legacy GAAP”.

 

The cumulative effect of the adoption on our condensed consolidated balance sheet, by applying the modified retrospective method as of January 1, 2018, is as follows (in thousands):

 

   As Reported     As Adjusted
   December 31,
2017
  Cumulative
Adjustments
  January 1,
2018
Assets:               
Property, plant and equipment  $106,716   $1,027   $107,743 
Accumulated depreciation and amortization   (53,064)   (548)   (53,612)
Net property, plant and equipment   53,652    479    54,131 
Liabilities:               
Deferred revenue   297    574    871 
Deferred income taxes   2,440    (25)   2,415 
Stockholders' equity:               
Retained earnings   97,562    (70)   97,492 

 

 7 

 

The following reflects the Company’s condensed consolidated balance sheet and condensed consolidated statement of income on an as-reported basis and as if we had continued to recognize revenue under legacy GAAP (in thousands):

 

   September 30, 2018
   As Reported  Balances
without
adoption of
ASC 606
  Difference
Assets:         
Property, plant and equipment  $112,503   $111,230   $1,273 
Accumulated depreciation and amortization   (54,044)   (53,145)   (899)
Net property, plant and equipment   58,459    58,085    374 
Liabilities:               
Deferred revenue   3,918    3,502    416 
Deferred income taxes   3,256    3,281    (25)
Stockholders' equity:               
Retained earnings   107,392    107,409    (17)

 

   For the Nine Months Ended September 30, 2018
   As Reported  Balances
without
adoption of
ASC 606
  Difference
Net sales  $139,758   $139,600   $158 
Cost of sales   104,156    104,051    105 
Gross profit   35,602    35,549    53 

 

The following summarizes the significant changes under ASC 606 as compared to legacy GAAP:

 

·Under legacy GAAP, the Company recognized revenue for certain customer tooling at the time the tooling was complete and accepted by the customer. Under ASC 606, as “control” of this tooling does not transfer to the customer, the related purchase orders do not qualify as an “accounting contract” and as a result the consideration received is recorded as deferred revenue and recognized over the estimated time for which parts are produced on each respective tool (approximately two years). The related costs to produce the tooling are capitalized and depreciated over the estimated useful life of the tool (approximately two years).

 

·Under legacy GAAP, the Company recognized revenue on long-term agreements with variable pricing at the selling price that was in effect for the current period at the time of shipment. Under ASC 606, the Company will recognize revenue at the weighted average selling price for each part over the term of the agreement for any agreements where the Company estimates that we will not be able to achieve the corresponding cost changes necessary to maintain a consistent margin over the term of the agreement. The Company has a small number of long-term agreements with variable pricing.

 

The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC 606 which include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. The Company recognizes all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance, with the exception of certain tooling where control does not transfer to the customer, which results in revenue being recognized over the estimated time for which parts are produced on each respective tool. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale not as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the good and are expensed when revenue is recognized.

 

 8 

 

Disaggregated Revenue

 

The following table presents the Company’s revenue disaggregated by the major types of goods and services sold to our customers (in thousands) (See Note 9 for further information regarding net sales by market):

 

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
   2018  2017  2018  2017
Net sales of:      
Products  $46,423   $35,301   $135,670   $109,196 
Tooling and Machinery   537    277    2,135    1,150 
Engineering services   848    106    1,953    277 
Total net sales  $47,808   $35,684   $139,758   $110,623 

 

Contract balances

 

The timing of revenue recognition may differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has deferred revenue (contract liabilities), included within “deferred revenue” on the condensed consolidated balance sheets.

 

The following table presents opening and closing balances of contract liabilities for the nine-month period ended September 30, 2018 (in thousands):

 

   Contract
Liabilities
    
Deferred revenue - January 1, 2018  $871 
Acquired in Dielectrics business combination   2,175 
Increases due to consideration received from customers   3,088 
Revenue recognized   (2,216)
Deferred revenue - September 30, 2018  $3,918 

 

Revenue recognized during the nine-month period ended September 30, 2018 from amounts included in deferred revenue at the beginning of the period was approximately $527,000.

 

When invoicing occurs after revenue recognition, the Company has unbilled receivables (contract assets) included within “receivables” on the condensed consolidated balance sheet. Unbilled receivables were approximately $48,000 at September 30, 2018.

 

 9 

 

(3)Supplemental Cash Flow Information

 

   Nine Months Ended
September 30,
   2018  2017
   (in thousands)
Cash paid for:          
Interest  $853   $37 
Income taxes, net of refunds   2,308    3,167 
Non-cash investing and financing activities:          
Capital additions accrued but not yet paid  $216   $527 

 

(4)Fair Value of Financial Instruments

 

Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC 820, Fair Value Measurements and Disclosures, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:

 

Level 1

Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2

Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3

Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

 

The following table presents the fair value and hierarchy levels, for financial assets that are measured at fair value on a recurring basis (in thousands):

 

Level 2  September 30,
2018
Assets:     
Derivative financial instruments  $137 

 

Derivative financial instruments consist of an interest rate swap for which fair value is determined through the use of a pricing model that utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals for the full term of the swap agreement.

 

The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, that are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.

 

(5)Share-Based Compensation

 

Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (the vesting period of the equity grant).

 

 10 

 

The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2017. The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands):

 

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
Share-based compensation related to:  2018  2017  2018  2017
Common stock grants  $100   $100   $405   $405 
Stock option grants   9    4    143    130 
Restricted Stock Unit awards ("RSUs")   163    102    415    307 
Total share-based compensation  $272   $206   $963   $842 

 

The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $289,000 and $106,000 for the three-month periods ended September 30, 2018 and 2017, respectively, and approximately $649,000 and $441,000 for the nine-month periods ended September 30, 2018 and 2017, respectively.

 

The following is a summary of stock option activity under all plans for the nine-month period ended September 30, 2018:

 

   Shares Under
Options
  Weighted
Average
Exercise Price
(per share)
  Weighted
Average
Remaining
Contractual
Life

(in years)
  Aggregate
Intrinsic
Value

(in thousands)
Outstanding at December 31, 2017   202,379   $18.23           
Granted   10,344    31.20           
Exercised   (78,680)   16.14           
Outstanding at September 30, 2018   134,043   $20.46    4.75   $2,183 
Exercisable at September 30, 2018   122,793   $19.71    4.80   $2,093 
Vested and expected to vest at September 30, 2018   134,043   $20.46    4.75   $2,183 

 

On June 6, 2018, the Company granted options to its directors for the purchase of 10,344 shares of common stock at that day’s closing price of $31.20. The compensation expense related to these grants was determined as the fair value of the options using the Black-Scholes option pricing model based on the following assumptions:

 

Expected volatility   27.7%  
Expected dividends   None   
Risk-free interest rate   2.70%  
Exercise price  $31.20   
Expected term (in years)   6.0   
Weighted-average grant date fair value  $10.15   

 

The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option. The expected term is estimated based on historical option exercise activity.

 

During the nine-month period ended September 30, 2018 and 2017, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was approximately $1.2 million and $577,000, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $1.3 million and $802,000, respectively. At its discretion, the Company allows option holders to surrender previously-owned common stock in lieu of paying the exercise price and withholding taxes. During the nine-month period ended September 30, 2018, no shares were surrendered for this purpose. During the nine-month period ended September 30, 2017, 6,511 shares were surrendered for this purpose at an average market price of $26.45.

 

 11 

 

On February 21, 2018, the Company’s Compensation Committee approved the award of $400,000, payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan. Subject to his continued employment and the terms of his employment agreement, the shares will be issued in December 2018.

 

The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the nine-month period ended September 30, 2018:

 

   Restricted
Stock Units
  Weighted Average
Award Date
Fair Value
Outstanding at December 31, 2017   57,395   $21.03 
Awarded   29,867    29.30 
Shares vested   (16,050)   23.55 
Outstanding at September 30, 2018   71,212   $23.48 

 

At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the nine-month periods ended September 30, 2018 and 2017, 5,328 and 4,377 shares were surrendered at an average market price of $27.60 and $24.50, respectively.

 

As of September 30, 2018, the Company had approximately $1.2 million of unrecognized compensation expense that is expected to be recognized over a period of 3.5 years.

 

(6)Inventories

 

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or net realizable value, and consist of the following at the stated dates (in thousands):

 

   September 30,
2018
  December 31,
2017
Raw materials  $10,226   $6,898 
Work in process   4,105    1,207 
Finished goods   5,571    4,758 
Total inventory  $19,902   $12,863 

 

(7)Preferred Stock

 

On March 18, 2009, the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, to the stockholders of record on March 20, 2009. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Share”) of the Company, at a price of $25 per one one-thousandth of a Preferred Share subject to adjustment and the terms of the Rights Agreement. The Rights expire on March 19, 2019.

 

 12 

 

(8)Income Per Share

 

Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.

 

The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):

 

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
   2018  2017  2018  2017
Basic weighted average common shares outstanding   7,366    7,264    7,338    7,240 
Weighted average common equivalent shares due to stock options and RSUs   69    89    68    86 
Diluted weighted average common shares outstanding   7,435    7,353    7,406    7,326 

 

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would be antidilutive. For the three- and nine-month periods ended September 30, 2018, the number of antidilutive stock awards excluded from the computation of diluted earnings per share was zero and 10,344, respectively. For the three- and nine-month periods ended September 30, 2017, the number of antidilutive stock awards excluded from the computation of diluted earnings per share was zero and 27,336, respectively.

 

(9)Segment Reporting

 

The Company consists of a single operating and reportable segment.

 

Revenues from customers outside of the United States are not material. No customer comprised more than 10% of the Company’s consolidated revenues for the three- and nine-month periods ended September 30, 2018. All of the Company’s assets are located in the United States.

 

The Company’s products are primarily sold to customers within the Medical, Consumer, Automotive, Aerospace and Defense, Electronics and Industrial markets. Net sales by market for the three- and nine-month periods ended September 30, 2018 and 2017 are as follows (in thousands):

 

   Three Months Ended September 30,  Nine Months Ended September 30,
   2018  2017  2018  2017
Market  Net Sales  %  Net Sales  %  Net Sales  %  Net Sales  %
                         
Medical  $27,629    57.8%  $16,811    47.1%  $80,994    58.0%  $53,001    47.9%
Consumer   6,588    13.8%   5,714    16.0%   17,825    12.8%   14,928    13.5%
Automotive   4,572    9.6%   5,174    14.5%   14,993    10.7%   18,018    16.3%
Aerospace & Defense   3,814    8.0%   2,657    7.4%   9,381    6.7%   8,255    7.5%
Electronics   2,800    5.9%   2,821    7.9%   8,641    6.2%   8,898    8.0%
Industrial   2,405    5.0%   2,507    7.0%   7,924    5.7%   7,523    6.8%
Net Sales  $47,808    100.0%  $35,684    100.0%  $139,758    100.0%  $110,623    100.0%

 

Certain immaterial amounts for the three- and nine-months ended September 30, 2017 were reclassified between markets to conform to the current period presentation.

 

 13 

 

(10)Other Intangible Assets

 

The carrying values of the Company’s definite lived intangible assets as of September 30, 2018, are as follows (in thousands):

 

   Tradename &
Brand
  Non-
Compete
  Customer
List
  Total
Estimated useful life  10 years  5 years  20 years   
Gross amount  $367   $462   $22,555   $23,384 
Accumulated amortization   (24)   (62)   (752)  $(838)
Net balance  $343   $400   $21,803   $22,546 

 

The weighted-average amortization period for all intangible assets is 19.6 years. Amortization expense related to intangible assets was approximately $314,000 and $79,000 for the three-month periods ended September 30, 2018 and 2017, respectively, and $838,000 and $239,000 for the nine-month periods ended September 30, 2018 and 2017, respectively. The estimated remaining amortization expense as of September 30, 2018 is as follows (in thousands):

 

Remainder of:     
2018  $314   
2019   1,257   
2020   1,257   
2021   1,257   
2022   1,257   
Thereafter   17,204   
Total  $22,546   

 

(11)Income Taxes

 

The income tax expense included in the accompanying unaudited condensed consolidated statements of income principally relates to the Company’s proportionate share of the pre-tax income of its wholly-owned subsidiaries. The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur.

 

The Company recorded tax expense of approximately 26.5% and 33.6% of income before income tax expense, for each of the three-month periods ended September 30, 2018 and 2017, respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for 2018 and share-based payment related tax benefits recorded in the three-month period ended September 30, 2018 of approximately $36,000. The Company recorded tax expense of approximately 25.4% and 33.3% of income before income tax expense, for each of the nine-month periods ended September 30, 2018 and 2017, respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for 2018 and share-based payment related tax benefits recorded in the nine-month period ended September 30, 2018 of approximately $220,000. The Company notes the potential for volatility in its effective tax rate, as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly into income tax expense.

 

On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “2017 Tax Act”), resulting in significant modifications to existing law.  The 2017 Tax Act effected a reduction in the corporate tax rate from 35% to 21%, and changes to executive compensation limitations under IRC Section 162(m), among other changes. The Company made what it considers to be a reasonable estimate of the impact of the 2017 Tax Act in its financials for the year ended December 31, 2017. The Company has not recorded any changes to this estimate for the three-month period ended September 30, 2018.

 

Staff Accounting Bulletin (“SAB”) No. 118, issued by the Securities and Exchange Commission (“SEC”), provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. In the subsequent period, provisional amounts will be adjusted for the effects, if any, of interpretative guidance issued after December 31, 2017 by the U.S. Department of the Treasury.

 

 14 

 

(12)Indebtedness

 

On December 2, 2013, the Company entered into an unsecured $40 million revolving credit facility with Bank of America, N.A. The credit facility called for interest of LIBOR plus a margin that ranged from 1.0% to 1.5% or, at the discretion of the Company, the bank’s prime rate less a margin that ranged from 0.25% to zero. In both cases the applicable margin was dependent upon Company performance. Under the credit facility, the Company was subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The credit facility was amended effective December 31, 2014, to modify the definition of “consolidated fixed-charge coverage ratio”. The Company’s $40 million credit facility was to mature on November 30, 2018.

 

On February 1, 2018, the Company, as the borrower, entered into an unsecured $70 million Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with the Company’s subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement.

 

The credit facilities under the Amended and Restated Credit Agreement (the “Amended and Restated Credit Facilities”) consist of a $20 million unsecured term loan and an unsecured revolving credit facility, under which the Company may borrow up to $50 million. The Amended and Restated Credit Agreement matures on February 1, 2023.  The proceeds borrowed pursuant to the Amended and Restated Credit Agreement may be used for general corporate purposes, including funding the acquisition of Dielectrics Inc. (“Dielectrics”) (See Note 13), as well as certain other permitted acquisitions. The Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by the Subsidiary Guarantors.

 

The Amended and Restated Credit Agreement calls for interest of LIBOR plus a margin that ranges from 1.0% to 1.5% or, at the discretion of the Company, the bank’s prime rate less a margin that ranges from .25% to zero. In both cases the applicable margin is dependent upon Company performance.  Under the Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant.  The Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.  As of September 30, 2018, the applicable interest rate was approximately 3.26% and the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.

 

Included in the Amended and Restated Credit Facilities were approximately $0.6 million in standby letters of credit as a financial guarantee on worker’s compensation insurance policies.

 

Long-term debt consists of the following (in thousands):

 

   September 30,
2018
 
Revolving credit facility  $16,000   
Term loan   17,857   
Total long-term debt   33,857   
Current portion   (2,857)  
Long-term debt, excluding current portion  $31,000   

 

Derivative Financial Instruments

 

The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on certain of its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, creating credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, in these circumstances the Company is not exposed to the counterparty’s credit risk. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with carefully selected major financial institutions based upon their credit profile. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

 

 15 

 

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company’s debt obligations expose the Company to variability in interest payments due to changes in interest rates. The Company believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, in connection with the Amended and Restated Credit Agreement, the Company entered into a $20 million, 5-year interest rate swap agreement under which the Company receives three-month LIBOR plus the applicable margin and pays a 2.7% fixed rate plus the applicable margin. The swap modifies the Company’s interest rate exposure by converting the term loan from a variable rate to a fixed rate in order to hedge against the possibility of rising interest rates during the term of the loan. The notional amount was $17,857,142 at September 30, 2018. The fair value of the swap as of September 30, 2018 was approximately $137,000 and is included in other assets. Changes in the fair value of the swap are recorded in other income/expense and resulted in income of approximately $85,000 and $137,000 during the three- and nine-month periods ended September 30, 2018, respectively.

 

(13)Acquisition

 

On February 1, 2018 the Company purchased 100% of the outstanding shares of common stock of Dielectrics Inc., pursuant to a stock purchase agreement and related agreements, for an aggregate purchase price of $80 million in cash. The purchase price was subject to adjustment based upon Dielectrics’ working capital at closing. An additional $250,000 of consideration was paid by the Company as a result of the final working capital adjustment. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses and liabilities. The Purchase Agreement contains customary representations, warranties and covenants customary for transactions of this type.

 

Founded in 1954 and based in Chicopee, Massachusetts, Dielectrics is a leader in the design, development, and manufacture of medical devices using thermoplastic materials. They primarily use radio frequency and impulse welding to design and manufacture solutions for the medical industry. In addition to the long-standing customer relationships, they bring to the Company a seasoned management team and a profitable book of business. The Company has leased the Chicopee location from a realty trust owned by the selling shareholder and affiliates. The lease is for five years with two five-year renewal options.

 

 16 

 

The following table summarizes the preliminary allocation of consideration paid to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value. The final purchase price allocation may change based on final appraisals, valuations and analysis of the fair value of the acquired assets and assumed liabilities (in thousands):

 

Consideration Paid:     
Cash paid at closing  $80,000   
Working capital adjustment   250   
Cash from Dielectrics   (3,272)  
Total consideration  $76,978   
        
Purchase Price Allocation:       
Accounts receivable  $4,384   
Inventory   4,418   
Other current assets   122   
Property, plant and equipment   4,600   
Customer list   22,555   
Non-compete   462   
Trade name and brand   367   
Goodwill   44,516   
Total identifiable assets  $81,424   
Accounts payable   (1,325)  
Accrued expenses   (946)  
Deferred revenue   (2,175)  
Net assets acquired  $76,978   

 

Acquisition costs associated with the transaction were approximately $1.1 million and were charged to expense in the nine-month period ended September 30, 2018. These costs were primarily for investment banking and legal fees and are reflected on the face of the income statement.

 

The following table contains an unaudited pro forma condensed consolidated statement of operations for the three- and nine-month periods ended September 30, 2018 and 2017, as if the Dielectrics acquisition had occurred at the beginning of each of the respective periods (in thousands):

 

   Three Months Ended September 30,  Nine Months Ended September 30,
   2018  2017  2018  2017
   (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
Sales  $47,808   $46,141   $142,813   $143,199 
Operating Income  $5,885   $4,606   $13,970   $14,194 
Net Income  $4,134   $2,834   $9,700   $8,788 
Earnings per share:                    
Basic  $0.56   $0.39   $1.32   $1.21 
Diluted  $0.56   $0.39   $1.31   $1.20 

 

The above unaudited pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred had the Dielectrics acquisition occurred as presented. In addition, future results may vary significantly from the results reflected in such pro forma information.

 

The amount of revenue and net income of Dielectrics recognized since the acquisition date, which is included in the condensed consolidated statement of income for the nine month period ended September 30, 2018, was approximately $25.1 million and $4.4 million, respectively.

 

 

 

 17 

 

ITEM 2:MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-looking Statements

 

Some of the statements contained in this Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Forward-looking statements include, but are not limited to, statements about the Company’s future operating results, prospects, anticipated trends in the different markets in which the Company competes, including the medical, consumer, automotive, aerospace and defense, electronics and industrial markets, statements regarding the Company's acquisition and integration of Dielectrics and synergies associated with the Dielectrics business, anticipated advantages the Company expects to realize from its investments and capital expenditures, statements about new product offerings and program launches and the expected timing thereof, statements regarding anticipated advantages relating to the Company’s decisions to consolidate its facilities and the expected cost savings and efficiencies associated therewith, statements regarding the end of the Company’s automotive door panel program with Mercedes Benz, the closure of the Company’s Georgia plant and the resulting impact to revenues, anticipated advantages and the timing associated with requalification of parts, anticipated advantages of maintaining fewer, larger plants, expectations regarding the manufacturing capacity and efficiencies of the Company, statements about the Company’s entry into new contracts, and the timing and anticipated advantages associated therewith, statements about the Company’s acquisition opportunities and strategies, the Company’s participation and growth in multiple markets, its business opportunities, the Company’s growth potential and strategies for growth, anticipated revenues and the timing of such revenues, and any indication that the Company may be able to sustain or increase its sales and earnings or sales and earnings growth rates. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated. New product and program launches are often subject to lengthy manufacturing qualification processes, and the Company cannot assure that it will be able to launch new programs on a timely basis, if at all. New program launches may require significant start-up and other expenses prior to launch, as tooling and related manufacturing processes are developed, and the Company may experience manufacturing inefficiencies in connection with new program launches. As a result, new programs may not generate profits in accordance with anticipated timetables, or at all. Additional risks and uncertainties include, without limitation, risks and uncertainties associated with the Company's acquisition and integration of Dielectrics, risks associated with the effect of the acquisition of Dielectrics on the Company's earnings, risks and uncertainties associated with the identification of suitable acquisition candidates and the successful and efficient execution of acquisition transactions and integration of any acquisition candidates, risks and uncertainties associated with plant closures and consolidations, including the closure of the Company’s Georgia plant and expected efficiencies from consolidating manufacturing, risks and uncertainties associated with the requalification and relocation of parts, risks associated with the implementation of new production equipment and requalification or recertification of transferred equipment in a timely and cost-efficient manner, risks that any benefits from such new equipment may be delayed or not fully realized, or that the Company may be unable to fully utilize its expected production capacity, and risks related to our indebtedness and compliance with covenants contained in our financing arrangements. Accordingly, actual results may differ materially.

 

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” and similar expressions intended to identify forward-looking statements. Our actual results could be different from the results described in or anticipated by our forward-looking statements due to the inherent uncertainty of estimates, forecasts, and projections, and may be materially better or worse than anticipated. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements represent our estimates and assumptions only as of the date of this Report. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the date of this Report, in order to reflect changes in circumstances or expectations, or the occurrence of unanticipated events, except to the extent required by applicable securities laws. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed above and under “Risk Factors” set forth in Part I Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as well as the risks and uncertainties discussed elsewhere in this Report. We qualify all of our forward-looking statements by these cautionary statements. We caution you that these risks are not exhaustive. We operate in a continually changing business environment and new risks emerge from time to time.

 

Unless the context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer to UFP Technologies, Inc. and its consolidated subsidiaries.

 

 18 

 

Overview

 

UFP Technologies is an innovative designer and custom converter of foams, plastics, composites, and natural fiber products, principally serving the medical, consumer, automotive, aerospace and defense, electronics and industrial markets. The Company consists of a single operating and reportable segment. As previously disclosed, on February 1, 2018, the Company acquired Dielectrics, Inc. pursuant to a stock purchase agreement and related agreements for an aggregate purchase price of $77 million net of Dielectrics’ cash.

 

Sales for the Company for the nine-month period ended September 30, 2018 grew 26.3% to $139.8 million from $110.6 million in the same 2017 period largely due to sales of approximately $25.1 million from Dielectrics. Although Dielectrics contributed significantly to earnings, the Company absorbed $1.1 million in transaction costs during the nine-month period ended September 30, 2018 as well as approximately $760,000 in losses associated with the closure of its manufacturing plant in Georgia. Despite these costs, for the nine-month period ended September 30, 2018, the Company generated increases of 46.5% and 52.4% in operating income and net income, respectively.

 

The Company’s current strategy includes further organic growth and growth through strategic acquisitions.

 

Results of Operations

 

Sales

 

Sales for the three-month period ended September 30, 2018 increased approximately 34.0% to $47.8 million from sales of $35.7 million for the same period in 2017. The increase in sales was primarily due to Dielectric’s sales of approximately $9.5 million, which were all in the medical market. On a market basis, sales to customers in the medical, aerospace and defense and consumer markets grew 64.3%, 43.6% and 15.3%, respectively, while sales to customers in the automotive market declined 11.6%. The increase in sales to customers in the medical market was primarily due to sales by Dielectrics as well as a 7.6% increase in demand from the Company’s legacy medical customers. The increase in sales to customers in the aerospace and defense market was largely due to a general uptick in government contract based orders. The increase in sales to customers in the consumer market was primarily due to sales of molded fiber protective packaging to a new customer. The decline in sales to customers in the automotive market was primarily due to the phase-out of the automotive door panel program for Mercedes-Benz.

 

Sales for the nine-month period ended September 30, 2018 increased approximately 26.3% to $139.8 million from sales of $110.6 million for the same period in 2017. The increase in sales was primarily due to Dielectric’s sales of approximately $25.1 million, which were all in the medical market. On a market basis, sales to customers in the medical, aerospace and defense and consumer markets grew 52.8%, 13.6% and 19.4%, respectively, while sales to customers in the automotive market declined 16.8%. The increase in sales to customers in the medical market was primarily due to sales by Dielectrics as well as a 5.4% increase in demand from the Company’s legacy medical customers. The increase in sales to customers in the aerospace and defense market was largely due to a general uptick in government contract based orders. The increase in sales to customers in the consumer market was primarily due to sales of molded fiber protective packaging to a new customer. The decline in sales to customers in the automotive market was primarily due to the phase-out of the automotive door panel program for Mercedes-Benz.

 

Gross Profit

 

Gross profit as a percentage of sales (“gross margin”) increased to 26.0% for the three-month period ended September 30, 2018, from 23.0% for the same period in 2017. As a percentage of sales, material and labor costs collectively decreased 1.4%, while overhead decreased 1.6%. The decrease in collective material and labor costs as a percentage of sales is primarily due to gains in manufacturing efficiencies resulting from continuous improvement initiatives, strategic price increases and an improvement in the overall book of business. The decrease in overhead as a percentage of sales is primarily due to the increase in sales on fixed overhead costs.

 

Gross margin increased to 25.5% for the nine-month period ended September 30, 2018, from 25.0% for the same period in 2017. As a percentage of sales, material and labor costs collectively decreased 0.5% primarily due to gains in manufacturing efficiencies resulting from continuous improvement initiatives, strategic price increases and an improvement in the overall book of business.

 

 19 

 

Selling, General and Administrative Expenses

 

Selling, general, and administrative expenses (“SG&A”) increased approximately 14.9% to $6.5 million for the three-month period ended September 30, 2018, from $5.7 million for the same period in 2017. As a percentage of sales, SG&A decreased to 13.7% for the three-month period ended September 30, 2018, from 16.0% for the same three-month period in 2017. The increase in SG&A for the three-month period ended September 30, 2018 is due to approximately $900,000 in SG&A expenses from Dielectrics and the decrease in SG&A as a percentage of sales is primarily due to lower SG&A as a percentage of sales at Dielectrics.

 

SG&A increased approximately 13.7% to $20.5 million for the nine-month period ended September 30, 2018, from $18.1 million for the same period in 2017. As a percentage of sales, SG&A decreased to 14.7% for the nine-month period ended September 30, 2018, from 16.3% for the same nine-month period in 2017. The increase in SG&A for the nine-month period ended September 30, 2018 is due to approximately $2.6 million in SG&A expenses from Dielectrics. The decrease in SG&A as a percentage of sales is primarily due lower SG&A as a percentage of sales at Dielectrics.

 

Acquisition Costs

 

The Company incurred approximately $1.1 million in costs associated with the Dielectrics acquisition which were charged to expense in the nine-month period ended September 30, 2018. These costs were primarily for investment banking and legal fees and are reflected on the face of the income statement.

 

Interest Income and Expense

 

The Company had net interest expense of approximately $343,000 and net interest income of $51,000 for the three-month periods ended September 30, 2018 and 2017, respectively. The increase in net interest expense is primarily due to interest paid on the debt incurred to finance the Dielectrics acquisition.

 

The Company had net interest expense of approximately $988,000 and net interest income of $108,000 for the nine-month periods ended September 30, 2018 and 2017, respectively. The increase in net interest expense is primarily due to interest paid on the debt incurred to finance the Dielectrics acquisition.

 

Income Taxes

 

The Company recorded tax expense of approximately 26.5% and 33.6% of income before income tax expense for each of the three-month periods ended September 30, 2018 and 2017, respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for 2018 and share-based payment related tax benefits recorded of approximately $36,000. The Company recorded tax expense of approximately 25.4% and 33.3% of income before income tax expense for each of the nine-month periods ended September 30, 2018 and 2017, respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for 2018 and share-based payment related tax benefits recorded of approximately $220,000. The Company notes the potential for volatility in its effective tax rate, as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly into income tax expense.

 

On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “2017 Tax Act”), resulting in significant modifications to existing law.  The 2017 Tax Act effected a reduction in the corporate tax rate from 35% to 21%, and changed executive compensation limitations under IRC Section 162(m), among other changes. The Company made what it considers to be a reasonable estimate of the impact of the 2017 Tax Act in its financials for the year ended December 31, 2017. The Company has not recorded any changes to this estimate for the three month period ended September 30, 2018.

 

Staff Accounting Bulletin (“SAB”) No. 118, issued by the Securities and Exchange Commission (“SEC”), provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. In the subsequent period, provisional amounts will be adjusted for the effects, if any, of interpretative guidance issued after December 31, 2017 by the U.S. Department of the Treasury.

 

Liquidity and Capital Resources

 

The Company generally funds its operating expenses, capital requirements, and growth plan through internally generated cash and bank credit facilities.

 

 20 

 

Cash Flows

 

Net cash provided by operations for the nine-month period ended September 30, 2018 was approximately $13.5 million and was primarily a result of net income generated of $9.9 million, depreciation and amortization of approximately $5.8 million, share-based compensation of $1.0 million, an increase in deferred taxes of $1.0 million, an increase in accounts payable of $2.2 million due to the timing of vendor payments in the ordinary course of business, an increase in deferred revenue of approximately $1.4 million due primarily to advanced billings on customer tooling projects and an increase in other liabilities of approximately $0.3 million. These cash inflows and adjustments to income were offset by an increase in accounts receivable of approximately $4.4 million primarily due to increased sales in the last two months of the third quarter of 2018 over the same period of 2017, an increase in inventory of approximately $2.6 million primarily due to in-process customer tooling and the building of inventory to support the higher sales, an increase in prepaid expenses of approximately $0.3 million, an increase in other assets of approximately $0.4 million, and a decrease in accrued expenses of approximately $0.4 million due to payments of year-end variable compensation.

 

Net cash used in investing activities during the nine-month period ended September 30, 2018 was approximately $81.4 million and was primarily the result of the acquisition of Dielectrics and additions of manufacturing machinery and equipment and various building improvements across the Company.

 

Net cash provided by financing activities was approximately $35.0 million during the nine-month period ended September 30, 2018, representing borrowings under our credit facility to fund the Dielectrics acquisition of $56.0 million and net proceeds received upon stock options exercises of approximately $1.3 million, partially offset by repayments on our credit facility and term loan of approximately $22.1 million, and payments of statutory withholding for stock options exercised and restricted stock units vested of approximately $0.2 million.

 

Outstanding and Available Debt

 

On December 2, 2013, the Company entered into an unsecured $40 million revolving credit facility with Bank of America, N.A. The credit facility called for interest of LIBOR plus a margin that ranged from 1.0% to 1.5% or, at the discretion of the Company, the bank’s prime rate less a margin that ranged from 0.25% to zero. In both cases the applicable margin was dependent upon Company performance. Under the credit facility, the Company was subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The credit facility was amended effective December 31, 2014, to modify the definition of “consolidated fixed-charge coverage ratio”. The Company’s $40 million credit facility was to mature on November 30, 2018.

 

On February 1, 2018, the Company, as the borrower, entered into an unsecured $70 million Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement.

 

The credit facilities under the Amended and Restated Credit Agreement (the “Amended and Restated Credit Facilities”) consist of a $20 million unsecured term loan to the Company and an unsecured revolving credit facility, under which the Company may borrow up to $50 million.  The Amended and Restated Credit Facilities mature on February 1, 2023.  The proceeds of the Amended and Restated Credit Agreement may be used for general corporate purposes, including funding the acquisition of Dielectrics, as well as certain other permitted acquisitions. The Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by the Subsidiary Guarantors.

 

The Amended and Restated Credit Facilities call for interest of LIBOR plus a margin that ranges from 1.0% to 1.5% or, at the discretion of the Company, the bank’s prime rate less a margin that ranges from .25% to zero. In both cases the applicable margin is dependent upon Company performance.  Under the Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant.  The Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments. 

 

 21 

 

Included in the Amended and Restated Credit Facilities were approximately $0.6 million in standby letters of credit as a financial guarantee on worker’s compensation insurance policies. As of September 30, 2018, the Company was in compliance with all covenants under the credit facility.

 

Long-term debt consists of the following (in thousands):

 

   September 30,
2018
Revolving credit facility  $16,000 
Term loan   17,857 
Total long-term debt   33,857 
Current portion   (2,857)
Long-term debt, excluding current portion  $31,000 

 

Future Liquidity

 

The Company requires cash to pay its operating expenses, purchase capital equipment, and to service its contractual obligations. The Company’s principal sources of funds are its operations and its Amended and Restated Credit Facilities. The Company generated cash of approximately $13.5 million in operations during the nine months ended September 30, 2018; however, the Company cannot guarantee that its operations will generate cash in future periods. The Company’s longer-term liquidity is contingent upon future operating performance.

 

Throughout the remainder of fiscal 2018, the Company plans to continue to add capacity to enhance operating efficiencies in its manufacturing plants. The Company may consider additional acquisitions of companies, technologies, or products that are complementary to its business. The Company plans to use available cash to pay down amounts outstanding under its credit facility in an expeditious manner. The Company believes that its existing resources, including its revolving credit facility, together with cash expected to be generated from operations and funds expected to be available to it through any necessary equipment financings and additional bank borrowings, will be sufficient to fund its cash flow requirements, including capital asset acquisitions, through the next twelve months.

 

Stock Repurchase Program

 

On June 16, 2015, the Company announced that its Board of Directors authorized the repurchase of up to $10.0 million of the Company’s outstanding common stock. Under the program, the Company is authorized to repurchase shares through Rule 10b5-1 plans, open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934. The stock repurchase program will end upon the earlier of the date on which the plan is terminated by the Board or when all authorized repurchases are completed. The timing and amount of stock repurchases, if any, will be determined based upon our evaluation of market conditions and other factors. The stock repurchase program may be suspended, modified, or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the program. The Company did not repurchase any shares of its common stock under this program in the first nine months of 2018. Through September 30, 2018, the Company repurchased a total of 29,559 shares of its common stock under this program at a cost of approximately $587,000. At September 30, 2018, approximately $9.4 million was available for future repurchases of the Company’s common stock under this authorization.

 

Commitments and Contractual Obligations

 

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017.

 

Off-Balance-Sheet Arrangements

 

In addition to operating leases, the Company’s off-balance-sheet arrangements include standby letters of credit which are included in the Company’s revolving credit facility. As of September 30, 2018, there was approximately $0.6 million in standby letters of credit as a financial guarantee on worker’s compensation insurance policies.

 

 

 22 

 

ITEM 3:QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

There have been no material changes in our market risks as previously disclosed in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2017.

 

 

ITEM 4:CONTROLS AND PROCEDURES

 

As of the end of the period covered by this report (the “Evaluation Date”), the Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in SEC Rule 13a-15(e) or 15d-15(e)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

The Company closed the acquisition of Dielectrics on February 1, 2018, and Dielectrics’ total assets and revenues constituted 42.4% and 18.0%, respectively, of the Company’s consolidated total assets and revenues as shown on our consolidated financial statements as of and for the nine months ended September 30, 2018. As the acquisition occurred in the first quarter of fiscal 2018, the Company excluded Dielectrics’ internal control over financial reporting from the scope of the assessment of the effectiveness of the Company’s disclosure controls and procedures. This exclusion is in accordance with the general guidance issued by the Staff of the Securities and Exchange Commission that an assessment of a recently-acquired business may be omitted from the scope in the year of acquisition, if specified conditions are satisfied.

 

An evaluation was also performed under the supervision and with the participation of our management, including the Company’s Chief Executive Officer and Chief Financial Officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Except as described above, that evaluation did not identify any change in the Company’s internal control over financial reporting that occurred during our latest fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

The adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), did not require significant changes in our internal controls over financial reporting or disclosure controls and procedures. However, the Company made enhancements to existing controls and procedures to ensure compliance with the new guidance.

 

 

PART II:OTHER INFORMATION

 

ITEM 1A:RISK FACTORS

 

There have been no material changes from the risk factors previously disclosed in Part 1 - Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

 

ITEM 2:UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Issuer’s Purchases of Equity Securities

 

On June 16, 2015, the Company issued a press release announcing that its Board of Directors authorized the repurchase of up to $10.0 million of the Company’s outstanding common stock. The Company did not repurchase any shares of its common stock under this program in the first nine months of 2018. Through September 30, 2018, the Company had repurchased a total of 29,559 shares of its common stock under this program at a cost of approximately $587,000. At September 30, 2018, approximately $9.4 million was available for future repurchases of the Company's common stock under this authorization.

 

 

 23 

 

ITEM 6:EXHIBITS

 

Exhibit No. Description
31.1 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.*
31.2 Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.*
32.1 Certifications pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS XBRL Instance Document.*
101.SCH XBRL Taxonomy Extension Schema Document.*
101.CAL XBRL Taxonomy Calculation Linkbase Document.*
101.LAB XBRL Taxonomy Label Linkbase Document.*
101.PRE XBRL Taxonomy Presentation Linkbase Document.*
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.*

__________________

*Filed herewith.
**Furnished herewith.

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

UFP TECHNOLOGIES, INC.

 

Date: November 9, 2018 By:    /s/ R. Jeffrey Bailly  
 

R. Jeffrey Bailly

Chairman, Chief Executive Officer, President, and Director

(Principal Executive Officer)

 
     
Date: November 9, 2018 By:    /s/ Ronald J. Lataille   
 

Ronald J. Lataille

Chief Financial Officer

(Principal Financial Officer)

 

 

24


EX-31.1 2 exh_311.htm EXHIBIT 31.1

EXHIBIT 31.1

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, R. Jeffrey Bailly, President and Chief Executive Officer of UFP Technologies, Inc. certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of UFP Technologies, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 9, 2018  /s/ R. Jeffrey Bailly     
   R. Jeffrey Bailly
   Chairman, Chief Executive Officer, President and Director
   (Principal Executive Officer)

EX-31.2 3 exh_312.htm EXHIBIT 31.2

EXHIBIT 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Ronald J. Lataille, Chief Financial Officer of UFP Technologies, Inc., certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of UFP Technologies, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 9, 2018  /s/ Ronald J. Lataille     
   Ronald J. Lataille
   Chief Financial Officer
   (Principal Financial Officer)

EX-32.1 4 exh_321.htm EXHIBIT 32.1

EXHIBIT 32.1

 

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officers of UFP Technologies, Inc., a Delaware corporation (the “Company”) do hereby certify that, to the best of such officers’ knowledge and belief, that:

 

(1)The Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Form 10-Q fairly presents, in all materials respects, the financial condition and results of operations of the Company.

 

 

Date: November 9, 2018 /s/ R. Jeffrey Bailly  
  R. Jeffrey Bailly  
  Chairman, Chief Executive Officer, President, and Director  
  (Principal Executive Officer)  
     
     
     
Date: November 9, 2018 /s/ Ronald J. Lataille  
  Ronald J. Lataille  
  Chief Financial Officer  
  (Principal Financial Officer)  

 

 

A signed original of these written statements required by Section 906 has been provided to UFP Technologies, Inc. and will be retained by UFP Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

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font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">Share-based compensation related to:</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; text-align: left">Common stock grants</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">405</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">405</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stock option grants</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">143</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">130</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Restricted Stock Unit awards ("RSUs")</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">163</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">102</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">415</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">307</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total share-based compensation</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">272</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">206</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">963</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> 0 6511 26.45 27.60 24.50 7970000 4180000 6569000 5466000 54044000 53064000 548000 53612000 53145000 899000 P19Y219D 28918000 26664000 100000 100000 405000 405000 9000 4000 143000 130000 163000 102000 415000 307000 272000 206000 963000 842000 786000 652000 314000 79000 838000 239000 0 10344 0 27336 193760000 138207000 58319000 75074000 1 0.56 0.39 1.32 1.21 0.56 0.39 1.31 1.20 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Sales</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,141</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">142,813</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">143,199</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Operating Income</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,885</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,606</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13,970</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,194</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net Income</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,134</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,834</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,700</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,788</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Earnings per share:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Basic</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.56</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.39</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.32</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.21</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Diluted</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.56</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.39</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.31</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.20</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table></div> 5885000 4606000 13970000 14194000 4134000 2834000 9700000 8788000 47808000 46141000 142813000 143199000 1100000 1089000 76978000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 27pt"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13</div>)</div></div></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Acquisition</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 1, 2018 </div>the Company purchased <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100%</div> of the outstanding shares of common stock of Dielectrics Inc., pursuant to a stock purchase agreement and related agreements, for an aggregate purchase price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$80</div>&nbsp;million in cash. The purchase price was subject to adjustment based upon Dielectrics&#x2019; working capital at closing. An additional <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$250,000</div> of consideration was paid by the Company as a result of the final working capital adjustment. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses and liabilities. The Purchase Agreement contains customary representations, warranties and covenants customary for transactions of this type.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Founded in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1954</div> and based in Chicopee, Massachusetts, Dielectrics is a leader in the design, development, and manufacture of medical devices using thermoplastic materials. They primarily use radio frequency and impulse welding to design and manufacture solutions for the medical industry. In addition to the long-standing customer relationships, they bring to the Company a seasoned management team and a profitable book of business. The Company has leased the Chicopee location from a realty trust owned by the selling shareholder and affiliates. The lease is for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> years with <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two five</div>-year renewal options.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The following table summarizes the preliminary allocation of consideration paid to the acquisition date fair value of the assets acquired and liabilities assumed based on management&#x2019;s estimates of fair value. The final purchase price allocation <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>change based on final appraisals, valuations and analysis of the fair value of the acquired assets and assumed liabilities (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Consideration Paid:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left; padding-left: 10pt">Cash paid at closing</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80,000</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 50%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Working capital adjustment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Cash from Dielectrics</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,272</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total consideration</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76,978</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Purchase Price Allocation:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Accounts receivable</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,384</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Inventory</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,418</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Other current assets</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">122</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,600</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Customer list</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,555</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Non-compete</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">462</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Trade name and brand</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">367</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 10pt">Goodwill</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">44,516</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total identifiable assets</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">81,424</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Accounts payable</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,325</div></td> <td style="text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Accrued expenses</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(946</div></td> <td style="text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Deferred revenue</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,175</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Net assets acquired</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76,978</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Acquisition costs associated with the transaction were approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.1</div> million and were charged to expense in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018. </div>These costs were primarily for investment banking and legal fees and are reflected on the face of the income statement.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The following table contains an unaudited pro forma condensed consolidated statement of operations for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> as if the Dielectrics acquisition had occurred at the beginning of each of the respective periods (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; color: Red">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center">(Unaudited)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Sales</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,141</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">142,813</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">143,199</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Operating Income</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,885</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,606</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13,970</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,194</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net Income</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,134</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,834</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,700</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,788</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Earnings per share:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Basic</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.56</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.39</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.32</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.21</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Diluted</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.56</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.39</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.31</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.20</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The above unaudited pro forma information is presented for illustrative purposes only and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be indicative of the results of operations that would have actually occurred had the Dielectrics acquisition occurred as presented. In addition, future results <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>vary significantly from the results reflected in such pro&nbsp;forma information.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The amount of revenue and net income of Dielectrics recognized since the acquisition date, which is included in the condensed consolidated statement of income for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div> month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$25.1</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$4.4</div> million, respectively.</div></div> 122000 4384000 1325000 2175000 22555000 462000 367000 4418000 4600000 76978000 216000 527000 3272000 5088000 37978000 31359000 37246000 -32890000 5887000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Supplemental Cash Flow Information</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td>&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">(in thousands)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash paid for:</td> <td style="font-weight: bold">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold; text-align: right">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold; text-align: right">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 70%; padding-left: 10pt">Interest</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">853</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Income taxes, net of refunds</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,308</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,167</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Non-cash investing and financing activities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Capital additions accrued but not yet paid</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">216</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">527</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table> </div></div> 25 1 0.001 0.01 0.01 0.01 20000000 20000000 7402766 7309909 7373207 7280350 74000 73000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Contract <br /> Liabilities</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: right">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 85%">Deferred revenue - January 1, 2018</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">871</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Acquired in Dielectrics business combination</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,175</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Increases due to consideration received from customers</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,088</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Revenue recognized</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,216</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Deferred revenue - September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,918</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> 48000 871000 3918000 3918000 297000 574000 871000 3502000 416000 2175000 2216000 35377000 27491000 104156000 82973000 104051000 105000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0; text-align: right"></td> <td style="width: 27pt"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div>)</div></div></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Indebtedness</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 2, 2013, </div>the Company entered into an unsecured <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$40</div> million revolving credit facility with Bank of America, N.A. The credit facility called for interest of LIBOR plus a margin that ranged from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.0%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.5%</div> or, at the discretion of the Company, the bank&#x2019;s prime rate less a margin that ranged from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.25%</div> to zero. In both cases the applicable margin was dependent upon Company performance. Under the credit facility, the Company was subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The credit facility was amended effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2014, </div>to modify the definition of &#x201c;consolidated fixed-charge coverage ratio&#x201d;. The Company&#x2019;s <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$40</div> million credit facility was to mature on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 30, 2018.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 1, 2018, </div>the Company, as the borrower, entered into an unsecured <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$70</div> million Amended and Restated Credit Agreement (the &#x201c;Amended and Restated Credit Agreement&#x201d;) with the Company&#x2019;s subsidiaries (the &#x201c;Subsidiary Guarantors&#x201d;) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restated Credit Agreement amends and restates the Company&#x2019;s prior credit agreement.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The credit facilities under the Amended and Restated Credit Agreement (the &#x201c;Amended and Restated Credit Facilities&#x201d;) consist of a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$20</div> million unsecured term loan and an unsecured revolving credit facility, under which the Company <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>borrow up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$50</div> million. The Amended and Restated Credit Agreement matures on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 1, 2023.&nbsp; </div>The proceeds borrowed pursuant to the Amended and Restated Credit Agreement <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be used for general corporate purposes, including funding the acquisition of&nbsp;Dielectrics Inc. (&#x201c;Dielectrics&#x201d;) (See Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13</div>), as well as certain other permitted acquisitions. The Company&#x2019;s obligations under the Amended and Restated Credit Agreement are guaranteed by the Subsidiary Guarantors.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Amended and Restated Credit Agreement calls for interest of LIBOR plus a margin that ranges from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.0%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.5%</div> or, at the discretion of the Company, the bank&#x2019;s prime rate less a margin that ranges from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">.25%</div> to zero. In both cases the applicable margin is dependent upon Company performance.&nbsp; Under the Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant.&nbsp; The Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.&nbsp; As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>the applicable interest rate was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.26%</div> and the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Included in the Amended and Restated Credit Facilities were approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.6</div> million in standby letters of credit as a financial guarantee on worker&#x2019;s compensation insurance policies.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">Long-term debt consists of the following (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, <br /> 2018</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Revolving credit facility</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,000</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 40%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Term loan</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,857</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total long-term debt</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">33,857</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Current portion</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,857</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Long-term debt, excluding current portion</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,000</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"><div style="display: inline; font-style: italic;">Derivative Financial Instruments</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on certain of its variable-rate debt instruments. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> enter into derivative instruments for any purpose other than cash flow hedging. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, creating credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, in these circumstances the Company is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> exposed to the counterparty&#x2019;s credit risk. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with carefully selected major financial institutions based upon their credit profile. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be undertaken.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>adversely impact expected future cash flows and by evaluating hedging opportunities. The Company&#x2019;s debt obligations expose the Company to variability in interest payments due to changes in interest rates. The Company believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, in connection with the Amended and Restated Credit Agreement, the Company entered into a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$20</div> million, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div>-year interest rate swap agreement under which the Company receives <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month LIBOR plus the applicable margin and pays a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.7%</div> fixed rate plus the applicable margin. The swap modifies the Company&#x2019;s interest rate exposure by converting the term loan from a variable rate to a fixed rate in order to hedge against the possibility of rising interest rates during the term of the loan. The notional amount was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$17,857,142</div> at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018. </div>The fair value of the swap as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$137,000</div> and is included in other assets. Changes in the fair value of the swap are recorded in other income/expense and resulted in income of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$85,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$137,000</div> during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>respectively.</div></div> 0.01 0.015 0.0025 0.01 0.015 0.0025 70000000 20000000 0.0326 2328000 2030000 2323000 2015000 1007000 254000 527000 3256000 2440000 -25000 2415000 3281000 -25000 5820000 4171000 137000 137000 0.027 85000 137000 P5Y <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; padding-bottom: 1pt">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended<br /> September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left; border-bottom: Black 1pt solid">Net sales of:</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Products</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,423</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,301</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">135,670</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">109,196</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tooling and Machinery</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">537</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">277</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,135</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,150</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Engineering services</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">848</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">106</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,953</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">277</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total net sales</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,684</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,758</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110,623</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Share-Based Compensation</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (the vesting period of the equity grant).</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017. </div>The compensation cost charged against income for those plans is included in selling, general &amp; administrative expenses as follows (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; color: #8497B0; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended<br /> September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">Share-based compensation related to:</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; text-align: left">Common stock grants</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">405</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">405</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stock option grants</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">143</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">130</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Restricted Stock Unit awards ("RSUs")</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">163</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">102</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">415</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">307</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total share-based compensation</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">272</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">206</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">963</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"><div style="display: inline; font-weight: bold;">&nbsp;</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$289,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$106,000</div> for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively, and approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$649,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$441,000</div> for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 27.9pt 0pt 27pt">The following is a summary of stock option activity under all plans for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018:</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 27.9pt 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares Under <br /> Options</td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Weighted </div><br /> <div style="display: inline; font-weight: bold;">Average </div><br /> <div style="display: inline; font-weight: bold;">Exercise Price</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(per share)</div></td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Weighted <br /> Average <br /> Remaining <br /> Contractual <br /> Life</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(in years)</div></td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Aggregate <br /> Intrinsic <br /> Value</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(in thousands)</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Outstanding at December 31, 2017</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">202,379</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18.23</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%; text-decoration: none">&nbsp;</td> <td style="width: 1%; text-decoration: none; text-align: left">&nbsp;</td> <td style="width: 10%; text-decoration: none; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="width: 1%; text-decoration: none; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Granted</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,344</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31.20</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Exercised</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(78,680</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.14</div></td> <td style="text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.25pt">Outstanding at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">134,043</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20.46</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.75</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,183</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Exercisable at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">122,793</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.71</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.80</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,093</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Vested and expected to vest at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">134,043</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20.46</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.75</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,183</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 6, 2018, </div>the Company granted options to its directors for the purchase of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,344</div> shares of common stock at that day&#x2019;s closing price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$31.20.</div> The compensation expense related to these grants was determined as the fair value of the options using the Black-Scholes option pricing model based on the following assumptions:</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Expected volatility</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27.7</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 40%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected dividends</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">None</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Risk-free interest rate</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.70</div></td> <td style="text-align: left">%</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Exercise price</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31.20</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term (in years)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.0</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Weighted-average grant date fair value</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.15</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company&#x2019;s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option. The expected term is estimated based on historical option exercise activity.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.2</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$577,000,</div> respectively, and the total amount of consideration received by the Company from the exercised options was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.3</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$802,000,</div> respectively. At its discretion, the Company allows option holders to surrender previously-owned common stock in lieu of paying the exercise price and withholding taxes. During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> shares were surrendered for this purpose. During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2017, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,511</div> shares were surrendered for this purpose at an average market price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$26.45.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 21, 2018, </div>the Company&#x2019;s Compensation Committee approved the award of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$400,000,</div> payable in shares of common stock to the Company&#x2019;s Chairman, Chief Executive Officer, and President under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2003</div> Incentive Plan. Subject to his continued employment and the terms of his employment agreement, the shares will be issued in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 2018.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The following table summarizes information about Restricted Stock Units (&#x201c;RSUs&#x201d;) activity during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018:</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center; padding-bottom: 1pt">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Restricted<br /> Stock Units</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average<br /> Award Date<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%">Outstanding at December 31, 2017</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57,395</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21.03</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Awarded</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29,867</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29.30</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Shares vested</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(16,050</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23.55</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.25pt">Outstanding at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">71,212</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23.48</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">At the Company&#x2019;s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,328</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,377</div> shares were surrendered at an average market price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$27.60</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$24.50,</div> respectively.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>the Company had approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.2</div> million of unrecognized compensation expense that is expected to be recognized over a period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.5</div> years.</div></div> 0.56 0.23 1.35 0.90 0.56 0.23 1.34 0.89 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Income Per Share</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended<br /> September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Basic weighted average common shares outstanding</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,366</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,264</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,338</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,240</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Weighted average common equivalent shares due to stock options and RSUs</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">69</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">89</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">68</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">86</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Diluted weighted average common shares outstanding</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,435</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,353</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,406</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,326</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"><div style="display: inline; font-weight: bold;">&nbsp;</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> included in the computation of diluted income per share because the effect would be antidilutive. For the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>the number of antidilutive stock awards excluded from the computation of diluted earnings per share was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,344,</div> respectively. For the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2017, </div>the number of antidilutive stock awards excluded from the computation of diluted earnings per share was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,336,</div> respectively.</div></div> 0.265 0.336 0.254 0.333 0.35 0.21 1200000 P3Y182D 289000 106000 649000 441000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left"><div style="display: inline; text-decoration: underline;">Level 2</div></td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, <br /> 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 85%; text-align: left; padding-left: 10pt">Derivative financial instruments</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">137</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Fair Value of Financial Instruments</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">820,</div> <div style="display: inline; font-style: italic;">Fair Value Measurements and Disclosures</div>, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt"><div style="display: inline; font-style: italic;">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div></div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt">Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt"><div style="display: inline; font-style: italic;">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div></div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt">Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument&#x2019;s anticipated life.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt"><div style="display: inline; font-style: italic;">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div></div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.35pt">Valued based on management&#x2019;s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The following table presents the fair value and hierarchy levels, for financial assets that are measured at fair value on a recurring basis (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left"><div style="display: inline; text-decoration: underline;">Level 2</div></td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, <br /> 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 85%; text-align: left; padding-left: 10pt">Derivative financial instruments</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">137</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Derivative financial instruments consist of an interest rate swap for which fair value is determined through the use of a pricing model that utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals for the full term of the swap agreement.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, that are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company&#x2019;s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.</div></div> 24000 62000 752000 838000 17204000 314000 1257000 1257000 1257000 1257000 367000 462000 22555000 23384000 22546000 51000 -3000 -5000 104000 121000 44516000 51838000 7322000 12431000 8193000 35602000 27650000 35549000 53000 5627000 2551000 13267000 9743000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0; text-align: right"></td> <td style="width: 27pt"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11</div>)</div></div></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Income Taxes</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The income tax expense included in the accompanying unaudited condensed consolidated statements of income principally relates to the Company&#x2019;s proportionate share of the pre-tax income of its wholly-owned subsidiaries. The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The Company recorded tax expense of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26.5%</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">33.6%</div> of income before income tax expense, for each of the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and share-based payment related tax benefits recorded in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$36,000.</div> The Company recorded tax expense of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25.4%</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">33.3%</div> of income before income tax expense, for each of the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and share-based payment related tax benefits recorded in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$220,000.</div> The Company notes the potential for volatility in its effective tax rate, as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly into income tax expense.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 22, 2017, </div>the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&#x201c;2017</div> Tax Act&#x201d;), resulting in significant modifications to existing law.&nbsp; The <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> Tax Act effected a reduction in the corporate tax rate from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21%,</div> and changes to executive compensation limitations under IRC Section <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">162</div>(m), among other changes. The Company made what it considers to be a reasonable estimate of the impact of the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> Tax Act in its financials for the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017. </div>The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recorded any changes to this estimate for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">Staff Accounting Bulletin (&#x201c;SAB&#x201d;) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118,</div> issued by the Securities and Exchange Commission (&#x201c;SEC&#x201d;), provides for a measurement period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> year from the enactment date to finalize the accounting for effects of&nbsp;the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> Tax Act. In accordance with SEC guidance, provisional amounts <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. In the subsequent period, provisional amounts will be adjusted for the effects, if any, of interpretative guidance issued after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017 </div>by the U.S. Department of the Treasury.</div></div> 1493000 856000 3366000 3248000 36000 220000 2308000 3167000 966000 1017000 2249000 429000 -417000 554000 1446000 104000 -51000 172000 2621000 -1015000 439000 138000 281000 201000 262000 -47000 4379000 795000 69000 89000 68000 86000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 27pt"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>)</div></div></td> <td style="text-align: justify"><div style="display: inline; font-weight: bold;">Other Intangible Assets</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The carrying values of the Company&#x2019;s definite lived intangible assets as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>are as follows (in&nbsp;thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Tradename &amp; <br /> Brand</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-<br /> Compete</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Customer<br /> List</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Estimated useful life</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">10 years</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">5 years</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">20 years</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; text-align: left">Gross amount</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">367</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">462</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,555</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,384</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accumulated amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(24</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(62</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(752</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(838</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Net balance</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">343</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">400</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,803</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,546</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"><div style="display: inline; font-weight: bold;">&nbsp;</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The weighted-average amortization period for all intangible assets is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.6</div> years. Amortization expense related to intangible assets was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$314,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$79,000</div> for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively, and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$838,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$239,000</div> for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively. The estimated remaining amortization expense as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>is as follows (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; text-align: center; text-indent: -0.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Remainder of:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">2018</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">314</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 50%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2019</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2020</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2021</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2022</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Thereafter</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,204</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Total</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,546</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table> </div></div> 22546000 343000 400000 21803000 355000 12000 1032000 39000 853000 37000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Inventories</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Inventories are stated at the lower of cost (determined using the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-in, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-out method) or net realizable value, and consist of the following at the stated dates (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27pt; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,<br /> 2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, <br /> 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; text-align: left">Raw materials</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,226</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,898</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Work in process</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,105</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,207</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Finished goods</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,571</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,758</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Total inventory</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,902</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,863</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div></div> 5571000 4758000 19902000 12863000 10226000 6898000 4105000 1207000 12000 63000 44000 147000 P5Y 57963000 14495000 193760000 138207000 21314000 9943000 40000000 50000000 600000 16000000 17857000 33857000 2857000 31000000 34983000 -249000 -81422000 -6874000 13549000 13010000 4400000 9901000 6495000 4134000 1695000 1 1 5885000 2500000 14118000 9635000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Basis of Presentation</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The interim condensed consolidated financial statements of UFP Technologies,&nbsp;Inc. (the &#x201c;Company&#x201d;) presented herein, have been prepared pursuant to the rules&nbsp;of the Securities and Exchange Commission for quarterly reports on Form&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-Q and do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017, </div>included in the Company's <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> Annual Report on Form&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-K, as filed with the Securities and Exchange Commission.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The condensed consolidated balance sheet as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>the condensed consolidated statements of income for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> and the condensed consolidated statements of cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017 </div>has been derived from the Company&#x2019;s annual financial statements that were audited by an independent registered public accounting firm, but does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include all of the information and footnotes required for complete annual financial statements.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The results of operations for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018, </div>are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> necessarily indicative of the results to be expected for the entire fiscal year ending <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"><div style="display: inline; font-style: italic;">Recent Accounting Pronouncements</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"><div style="display: inline; font-style: italic;">&nbsp;</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 2014, </div>the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09,</div> <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers</div>, which was subsequently updated (&#x201c;Accounting Standards Codification (ASC) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606&#x201d;</div>). The Company adopted ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div> on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018. </div>See Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> for further details.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; background-color: white">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB issued ASU&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div>&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div>&nbsp;&#x201c;<div style="display: inline; font-style: italic;">Leases (ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div>),</div>&#x201d; and issued subsequent amendments to the initial guidance in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2018 </div>within ASU&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div>&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01</div>&nbsp;and in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 2018 </div>within ASU Nos.&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>&nbsp;and&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11.</div>&nbsp;The standard requires lessees to recognize leases on the balance sheet as a&nbsp;right-of-use&nbsp;asset and a lease liability, other than leases that meet the definition of a short-term lease. The liability will be equal to the present value of the lease payments. The asset will be based on the liability, subject to adjustment. Currently, under existing U.S. generally accepted accounting principles, the Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recognize on the balance sheet a&nbsp;right-of-use&nbsp;asset or lease liability related to its operating leases. For income statement purposes, the leases will continue to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) and finance leases will result in a front-loaded expense pattern (similar to current capital leases). The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018.</div> Early adoption is permitted. The standard allows an entity to elect to have a date of initial application as of the beginning of the period of adoption. The standard provides for the option to elect a package of practical expedients upon adoption. The Company intends to adopt the standard on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> and continues to assess its lease population and its option to elect certain practical expedients as defined in the new standard. The Company expects expanded financial statement note disclosure in addition to recognizing a&nbsp;right-of-use&nbsp;asset and lease liability for its operating leases on the balance sheet. The Company continues to evaluate the impacts of the pending adoption. As such, the Company&#x2019;s preliminary assessments are subject to change.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; background-color: white">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2017, </div>the FASB issued ASU&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div>&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">04,</div>&nbsp;<div style="display: inline; font-style: italic;">Intangibles&#x2014;Goodwill and Other (ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">350</div>), Simplifying the Test for Goodwill Impairment</div>. The guidance removes Step <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> of the goodwill impairment test and eliminates the need to determine the fair value of individual assets and liabilities to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit&#x2019;s carrying value exceeds its fair value, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance will be applied prospectively, and is effective for annual and interim goodwill impairment tests in fiscal years beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019.</div> Early adoption is permitted for any impairment tests performed on testing dates after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> believe adoption will have a material impact on its financial condition or results of operations.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; font-style: italic;">Revisions</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">Certain revisions have been made to the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017 </div>Condensed Consolidated Balance Sheet to conform to the current year presentation relating to a reclassification of deferred revenue. The reclassification resulted in an increase in deferred revenue and a decrease in accrued expenses in the amount of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$297,000.</div> In addition, certain revisions have been made to the Condensed Consolidated Statements of Cash Flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2017, </div>also due to a reclassification of deferred revenue. The reclassification resulted in an increase to the change in deferred revenue and a decrease in the change in accrued expenses in the amount of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$104,000.</div> These revisions had <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> impact on previously reported net income and are deemed immaterial to the previously issued financial statements.</div></div> 275000 144000 65000 82000 85000 137000 144000 107000 80000000 76978000 4521000 6880000 0.01 0.01 0.01 1000000 1000000 0 0 0 0 2219000 1835000 297000 104000 20000000 36000000 77000 6000 1300000 802000 112503000 106716000 1027000 107743000 111230000 1273000 58459000 53652000 479000 54131000 58085000 374000 30144000 21381000 2143000 772000 20000000 63000 107392000 97562000 -70000 97492000 107409000 -17000 25100000 47808000 35684000 139758000 110623000 139600000 158000 46423000 35301000 135670000 109196000 537000 277000 2135000 1150000 848000 106000 1953000 277000 27629000 16811000 80994000 53001000 6588000 5714000 17825000 14928000 4572000 5174000 14993000 18018000 3814000 2657000 9381000 8255000 2800000 2821000 8641000 8898000 2405000 2507000 7924000 7523000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Revenue Recognition</div></td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018, </div>the Company adopted ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606,</div> <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers</div>, using the modified retrospective transition method. Under this method, the Company applied ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div> to contracts under which all performance obligations were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> completed as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018 </div>and recognized the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings. Results for reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018 </div>are presented in accordance with ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606.</div> Prior period amounts are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> adjusted and are reported in accordance with requirements in ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">605,</div> <div style="display: inline; font-style: italic;">Revenue Recognition</div>, which is also referred to herein as &#x201c;legacy GAAP&#x201d;.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The cumulative effect of the adoption on our condensed consolidated balance sheet, by applying the modified retrospective method as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> is as follows (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red; text-indent: 0.5in"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Adjusted</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, <br /> 2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cumulative <br /> Adjustments</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">January 1, <br /> 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left">Property, plant and equipment</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">106,716</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,027</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,743</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation and amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,064</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(548</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,612</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Net property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,652</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">479</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">54,131</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Liabilities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred revenue</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">297</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">574</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">871</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred income taxes</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,440</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(25</div></td> <td style="text-align: left">)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,415</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stockholders' equity:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Retained earnings</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">97,562</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(70</div></td> <td style="text-align: left">)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">97,492</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red; text-indent: 0.5in"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The following reflects the Company&#x2019;s condensed consolidated balance sheet and condensed consolidated statement of income on an as-reported basis and as if we had continued to recognize revenue under legacy GAAP (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="11" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balances <br /> without <br /> adoption of <br /> ASC 606</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Difference</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">Assets:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left">Property, plant and equipment</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">112,503</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">111,230</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,273</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation and amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(54,044</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,145</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(899</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Net property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,459</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,085</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">374</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Liabilities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred revenue</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,918</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,502</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">416</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred income taxes</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,256</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,281</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(25</div></td> <td style="text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stockholders' equity:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Retained earnings</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,392</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,409</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(17</div></td> <td style="text-align: left">)</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red; text-indent: 0.5in">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red; text-indent: 0.5in"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="11" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Nine Months Ended September 30, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balances <br /> without <br /> adoption of <br /> ASC 606</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Difference</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; text-align: left">Net sales</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,758</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,600</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">158</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Cost of sales</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">104,156</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">104,051</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">105</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Gross profit</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,602</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,549</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red; text-indent: 0.5in"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The following summarizes the significant changes under ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div> as compared to legacy GAAP:</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</div> <table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0.75in"></td> <td style="width: 0.25in"><div style="display: inline; font-family: Symbol">&middot;</div></td> <td>Under legacy GAAP, the Company recognized revenue for certain customer tooling at the time the tooling was complete and accepted by the customer. Under ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606,</div> as &#x201c;control&#x201d; of this tooling does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> transfer to the customer, the related purchase orders do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> qualify as an &#x201c;accounting contract&#x201d; and as a result the consideration received is recorded as deferred revenue and recognized over the estimated time for which parts are produced on each respective tool (approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> years). The related costs to produce the tooling are capitalized and depreciated over the estimated useful life of the tool (approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> years).</td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</div> <table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0.75in"></td> <td style="width: 0.25in"><div style="display: inline; font-family: Symbol">&middot;</div></td> <td>Under legacy GAAP, the Company recognized revenue on long-term agreements with variable pricing at the selling price that was in effect for the current period at the time of shipment. Under ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606,</div> the Company will recognize revenue at the weighted average selling price for each part over the term of the agreement for any agreements where the Company estimates that we will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be able to achieve the corresponding cost changes necessary to maintain a consistent margin over the term of the agreement. The Company has a small number of long-term agreements with variable pricing.</td> </tr> </table> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div> which include (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div>) identifying the contract with a customer, (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div>) identifying separate performance obligations within the contract, (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div>) determining the transaction price, (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div>) allocating the transaction price to the performance obligations, and (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div>) recognizing revenue. The Company recognizes all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance, with the exception of certain tooling where control does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> transfer to the customer, which results in revenue being recognized over the estimated time for which parts are produced on each respective tool. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company&#x2019;s promise to transfer the good and are expensed when revenue is recognized.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <!-- Field: /Page --> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; font-style: italic;">Disaggregated Revenue</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; font-style: italic;">&nbsp;</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The following table presents the Company&#x2019;s revenue disaggregated by the major types of goods and services sold to our customers (in thousands) (See Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9</div> for further information regarding net sales by market):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; padding-bottom: 1pt">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended<br /> September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left; border-bottom: Black 1pt solid">Net sales of:</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Products</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,423</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,301</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">135,670</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">109,196</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tooling and Machinery</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">537</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">277</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,135</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,150</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Engineering services</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">848</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">106</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,953</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">277</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total net sales</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,684</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,758</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110,623</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt"><div style="display: inline; font-style: italic;">Contract balances</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The timing of revenue recognition <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has deferred revenue (contract liabilities), included within &#x201c;deferred revenue&#x201d; on the condensed consolidated balance sheets.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">The following table presents opening and closing balances of contract liabilities for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 (</div>in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Contract <br /> Liabilities</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: right">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 85%">Deferred revenue - January 1, 2018</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">871</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Acquired in Dielectrics business combination</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,175</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Increases due to consideration received from customers</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,088</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Revenue recognized</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,216</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Deferred revenue - September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,918</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; color: Red"></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Revenue recognized during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>from amounts included in deferred revenue at the beginning of the period was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$527,000.</div></div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">When invoicing occurs after revenue recognition, the Company has unbilled receivables (contract assets) included within &#x201c;receivables&#x201d; on the condensed consolidated balance sheet. Unbilled receivables were approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$48,000</div> at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018.</div></div></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; text-align: right">&nbsp;</td> <td>&nbsp;</td> <td colspan="7" style="white-space: nowrap; text-align: center">(in thousands)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash paid for:</td> <td style="font-weight: bold">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold; text-align: right">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> <td style="font-weight: bold; text-align: right">&nbsp;</td> <td style="font-weight: bold; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 70%; padding-left: 10pt">Interest</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">853</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Income taxes, net of refunds</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,308</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,167</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Non-cash investing and financing activities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Capital additions accrued but not yet paid</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">216</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">527</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, <br /> 2018</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Revolving credit facility</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,000</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 40%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Term loan</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,857</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total long-term debt</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">33,857</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Current portion</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,857</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Long-term debt, excluding current portion</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,000</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Tradename &amp; <br /> Brand</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-<br /> Compete</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Customer<br /> List</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Estimated useful life</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">10 years</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">5 years</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; text-align: center; border-bottom: Black 1pt solid">20 years</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; text-align: left">Gross amount</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">367</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">462</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,555</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,384</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accumulated amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(24</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(62</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(752</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(838</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Net balance</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">343</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">400</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,803</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,546</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,<br /> 2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, <br /> 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; text-align: left">Raw materials</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,226</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,898</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Work in process</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,105</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,207</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Finished goods</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,571</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,758</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Total inventory</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,902</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,863</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Adjusted</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, <br /> 2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cumulative <br /> Adjustments</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">January 1, <br /> 2018</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left">Property, plant and equipment</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">106,716</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,027</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,743</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation and amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,064</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(548</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,612</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Net property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,652</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">479</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">54,131</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Liabilities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred revenue</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">297</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">574</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">871</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred income taxes</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,440</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(25</div></td> <td style="text-align: left">)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,415</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stockholders' equity:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Retained earnings</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">97,562</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(70</div></td> <td style="text-align: left">)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">97,492</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="11" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balances <br /> without <br /> adoption of <br /> ASC 606</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Difference</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">Assets:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left">Property, plant and equipment</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">112,503</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">111,230</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,273</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation and amortization</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(54,044</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(53,145</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(899</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Net property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,459</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,085</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">374</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Liabilities:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred revenue</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,918</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,502</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">416</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred income taxes</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,256</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,281</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(25</div></td> <td style="text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Stockholders' equity:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Retained earnings</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,392</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">107,409</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(17</div></td> <td style="text-align: left">)</td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="11" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Nine Months Ended September 30, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As Reported</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balances <br /> without <br /> adoption of <br /> ASC 606</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Difference</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; text-align: left">Net sales</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,758</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,600</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">158</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Cost of sales</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">104,156</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">104,051</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">105</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Gross profit</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,602</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,549</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Consideration Paid:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left; padding-left: 10pt">Cash paid at closing</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80,000</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 50%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Working capital adjustment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Cash from Dielectrics</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,272</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total consideration</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76,978</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Purchase Price Allocation:</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Accounts receivable</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,384</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Inventory</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,418</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Other current assets</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">122</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Property, plant and equipment</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,600</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Customer list</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,555</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Non-compete</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">462</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Trade name and brand</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">367</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 10pt">Goodwill</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">44,516</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total identifiable assets</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">81,424</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">Accounts payable</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,325</div></td> <td style="text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 10pt">Accrued expenses</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(946</div></td> <td style="text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Deferred revenue</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(2,175</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Net assets acquired</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76,978</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="15" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="15" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Market</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%">Medical</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,629</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57.8</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,811</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47.1</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80,994</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58.0</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,001</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47.9</div></td> <td style="width: 1%; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Consumer</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,588</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.8</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,714</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.0</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,825</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12.8</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,928</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.5</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Automotive</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,572</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.6</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,174</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.5</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,993</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.7</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18,018</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.3</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Aerospace &amp; Defense</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,814</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.0</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,657</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.4</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,381</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.7</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,255</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.5</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Electronics</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,800</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.9</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,821</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.9</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,641</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.2</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,898</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.0</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Industrial</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,405</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.0</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,507</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.0</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,924</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.7</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,523</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.8</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Net Sales</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100.0</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">%</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35,684</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100.0</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">%</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">139,758</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100.0</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">%</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">110,623</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100.0</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">%</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif;margin: 0pt 0 0pt 27pt; min-; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center; padding-bottom: 1pt">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Restricted<br /> Stock Units</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average<br /> Award Date<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%">Outstanding at December 31, 2017</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57,395</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21.03</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Awarded</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29,867</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29.30</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Shares vested</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(16,050</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23.55</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.25pt">Outstanding at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">71,212</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23.48</div></td> <td style="text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 27.9pt 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares Under <br /> Options</td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Weighted </div><br /> <div style="display: inline; font-weight: bold;">Average </div><br /> <div style="display: inline; font-weight: bold;">Exercise Price</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(per share)</div></td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Weighted <br /> Average <br /> Remaining <br /> Contractual <br /> Life</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(in years)</div></td> <td style="font-weight: normal; font-style: normal; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Aggregate <br /> Intrinsic <br /> Value</div><br /> <div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">(in thousands)</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Outstanding at December 31, 2017</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">202,379</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18.23</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%; text-decoration: none">&nbsp;</td> <td style="width: 1%; text-decoration: none; text-align: left">&nbsp;</td> <td style="width: 10%; text-decoration: none; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="width: 1%; text-decoration: none; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Granted</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,344</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31.20</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Exercised</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(78,680</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.14</div></td> <td style="text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&nbsp;</div></td> <td style="text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.25pt">Outstanding at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">134,043</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20.46</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.75</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,183</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Exercisable at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">122,793</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.71</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.80</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,093</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Vested and expected to vest at September 30, 2018</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">134,043</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20.46</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.75</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,183</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Expected volatility</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27.7</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 40%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected dividends</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">None</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Risk-free interest rate</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.70</div></td> <td style="text-align: left">%</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Exercise price</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31.20</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term (in years)</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.0</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Weighted-average grant date fair value</td> <td>&nbsp;</td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.15</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended<br /> September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended<br /> September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%">Basic weighted average common shares outstanding</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,366</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,264</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,338</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 10%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,240</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Weighted average common equivalent shares due to stock options and RSUs</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">69</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">89</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">68</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">86</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.25pt">Diluted weighted average common shares outstanding</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,435</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,353</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,406</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,326</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: left">Remainder of:</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">2018</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 12%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">314</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 50%; background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2019</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2020</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2021</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2022</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,257</div></td> <td style="text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Thereafter</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,204</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Total</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,546</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="background-color: White">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 10pt"><div style="display: inline; font-weight: bold;">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9</div>)</div></div></td> <td><div style="display: inline; font-weight: bold;">Segment Reporting</div></td> </tr> </table> <div style=" margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-indent: 0in">The Company consists of a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">single</div></div> operating and reportable segment.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">Revenues from customers outside of the United States are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material. <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No</div> customer comprised more than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10%</div> of the Company&#x2019;s consolidated revenues for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018. </div>All of the Company&#x2019;s assets are located in the United States.</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The Company&#x2019;s products are primarily sold to customers within the Medical, Consumer, Automotive, Aerospace and Defense, Electronics and Industrial markets. Net sales by market for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">nine</div>-month periods ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 30, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> are as follows (in thousands):</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</div> <div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; color: Red"></div> <div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="15" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended September 30,</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="15" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended September 30,</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="7" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Market</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net Sales</td> <td style="font-weight: bold; padding-bottom: 1pt">&nbsp;</td> <td colspan="3" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> <td>&nbsp;</td> <td colspan="3" style="white-space: nowrap">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%">Medical</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,629</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57.8</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,811</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47.1</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">80,994</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58.0</div></td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,001</div></td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 1%">&nbsp;</td> <td style="width: 1%; text-align: left">&nbsp;</td> <td style="width: 6%; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47.9</div></td> <td style="width: 1%; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td>Consumer</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,588</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.8</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,714</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.0</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,825</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12.8</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,928</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.5</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Automotive</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,572</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.6</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,174</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.5</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,993</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.7</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18,018</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.3</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Aerospace &amp; Defense</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,814</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.0</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,657</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.4</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,381</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.7</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,255</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.5</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Electronics</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,800</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.9</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,821</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.9</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,641</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.2</div></td> <td style="text-align: left">%</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,898</div></td> <td style="text-align: left">&nbsp;</td> <td>&nbsp;</td> <td style="text-align: left">&nbsp;</td> <td style="text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.0</div></td> <td style="text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Industrial</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,405</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.0</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,507</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.0</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,924</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.7</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,523</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="padding-bottom: 1pt">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1pt solid; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.8</div></td> <td style="border-bottom: Black 1pt solid; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Net Sales</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,808</div></td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="padding-bottom: 2.25pt">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.25pt double; text-align: right"><div style="display: inline; 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Document And Entity Information - shares
9 Months Ended
Sep. 30, 2018
Nov. 02, 2018
Document Information [Line Items]    
Entity Registrant Name UFP TECHNOLOGIES INC  
Entity Central Index Key 0000914156  
Trading Symbol ufpt  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Common Stock, Shares Outstanding (in shares)   7,373,207
Document Type 10-Q  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Amendment Flag false  
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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 5,088 $ 37,978
Receivables, less allowance for doubtful accounts of $786 at September 30, 2018 and $652 at December 31, 2017 30,144 21,381
Inventories 19,902 12,863
Prepaid expenses 2,219 1,835
Refundable income taxes 966 1,017
Total current assets 58,319 75,074
Property, plant and equipment 112,503 106,716
Less accumulated depreciation and amortization (54,044) (53,064)
Net property, plant and equipment 58,459 53,652
Goodwill 51,838 7,322
Intangible assets, net 22,546
Non-qualified deferred compensation plan 2,323 2,015
Other assets 275 144
Total assets 193,760 138,207
Current liabilities:    
Accounts payable 7,970 4,180
Accrued expenses 6,569 5,466
Deferred revenue 3,918 297
Current portion of long-term debt 2,857
Total current liabilities 21,314 9,943
Long-term debt, excluding current portion 31,000
Deferred income taxes 3,256 2,440
Non-qualified deferred compensation plan 2,328 2,030
Other liabilities 65 82
Total liabilities 57,963 14,495
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $.01 par value, 1,000,000 shares authorized; zero shares issued or outstanding
Common stock, $.01 par value, 20,000,000 shares authorized; 7,402,766 and 7,373,207 shares issued and outstanding, respectively at September 30, 2018; 7,309,909 and 7,280,350 shares issued and outstanding, respectively at December 31, 2017 74 73
Additional paid-in capital 28,918 26,664
Retained earnings 107,392 97,562
Treasury stock at cost, 29,559 shares at both September 30, 2018 and December 31, 2017 (587) (587)
Total stockholders’ equity 135,797 123,712
Total liabilities and stockholders' equity $ 193,760 $ 138,207
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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Receivables, allowance for doubtful accounts $ 786 $ 652
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares) 1,000,000 1,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 20,000,000 20,000,000
Common stock, shares issued (in shares) 7,402,766 7,309,909
Common stock, shares outstanding (in shares) 7,373,207 7,280,350
Treasury stock, shares (in shares) 29,559 29,559
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Condensed Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Net sales $ 47,808 $ 35,684 $ 139,758 $ 110,623
Cost of sales 35,377 27,491 104,156 82,973
Gross profit 12,431 8,193 35,602 27,650
Selling, general & administrative expenses 6,541 5,693 20,550 18,070
Acquisition-related costs 1,089
Restructuring costs 63
Material overcharge settlement (104) (121)
(Gain) loss on sale of fixed assets 5 (51) 3
Operating income 5,885 2,500 14,118 9,635
Interest income 12 63 44 147
Interest expense (355) (12) (1,032) (39)
Other income 85 137
Income before income tax expense 5,627 2,551 13,267 9,743
Income tax expense 1,493 856 3,366 3,248
Net income $ 4,134 $ 1,695 $ 9,901 $ 6,495
Net income per share:        
Basic (in dollars per share) $ 0.56 $ 0.23 $ 1.35 $ 0.90
Diluted (in dollars per share) $ 0.56 $ 0.23 $ 1.34 $ 0.89
Weighted average common shares outstanding:        
Basic (in shares) 7,366 7,264 7,338 7,240
Diluted (in shares) 7,435 7,353 7,406 7,326
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash flows from operating activities:    
Net income $ 9,901 $ 6,495
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 5,820 4,171
(Gain) loss on sale of fixed assets (51) 3
Share-based compensation 963 842
Deferred income taxes 1,007 254
Changes in operating assets and liabilities:    
Receivables, net (4,379) (795)
Inventories (2,621) 1,015
Prepaid expenses (262) 47
Refundable income taxes 51 (172)
Other assets (439) (138)
Accounts payable 2,249 429
Accrued expenses (417) 554
Deferred revenue 1,446 104
Non-qualified deferred compensation plan and other liabilities 281 201
Net cash provided by operating activities 13,549 13,010
Cash flows from investing activities:    
Additions to property, plant, and equipment (4,521) (6,880)
Acquisition of Dielectrics, net of cash acquired (76,978)
Proceeds from sale of fixed assets 77 6
Net cash used in investing activities (81,422) (6,874)
Cash flows from financing activities:    
Proceeds from advances on revolving line of credit 36,000
Payments on revolving line of credit (20,000)
Proceeds from the issuance of long-term debt 20,000
Principal repayments of long-term debt (2,143) (772)
Proceeds from exercise of stock options, net of shares presented for exercise 1,270 630
Payment of statutory withholdings for stock options exercised and restricted stock units vested (144) (107)
Net cash provided by (used in) financing activities 34,983 (249)
Net (decrease) increase in cash and cash equivalents (32,890) 5,887
Cash and cash equivalents at beginning of period 37,978 31,359
Cash and cash equivalents at end of period $ 5,088 $ 37,246
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 1 - Basis of Presentation
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
(
1
)
Basis of Presentation
 
The interim condensed consolidated financial statements of UFP Technologies, Inc. (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 
10
-Q and do
not
include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended
December 31, 2017,
included in the Company's
2017
Annual Report on Form 
10
-K, as filed with the Securities and Exchange Commission.
 
The condensed consolidated balance sheet as of
September 30, 2018,
the condensed consolidated statements of income for the
three
- and
nine
-month periods ended
September 30, 2018
and
2017,
and the condensed consolidated statements of cash flows for the
nine
-month periods ended
September 30, 2018
and
2017
are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of
December 31, 2017
has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm, but does
not
include all of the information and footnotes required for complete annual financial statements.
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
 
The results of operations for the
three
- and
nine
-month periods ended
September 30, 2018,
are
not
necessarily indicative of the results to be expected for the entire fiscal year ending
December 
31,
2018.
 
Recent Accounting Pronouncements
 
In
May 2014,
the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
No.
2014
-
09,
Revenue from Contracts with Customers
, which was subsequently updated (“Accounting Standards Codification (ASC)
606”
). The Company adopted ASC
606
on
January 1, 2018.
See Note
2
for further details.
 
In
February 2016,
the FASB issued ASU 
No.
 
2016
-
02,
 “
Leases (ASC
842
),
” and issued subsequent amendments to the initial guidance in
January 2018
within ASU 
No.
 
2018
-
01
 and in
July 2018
within ASU Nos. 
2018
-
10
 and 
2018
-
11.
 The standard requires lessees to recognize leases on the balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a short-term lease. The liability will be equal to the present value of the lease payments. The asset will be based on the liability, subject to adjustment. Currently, under existing U.S. generally accepted accounting principles, the Company does
not
recognize on the balance sheet a right-of-use asset or lease liability related to its operating leases. For income statement purposes, the leases will continue to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) and finance leases will result in a front-loaded expense pattern (similar to current capital leases). The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 
15,
2018.
Early adoption is permitted. The standard allows an entity to elect to have a date of initial application as of the beginning of the period of adoption. The standard provides for the option to elect a package of practical expedients upon adoption. The Company intends to adopt the standard on
January 
1,
2019
and continues to assess its lease population and its option to elect certain practical expedients as defined in the new standard. The Company expects expanded financial statement note disclosure in addition to recognizing a right-of-use asset and lease liability for its operating leases on the balance sheet. The Company continues to evaluate the impacts of the pending adoption. As such, the Company’s preliminary assessments are subject to change.
 
In
January 2017,
the FASB issued ASU 
No.
 
2017
-
04,
 
Intangibles—Goodwill and Other (ASC
350
), Simplifying the Test for Goodwill Impairment
. The guidance removes Step
2
of the goodwill impairment test and eliminates the need to determine the fair value of individual assets and liabilities to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value,
not
to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The guidance will be applied prospectively, and is effective for annual and interim goodwill impairment tests in fiscal years beginning after
December 
15,
2019.
Early adoption is permitted for any impairment tests performed on testing dates after
January 
1,
2017.
The Company does
not
believe adoption will have a material impact on its financial condition or results of operations.
 
Revisions
 
Certain revisions have been made to the
December 31, 2017
Condensed Consolidated Balance Sheet to conform to the current year presentation relating to a reclassification of deferred revenue. The reclassification resulted in an increase in deferred revenue and a decrease in accrued expenses in the amount of approximately
$297,000.
In addition, certain revisions have been made to the Condensed Consolidated Statements of Cash Flows for the
nine
-month period ended
September 30, 2017,
also due to a reclassification of deferred revenue. The reclassification resulted in an increase to the change in deferred revenue and a decrease in the change in accrued expenses in the amount of approximately
$104,000.
These revisions had
no
impact on previously reported net income and are deemed immaterial to the previously issued financial statements.
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]
(
2
)
Revenue Recognition
 
On
January 1, 2018,
the Company adopted ASC
606,
Revenue from Contracts with Customers
, using the modified retrospective transition method. Under this method, the Company applied ASC
606
to contracts under which all performance obligations were
not
completed as of
January 1, 2018
and recognized the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings. Results for reporting periods beginning after
January 1, 2018
are presented in accordance with ASC
606.
Prior period amounts are
not
adjusted and are reported in accordance with requirements in ASC
605,
Revenue Recognition
, which is also referred to herein as “legacy GAAP”.
 
The cumulative effect of the adoption on our condensed consolidated balance sheet, by applying the modified retrospective method as of
January 
1,
2018,
is as follows (in thousands):
 
    As Reported       As Adjusted
    December 31,
2017
  Cumulative
Adjustments
  January 1,
2018
Assets:                        
Property, plant and equipment   $
106,716
    $
1,027
    $
107,743
 
Accumulated depreciation and amortization    
(53,064
)    
(548
)    
(53,612
)
Net property, plant and equipment    
53,652
     
479
     
54,131
 
Liabilities:                        
Deferred revenue    
297
     
574
     
871
 
Deferred income taxes    
2,440
     
(25
)    
2,415
 
Stockholders' equity:                        
Retained earnings    
97,562
     
(70
)    
97,492
 
 
The following reflects the Company’s condensed consolidated balance sheet and condensed consolidated statement of income on an as-reported basis and as if we had continued to recognize revenue under legacy GAAP (in thousands):
 
    September 30, 2018
    As Reported   Balances
without
adoption of
ASC 606
  Difference
Assets:            
Property, plant and equipment   $
112,503
    $
111,230
    $
1,273
 
Accumulated depreciation and amortization    
(54,044
)    
(53,145
)    
(899
)
Net property, plant and equipment    
58,459
     
58,085
     
374
 
Liabilities:                        
Deferred revenue    
3,918
     
3,502
     
416
 
Deferred income taxes    
3,256
     
3,281
     
(25
)
Stockholders' equity:                        
Retained earnings    
107,392
     
107,409
     
(17
)
 
    For the Nine Months Ended September 30, 2018
    As Reported   Balances
without
adoption of
ASC 606
  Difference
Net sales   $
139,758
    $
139,600
    $
158
 
Cost of sales    
104,156
     
104,051
     
105
 
Gross profit    
35,602
     
35,549
     
53
 
 
The following summarizes the significant changes under ASC
606
as compared to legacy GAAP:
 
·
Under legacy GAAP, the Company recognized revenue for certain customer tooling at the time the tooling was complete and accepted by the customer. Under ASC
606,
as “control” of this tooling does
not
transfer to the customer, the related purchase orders do
not
qualify as an “accounting contract” and as a result the consideration received is recorded as deferred revenue and recognized over the estimated time for which parts are produced on each respective tool (approximately
two
years). The related costs to produce the tooling are capitalized and depreciated over the estimated useful life of the tool (approximately
two
years).
 
·
Under legacy GAAP, the Company recognized revenue on long-term agreements with variable pricing at the selling price that was in effect for the current period at the time of shipment. Under ASC
606,
the Company will recognize revenue at the weighted average selling price for each part over the term of the agreement for any agreements where the Company estimates that we will
not
be able to achieve the corresponding cost changes necessary to maintain a consistent margin over the term of the agreement. The Company has a small number of long-term agreements with variable pricing.
 
The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC
606
which include (
1
) identifying the contract with a customer, (
2
) identifying separate performance obligations within the contract, (
3
) determining the transaction price, (
4
) allocating the transaction price to the performance obligations, and (
5
) recognizing revenue. The Company recognizes all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance, with the exception of certain tooling where control does
not
transfer to the customer, which results in revenue being recognized over the estimated time for which parts are produced on each respective tool. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale
not
as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the good and are expensed when revenue is recognized.
 
Disaggregated Revenue
 
The following table presents the Company’s revenue disaggregated by the major types of goods and services sold to our customers (in thousands) (See Note
9
for further information regarding net sales by market):
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Net sales of:        
Products   $
46,423
    $
35,301
    $
135,670
    $
109,196
 
Tooling and Machinery    
537
     
277
     
2,135
     
1,150
 
Engineering services    
848
     
106
     
1,953
     
277
 
Total net sales   $
47,808
    $
35,684
    $
139,758
    $
110,623
 
 
Contract balances
 
The timing of revenue recognition
may
differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has deferred revenue (contract liabilities), included within “deferred revenue” on the condensed consolidated balance sheets.
 
The following table presents opening and closing balances of contract liabilities for the
nine
-month period ended
September 30, 2018 (
in thousands):
 
    Contract
Liabilities
     
Deferred revenue - January 1, 2018   $
871
 
Acquired in Dielectrics business combination    
2,175
 
Increases due to consideration received from customers    
3,088
 
Revenue recognized    
(2,216
)
Deferred revenue - September 30, 2018   $
3,918
 
 
Revenue recognized during the
nine
-month period ended
September 30, 2018
from amounts included in deferred revenue at the beginning of the period was approximately
$527,000.
 
When invoicing occurs after revenue recognition, the Company has unbilled receivables (contract assets) included within “receivables” on the condensed consolidated balance sheet. Unbilled receivables were approximately
$48,000
at
September 30, 2018.
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 3 - Supplemental Cash Flow Information
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Cash Flow, Supplemental Disclosures [Text Block]
(
3
)
Supplemental Cash Flow Information
 
    Nine Months Ended
September 30,
    2018   2017
    (in thousands)
Cash paid for:                
Interest   $
853
    $
37
 
Income taxes, net of refunds    
2,308
     
3,167
 
Non-cash investing and financing activities:                
Capital additions accrued but not yet paid   $
216
    $
527
 
XML 19 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 4 - Fair Value of Financial Instruments
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
(
4
)
Fair Value of Financial Instruments
 
Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC
820,
Fair Value Measurements and Disclosures
, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:
 
Level
1
Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
 
Level
2
Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
 
Level
3
Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
 
The following table presents the fair value and hierarchy levels, for financial assets that are measured at fair value on a recurring basis (in thousands):
 
Level 2
  September 30,
2018
Assets:        
Derivative financial instruments   $
137
 
 
Derivative financial instruments consist of an interest rate swap for which fair value is determined through the use of a pricing model that utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals for the full term of the swap agreement.
 
The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, that are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.
XML 20 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
(
5
)
Share-Based Compensation
 
Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (the vesting period of the equity grant).
 
The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended
December 31, 2017.
The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands):
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
Share-based compensation related to:   2018   2017   2018   2017
Common stock grants   $
100
    $
100
    $
405
    $
405
 
Stock option grants    
9
     
4
     
143
     
130
 
Restricted Stock Unit awards ("RSUs")    
163
     
102
     
415
     
307
 
Total share-based compensation   $
272
    $
206
    $
963
    $
842
 
 
The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately
$289,000
and
$106,000
for the
three
-month periods ended
September 30, 2018
and
2017,
respectively, and approximately
$649,000
and
$441,000
for the
nine
-month periods ended
September 
30,
2018
and
2017,
respectively.
 
The following is a summary of stock option activity under all plans for the
nine
-month period ended
September 
30,
2018:
 
    Shares Under
Options
 
Weighted

Average

Exercise Price

(per share)
 
Weighted
Average
Remaining
Contractual
Life

(in years)
 
Aggregate
Intrinsic
Value

(in thousands)
Outstanding at December 31, 2017    
202,379
    $
18.23
     
 
     
 
 
Granted    
10,344
     
31.20
     
 
     
 
 
Exercised    
(78,680
)    
16.14
     
 
     
 
 
Outstanding at September 30, 2018    
134,043
    $
20.46
     
4.75
    $
2,183
 
Exercisable at September 30, 2018    
122,793
    $
19.71
     
4.80
    $
2,093
 
Vested and expected to vest at September 30, 2018    
134,043
    $
20.46
     
4.75
    $
2,183
 
 
On
June 6, 2018,
the Company granted options to its directors for the purchase of
10,344
shares of common stock at that day’s closing price of
$31.20.
The compensation expense related to these grants was determined as the fair value of the options using the Black-Scholes option pricing model based on the following assumptions:
 
Expected volatility    
27.7
%  
Expected dividends    
None
   
Risk-free interest rate    
2.70
%  
Exercise price   $
31.20
   
Expected term (in years)    
6.0
   
Weighted-average grant date fair value   $
10.15
   
 
The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option. The expected term is estimated based on historical option exercise activity.
 
During the
nine
-month period ended
September 30, 2018
and
2017,
the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was approximately
$1.2
million and
$577,000,
respectively, and the total amount of consideration received by the Company from the exercised options was approximately
$1.3
million and
$802,000,
respectively. At its discretion, the Company allows option holders to surrender previously-owned common stock in lieu of paying the exercise price and withholding taxes. During the
nine
-month period ended
September 30, 2018,
no
shares were surrendered for this purpose. During the
nine
-month period ended
September 30, 2017,
6,511
shares were surrendered for this purpose at an average market price of
$26.45.
 
On
February 21, 2018,
the Company’s Compensation Committee approved the award of
$400,000,
payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the
2003
Incentive Plan. Subject to his continued employment and the terms of his employment agreement, the shares will be issued in
December 2018.
 
The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the
nine
-month period ended
September 30, 2018:
 
    Restricted
Stock Units
  Weighted Average
Award Date
Fair Value
Outstanding at December 31, 2017    
57,395
    $
21.03
 
Awarded    
29,867
     
29.30
 
Shares vested    
(16,050
)    
23.55
 
Outstanding at September 30, 2018    
71,212
    $
23.48
 
 
At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the
nine
-month periods ended
September 30, 2018
and
2017,
5,328
and
4,377
shares were surrendered at an average market price of
$27.60
and
$24.50,
respectively.
 
As of
September 30, 2018,
the Company had approximately
$1.2
million of unrecognized compensation expense that is expected to be recognized over a period of
3.5
years.
XML 21 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 6 - Inventories
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Inventory Disclosure [Text Block]
(
6
)
Inventories
 
Inventories are stated at the lower of cost (determined using the
first
-in,
first
-out method) or net realizable value, and consist of the following at the stated dates (in thousands):
 
    September 30,
2018
  December 31,
2017
Raw materials   $
10,226
    $
6,898
 
Work in process    
4,105
     
1,207
 
Finished goods    
5,571
     
4,758
 
Total inventory   $
19,902
    $
12,863
 
XML 22 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 7 - Preferred Stock
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
(
7
)
Preferred Stock
 
On
March 18, 2009,
the Company declared a dividend of
one
preferred share purchase right (a “Right”) for each outstanding share of common stock, par value
$0.01
per share, to the stockholders of record on
March 
20,
2009.
Each Right entitles the registered holder to purchase from the Company one
one
-thousandth of a share of Series A Junior Participating Preferred Stock, par value
$0.01
per share (the “Preferred Share”) of the Company, at a price of
$25
per
one one
-thousandth of a Preferred Share subject to adjustment and the terms of the Rights Agreement. The Rights expire on
March 19, 2019.
XML 23 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 8 - Income Per Share
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Earnings Per Share [Text Block]
(
8
)
Income Per Share
 
Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.
 
The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Basic weighted average common shares outstanding    
7,366
     
7,264
     
7,338
     
7,240
 
Weighted average common equivalent shares due to stock options and RSUs    
69
     
89
     
68
     
86
 
Diluted weighted average common shares outstanding    
7,435
     
7,353
     
7,406
     
7,326
 
 
The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are
not
included in the computation of diluted income per share because the effect would be antidilutive. For the
three
- and
nine
-month periods ended
September 30, 2018,
the number of antidilutive stock awards excluded from the computation of diluted earnings per share was
zero
and
10,344,
respectively. For the
three
- and
nine
-month periods ended
September 30, 2017,
the number of antidilutive stock awards excluded from the computation of diluted earnings per share was
zero
and
27,336,
respectively.
XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 9 - Segment Reporting
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(
9
)
Segment Reporting
 
The Company consists of a
single
operating and reportable segment.
 
Revenues from customers outside of the United States are
not
material.
No
customer comprised more than
10%
of the Company’s consolidated revenues for the
three
- and
nine
-month periods ended
September 30, 2018.
All of the Company’s assets are located in the United States.
 
The Company’s products are primarily sold to customers within the Medical, Consumer, Automotive, Aerospace and Defense, Electronics and Industrial markets. Net sales by market for the
three
- and
nine
-month periods ended
September 30, 2018
and
2017
are as follows (in thousands):
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
Market   Net Sales   %   Net Sales   %   Net Sales   %   Net Sales   %
                                 
Medical   $
27,629
     
57.8
%   $
16,811
     
47.1
%   $
80,994
     
58.0
%   $
53,001
     
47.9
%
Consumer    
6,588
     
13.8
%    
5,714
     
16.0
%    
17,825
     
12.8
%    
14,928
     
13.5
%
Automotive    
4,572
     
9.6
%    
5,174
     
14.5
%    
14,993
     
10.7
%    
18,018
     
16.3
%
Aerospace & Defense    
3,814
     
8.0
%    
2,657
     
7.4
%    
9,381
     
6.7
%    
8,255
     
7.5
%
Electronics    
2,800
     
5.9
%    
2,821
     
7.9
%    
8,641
     
6.2
%    
8,898
     
8.0
%
Industrial    
2,405
     
5.0
%    
2,507
     
7.0
%    
7,924
     
5.7
%    
7,523
     
6.8
%
Net Sales   $
47,808
     
100.0
%   $
35,684
     
100.0
%   $
139,758
     
100.0
%   $
110,623
     
100.0
%
 
Certain immaterial amounts for the
three
- and
nine
-months ended
September 30, 2017
were reclassified between markets to conform to the current period presentation.
XML 25 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 10 - Other Intangible Assets
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]
(
10
)
Other Intangible Assets
 
The carrying values of the Company’s definite lived intangible assets as of
September 30, 2018,
are as follows (in thousands):
 
    Tradename &
Brand
  Non-
Compete
  Customer
List
  Total
Estimated useful life   10 years   5 years   20 years    
Gross amount   $
367
    $
462
    $
22,555
    $
23,384
 
Accumulated amortization    
(24
)    
(62
)    
(752
)   $
(838
)
Net balance   $
343
    $
400
    $
21,803
    $
22,546
 
 
The weighted-average amortization period for all intangible assets is
19.6
years. Amortization expense related to intangible assets was approximately
$314,000
and
$79,000
for the
three
-month periods ended
September 30, 2018
and
2017,
respectively, and
$838,000
and
$239,000
for the
nine
-month periods ended
September 30, 2018
and
2017,
respectively. The estimated remaining amortization expense as of
September 30, 2018
is as follows (in thousands):
 
Remainder of:      
2018   $
314
   
2019    
1,257
   
2020    
1,257
   
2021    
1,257
   
2022    
1,257
   
Thereafter    
17,204
   
Total   $
22,546
   
XML 26 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 11 - Income Taxes
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
(
11
)
Income Taxes
 
The income tax expense included in the accompanying unaudited condensed consolidated statements of income principally relates to the Company’s proportionate share of the pre-tax income of its wholly-owned subsidiaries. The determination of income tax expense for interim reporting purposes is based upon the estimated effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur.
 
The Company recorded tax expense of approximately
26.5%
and
33.6%
of income before income tax expense, for each of the
three
-month periods ended
September 30, 2018
and
2017,
respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for
2018
and share-based payment related tax benefits recorded in the
three
-month period ended
September 30, 2018
of approximately
$36,000.
The Company recorded tax expense of approximately
25.4%
and
33.3%
of income before income tax expense, for each of the
nine
-month periods ended
September 30, 2018
and
2017,
respectively. The decrease in the effective tax rate for the current period is largely due to a change in the statutory federal tax rate for
2018
and share-based payment related tax benefits recorded in the
nine
-month period ended
September 30, 2018
of approximately
$220,000.
The Company notes the potential for volatility in its effective tax rate, as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly into income tax expense.
 
On
December 22, 2017,
the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the
“2017
Tax Act”), resulting in significant modifications to existing law.  The
2017
Tax Act effected a reduction in the corporate tax rate from
35%
to
21%,
and changes to executive compensation limitations under IRC Section
162
(m), among other changes. The Company made what it considers to be a reasonable estimate of the impact of the
2017
Tax Act in its financials for the year ended
December 31, 2017.
The Company has
not
recorded any changes to this estimate for the
three
-month period ended
September 30, 2018.
 
Staff Accounting Bulletin (“SAB”)
No.
118,
issued by the Securities and Exchange Commission (“SEC”), provides for a measurement period of
one
year from the enactment date to finalize the accounting for effects of the
2017
Tax Act. In accordance with SEC guidance, provisional amounts
may
be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. In the subsequent period, provisional amounts will be adjusted for the effects, if any, of interpretative guidance issued after
December 31, 2017
by the U.S. Department of the Treasury.
XML 27 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 12 - Indebtedness
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Debt Disclosure [Text Block]
(
12
)
Indebtedness
 
On
December 2, 2013,
the Company entered into an unsecured
$40
million revolving credit facility with Bank of America, N.A. The credit facility called for interest of LIBOR plus a margin that ranged from
1.0%
to
1.5%
or, at the discretion of the Company, the bank’s prime rate less a margin that ranged from
0.25%
to zero. In both cases the applicable margin was dependent upon Company performance. Under the credit facility, the Company was subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant. The credit facility was amended effective
December 31, 2014,
to modify the definition of “consolidated fixed-charge coverage ratio”. The Company’s
$40
million credit facility was to mature on
November 30, 2018.
 
On
February 1, 2018,
the Company, as the borrower, entered into an unsecured
$70
million Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with the Company’s subsidiaries (the “Subsidiary Guarantors”) and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restated Credit Agreement amends and restates the Company’s prior credit agreement.
 
The credit facilities under the Amended and Restated Credit Agreement (the “Amended and Restated Credit Facilities”) consist of a
$20
million unsecured term loan and an unsecured revolving credit facility, under which the Company
may
borrow up to
$50
million. The Amended and Restated Credit Agreement matures on
February 1, 2023. 
The proceeds borrowed pursuant to the Amended and Restated Credit Agreement
may
be used for general corporate purposes, including funding the acquisition of Dielectrics Inc. (“Dielectrics”) (See Note
13
), as well as certain other permitted acquisitions. The Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by the Subsidiary Guarantors.
 
The Amended and Restated Credit Agreement calls for interest of LIBOR plus a margin that ranges from
1.0%
to
1.5%
or, at the discretion of the Company, the bank’s prime rate less a margin that ranges from
.25%
to zero. In both cases the applicable margin is dependent upon Company performance.  Under the Amended and Restated Credit Agreement, the Company is subject to a minimum fixed-charge coverage financial covenant as well as a maximum total funded debt to EBITDA financial covenant.  The Amended and Restated Credit Agreement contains other covenants customary for transactions of this type, including restrictions on certain payments, permitted indebtedness and permitted investments.  As of
September 30, 2018,
the applicable interest rate was approximately
3.26%
and the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.
 
Included in the Amended and Restated Credit Facilities were approximately
$0.6
million in standby letters of credit as a financial guarantee on worker’s compensation insurance policies.
 
Long-term debt consists of the following (in thousands):
 
    September 30,
2018
 
Revolving credit facility   $
16,000
   
Term loan    
17,857
   
Total long-term debt    
33,857
   
Current portion    
(2,857
)  
Long-term debt, excluding current portion   $
31,000
   
 
Derivative Financial Instruments
 
The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on certain of its variable-rate debt instruments. The Company does
not
enter into derivative instruments for any purpose other than cash flow hedging. The Company does
not
speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, creating credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, in these circumstances the Company is
not
exposed to the counterparty’s credit risk. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with carefully selected major financial institutions based upon their credit profile. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that
may
be undertaken.
 
The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that
may
adversely impact expected future cash flows and by evaluating hedging opportunities. The Company’s debt obligations expose the Company to variability in interest payments due to changes in interest rates. The Company believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, in connection with the Amended and Restated Credit Agreement, the Company entered into a
$20
million,
5
-year interest rate swap agreement under which the Company receives
three
-month LIBOR plus the applicable margin and pays a
2.7%
fixed rate plus the applicable margin. The swap modifies the Company’s interest rate exposure by converting the term loan from a variable rate to a fixed rate in order to hedge against the possibility of rising interest rates during the term of the loan. The notional amount was
$17,857,142
at
September 30, 2018.
The fair value of the swap as of
September 30, 2018
was approximately
$137,000
and is included in other assets. Changes in the fair value of the swap are recorded in other income/expense and resulted in income of approximately
$85,000
and
$137,000
during the
three
- and
nine
-month periods ended
September 30, 2018,
respectively.
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 13 - Acquisition
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
(
13
)
Acquisition
 
On
February 1, 2018
the Company purchased
100%
of the outstanding shares of common stock of Dielectrics Inc., pursuant to a stock purchase agreement and related agreements, for an aggregate purchase price of
$80
 million in cash. The purchase price was subject to adjustment based upon Dielectrics’ working capital at closing. An additional
$250,000
of consideration was paid by the Company as a result of the final working capital adjustment. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses and liabilities. The Purchase Agreement contains customary representations, warranties and covenants customary for transactions of this type.
 
Founded in
1954
and based in Chicopee, Massachusetts, Dielectrics is a leader in the design, development, and manufacture of medical devices using thermoplastic materials. They primarily use radio frequency and impulse welding to design and manufacture solutions for the medical industry. In addition to the long-standing customer relationships, they bring to the Company a seasoned management team and a profitable book of business. The Company has leased the Chicopee location from a realty trust owned by the selling shareholder and affiliates. The lease is for
five
years with
two five
-year renewal options.
 
The following table summarizes the preliminary allocation of consideration paid to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value. The final purchase price allocation
may
change based on final appraisals, valuations and analysis of the fair value of the acquired assets and assumed liabilities (in thousands):
 
Consideration Paid:      
Cash paid at closing   $
80,000
   
Working capital adjustment    
250
   
Cash from Dielectrics    
(3,272
)  
Total consideration   $
76,978
   
           
Purchase Price Allocation:          
Accounts receivable   $
4,384
   
Inventory    
4,418
   
Other current assets    
122
   
Property, plant and equipment    
4,600
   
Customer list    
22,555
   
Non-compete    
462
   
Trade name and brand    
367
   
Goodwill    
44,516
   
Total identifiable assets   $
81,424
   
Accounts payable    
(1,325
)  
Accrued expenses    
(946
)  
Deferred revenue    
(2,175
)  
Net assets acquired   $
76,978
   
 
Acquisition costs associated with the transaction were approximately
$1.1
million and were charged to expense in the
nine
-month period ended
September 30, 2018.
These costs were primarily for investment banking and legal fees and are reflected on the face of the income statement.
 
The following table contains an unaudited pro forma condensed consolidated statement of operations for the
three
- and
nine
-month periods ended
September 30, 2018
and
2017,
as if the Dielectrics acquisition had occurred at the beginning of each of the respective periods (in thousands):
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Sales   $
47,808
    $
46,141
    $
142,813
    $
143,199
 
Operating Income   $
5,885
    $
4,606
    $
13,970
    $
14,194
 
Net Income   $
4,134
    $
2,834
    $
9,700
    $
8,788
 
Earnings per share:                                
Basic   $
0.56
    $
0.39
    $
1.32
    $
1.21
 
Diluted   $
0.56
    $
0.39
    $
1.31
    $
1.20
 
 
The above unaudited pro forma information is presented for illustrative purposes only and
may
not
be indicative of the results of operations that would have actually occurred had the Dielectrics acquisition occurred as presented. In addition, future results
may
vary significantly from the results reflected in such pro forma information.
 
The amount of revenue and net income of Dielectrics recognized since the acquisition date, which is included in the condensed consolidated statement of income for the
nine
month period ended
September 30, 2018,
was approximately
$25.1
million and
$4.4
million, respectively.
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]
    As Reported       As Adjusted
    December 31,
2017
  Cumulative
Adjustments
  January 1,
2018
Assets:                        
Property, plant and equipment   $
106,716
    $
1,027
    $
107,743
 
Accumulated depreciation and amortization    
(53,064
)    
(548
)    
(53,612
)
Net property, plant and equipment    
53,652
     
479
     
54,131
 
Liabilities:                        
Deferred revenue    
297
     
574
     
871
 
Deferred income taxes    
2,440
     
(25
)    
2,415
 
Stockholders' equity:                        
Retained earnings    
97,562
     
(70
)    
97,492
 
    September 30, 2018
    As Reported   Balances
without
adoption of
ASC 606
  Difference
Assets:            
Property, plant and equipment   $
112,503
    $
111,230
    $
1,273
 
Accumulated depreciation and amortization    
(54,044
)    
(53,145
)    
(899
)
Net property, plant and equipment    
58,459
     
58,085
     
374
 
Liabilities:                        
Deferred revenue    
3,918
     
3,502
     
416
 
Deferred income taxes    
3,256
     
3,281
     
(25
)
Stockholders' equity:                        
Retained earnings    
107,392
     
107,409
     
(17
)
    For the Nine Months Ended September 30, 2018
    As Reported   Balances
without
adoption of
ASC 606
  Difference
Net sales   $
139,758
    $
139,600
    $
158
 
Cost of sales    
104,156
     
104,051
     
105
 
Gross profit    
35,602
     
35,549
     
53
 
Disaggregation of Revenue [Table Text Block]
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Net sales of:        
Products   $
46,423
    $
35,301
    $
135,670
    $
109,196
 
Tooling and Machinery    
537
     
277
     
2,135
     
1,150
 
Engineering services    
848
     
106
     
1,953
     
277
 
Total net sales   $
47,808
    $
35,684
    $
139,758
    $
110,623
 
Contract with Customer, Asset and Liability [Table Text Block]
    Contract
Liabilities
     
Deferred revenue - January 1, 2018   $
871
 
Acquired in Dielectrics business combination    
2,175
 
Increases due to consideration received from customers    
3,088
 
Revenue recognized    
(2,216
)
Deferred revenue - September 30, 2018   $
3,918
 
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 3 - Supplemental Cash Flow Information (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
    Nine Months Ended
September 30,
    2018   2017
    (in thousands)
Cash paid for:                
Interest   $
853
    $
37
 
Income taxes, net of refunds    
2,308
     
3,167
 
Non-cash investing and financing activities:                
Capital additions accrued but not yet paid   $
216
    $
527
 
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 4 - Fair Value of Financial Instruments (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Fair Value, Assets Measured on Recurring Basis [Table Text Block]
Level 2
  September 30,
2018
Assets:        
Derivative financial instruments   $
137
 
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Employee Service Share Based Compensation Allocation of Recognized Period Costs, By Award Type [Table Text Block]
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
Share-based compensation related to:   2018   2017   2018   2017
Common stock grants   $
100
    $
100
    $
405
    $
405
 
Stock option grants    
9
     
4
     
143
     
130
 
Restricted Stock Unit awards ("RSUs")    
163
     
102
     
415
     
307
 
Total share-based compensation   $
272
    $
206
    $
963
    $
842
 
Share-based Compensation, Stock Options, Activity [Table Text Block]
    Shares Under
Options
 
Weighted

Average

Exercise Price

(per share)
 
Weighted
Average
Remaining
Contractual
Life

(in years)
 
Aggregate
Intrinsic
Value

(in thousands)
Outstanding at December 31, 2017    
202,379
    $
18.23
     
 
     
 
 
Granted    
10,344
     
31.20
     
 
     
 
 
Exercised    
(78,680
)    
16.14
     
 
     
 
 
Outstanding at September 30, 2018    
134,043
    $
20.46
     
4.75
    $
2,183
 
Exercisable at September 30, 2018    
122,793
    $
19.71
     
4.80
    $
2,093
 
Vested and expected to vest at September 30, 2018    
134,043
    $
20.46
     
4.75
    $
2,183
 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
Expected volatility    
27.7
%  
Expected dividends    
None
   
Risk-free interest rate    
2.70
%  
Exercise price   $
31.20
   
Expected term (in years)    
6.0
   
Weighted-average grant date fair value   $
10.15
   
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]
    Restricted
Stock Units
  Weighted Average
Award Date
Fair Value
Outstanding at December 31, 2017    
57,395
    $
21.03
 
Awarded    
29,867
     
29.30
 
Shares vested    
(16,050
)    
23.55
 
Outstanding at September 30, 2018    
71,212
    $
23.48
 
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 6 - Inventories (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
    September 30,
2018
  December 31,
2017
Raw materials   $
10,226
    $
6,898
 
Work in process    
4,105
     
1,207
 
Finished goods    
5,571
     
4,758
 
Total inventory   $
19,902
    $
12,863
 
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 8 - Income Per Share (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Weighted Average Number of Shares [Table Text Block]
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2018   2017   2018   2017
Basic weighted average common shares outstanding    
7,366
     
7,264
     
7,338
     
7,240
 
Weighted average common equivalent shares due to stock options and RSUs    
69
     
89
     
68
     
86
 
Diluted weighted average common shares outstanding    
7,435
     
7,353
     
7,406
     
7,326
 
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 9 - Segment Reporting (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
Market   Net Sales   %   Net Sales   %   Net Sales   %   Net Sales   %
                                 
Medical   $
27,629
     
57.8
%   $
16,811
     
47.1
%   $
80,994
     
58.0
%   $
53,001
     
47.9
%
Consumer    
6,588
     
13.8
%    
5,714
     
16.0
%    
17,825
     
12.8
%    
14,928
     
13.5
%
Automotive    
4,572
     
9.6
%    
5,174
     
14.5
%    
14,993
     
10.7
%    
18,018
     
16.3
%
Aerospace & Defense    
3,814
     
8.0
%    
2,657
     
7.4
%    
9,381
     
6.7
%    
8,255
     
7.5
%
Electronics    
2,800
     
5.9
%    
2,821
     
7.9
%    
8,641
     
6.2
%    
8,898
     
8.0
%
Industrial    
2,405
     
5.0
%    
2,507
     
7.0
%    
7,924
     
5.7
%    
7,523
     
6.8
%
Net Sales   $
47,808
     
100.0
%   $
35,684
     
100.0
%   $
139,758
     
100.0
%   $
110,623
     
100.0
%
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 10 - Other Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
    Tradename &
Brand
  Non-
Compete
  Customer
List
  Total
Estimated useful life   10 years   5 years   20 years    
Gross amount   $
367
    $
462
    $
22,555
    $
23,384
 
Accumulated amortization    
(24
)    
(62
)    
(752
)   $
(838
)
Net balance   $
343
    $
400
    $
21,803
    $
22,546
 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]
Remainder of:      
2018   $
314
   
2019    
1,257
   
2020    
1,257
   
2021    
1,257
   
2022    
1,257
   
Thereafter    
17,204
   
Total   $
22,546
   
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 12 - Indebtedness (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Long-term Debt Instruments [Table Text Block]
    September 30,
2018
 
Revolving credit facility   $
16,000
   
Term loan    
17,857
   
Total long-term debt    
33,857
   
Current portion    
(2,857
)  
Long-term debt, excluding current portion   $
31,000
   
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 13 - Acquisition (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
Consideration Paid:      
Cash paid at closing   $
80,000
   
Working capital adjustment    
250
   
Cash from Dielectrics    
(3,272
)  
Total consideration   $
76,978
   
           
Purchase Price Allocation:          
Accounts receivable   $
4,384
   
Inventory    
4,418
   
Other current assets    
122
   
Property, plant and equipment    
4,600
   
Customer list    
22,555
   
Non-compete    
462
   
Trade name and brand    
367
   
Goodwill    
44,516
   
Total identifiable assets   $
81,424
   
Accounts payable    
(1,325
)  
Accrued expenses    
(946
)  
Deferred revenue    
(2,175
)  
Net assets acquired   $
76,978
   
Business Acquisition, Pro Forma Information [Table Text Block]
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Sales   $
47,808
    $
46,141
    $
142,813
    $
143,199
 
Operating Income   $
5,885
    $
4,606
    $
13,970
    $
14,194
 
Net Income   $
4,134
    $
2,834
    $
9,700
    $
8,788
 
Earnings per share:                                
Basic   $
0.56
    $
0.39
    $
1.32
    $
1.21
 
Diluted   $
0.56
    $
0.39
    $
1.31
    $
1.20
 
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 1 - Basis of Presentation (Details Textual) - Reclassification from Accrued Expenses to Customer Deposits [Member]
9 Months Ended
Sep. 30, 2018
USD ($)
Year Ended December 31, 2017 [Member]  
Prior Period Reclassification Adjustment $ 297,000
Nine Months Ended September 30, 2017 [Member]  
Prior Period Reclassification Adjustment $ 104,000
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition (Details Textual)
9 Months Ended
Sep. 30, 2018
USD ($)
Deferred Revenue, Revenue Recognized $ 527,000
Receivables [Member]  
Contract with Customer, Asset, Net, Current, Total $ 48,000
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition - Adoption of ASC 606 (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Jan. 01, 2018
Dec. 31, 2017
Property, plant and equipment $ 112,503   $ 112,503   $ 107,743 $ 106,716
Less accumulated depreciation and amortization (54,044)   (54,044)   (53,612) (53,064)
Net property, plant and equipment 58,459   58,459   54,131 53,652
Deferred revenue 3,918   3,918   871 297
Deferred income taxes 3,256   3,256   2,415 2,440
Retained earnings 107,392   107,392   97,492 $ 97,562
Net sales 47,808 $ 35,684 139,758 $ 110,623    
Cost of sales 35,377 27,491 104,156 82,973    
Gross profit 12,431 $ 8,193 35,602 $ 27,650    
Accounting Standards Update 2014-09 [Member]            
Property, plant and equipment         1,027  
Less accumulated depreciation and amortization         (548)  
Net property, plant and equipment         479  
Deferred revenue         574  
Deferred income taxes         (25)  
Retained earnings         $ (70)  
Calculated under Revenue Guidance in Effect before Topic 606 [Member]            
Property, plant and equipment 111,230   111,230      
Less accumulated depreciation and amortization (53,145)   (53,145)      
Net property, plant and equipment 58,085   58,085      
Deferred revenue 3,502   3,502      
Deferred income taxes 3,281   3,281      
Retained earnings 107,409   107,409      
Net sales     139,600      
Cost of sales     104,051      
Gross profit     35,549      
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]            
Property, plant and equipment 1,273   1,273      
Less accumulated depreciation and amortization (899)   (899)      
Net property, plant and equipment 374   374      
Deferred revenue 416   416      
Deferred income taxes (25)   (25)      
Retained earnings $ (17)   (17)      
Net sales     158      
Cost of sales     105      
Gross profit     $ 53      
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition - Revenue Disaggregated by the Major Types of Good and Services Sold (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Net sales $ 47,808 $ 35,684 $ 139,758 $ 110,623
Product [Member]        
Net sales 46,423 35,301 135,670 109,196
Tooling and Machinery [Member]        
Net sales 537 277 2,135 1,150
Engineering and Development [Member]        
Net sales $ 848 $ 106 $ 1,953 $ 277
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 2 - Revenue Recognition - Contract Liabilities (Details)
$ in Thousands
9 Months Ended
Sep. 30, 2018
USD ($)
Deferred revenue - January 1, 2018 $ 871
Acquired in Dielectrics business combination 2,175
Increases due to consideration received from customers 3,088
Revenue recognized (2,216)
Deferred revenue - September 30, 2018 $ 3,918
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 3 - Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash paid for:    
Interest $ 853 $ 37
Income taxes, net of refunds 2,308 3,167
Non-cash investing and financing activities:    
Capital additions accrued but not yet paid $ 216 $ 527
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 4 - Fair Value of Financial Instruments - Financial Assets Measured at Fair Value on a Recurring Basis (Details)
$ in Thousands
Sep. 30, 2018
USD ($)
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]  
Assets:  
Derivative financial instruments $ 137
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Jun. 06, 2018
Feb. 21, 2018
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense     $ 289,000 $ 106,000 $ 649,000 $ 441,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross 10,344          
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price $ 31.20          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value         1,200,000 577,000
Proceeds from Stock Options Exercised         $ 1,300,000 $ 802,000
Shares Paid for Exercise Price and Tax Withholding for Share Based Compensation         0 6,511
Shares Paid for Exercise Price and Tax Withholding for Share-based Compensation, Average Market Price           $ 26.45
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total     $ 1,200,000   $ 1,200,000  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition         3 years 182 days  
Restricted Stock Units (RSUs) [Member]            
Shares Paid for Tax Withholding for Share Based Compensation         5,328 4,377
Shares Paid for Tax Withholding for Share Based Compensation Market Price         $ 27.60 $ 24.50
The 2003 Incentive Plan [Member] | Chairman Chief Executive Officer and President [Member] | Common Stock [Member]            
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures, Total   $ 400,000        
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation - Compensation Cost (Details) - Selling, General and Administrative Expenses [Member] - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Share-based compensation $ 272 $ 206 $ 963 $ 842
Common Stock [Member]        
Share-based compensation 100 100 405 405
Employee and Nonemployee Stock Option [Member]        
Share-based compensation 9 4 143 130
Restricted Stock Units (RSUs) [Member]        
Share-based compensation $ 163 $ 102 $ 415 $ 307
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended
Jun. 06, 2018
Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross 10,344  
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price $ 31.20  
Employee and Nonemployee Stock Option [Member]    
Outstanding (in shares)   202,379
Outstanding, weighted average exercise price (in dollars per share)   $ 18.23
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross   10,344
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price   $ 31.20
Exercised (in shares)   (78,680)
Exercised, weighted average exercise price (in dollars per share)   $ 16.14
Outstanding (in shares)   134,043
Outstanding, weighted average exercise price (in dollars per share)   $ 20.46
Outstanding, weighted average remaining contractual life (Year)   4 years 273 days
Outstanding, aggregate intrinsic value   $ 2,183
Exercisable (in shares)   122,793
Exercisable, weighted average exercise price (in dollars per share)   $ 19.71
Exercisable, weighted average remaining contractual life (Year)   4 years 292 days
Exercisable, aggregate intrinsic value   $ 2,093
Vested and expected to vest (in shares)   134,043
Vested and expected to vest, weighted average exercise price (in dollars per share)   $ 20.46
Vested and expected to vest, weighted average remaining contractual life (Year)   4 years 273 days
Vested and expected to vest, aggregate intrinsic value   $ 2,183
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation - Option Pricing Assumptions (Details)
Jun. 06, 2018
$ / shares
Weighted-average grant date fair value (in dollars per share) $ 10.15
Employee Stock Option [Member]  
Expected volatility 27.70%
Expected dividends
Risk-free interest rate 2.70%
Exercise price (in dollars per share) $ 31.20
Expected term (in years) (Year) 6 years
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 5 - Share-based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member]
9 Months Ended
Sep. 30, 2018
$ / shares
shares
Outstanding (in shares) | shares 57,395
Outstanding, weighted average award date fair value (in dollars per share) | $ / shares $ 21.03
Awarded (in shares) | shares 29,867
Awarded, weighted average award date fair value (in dollars per share) | $ / shares $ 29.30
Shares vested (in shares) | shares (16,050)
Shares vested (in dollars per share) | $ / shares $ 23.55
Outstanding (in shares) | shares 71,212
Outstanding, weighted average award date fair value (in dollars per share) | $ / shares $ 23.48
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 6 - Inventories - Summary of Inventory (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Raw materials $ 10,226 $ 6,898
Work in process 4,105 1,207
Finished goods 5,571 4,758
Total inventory $ 19,902 $ 12,863
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 7 - Preferred Stock (Details Textual)
Mar. 18, 2009
$ / shares
shares
Sep. 30, 2018
$ / shares
Dec. 31, 2017
$ / shares
Preferred Stock Dividends Number of Preferred Share Purchase Rights Distributed for each Share of Common Stock Outstanding 1    
Common Stock, Par or Stated Value Per Share $ 0.01 $ 0.01 $ 0.01
Preferred Stock, Par or Stated Value Per Share   $ 0.01 $ 0.01
Preferred Share Purchase Right [Member]      
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares 0.001    
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 25    
Series A Junior Participating Preferred Stock [Member]      
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares 1    
Preferred Stock, Par or Stated Value Per Share $ 0.01    
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 8 - Income Per Share (Details Textual) - shares
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 0 0 10,344 27,336
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 8 - Income Per Share - Weighted Average Number of Shares Used to Compute Net EPS (Details) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Basic (in shares) 7,366 7,264 7,338 7,240
Weighted average common equivalent shares due to stock options and RSUs (in shares) 69 89 68 86
Diluted weighted average common shares outstanding (in shares) 7,435 7,353 7,406 7,326
XML 55 R45.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 9 - Segment Reporting (Details Textual)
9 Months Ended
Sep. 30, 2018
Number of Reportable Segments 1
Number of Operating Segments 1
XML 56 R46.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 9 - Segment Reporting - Net Sales by Market (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Net sales $ 47,808 $ 35,684 $ 139,758 $ 110,623
Percentage of concentration risk 100.00% 100.00% 100.00% 100.00%
Medical [Member]        
Net sales $ 27,629 $ 16,811 $ 80,994 $ 53,001
Percentage of concentration risk 57.80% 47.10% 58.00% 47.90%
Consumer [Member]        
Net sales $ 6,588 $ 5,714 $ 17,825 $ 14,928
Percentage of concentration risk 13.80% 16.00% 12.80% 13.50%
Automotive [Member]        
Net sales $ 4,572 $ 5,174 $ 14,993 $ 18,018
Percentage of concentration risk 9.60% 14.50% 10.70% 16.30%
Aerospace & Defense [Member]        
Net sales $ 3,814 $ 2,657 $ 9,381 $ 8,255
Percentage of concentration risk 8.00% 7.40% 6.70% 7.50%
Electronics [Member]        
Net sales $ 2,800 $ 2,821 $ 8,641 $ 8,898
Percentage of concentration risk 5.90% 7.90% 6.20% 8.00%
Industrial [Member]        
Net sales $ 2,405 $ 2,507 $ 7,924 $ 7,523
Percentage of concentration risk 5.00% 7.00% 5.70% 6.80%
XML 57 R47.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 10 - Other Intangible Assets (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life     19 years 219 days  
Amortization of Intangible Assets, Total $ 314,000 $ 79,000 $ 838,000 $ 239,000
XML 58 R48.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 10 - Other Intangible Assets - Definite-lived Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Gross amount $ 23,384  
Accumulated amortization (838)  
Intangible assets, net 22,546
Trade Name and Brand [Member]    
Gross amount 367  
Accumulated amortization (24)  
Intangible assets, net 343  
Noncompete Agreements [Member]    
Gross amount 462  
Accumulated amortization (62)  
Intangible assets, net 400  
Customer Lists [Member]    
Gross amount 22,555  
Accumulated amortization (752)  
Intangible assets, net $ 21,803  
XML 59 R49.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 10 - Other Intangible Assets - Future Amortization of Intangible Assets (Details)
$ in Thousands
Sep. 30, 2018
USD ($)
2018 $ 314
2019 1,257
2020 1,257
2021 1,257
2022 1,257
Thereafter 17,204
Total $ 22,546
XML 60 R50.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 11 - Income Taxes (Details Textual) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2018
Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Percent, Total 26.50% 33.60% 25.40% 33.30%    
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount $ 36,000   $ 220,000      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent           35.00%
Scenario, Forecast [Member]            
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent         21.00%  
XML 61 R51.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 12 - Indebtedness (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Feb. 01, 2018
Dec. 02, 2013
Sep. 30, 2018
Sep. 30, 2018
Interest Rate Swap [Member]        
Derivative, Notional Amount $ 20,000,000   $ 17,857,142 $ 17,857,142
Derivative, Term of Contract 5 years      
Derivative, Fixed Interest Rate     2.70% 2.70%
Interest Rate Swap [Member] | Other Nonoperating Income (Expense) [Member]        
Derivative, Gain on Derivative     $ 85,000 $ 137,000
Interest Rate Swap [Member] | Other Assets [Member]        
Derivative Asset, Total     $ 137,000 $ 137,000
Revolving Credit Facility [Member]        
Line of Credit Facility, Maximum Borrowing Capacity   $ 40,000,000    
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]        
Debt Instrument, Basis Spread on Variable Rate   1.00%    
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]        
Debt Instrument, Basis Spread on Variable Rate   1.50%    
Revolving Credit Facility [Member] | Prime Rate [Member] | Maximum [Member]        
Debt Instrument, Basis Spread on Variable Rate   0.25%    
Amended and Restated Credit Agreement [Member] | Subsidiary Guarantors [Member]        
Debt Instrument, Face Amount $ 70,000,000      
Debt Instrument, Interest Rate, Effective Percentage     3.26% 3.26%
Amended and Restated Credit Agreement [Member] | Subsidiary Guarantors [Member] | Unsecured Term Loan [Member]        
Debt Instrument, Face Amount 20,000,000      
Amended and Restated Credit Agreement [Member] | Subsidiary Guarantors [Member] | Unsecured Revolving Credit Facility [Member]        
Line of Credit Facility, Maximum Borrowing Capacity 50,000,000      
Amended and Restated Credit Agreement [Member] | Subsidiary Guarantors [Member] | Standby Letters of Credit [Member]        
Line of Credit Facility, Maximum Borrowing Capacity $ 600,000      
Amended and Restated Credit Agreement [Member] | Prime Rate [Member] | Maximum [Member] | Subsidiary Guarantors [Member]        
Debt Instrument, Basis Spread on Variable Rate 0.25%      
Unsecured Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Subsidiary Guarantors [Member]        
Debt Instrument, Basis Spread on Variable Rate 1.00%      
Unsecured Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Subsidiary Guarantors [Member]        
Debt Instrument, Basis Spread on Variable Rate 1.50%      
XML 62 R52.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 12 - Indebtedness - Long-term Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Long-term debt $ 33,857  
Current portion (2,857)
Long-term debt, excluding current portion 31,000
Term Loan [Member]    
Long-term debt 17,857  
Revolving Credit Facility [Member]    
Long-term debt $ 16,000  
XML 63 R53.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 13 - Acquisition (Details Textual)
3 Months Ended 9 Months Ended
Feb. 01, 2018
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Business Combination, Acquisition Related Costs   $ 1,089,000
Revenue from Contract with Customer, Including Assessed Tax   47,808,000 35,684,000 139,758,000 110,623,000
Net Income (Loss) Attributable to Parent, Total   $ 4,134,000 $ 1,695,000 9,901,000 $ 6,495,000
Dielectrics [Member]          
Lessee, Operating Lease, Term of Contract 5 years        
Number of Lease Term Options 2        
Dielectrics [Member]          
Business Acquisition, Percentage of Voting Interests Acquired 100.00%        
Payments to Acquire Businesses, Gross $ 80,000,000        
Business Combination, Consideration Transferred, Working Capital Adjustment $ 250,000        
Business Combination, Acquisition Related Costs       1,100,000  
Revenue from Contract with Customer, Including Assessed Tax       25,100,000  
Net Income (Loss) Attributable to Parent, Total       $ 4,400,000  
XML 64 R54.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 13 - Acquisition - Assets Acquires and Liabilities Assumed (Details) - USD ($)
Feb. 01, 2018
Sep. 30, 2018
Dec. 31, 2017
Goodwill   $ 51,838,000 $ 7,322,000
Dielectrics [Member]      
Cash paid at closing $ 80,000,000    
Working capital adjustment 250,000    
Cash from Dielectrics (3,272,000)    
Total consideration 76,978,000    
Accounts receivable 4,384,000    
Inventory 4,418,000    
Other current assets 122,000    
Property, plant and equipment 4,600,000    
Goodwill 44,516,000    
Total identifiable assets 81,424,000    
Accounts payable (1,325,000)    
Accrued expenses (946,000)    
Deferred revenue (2,175,000)    
Net assets acquired 76,978,000    
Dielectrics [Member] | Customer Lists [Member]      
Intangible assets 22,555,000    
Dielectrics [Member] | Noncompete Agreements [Member]      
Intangible assets 462,000    
Dielectrics [Member] | Trade Name and Brand [Member]      
Intangible assets $ 367,000    
XML 65 R55.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note 13 - Acquisition - Pro Forma Information (Unaudited) (Details) - Dielectrics [Member] - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Sales $ 47,808 $ 46,141 $ 142,813 $ 143,199
Operating Income 5,885 4,606 13,970 14,194
Net Income $ 4,134 $ 2,834 $ 9,700 $ 8,788
Basic (in dollars per share) $ 0.56 $ 0.39 $ 1.32 $ 1.21
Diluted (in dollars per share) $ 0.56 $ 0.39 $ 1.31 $ 1.20
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