QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended |
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 |
THE L. S. STARRETT COMPANY | ||
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class B Common - $1.00 Per Share Par Value | Not applicable | Not applicable |
Common Shares outstanding as of | October 24, 2023 | ||||||||||
Class A Common Shares | |||||||||||
Class B Common Shares |
Page No. | |||||||||||
Condensed Consolidated Balance Sheets – September 30, 2023 (unaudited) and June 30, 2023 | |||||||||||
Condensed Consolidated Statements of Operations (unaudited)– three months ended September 30, 2023 and September 30, 2022 | |||||||||||
Condensed Consolidated Statements of Comprehensive (Loss) (unaudited) – three months ended September 30, 2023 and September 30, 2022 | |||||||||||
Condensed Consolidated Statements of Stockholders' Equity (unaudited) – three months ended September 30, 2023 and September 30, 2022 | |||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) - three months ended September 30, 2023 and September 30, 2022 | |||||||||||
9-18 | |||||||||||
9/30/2023 | 6/30/2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable (less allowance for credit losses of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Right of use assets | |||||||||||
Deferred tax assets, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current maturities of debt | $ | $ | |||||||||
Current lease liability | |||||||||||
Accounts payable | |||||||||||
Accrued expenses | |||||||||||
Accrued compensation | |||||||||||
Total current liabilities | |||||||||||
Other tax obligations | |||||||||||
Long-term lease liability | |||||||||||
Long-term debt, net of current portion | |||||||||||
Postretirement benefit and pension obligations | |||||||||||
Total liabilities | |||||||||||
Contingencies (Note 12) | |||||||||||
Stockholders' equity: | |||||||||||
Class A Common stock $ | |||||||||||
Class B Common stock $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
Three Months Ended | |||||||||||
9/30/2023 | 9/30/2022 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
% of Net sales | % | % | |||||||||
Restructuring charges | |||||||||||
Selling, general and administrative expenses | |||||||||||
Operating income | |||||||||||
Other (expense) | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Basic income per share | $ | $ | |||||||||
Diluted income per share | $ | $ | |||||||||
Weighted average outstanding shares used in per share calculations: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended | |||||||||||
9/30/2023 | 9/30/2022 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive (loss): | |||||||||||
Currency translation (loss), net of tax | ( | ( | |||||||||
Pension and postretirement plans, net of tax | ( | ( | |||||||||
Other comprehensive (loss) | ( | ( | |||||||||
Total comprehensive (loss) | $ | ( | $ | ( |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | ( | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | |||||||||||||||||||||||||||||||||||
$ | ( |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Repurchase of shares | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Conversion | ( | — | — | — | |||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | ( | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | |||||||||||||||||||||||||||||||||||
$ | ( |
Three Months Ended | |||||||||||
9/30/2023 | 9/30/2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Non-cash operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Stock-based compensation | |||||||||||
Net long-term tax obligations | |||||||||||
Deferred taxes | ( | ||||||||||
Postretirement benefit and pension obligations | |||||||||||
Working capital changes: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ( | |||||||||
Other current assets | ( | ( | |||||||||
Other current liabilities | |||||||||||
Prepaid pension expense | ( | ( | |||||||||
Other | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Software development | ( | ( | |||||||||
Net cash (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from line of credit borrowings | |||||||||||
Term debt repayments | ( | ( | |||||||||
Shares repurchased | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash | ( | ||||||||||
Net increase (decrease) in cash | ( | ||||||||||
Cash, beginning of period | |||||||||||
Cash, end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid, net | |||||||||||
Property and equipment acquired through term-loan borrowings |
NAI | INI | GTM | Unallocated | Total | |||||||||||||
Three Months Ended September 30, 2023 | |||||||||||||||||
Sales1 | $ | $ | $ | $ | $ | ||||||||||||
Operating Income (Loss) | $ | ( | $ | $ | $ | ( | $ | ||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||
Sales2 | $ | $ | $ | $ | $ | ||||||||||||
Operating Income (Loss) | $ | $ | $ | $ | ( | $ |
Three Months Ended | ||||||||||||||
9/30/2023 | 9/30/2022 | |||||||||||||
North America | ||||||||||||||
United States | $ | $ | ||||||||||||
Canada & Mexico | ||||||||||||||
International | ||||||||||||||
Brazil | ||||||||||||||
United Kingdom | ||||||||||||||
China | ||||||||||||||
Australia & New Zealand | ||||||||||||||
Total Sales | $ | $ |
Right-of-Use Assets | Operating Lease Obligations | Remaining Cash Commitment | |||||||||||||||
Operating leases | $ | $ | $ |
9/30/2023 | 6/30/2023 | ||||||||||
Raw material and supplies | $ | $ | |||||||||
Goods in process and finished parts | |||||||||||
Finished goods | |||||||||||
LIFO Reserve | ( | ( | |||||||||
Total Inventory | $ | $ |
9/30/2023 | 6/30/2023 | ||||||||||
Trademarks and trade names | $ | $ | |||||||||
Customer relationships | |||||||||||
Software development | |||||||||||
Other intangible assets | |||||||||||
Gross intangible assets | |||||||||||
Accumulated amortization and impairment | ( | ( | |||||||||
Net intangible assets | $ | $ |
09/30/2023 | 06/30/2023 | ||||||||||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ | $ | |||||||||
Income taxes | |||||||||||
Professional fees | |||||||||||
Other | |||||||||||
Current portion pension cost | |||||||||||
Taxes other than income tax | |||||||||||
Workers compensation and employee deposits | |||||||||||
Freight | |||||||||||
Total | $ | $ |
Three Months Ended | ||||||||||||||
9/30/2023 | 9/30/2022 | |||||||||||||
Interest cost | ||||||||||||||
Expected return on plan assets | ( | ( | ||||||||||||
Amortization of net loss | ||||||||||||||
$ | $ |
Three Months Ended | ||||||||||||||
9/30/2023 | 9/30/2022 | |||||||||||||
Service cost | $ | $ | ||||||||||||
Interest cost | ||||||||||||||
Amortization of prior service credit | ( | ( | ||||||||||||
Amortization of net loss | ||||||||||||||
$ | ( | $ | ( |
9/30/2023 | 6/30/2023 | ||||||||||
Short-term and current maturities | |||||||||||
Loan and Security Agreement (Term Loan) | $ | $ | |||||||||
Brazil Loans | |||||||||||
Subtotal short-term and current maturities | |||||||||||
Long-term debt (net of current portion) | |||||||||||
Loan and Security Agreement (Term Loan) | |||||||||||
Loan and Security Agreement (Line of Credit) | |||||||||||
Brazil Loans | |||||||||||
Debt Reacquisition Cost | ( | ( | |||||||||
Subtotal long-term debt | |||||||||||
Total Debt | $ | $ |
Lending Institution | Interest Rate | Beginning Date | Ending Date | Outstanding Balance | |||||||||||||||||||
Itau | % | October 2021 | September 2024 | $ | |||||||||||||||||||
Itau | % | February 2022 | February 2024 | ||||||||||||||||||||
Brasil | % | August 2022 | July 2025 | ||||||||||||||||||||
Brasil | % | September 2022 | August 2024 | ||||||||||||||||||||
$ |
Three Months Ended | |||||||||||||||||
(Amounts in thousands) | 9/30/2023 | 09/30/2022 | $ Change favorable (unfavorable) | % Change | |||||||||||||
Net sales | $ | 60,636 | $ | 60,461 | $ | 149 | 0.2 | % | |||||||||
Gross profit | 19,536 | 20,200 | (664) | (3.3) | % | ||||||||||||
% of net sales | 32.2 | % | 33.4 | % | |||||||||||||
Restructuring charges | — | 190 | 190 | (100.0) | % | ||||||||||||
Selling, general and administrative expenses | 17,077 | 16,294 | (783) | (4.8) | % | ||||||||||||
% of net sales | 28.2 | % | 27.3 | % | |||||||||||||
Operating income | 2,459 | 3,716 | (1,249) | (33.6) | % | ||||||||||||
Other (expense), net | (365) | (676) | 311 | (46.0) | % | ||||||||||||
Income before income taxes | 2,094 | 3,040 | (946) | (31.1) | % | ||||||||||||
Income tax expense | 174 | 984 | 810 | 82.3 | % | ||||||||||||
Net income | $ | 1,920 | $ | 2,056 | $ | (136) | (6.6) | % |
GAAP to Non-GAAP reconciliation: | ||||||||||||||
Three Months Ended | ||||||||||||||
(Amounts in thousands) | 09/30/23 | 09/30/22 | $ Change favorable (unfavorable) | % Change | ||||||||||
Operating income as reported | $ | 2,459 | $ | 3,716 | $ | (1,257) | (33.8) | % | ||||||
Add back restructuring charges | — | 190 | (190) | (100.0) | % | |||||||||
Non- GAAP adjusted operating income | $ | 2,459 | $ | 3,906 | $ | (1,918) | (49.1) | % |
Three Months Ended September 2023 | Three Months Ended September 2022 | ||||||||||||||||||||||||||||||||||
(Amounts in thousands) | NAI | INI | GTM | Corporate | Total | NAI | INI | GTM | Corporate | Total | |||||||||||||||||||||||||
Net sales | $ | 19,470 | $ | 25,374 | $ | 15,792 | $ | — | $ | 60,636 | $ | 22,371 | $ | 23,299 | $ | 14,791 | — | $ | 60,461 | ||||||||||||||||
Gross profit | 3,928 | 9,776 | 5,832 | — | 19,536 | 5,415 | 8,952 | 5,833 | — | 20,200 | |||||||||||||||||||||||||
% of net sales | 20.2 | % | 38.5 | % | 36.9 | % | 32.2 | % | 24.2 | % | 38.4 | % | 39.4 | % | — | 33.4 | % | ||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | — | — | 190 | 190 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 4,611 | 7,016 | 3,461 | 1,989 | 17,077 | 4,715 | 6,072 | 3,555 | 1,952 | 16,294 | |||||||||||||||||||||||||
% of net sales | 23.7 | % | 27.7 | % | 21.9 | % | 28.2 | % | 21.1 | % | 26.1 | % | 24.0 | % | — | 26.9 | % | ||||||||||||||||||
Operating (loss) income | $ | (683) | $ | 2,760 | $ | 2,371 | $ | (1,989) | $ | 2,459 | $ | 700 | $ | 2,880 | $ | 2,278 | $ | (2,142) | $ | 3,716 | |||||||||||||||
% of net sales | (3.5) | % | 10.9 | % | 15.0 | % | 4.1 | % | 3.1 | % | 12.4 | % | 15.4 | % | — | 6.1 | % |
Three months ended | ||||||||||||||
(Amounts in Thousands) | 9/30/2023 | 9/30/2022 | $ Change | % Change | ||||||||||
Net Sales, as reported | $ | 60,636 | $ | 60,461 | $ | 175 | 0.3 | % | ||||||
Currency Neutralizing Adjustment* | (1,574) | — | (1,574) | (2.6) | % | |||||||||
Q1 FY24 Currency Neutral Net Sales | 59,062 | 60,461 | (1,399) | (2.3) | % | |||||||||
NAI Net Sales, as reported | 20,432 | 22,371 | (1,939) | (8.7) | % | |||||||||
Currency Neutralizing Adjustment* | (93) | — | (93) | (0.4) | % | |||||||||
Q1FY24 Currency Neutral NAI Net Sales | 20,339 | 22,371 | (2,032) | (9.1) | % | |||||||||
INl Net Sales, as reported | 25,655 | 23,299 | 2,356 | 10.1 | % | |||||||||
Currency Neutralizing Adjustment* | (1,449) | — | (1,449) | (6.2) | % | |||||||||
Q1FY24 Currency Neutral INI Net Sales | 24,206 | 23,299 | 907 | 3.9 | % | |||||||||
GTM Net Sales, as reported | 14,549 | 14,791 | (242) | (2) | % | |||||||||
Currency Neutralizing Adjustment* | (32) | — | (32) | 100 | % | |||||||||
Q1FY24 Currency Neutral GTM Net Sales | $ | 14,517 | $ | 14,791 | $ | (274) | (2) | % | ||||||
*"Currency Neutralizing Adjustment" = Change when converting Q1FY24 sales in non USD functional currencies at the same exchange rates used in the comparison period. |
Cash flows (in thousands) | Three Months Ended | ||||||||||
9/30/2023 | 9/30/2022 | ||||||||||
Cash provided by operating activities | $ | 4,818 | $ | 628 | |||||||
Cash (used in) investing activities | (3,512) | (1,162) | |||||||||
Cash provided by (used in) financing activities | 930 | (2,094) | |||||||||
Effect of exchange rate changes on cash | (161) | 7 | |||||||||
Net increase (decrease) in cash | $ | 2,075 | $ | (2,621) |
3a | Restated Articles of Organization as amended, filed with Form 10-K for the year ended June 30, 2012 filed September 12, 2012, is hereby incorporated by reference. | ||||
3b | Amended and Restated Bylaws, filed with Form 10-Q for the quarter ended December 31, 2012 filed February 7, 2013, is hereby incorporated by reference | ||||
4a | Rights Agreement dated as of November 2, 2010 between the Company and Mellon Investor Services LLC, as Rights Agent (together with exhibits, including the Form of Rights Certificate, and the Summary of Rights to Purchase Shares of Class A Common Stock), filed with Form 10-Q for the quarter ended September 25, 2010, filed November 4, 2010 is hereby incorporated by reference. | ||||
4b | Amendment No. 1 to Rights Agreement dated as of February 5, 2013 by and between the Company and Computershare Shareowner Services LLC, filed with Form 10-Q for the quarter ended December 31, 2012, filed February 7, 2013 is hereby incorporated by reference. | ||||
31.1* | |||||
31.2 * | |||||
32.1+ | |||||
32.2+ | |||||
101 | The following materials from The L. S. Starrett Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (I) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statement of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
THE L. S. STARRETT COMPANY (Registrant) | |||||||||||
Date | November 10, 2023 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett - President and CEO (Principal Executive Officer) | |||||||||||
Date | November 10, 2023 | /S/ John C. Tripp | |||||||||
John C. Tripp - CFO and Treasurer (Principal Accounting Officer) |
November 10, 2023 | /S/ | Douglas A. Starrett | ||||||
Douglas A. Starrett | ||||||||
Chief Executive Officer |
November 10, 2023 | /S/ | John C. Tripp | ||||||
John C. Tripp | ||||||||
Chief Financial Officer |
Date | November 10, 2023 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett | |||||||||||
Chief Executive Officer | |||||||||||
Date | November 10, 2023 | /S/ John C. Tripp | |||||||||
John C. Tripp | |||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Allowance for doubtful accounts | $ 508 | $ 449 |
Class A | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares, issued (in shares) | 8,340,540 | 8,265,033 |
Common stock, shares, outstanding (in shares) | 6,932,646 | 6,853,673 |
Class B | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares, issued (in shares) | 851,907 | 875,192 |
Common stock, shares, outstanding (in shares) | 551,039 | 576,396 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||
Net sales | $ 60,636 | $ 60,461 |
Cost of goods sold | 41,100 | 40,261 |
Gross profit | $ 19,536 | $ 20,200 |
% of Net sales | 32.20% | 33.40% |
Restructuring charges | $ 0 | $ 190 |
Selling, general and administrative expenses | 17,077 | 16,294 |
Operating income | 2,459 | 3,716 |
Other (expense) | (365) | (676) |
Income before income taxes | 2,094 | 3,040 |
Income tax expense | 174 | 984 |
Net income | $ 1,920 | $ 2,056 |
Basic income per share (in dollars per share) | $ 0.26 | $ 0.28 |
Diluted income per share (in dollars per share) | $ 0.25 | $ 0.27 |
Weighted average outstanding shares used in per share calculations: | ||
Basic (in shares) | 7,437 | 7,304 |
Diluted (in shares) | 7,608 | 7,505 |
Condensed Consolidated Statements of Comprehensive (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,920 | $ 2,056 |
Other comprehensive (loss): | ||
Currency translation (loss), net of tax | (2,405) | (2,806) |
Pension and postretirement plans, net of tax | (34) | (25) |
Other comprehensive (loss) | (2,439) | (2,831) |
Total comprehensive (loss) | $ (519) | $ (775) |
Basis of Presentation and Summary of Significant Account Policies |
3 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Account Policies | Basis of Presentation and Summary of Significant Accounting Policies The unaudited Condensed Consolidated Financial Statements as of and for the three months ended September 30, 2023 have been prepared by The L.S. Starrett Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These unaudited Condensed Consolidated Financial Statements, which, in the opinion of management, reflect all adjustments (including normal recurring adjustments) necessary for a fair presentation, should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The balance sheet as of June 30, 2023 has been derived from the audited Consolidated Financial Statements as of and for the year ended June 30, 2023. Operating results are not necessarily indicative of the results that may be expected for any future interim period or for the entire fiscal year. The Company’s “fiscal year” begins July 1st and ends June 30th. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at invoiced amount and do not bear interest. Allowance for credit losses is the Company's estimate of current expected credit losses on its existing accounts receivable and determined based on historical customer assessments, current financial conditions and reasonable and supportable forecasts. Account balances are charged off against the allowance when the Company determines the receivable will not be recovered. Fair Value Measurements Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 10 and 11 to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for financial assets and liabilities held at carrying amount on the unaudited Condensed Consolidated Balance Sheet. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect amounts reported in the consolidated financial statements and accompanying notes. Note 2 within the notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K, as amended, for the year ended June 30, 2023 describes the significant accounting policies and methods used in the preparation of the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
|
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The segment information and the accounting policies of each segment are the same as those described in the notes to the condensed consolidated financial statements entitled “Financial Information by Segment” included in our Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The chief operating decision maker, who is the Company’s President and CEO, allocates resources and assesses performance based on three segments: North America Industrial "NAI", International Industrial "INI" and Global Test and Measurement "GTM". Segment income is measured for internal reporting purposes by excluding corporate expenses, which are included in the unallocated column in the table below. Other income and expense, including interest income and expense, and income taxes are excluded entirely from the table below. There were no significant changes in the segment operations or in the segment assets from the Annual Report on Form 10-K, as amended for the year ended June 30, 2023. Financial results for each reportable segment are as follows (in thousands):
1.Excludes $334 of NAI segment intercompany sales to the INI segment, $78 of GTM segment intercompany sales to the INI segment, $3,475 of INI segment intercompany sales to NAI and $202 of GTM intercompany sales to NAI. 2.Excludes $652 of NAI segment intercompany sales to the INI segment, $275 of GTM segment intercompany sales to the INI segment, $4,626 of INI segment intercompany sales to NAI and $409 of GTM intercompany sales to NAI.
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Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customer | Revenue from Contracts with Customers Under ASC Topic 606, the Company is required to present a refund liability and a return asset within the unaudited Condensed Consolidated Balance Sheet. As of September 30, 2023, and June 30, 2023, the balance of the return asset was $0.2 million and $0.1 million, respectively, and the balance of the refund liability was $0.3 million and $0.2 million, respectively. They are presented within prepaid expenses and other current assets and accrued expenses, respectively, on the unaudited Condensed Consolidated Balance Sheets. The Company, in general, warrants its products against certain defects in material and workmanship when used as designed, for a period of up to one year. The Company does not sell extended warranties. Contract Balances Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date on contracts with customers. Contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been met, and therefore, revenue has not been recognized. The Company had no contract asset balances, but had contract liability balances of $0.3 million and $0.3 million at September 30, 2023 and June 30, 2023, respectively, located in Accounts Payable in the unaudited Condensed Consolidated Balance Sheets. Disaggregation of Revenue The Company operates in three reportable segments: NAI, INI and GTM. ASC Topic 606 requires further disaggregation of an entity’s revenue. In the following table, the Company's net sales by shipping origin are disaggregated accordingly for the three months ended September 30, 2023 and 2022 (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Operating lease expense amounted to $0.5 million and $0.5 million for three months period ended September 30, 2023 and 2022. As of September 30, 2023, the Company’s right-of-use "ROU" assets, lease obligations and remaining cash commitment on these leases were as follows (in thousands):
The Company has other operating lease agreements with commitments of less than one year or that are not significant. The Company elected the practical expedient option and as such, these lease payments are expensed as incurred. The Company’s weighted average discount rate and remaining term on lease liabilities is approximately 9.0% and 3.1 years. As of September 30, 2023, the Company’s financing leases are not material. The foreign exchange impact affecting the operating leases are, also, not material. There are no significant changes to fiscal year minimum operating lease commitments as reported in Note 9 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K, as amended, for the period ended June 30, 2023.
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Stock-based Compensation |
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Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Compensation expense related to all stock-based plans for the three-month period ended September 30, 2023 was $0.1 million recorded and adjusted down for cancelled performance shares and for the three-month period ended 2022 as $0.1 million. |
Inventories |
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Inventories | Inventories Inventories consist of the following (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Amortizable intangible assets consist of the following (in thousands):
The estimated useful lives of the intangible assets subject to amortization range between 5 years for software development and 20 years for trademark and trade name assets. The goodwill gross balance at September 30, 2023 was $4.7 million and accumulated impairment of $3.7 million. There was no change to goodwill in the three months ended September 30, 2023 and the balance is a net $1.0 million.
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Accrued Expenses |
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Accrued Expenses | Accrued Expenses (in thousands):
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Pension and Post-retirement Benefits |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Post-retirement Benefits | Pension and Post-retirement Benefits The Company has two defined benefit pension plans, one for U.S. employees which was frozen for new participants in 2016 and another for U.K. employees frozen for new participants in 2009. The Company has a postretirement medical insurance benefit plan for U.S. employees which remains open. The Company also has defined contribution plans. Net periodic benefit costs for the Company's defined benefit pension plans are located in Other (expense) in the unaudited Condensed Consolidated Statements of Operations except for service cost. Service cost are in cost of sales and selling, general and administrative expenses allocated on headcount. Net periodic benefit costs consist of the following (in thousands):
Net periodic benefit costs for the Company's Postretirement Medical Plan consists of the following (in thousands):
For the three months ended September 30, 2023, the Company contributed $0.6 million in the U.S. and $0.2 million in the UK pension plans. Based upon the actuarial valuations performed on the Company’s defined benefit plans the contribution for fiscal 2024 for the U.S. plans requires a contribution of $3.0 million and the U.K. plan requires one of $0.9 million. However, as a result of the American Rescue Plan Act of 2021, the minimum required company contribution for the U.S. Plan in fiscal 2024 can be lower. The Company believes that government regulation is only a small part of deciding the pension funding, and as a result, may contribute more than the federal requirement. The Company contributed $2.2 million in total during fiscal year 2023, with $1.4 million in the U.S. and $0.8 million in the U.K. The Company’s pension plans use fair value as the market-related value of plan assets and recognize net actuarial gains or losses in excess of ten percent (10%) of the greater of the market-related value of plan assets or of the plans’ projected benefit obligation in net periodic (benefit) cost as of the plan measurement date. Net actuarial gains or losses that are less than 10% of the thresholds noted above are accounted for as part of accumulated other comprehensive loss.
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Debt |
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Debt | Debt Debt is comprised of the following (in thousands):
On April 29, 2022, the Company and certain of the Company’s domestic subsidiaries entered into a Loan and Security agreement (the "Loan and Security Agreement") with HSBC Bank USA (the "Lender"). The Company incurred debt re-acquisition cost of $0.5 million which are recorded net of debt and amortized over five years. These credit facilities are comprised of a $30 million revolving Loan and Security Agreement Line of Credit ("Line of Credit") with a $10 million uncommitted accordion provision, a Loan and Security Agreement Term Loan ("the Term Loan") with original principal of $12.1 million and a $7 million Capital Expenditure draw down credit facility (collectively, the "Facilities"). The Facilities are secured by a valid first-priority security interest on substantially all existing and future assets of the Company and its domestic subsidiaries. The interest rate on the Facilities is based on a grid which uses the percentage of the remaining availability of the revolving credit line to determine the floating margin to be added to the one month or three months Secured Overnight Financing Rate, ("SOFR)". The Facilities mature on April 29, 2027. Availability under the revolving line of credit is secured by and subject to a borrowing base comprised of eligible inventory and accounts receivable. The percentage of receivables included in the borrowing base is 90% for domestic investment grade and foreign insured accounts, 85% for domestic accounts that are neither investment grade nor insured, and 75% of foreign uninsured accounts. The percentage of inventory included in the borrowing base is the lower of 65% of the value of eligible inventory at cost or 85% of the net orderly liquidation value of eligible inventory at cost. Receivables and inventory are reported monthly to HSBC and subject to an annual field exam and inventory appraisal by an independent auditor commissioned by the Bank. The Company believes that the agreement provides an initial borrowing base sufficient for current domestic working capital needs and flexibility to accommodate potential growth-related working capital needs. Availability under the Line of Credit remains subject to a borrowing base comprised of accounts receivable, inventory, and real estate. The Company believes that the borrowing base will consistently produce availability under the Line of Credit of $30.0 million. A 0.25% commitment fee is charged on the unused portion of the Line of Credit. Availability under the Term Loan facility was comprised of 70% of the fair market value of the Borrowers’ eligible real estate, which included facilities located in Westlake, Ohio, and Waite Park, Minnesota and totaled $4.6 million; and 85% of the net orderly liquidation value of the Borrowers’ machinery and equipment, capped at $7.5 million. The real estate portion of the Term facility is subject to a 12.5 year straight line amortization paid quarterly, and the machinery and equipment portion of the facility is subject to a 6.67 year straight line amortization, also paid quarterly. The Term Loan is subject to equal quarterly installments of $373,650, payable on the last day of each fiscal quarter. The capital expenditure loan facility is available for the purchase of new machinery and equipment at 80% of the net invoice value of new machinery and equipment purchases, with a draw period of eighteen months past the closing date, with any amount outstanding under the facility subject to a 3.75% amortization rate per quarter. The Facilities contain financial covenants with respect to a minimum fixed charge coverage ratio of 1.00, measured on a trailing twelve-month basis, for both the U.S. borrowing companies tested quarterly and the Condensed Consolidated L.S. Starrett Company tested semi-annually. The Loan and Security agreement also contains the customary affirmative and negative covenants, including limitations on indebtedness, liens, acquisitions, asset dispositions, fundamental corporate changes, excess pension contributions, and certain customary events of default. Upon the occurrence or continuation of an event of default, the Lender may terminate all commitments and facilities, and require the immediate payment of the entire unpaid principal balances, accrued interest, and all other obligations. In Brazil affecting the need for borrowing, the Company historically had a build-up of ICMS (which translates to "Tax on Commerce and Services"). The Company has changed the methodology of charging and re-claiming ICMS on imports and domestic sales so that this credit is subsequently relieved and does not increase at that rate again. The ICMS balance as of June 30, 2023 was $4.9 million and $4.8 million as of September 30, 2023. The balance is located on the unaudited Condensed Consolidated Balance Sheets in prepaid expenses and other current assets. The Company’s Brazilian subsidiary incurs short-term loans with local banks in order to support the Company’s strategic initiatives. The loans are backed by the entity’s US dollar denominated export receivables. The Company’s Brazilian subsidiary has the following loans of September 30, 2023 (in thousands):
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Income Taxes |
3 Months Ended |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax expense for the three month period ended September 30, 2023 was $0.2 million on profit before tax of $2.1 million (an effective tax rate of 8%). During the three months ended September 30, 2023 the Company recorded a discrete tax benefit of $0.7 million primarily related to IRS Notice 2023-55 released in July 2023, which grants taxpayers temporary relief from applying these final foreign tax credit regulations for tax years beginning on or after December 28, 2021 and ending on or before December 31, 2023. Excluding this discrete tax benefit recorded, the effective tax rate for the three months ended September 30, 2023 was higher than the U.S. statutory tax rate of 21% primarily due to the GILTI provisions and the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34%, foreign losses not benefitted, and non-creditable foreign withholding tax. Tax expense for the three month period ended September 30, 2022 was $1.0 million on profit before tax of $3.0 million (an effective tax rate of 32%). The effective tax rate for the three month period ended September 30, 2022 was higher than the U.S. statutory tax rate of 21% primarily due to the GILTI provisions, and the jurisdictional mix of earnings, particularly Brazil with a statutory rate of 34%, offset by discrete tax benefits recognized from excess stock compensation deductions, tax credits and permanent deductions generated from research expenses. The Company has considered the positive and negative evidence to determine the need for a valuation allowance offsetting the deferred tax assets in the U.S. and has concluded that a partial valuation allowance is required against foreign tax credit carryforwards and certain state net operating loss carryforwards and a full valuation allowance against deferred tax assets generated in China and Australia at September 30, 2023 and June 30, 2023. The Company had long term tax obligations related primarily to transfer pricing adjustments at September 30, 2023 and June 30, 2023.
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Contingencies |
3 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | ContingenciesThe Company is involved in certain legal matters, which arise, in the normal course of business. The Company does not believe it is reasonably possible that these matters will have a material impact on the Company’s results of operations or cash flows. |
Basis of Presentation and Summary of Significant Account Policies (Policies) |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The unaudited Condensed Consolidated Financial Statements as of and for the three months ended September 30, 2023 have been prepared by The L.S. Starrett Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These unaudited Condensed Consolidated Financial Statements, which, in the opinion of management, reflect all adjustments (including normal recurring adjustments) necessary for a fair presentation, should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, for the year ended June 30, 2023. The balance sheet as of June 30, 2023 has been derived from the audited Consolidated Financial Statements as of and for the year ended June 30, 2023. Operating results are not necessarily indicative of the results that may be expected for any future interim period or for the entire fiscal year. The Company’s “fiscal year” begins July 1st and ends June 30th. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at invoiced amount and do not bear interest. Allowance for credit losses is the Company's estimate of current expected credit losses on its existing accounts receivable and determined based on historical customer assessments, current financial conditions and reasonable and supportable forecasts. Account balances are charged off against the allowance when the Company determines the receivable will not be recovered. Fair Value Measurements Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 10 and 11 to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for financial assets and liabilities held at carrying amount on the unaudited Condensed Consolidated Balance Sheet. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect amounts reported in the consolidated financial statements and accompanying notes. Note 2 within the notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K, as amended, for the year ended June 30, 2023 describes the significant accounting policies and methods used in the preparation of the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of financial results for reportable segments | Financial results for each reportable segment are as follows (in thousands):
1.Excludes $334 of NAI segment intercompany sales to the INI segment, $78 of GTM segment intercompany sales to the INI segment, $3,475 of INI segment intercompany sales to NAI and $202 of GTM intercompany sales to NAI. 2.Excludes $652 of NAI segment intercompany sales to the INI segment, $275 of GTM segment intercompany sales to the INI segment, $4,626 of INI segment intercompany sales to NAI and $409 of GTM intercompany sales to NAI.
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Revenue from Contracts with Customers (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | In the following table, the Company's net sales by shipping origin are disaggregated accordingly for the three months ended September 30, 2023 and 2022 (in thousands):
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of lease assets and liabilities | As of September 30, 2023, the Company’s right-of-use "ROU" assets, lease obligations and remaining cash commitment on these leases were as follows (in thousands):
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consist of the following (in thousands):
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable intangible assets | Amortizable intangible assets consist of the following (in thousands):
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Accrued Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses |
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Pension and Post-retirement Benefits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Net periodic benefit costs consist of the following (in thousands):
Net periodic benefit costs for the Company's Postretirement Medical Plan consists of the following (in thousands):
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt schedule | Debt is comprised of the following (in thousands):
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Schedule of short-term debt, Brazilian subsidiary | The Company’s Brazilian subsidiary has the following loans of September 30, 2023 (in thousands):
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Segment Information - Narrative (Details) |
3 Months Ended |
---|---|
Sep. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Revenue from Contracts with Customers - Narrative (Details) |
3 Months Ended | |
---|---|---|
Sep. 30, 2023
USD ($)
segment
|
Jun. 30, 2023
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Customer return asset | $ 200,000 | $ 100,000 |
Customer refund liability | $ 300,000 | 200,000 |
Standard product warranty period | 1 year | |
Contract asset | $ 0 | |
Contract liability | $ 300,000 | $ 300,000 |
Number of reportable segments | segment | 3 |
Revenue from Contracts with Customers - Disaggregation of revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 60,636 | $ 60,461 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 34,535 | 36,484 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 26,101 | 23,977 |
United States | North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 32,777 | 34,272 |
Canada & Mexico | North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,758 | 2,212 |
Brazil | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19,430 | 17,248 |
United Kingdom | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3,535 | 3,201 |
China | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,456 | 1,686 |
Australia & New Zealand | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,680 | $ 1,842 |
Leases (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 500,000 | $ 500,000 |
Weighted average discount rate | 9.00% | |
Weighted average remaining lease term | 3 years 1 month 6 days | |
Financing leases | $ 0 |
Leases - Summary of lease assets and liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Leases [Abstract] | ||
Right of use assets | $ 4,630 | $ 4,931 |
Operating Lease Obligations | 4,773 | |
Remaining Cash Commitment | $ 5,486 |
Stock-based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
The 2012 Stock Incentive Plan | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense related to stock based plans | $ 0.1 | $ 0.1 |
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 36,975 | $ 36,402 |
Goods in process and finished parts | 20,153 | 20,978 |
Finished goods | 34,305 | 34,414 |
Total before LIFO reserve | 91,433 | 91,794 |
LIFO Reserve | (26,307) | (26,380) |
Total | $ 65,126 | $ 65,414 |
Inventories (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2023 |
|
Inventory [Line Items] | |||
Inventories | $ 65,126 | $ 65,414 | |
LIFO reserve | 26,307 | 26,380 | |
Inventory difference using FIFO basis | 37,800 | 38,100 | |
LIFO inventory amount | 11,500 | $ 11,700 | |
Cost of Sales | |||
Inventory [Line Items] | |||
Decrease in COGS | $ 100 | $ 300 |
Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 12,230 | $ 13,954 |
Accumulated amortization and impairment | (7,456) | (9,282) |
Net intangible assets | 4,774 | 4,672 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 2,070 | 2,070 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 630 | 630 |
Software development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 9,429 | 11,149 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 101 | $ 105 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill gross | $ 4,700 | |
Goodwill impairment loss | 3,700 | |
Goodwill | $ 1,015 | $ 1,015 |
Computer software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 5 years | |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 20 years |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ 2,893 | $ 2,590 |
Income taxes | 192 | 509 |
Professional fees | 2,412 | 2,237 |
Other | 1,319 | 1,499 |
Current portion pension cost | 2,215 | 2,216 |
Taxes other than income tax | 1,950 | 1,888 |
Workers compensation and employee deposits | 377 | 491 |
Freight | 288 | 149 |
Total | $ 11,646 | $ 11,579 |
Pension and Post-retirement Benefits - Net Periodic Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 1,552 | $ 1,482 |
Expected return on plan assets | (1,098) | (1,032) |
Amortization of net loss | 10 | 10 |
Total | 464 | 460 |
Post Retirement Medical Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 5 | 6 |
Interest cost | 17 | 18 |
Amortization of prior service credit | (369) | (369) |
Amortization of net loss | 31 | 44 |
Total | $ (316) | $ (301) |
Pension and Post-retirement Benefits (Details) - Pension Plan $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023
USD ($)
plan
|
Jun. 30, 2023
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Number of defined benefit pension plans | plan | 2 | |
Contributions by employer | $ 2.2 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Number of defined benefit pension plans | plan | 1 | |
Contributions by employer | $ 0.6 | $ 1.4 |
Expected future contributions for current fiscal year | 3.0 | |
Foreign Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | 0.2 | $ 0.8 |
Expected future contributions for current fiscal year | $ 0.9 |
Debt - Debt schedule (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Brazil Loans | $ 3,247 | |
Subtotal short-term and current maturities | 5,270 | $ 4,961 |
Long-term debt (net of current portion) | 7,944 | 5,273 |
Long-term debt | 13,214 | 10,234 |
Loan and Security Agreement (Term Loan) | ||
Debt Instrument [Line Items] | ||
Long-term debt (net of current portion) | 3,284 | 1,957 |
Loan and Security Agreement (Line of Credit) | ||
Debt Instrument [Line Items] | ||
Long-term debt (net of current portion) | 4,897 | 2,897 |
Brazil Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt (net of current portion) | 145 | 827 |
Debt Reacquisition Cost | (382) | (408) |
Loan and Security Agreement (Term Loan) | ||
Debt Instrument [Line Items] | ||
Loan and Security Agreement, current maturities | 2,168 | 1,495 |
Brazil Loans | ||
Debt Instrument [Line Items] | ||
Brazil Loans | $ 3,102 | $ 3,466 |
Debt - Short-term Debt (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Statement [Line Items] | |
Outstanding Balance | $ 3,247 |
Notes Payable to Banks | Itau Bank | 4.52% Short-Term Loan | |
Statement [Line Items] | |
Interest rate | 4.52% |
Outstanding Balance | $ 2,286 |
Notes Payable to Banks | Itau Bank | 4.98% Short Term Loan | |
Statement [Line Items] | |
Interest rate | 4.98% |
Outstanding Balance | $ 609 |
Notes Payable to Banks | Brasil Bank | 4.95% Short-Term Loan | |
Statement [Line Items] | |
Interest rate | 4.95% |
Outstanding Balance | $ 289 |
Notes Payable to Banks | Brasil Bank | 3.80% Short Term Loan | |
Statement [Line Items] | |
Interest rate | 3.80% |
Outstanding Balance | $ 63 |
Income Taxes (Details ) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 174 | $ 984 |
Profit before tax | $ 2,094 | $ 3,040 |
Effective income tax rate percentage | 8.00% | 32.00% |
Valuation allowance of the effective tax rate | $ 700 |
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