|
Form
|
8-K
|
|
|
|
|
Minnesota
|
000-02382
|
41-0908057
|
(STATE OR OTHER JURISDICTION OF INCORPORATION)
|
(COMMISSION FILE NUMBER)
|
(I.R.S. EMPLOYER IDENTIFICATION NO.)
|
|
|
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, $0.25 par value
|
MTSC
|
The Nasdaq Stock Market LLC
|
Emerging growth company
|
☐
|
Item 1.01
|
Entry into a Material Definitive Agreement
|
|
|
Total
Leverage
Ratio
|
|
Commitment
Fee Rate
|
|
Eurocurrency
Spread for
Revolving Loans
|
|
ABR Spread
for Revolving Loans
|
|
Performance and Commercial L/C Rate
|
||||
Category 1:
|
|
< 2.50 to 1.00
|
|
0.20
|
%
|
|
2.00
|
%
|
|
1.00
|
%
|
|
1.00
|
%
|
Category 2:
|
|
> 2.50 to 1.00 but < 3.00 to 1.00
|
|
0.25
|
%
|
|
2.25
|
%
|
|
1.25
|
%
|
|
1.125
|
%
|
Category 3:
|
|
3.00 to 1.00 but < 3.50 to 1.00
|
|
0.30
|
%
|
|
2.50
|
%
|
|
1.50
|
%
|
|
1.25
|
%
|
Category 4:
|
|
3.50 to 1.00 but < 4.25 to 1.00
|
|
0.35
|
%
|
|
2.75
|
%
|
|
1.75
|
%
|
|
1.375
|
%
|
Category 5:
|
|
4.25 to 1.00
|
|
0.45
|
%
|
|
3.25
|
%
|
|
2.25
|
%
|
|
1.50
|
%
|
Item 2.02
|
Results of Operations and Financial Condition
|
Item 2.03
|
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
|
Item 9.01
|
Financial Statements and Exhibits
|
(d)
|
|
Exhibits
|
10.1
|
|
99.1
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
|
|
|
MTS SYSTEMS CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
August 3, 2020
|
By:
|
/s/ BRIAN T. ROSS
|
|
|
|
Brian T. Ross
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Total Leverage Ratio
|
Commitment Fee Rate
|
Eurocurrency
Spread for
Revolving
Loans
|
ABR
Spread for
Revolving
Loans
|
Performance and
Commercial L/C
Rate
|
Category 1:
|
< 2.50 to 1.00
|
0.20%
|
2.00%
|
1.00%
|
1.00%
|
Category 2:
|
> 2.50 to 1.00 but
< 3.00 to 1.00
|
0.25%
|
2.25%
|
1.25%
|
1.125%
|
Category 3:
|
3.00 to 1.00 but
< 3.50 to 1.00
|
0.30%
|
2.50%
|
1.50%
|
1.25%
|
Category 4:
|
3.50 to 1.00 but
< 4.25 to 1.00
|
0.35%
|
2.75%
|
1.75%
|
1.375%
|
Category 5:
|
4.25 to 1.00
|
0.45%
|
3.25%
|
2.25%
|
1.50%
|
(i)
|
insert the following new paragraph (c) immediately after paragraph (b) thereof:
|
(ii)
|
replace the phrase “the matters specified in paragraphs (a) and (b) of this Section” appearing therein with the phrase “the matters specified in paragraphs (a), (b) and, if applicable, (c) of this Section”.
|
Day or Period
|
Ratio
|
September 30, 2020 through March 31, 2021
|
6.00:1.00
|
June 30, 2021
|
5.75:1.00
|
September 30, 2021 through December 31, 2021
|
5.50:1.00
|
March 31, 2022 through June 30, 2022
|
4.75:1.00
|
September 30, 2022
|
4.25:1.00
|
December 31, 2022 and thereafter
|
3.75:1.00
|
“Day or Period
|
Ratio
|
||
Amendment No. 4 Effective Date through March 31, 2021
|
3.00:1.00
|
||
June 30, 2021 through September 30, 2021
|
3.25:1.00
|
||
December 31, 2021 and thereafter
|
3.50:1.00”
|
By:
|
/s/ BRIAN ROSS
|
By:
|
/s/ KRYS SZREMSKI
|
By:
|
/s/ CHAD KARDASH
|
By:
|
/s/ SHARLYN REKENTHALER
|
By:
|
/s/ TYRONE PARKER
|
By:
|
/s/ SHAUN KLEINMAN
|
By:
|
/s/ DAVID HORE
|
|
|
|
|
FOR IMMEDIATE RELEASE
August 3, 2020
|
Ø
|
Positive operating cash flow of $16.0 million
|
Ø
|
Backlog of $451.4 million, an increase of 1.8% over prior year
|
Ø
|
GAAP diluted earnings per share of $0.23, including $0.08 of discrete tax benefits
|
Ø
|
Adjusted diluted earnings per share of $0.44, including $0.26 of amortization expense
|
Ø
|
Subsequent to quarter end, amended revolving credit facility to enhance operating and financial flexibility
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in thousands, except per share data - unaudited)
|
June 27,
2020 |
|
June 29,
2019 |
|
June 27,
2020 |
|
June 29,
2019 |
||||||||
Revenue
|
$
|
196,225
|
|
|
$
|
232,209
|
|
|
$
|
613,531
|
|
|
$
|
668,436
|
|
Revenue % increase (decrease)
|
(15.5
|
)%
|
|
19.3
|
%
|
|
(8.2
|
)%
|
|
15.2
|
%
|
||||
Gross margin
|
33.4
|
%
|
|
36.6
|
%
|
|
34.8
|
%
|
|
37.5
|
%
|
||||
Operating margin
|
6.4
|
%
|
|
9.9
|
%
|
|
5.8
|
%
|
|
9.7
|
%
|
||||
Earnings before taxes
|
$
|
3,351
|
|
|
$
|
16,190
|
|
|
$
|
8,737
|
|
|
$
|
44,463
|
|
Net income
|
4,389
|
|
|
13,585
|
|
|
8,624
|
|
|
38,246
|
|
||||
Diluted earnings per share
|
0.23
|
|
|
0.70
|
|
|
0.45
|
|
|
1.97
|
|
||||
Adjusted diluted earnings per share1
|
0.44
|
|
|
0.71
|
|
|
1.08
|
|
|
2.07
|
|
||||
Adjusted EBITDA1
|
28,800
|
|
|
35,357
|
|
|
89,954
|
|
|
103,013
|
|
||||
Cash and cash equivalents, end of period
|
65,073
|
|
|
75,735
|
|
|
|
|
|
||||||
Backlog, end of period
|
451,435
|
|
|
443,271
|
|
|
|
|
|
||||||
Total debt, end of period
|
595,096
|
|
|
462,516
|
|
|
|
|
|
1
|
Refer to the "Non-GAAP Financial Measures" section below for discussion of the calculation of these non-GAAP financial measures.
|
MTS SYSTEMS CORPORATION
|
|||||||||||||||
Consolidated Statements of Income
|
|||||||||||||||
(unaudited - in thousands, except per share data)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 27,
2020 |
|
June 29,
2019 |
|
June 27,
2020 |
|
June 29,
2019 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
175,223
|
|
|
$
|
205,528
|
|
|
$
|
537,304
|
|
|
$
|
587,297
|
|
Service
|
21,002
|
|
|
26,681
|
|
|
76,227
|
|
|
81,139
|
|
||||
Total revenue
|
196,225
|
|
|
232,209
|
|
|
613,531
|
|
|
668,436
|
|
||||
Cost of sales
|
|
|
|
|
|
|
|
||||||||
Product
|
116,491
|
|
|
130,514
|
|
|
349,336
|
|
|
368,260
|
|
||||
Service
|
14,239
|
|
|
16,592
|
|
|
50,850
|
|
|
49,418
|
|
||||
Total cost of sales
|
130,730
|
|
|
147,106
|
|
|
400,186
|
|
|
417,678
|
|
||||
Gross profit
|
65,495
|
|
|
85,103
|
|
|
213,345
|
|
|
250,758
|
|
||||
Gross margin
|
33.4
|
%
|
|
36.6
|
%
|
|
34.8
|
%
|
|
37.5
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
26,857
|
|
|
33,321
|
|
|
89,707
|
|
|
98,805
|
|
||||
General and administrative
|
19,692
|
|
|
20,621
|
|
|
67,382
|
|
|
63,804
|
|
||||
Research and development
|
6,303
|
|
|
8,160
|
|
|
20,485
|
|
|
23,008
|
|
||||
Total operating expenses
|
52,852
|
|
|
62,102
|
|
|
177,574
|
|
|
185,617
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
12,643
|
|
|
23,001
|
|
|
35,771
|
|
|
65,141
|
|
||||
Operating margin
|
6.4
|
%
|
|
9.9
|
%
|
|
5.8
|
%
|
|
9.7
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
(8,846
|
)
|
|
(6,687
|
)
|
|
(25,975
|
)
|
|
(20,873
|
)
|
||||
Other income (expense), net
|
(446
|
)
|
|
(124
|
)
|
|
(1,059
|
)
|
|
195
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
3,351
|
|
|
16,190
|
|
|
8,737
|
|
|
44,463
|
|
||||
Income tax provision (benefit)
|
(1,038
|
)
|
|
2,605
|
|
|
113
|
|
|
6,217
|
|
||||
Net income
|
$
|
4,389
|
|
|
$
|
13,585
|
|
|
$
|
8,624
|
|
|
$
|
38,246
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
$
|
0.23
|
|
|
$
|
0.70
|
|
|
$
|
0.45
|
|
|
$
|
1.99
|
|
Weighted average common shares outstanding
|
19,229
|
|
|
19,297
|
|
|
19,189
|
|
|
19,255
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
$
|
0.23
|
|
|
$
|
0.70
|
|
|
$
|
0.45
|
|
|
$
|
1.97
|
|
Weighted average common shares outstanding
|
19,315
|
|
|
19,520
|
|
|
19,349
|
|
|
19,436
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
$
|
—
|
|
|
$
|
0.30
|
|
|
$
|
0.60
|
|
|
$
|
0.90
|
|
MTS SYSTEMS CORPORATION
|
|||||||
Condensed Consolidated Balance Sheets
|
|||||||
(unaudited - in thousands)
|
|||||||
|
|
|
|
||||
|
June 27,
2020 |
|
September 28,
2019 |
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
65,073
|
|
|
$
|
57,937
|
|
Accounts receivable, net
|
118,686
|
|
|
121,260
|
|
||
Unbilled accounts receivable, net
|
91,787
|
|
|
80,331
|
|
||
Inventories, net
|
177,210
|
|
|
167,199
|
|
||
Prepaid expenses and other current assets
|
30,363
|
|
|
23,761
|
|
||
Total current assets
|
483,119
|
|
|
450,488
|
|
||
|
|
|
|
||||
Property and equipment, net
|
100,160
|
|
|
101,083
|
|
||
Goodwill
|
465,978
|
|
|
429,039
|
|
||
Intangible assets, net
|
342,901
|
|
|
306,585
|
|
||
Other long-term assets
|
30,962
|
|
|
10,782
|
|
||
Total assets
|
$
|
1,423,120
|
|
|
$
|
1,297,977
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
27,000
|
|
|
$
|
—
|
|
Current maturities of long-term debt, net
|
2,830
|
|
|
27,969
|
|
||
Accounts payable
|
51,639
|
|
|
46,849
|
|
||
Advance payments from customers
|
64,980
|
|
|
70,520
|
|
||
Other accrued liabilities
|
95,935
|
|
|
106,238
|
|
||
Total current liabilities
|
242,384
|
|
|
251,576
|
|
||
|
|
|
|
||||
Long-term debt, less current maturities, net
|
565,266
|
|
|
484,648
|
|
||
Other long-term liabilities
|
126,614
|
|
|
77,694
|
|
||
Total liabilities
|
934,264
|
|
|
813,918
|
|
||
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Common stock, $0.25 par; 64,000 shares authorized:
|
|
|
|
||||
19,220 and 19,124 shares issued and outstanding as
|
|
|
|
||||
of June 27, 2020 and September 28, 2019, respectively
|
4,805
|
|
|
4,781
|
|
||
Additional paid-in capital
|
187,128
|
|
|
182,422
|
|
||
Retained earnings
|
312,444
|
|
|
315,329
|
|
||
Accumulated other comprehensive income (loss)
|
(15,521
|
)
|
|
(18,473
|
)
|
||
Total shareholders' equity
|
488,856
|
|
|
484,059
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,423,120
|
|
|
$
|
1,297,977
|
|
MTS SYSTEMS CORPORATION
|
|||||||||||||||
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||
(unaudited - in thousands)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 27,
2020 |
|
June 29,
2019 |
|
June 27,
2020 |
|
June 29,
2019 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
4,389
|
|
|
$
|
13,585
|
|
|
$
|
8,624
|
|
|
$
|
38,246
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
119
|
|
|
2,609
|
|
|
5,214
|
|
|
7,298
|
|
||||
Fair value adjustment to acquired inventory
|
—
|
|
|
157
|
|
|
1,140
|
|
|
1,141
|
|
||||
Depreciation
|
5,218
|
|
|
5,236
|
|
|
17,287
|
|
|
15,485
|
|
||||
Amortization
|
6,288
|
|
|
4,449
|
|
|
17,343
|
|
|
12,668
|
|
||||
Accretion of contingent consideration
|
439
|
|
|
—
|
|
|
895
|
|
|
—
|
|
||||
Contingent consideration fair value adjustment
|
1,301
|
|
|
—
|
|
|
1,301
|
|
|
—
|
|
||||
(Gain) loss on sale or disposal of property and equipment
|
1,277
|
|
|
42
|
|
|
2,327
|
|
|
552
|
|
||||
Amortization of debt issuance costs
|
776
|
|
|
708
|
|
|
2,220
|
|
|
2,807
|
|
||||
Deferred income taxes
|
825
|
|
|
(187
|
)
|
|
1,718
|
|
|
(1,430
|
)
|
||||
Other
|
366
|
|
|
370
|
|
|
128
|
|
|
1,457
|
|
||||
Changes in operating assets and liabilities
|
(4,999
|
)
|
|
(7,668
|
)
|
|
(44,777
|
)
|
|
(28,254
|
)
|
||||
Net Cash Provided by (Used in) Operating Activities
|
15,999
|
|
|
19,301
|
|
|
13,420
|
|
|
49,970
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment
|
(4,863
|
)
|
|
(8,028
|
)
|
|
(21,144
|
)
|
|
(17,377
|
)
|
||||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Purchases of business, net of acquired cash
|
(1,164
|
)
|
|
(1,700
|
)
|
|
(49,268
|
)
|
|
(83,526
|
)
|
||||
Other
|
87
|
|
|
—
|
|
|
87
|
|
|
(285
|
)
|
||||
Net Cash Provided by (Used in) Investing Activities
|
(5,940
|
)
|
|
(9,728
|
)
|
|
(70,325
|
)
|
|
(101,178
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
—
|
|
|
58,576
|
|
|
80,391
|
|
||||
(Payments on) proceeds from financing arrangements, net
|
(6,615
|
)
|
|
(2,438
|
)
|
|
22,168
|
|
|
(9,221
|
)
|
||||
Cash dividends
|
(5,719
|
)
|
|
(5,375
|
)
|
|
(17,205
|
)
|
|
(16,099
|
)
|
||||
Proceeds from exercise of stock options and employee stock purchase plan
|
(1
|
)
|
|
996
|
|
|
630
|
|
|
1,697
|
|
||||
Payments to purchase and retire common stock
|
(303
|
)
|
|
(986
|
)
|
|
(1,176
|
)
|
|
(1,384
|
)
|
||||
Net Cash Provided by (Used in) Financing Activities
|
(12,638
|
)
|
|
(7,803
|
)
|
|
62,993
|
|
|
55,384
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
1,070
|
|
|
(157
|
)
|
|
1,048
|
|
|
(245
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) in cash and cash equivalents during the period
|
(1,509
|
)
|
|
1,613
|
|
|
7,136
|
|
|
3,931
|
|
||||
Cash and cash equivalents balance, beginning of period
|
66,582
|
|
|
74,122
|
|
|
57,937
|
|
|
71,804
|
|
||||
Cash and cash equivalents balance, end of period
|
$
|
65,073
|
|
|
$
|
75,735
|
|
|
$
|
65,073
|
|
|
$
|
75,735
|
|
Exhibit A
|
|||||||||||||||
MTS SYSTEMS CORPORATION
|
|||||||||||||||
Segment Financial Information
|
|||||||||||||||
(unaudited - in thousands)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 27,
2020 |
|
June 29,
2019 |
|
June 27,
2020 |
|
June 29,
2019 |
||||||||
Test & Simulation Segment
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
116,404
|
|
|
$
|
148,328
|
|
|
$
|
362,631
|
|
|
$
|
424,920
|
|
Cost of sales
|
87,629
|
|
|
104,053
|
|
|
263,777
|
|
|
293,810
|
|
||||
Gross profit
|
28,775
|
|
|
44,275
|
|
|
98,854
|
|
|
131,110
|
|
||||
Gross margin
|
24.7
|
%
|
|
29.8
|
%
|
|
27.3
|
%
|
|
30.9
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
29,067
|
|
|
32,851
|
|
|
92,955
|
|
|
99,671
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
(292
|
)
|
|
$
|
11,424
|
|
|
$
|
5,899
|
|
|
$
|
31,439
|
|
|
|
|
|
|
|
|
|
||||||||
Sensors Segment
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
80,222
|
|
|
$
|
84,231
|
|
|
$
|
251,955
|
|
|
$
|
244,556
|
|
Cost of sales
|
43,502
|
|
|
43,424
|
|
|
137,463
|
|
|
124,916
|
|
||||
Gross profit
|
36,720
|
|
|
40,807
|
|
|
114,492
|
|
|
119,640
|
|
||||
Gross margin
|
45.8
|
%
|
|
48.4
|
%
|
|
45.4
|
%
|
|
48.9
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
23,785
|
|
|
29,251
|
|
|
84,619
|
|
|
85,946
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
$
|
12,935
|
|
|
$
|
11,556
|
|
|
$
|
29,873
|
|
|
$
|
33,694
|
|
|
|
|
|
|
|
|
|
||||||||
Intersegment Eliminations
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
(401
|
)
|
|
$
|
(350
|
)
|
|
$
|
(1,055
|
)
|
|
$
|
(1,040
|
)
|
Cost of sales
|
(401
|
)
|
|
(371
|
)
|
|
(1,054
|
)
|
|
(1,048
|
)
|
||||
Gross profit
|
—
|
|
|
21
|
|
|
(1
|
)
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
||||||||
Total Company
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
196,225
|
|
|
$
|
232,209
|
|
|
$
|
613,531
|
|
|
$
|
668,436
|
|
Cost of sales
|
130,730
|
|
|
147,106
|
|
|
400,186
|
|
|
417,678
|
|
||||
Gross profit
|
65,495
|
|
|
85,103
|
|
|
213,345
|
|
|
250,758
|
|
||||
Gross margin
|
33.4
|
%
|
|
36.6
|
%
|
|
34.8
|
%
|
|
37.5
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
52,852
|
|
|
62,102
|
|
|
177,574
|
|
|
185,617
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
$
|
12,643
|
|
|
$
|
23,001
|
|
|
$
|
35,771
|
|
|
$
|
65,141
|
|
Exhibit B
|
|||||||||||||||||||
MTS SYSTEMS CORPORATION
|
|||||||||||||||||||
Reconciliation of Adjusted Diluted Earnings Per Share
|
|||||||||||||||||||
(unaudited - in thousands, except per share data)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
||||||||||||||||||
|
June 27, 2020
|
|
June 29, 2019
|
||||||||||||||||
|
Pre-Tax
|
Tax
|
Net
|
|
Pre-Tax
|
Tax
|
Net
|
||||||||||||
Net income
|
$
|
3,351
|
|
$
|
(1,038
|
)
|
$
|
4,389
|
|
|
$
|
16,190
|
|
$
|
2,605
|
|
$
|
13,585
|
|
Restructuring expenses 1
|
2,745
|
|
615
|
|
2,130
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Acquisition-related expenses 1
|
1,243
|
|
268
|
|
975
|
|
|
98
|
|
21
|
|
77
|
|
||||||
Acquisition inventory fair value adjustment 1
|
—
|
|
—
|
|
—
|
|
|
157
|
|
24
|
|
133
|
|
||||||
Contingent consideration fair value adjustment 1
|
1,301
|
|
286
|
|
1,015
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Adjusted net income 2
|
$
|
8,640
|
|
$
|
131
|
|
$
|
8,509
|
|
|
$
|
16,445
|
|
$
|
2,650
|
|
$
|
13,795
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average diluted common shares outstanding
|
|
|
19,315
|
|
|
|
|
19,520
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share
|
$
|
0.17
|
|
$
|
(0.06
|
)
|
$
|
0.23
|
|
|
$
|
0.84
|
|
$
|
0.14
|
|
$
|
0.70
|
|
Impact of restructuring expenses
|
0.14
|
|
0.03
|
|
0.11
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Impact of acquisition-related expenses
|
0.07
|
|
0.02
|
|
0.05
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Impact of acquisition inventory fair value adjustment
|
—
|
|
—
|
|
—
|
|
|
0.01
|
|
—
|
|
0.01
|
|
||||||
Impact of contingent consideration fair value adjustment
|
0.07
|
|
0.02
|
|
0.05
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Adjusted diluted earnings per share2
|
$
|
0.45
|
|
$
|
0.01
|
|
$
|
0.44
|
|
|
$
|
0.85
|
|
$
|
0.14
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
1 In determining the tax impact of restructuring expenses, acquisition-related expenses, acquisition inventory fair value adjustment and contingent consideration fair value adjustment, we applied the statutory rate in effect for each jurisdiction where the expenses were incurred.
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
2 Denotes non-GAAP financial measure.
|
Exhibit C
|
|||||||||||||||||||
MTS SYSTEMS CORPORATION
|
|||||||||||||||||||
Reconciliation of Adjusted Diluted Earnings Per Share
|
|||||||||||||||||||
(unaudited - in thousands, except per share data)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Nine Months Ended
|
||||||||||||||||||
|
June 27, 2020
|
|
June 29, 2019
|
||||||||||||||||
|
Pre-Tax
|
Tax
|
Net
|
|
Pre-Tax
|
Tax
|
Net
|
||||||||||||
Net income
|
$
|
8,737
|
|
$
|
113
|
|
$
|
8,624
|
|
|
$
|
44,463
|
|
$
|
6,217
|
|
$
|
38,246
|
|
Restructuring expenses 1
|
8,883
|
|
2,403
|
|
6,480
|
|
|
130
|
|
33
|
|
97
|
|
||||||
Acquisition-related expenses 1
|
4,867
|
|
1,043
|
|
3,824
|
|
|
1,133
|
|
238
|
|
895
|
|
||||||
Acquisition inventory fair value adjustment 1
|
1,140
|
|
239
|
|
901
|
|
|
1,141
|
|
172
|
|
969
|
|
||||||
Contingent consideration fair value adjustment 1
|
1,301
|
|
286
|
|
1,015
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Adjusted net income 2
|
$
|
24,928
|
|
$
|
4,084
|
|
$
|
20,844
|
|
|
$
|
46,867
|
|
$
|
6,660
|
|
$
|
40,207
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average diluted common shares outstanding
|
|
|
19,349
|
|
|
|
|
19,436
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share
|
$
|
0.45
|
|
$
|
—
|
|
$
|
0.45
|
|
|
$
|
2.29
|
|
$
|
0.32
|
|
$
|
1.97
|
|
Impact of restructuring expenses
|
0.46
|
|
0.13
|
|
0.33
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Impact of acquisition-related expenses
|
0.25
|
|
0.05
|
|
0.20
|
|
|
0.06
|
|
0.01
|
|
0.05
|
|
||||||
Impact of acquisition inventory fair value adjustment
|
0.06
|
|
0.01
|
|
0.05
|
|
|
0.06
|
|
0.01
|
|
0.05
|
|
||||||
Impact of contingent consideration fair value adjustment
|
0.07
|
|
0.02
|
|
0.05
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Adjusted diluted earnings per share2
|
$
|
1.29
|
|
$
|
0.21
|
|
$
|
1.08
|
|
|
$
|
2.41
|
|
$
|
0.34
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
1 In determining the tax impact of restructuring expenses, acquisition-related expenses, acquisition inventory fair value adjustment and contingent consideration fair value adjustment, we applied the statutory rate in effect for each jurisdiction where the expenses were incurred.
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
2 Denotes non-GAAP financial measure.
|
Exhibit D
|
|||||||||||||||
MTS SYSTEMS CORPORATION
|
|||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA
|
|||||||||||||||
(unaudited - in thousands)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 27, 2020
|
|
June 29, 2019
|
|
June 27, 2020
|
|
June 29, 2019
|
||||||||
Net income
|
$
|
4,389
|
|
|
$
|
13,585
|
|
|
$
|
8,624
|
|
|
$
|
38,246
|
|
Net income margin
|
2.2
|
%
|
|
5.9
|
%
|
|
1.4
|
%
|
|
5.7
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax provision
|
(1,038
|
)
|
|
2,605
|
|
|
113
|
|
|
6,217
|
|
||||
Interest expense, net
|
8,846
|
|
|
6,687
|
|
|
25,975
|
|
|
20,873
|
|
||||
Depreciation
|
5,218
|
|
|
5,236
|
|
|
17,287
|
|
|
15,485
|
|
||||
Amortization
|
6,288
|
|
|
4,449
|
|
|
17,343
|
|
|
12,668
|
|
||||
EBITDA 1
|
23,703
|
|
|
32,562
|
|
|
69,342
|
|
|
93,489
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
119
|
|
|
2,609
|
|
|
5,214
|
|
|
7,298
|
|
||||
Restructuring expenses 2
|
2,932
|
|
|
—
|
|
|
9,070
|
|
|
130
|
|
||||
Acquisition-related expenses 2
|
745
|
|
|
29
|
|
|
3,887
|
|
|
955
|
|
||||
Acquisition inventory fair value adjustment
|
—
|
|
|
157
|
|
|
1,140
|
|
|
1,141
|
|
||||
Contingent consideration fair value adjustment
|
1,301
|
|
|
—
|
|
|
1,301
|
|
|
—
|
|
||||
Adjusted EBITDA 1
|
$
|
28,800
|
|
|
$
|
35,357
|
|
|
$
|
89,954
|
|
|
$
|
103,013
|
|
Adjusted EBITDA margin 1,3
|
14.7
|
%
|
|
15.2
|
%
|
|
14.7
|
%
|
|
15.4
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
1 Denotes non-GAAP financial measure.
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
||||||||
2 Restructuring and acquisition-related expenses were adjusted to exclude stock-based compensation that is otherwise included in the stock-based compensation line and interest expense that is otherwise included in the interest expense, net line.
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
3 Adjusted EBITDA was divided by revenue when calculating the Adjusted EBITDA margin.
|
Exhibit E
|
|||||||||||||||
MTS SYSTEMS CORPORATION
|
|||||||||||||||
Reconciliation of Free Cash Flow
|
|||||||||||||||
(unaudited - in thousands)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 27, 2020
|
|
June 29, 2019
|
|
June 27, 2020
|
|
June 29, 2019
|
||||||||
Net Cash Provided by (Used in) Operating Activities
|
$
|
15,999
|
|
|
$
|
19,301
|
|
|
$
|
13,420
|
|
|
$
|
49,970
|
|
Purchases of property and equipment
|
(4,863
|
)
|
|
(8,028
|
)
|
|
(21,144
|
)
|
|
(17,377
|
)
|
||||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Free cash flow1
|
$
|
11,136
|
|
|
$
|
11,273
|
|
|
$
|
(7,724
|
)
|
|
$
|
32,603
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
1 Denotes non-GAAP financial measure.
|
|
|
|
|
|
|
|