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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New York
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16-0470200
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Hardinge Drive
Elmira, NY
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14902
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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PAGE
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Consolidated Balance Sheets at September 30, 2016 and December 31, 2015 (Audited)
|
|
|
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Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015
|
|
|
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Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015
|
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Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015
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Certifications
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|
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September 30,
2016 |
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December 31,
2015 |
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
22,943
|
|
|
$
|
32,774
|
|
Restricted cash
|
3,423
|
|
|
2,192
|
|
||
Accounts receivable, net
|
47,205
|
|
|
56,945
|
|
||
Inventories, net
|
120,350
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|
|
110,232
|
|
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Other current assets
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11,189
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|
|
9,314
|
|
||
Total current assets
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205,110
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|
211,457
|
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||
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|
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|
||||
Property, plant and equipment, net
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59,664
|
|
|
62,025
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|
||
Goodwill
|
6,612
|
|
|
6,620
|
|
||
Other intangible assets, net
|
27,402
|
|
|
28,018
|
|
||
Other non-current assets
|
4,061
|
|
|
3,015
|
|
||
Total non-current assets
|
97,739
|
|
|
99,678
|
|
||
Total assets
|
$
|
302,849
|
|
|
$
|
311,135
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Accounts payable
|
$
|
24,278
|
|
|
$
|
24,696
|
|
Accrued expenses
|
25,592
|
|
|
27,964
|
|
||
Customer deposits
|
18,122
|
|
|
19,845
|
|
||
Accrued income taxes
|
1,780
|
|
|
1,919
|
|
||
Deferred income taxes
|
2,567
|
|
|
2,164
|
|
||
Current portion of long-term debt
|
4,777
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|
|
5,621
|
|
||
Total current liabilities
|
77,116
|
|
|
82,209
|
|
||
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|
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||||
Long-term debt
|
3,848
|
|
|
5,985
|
|
||
Pension and postretirement liabilities
|
54,102
|
|
|
57,322
|
|
||
Deferred income taxes
|
1,241
|
|
|
1,121
|
|
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Other liabilities
|
3,178
|
|
|
3,393
|
|
||
Total non-current liabilities
|
62,369
|
|
|
67,821
|
|
||
Commitments and contingencies (see Note 10)
|
|
|
|
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|
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Common stock ($0.01 par value, 20,000,000 authorized; 12,893,537 issued and outstanding as of September 30, 2016, and 12,856,716 issued and 12,838,227 outstanding as of December 31, 2015)
|
129
|
|
|
128
|
|
||
Additional paid-in capital
|
121,189
|
|
|
120,524
|
|
||
Retained earnings
|
86,112
|
|
|
89,368
|
|
||
Treasury shares (at cost, none as of September 30, 2016, and 18,489 as of
December 31, 2015) |
—
|
|
|
(202
|
)
|
||
Accumulated other comprehensive loss
|
(44,066
|
)
|
|
(48,713
|
)
|
||
Total shareholders’ equity
|
163,364
|
|
|
161,105
|
|
||
Total liabilities and shareholders’ equity
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$
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302,849
|
|
|
$
|
311,135
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
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(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Sales
|
$
|
67,211
|
|
|
$
|
76,805
|
|
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$
|
205,218
|
|
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$
|
228,289
|
|
Cost of sales
|
44,060
|
|
|
51,435
|
|
|
135,770
|
|
|
154,103
|
|
||||
Gross profit
|
23,151
|
|
|
25,370
|
|
|
69,448
|
|
|
74,186
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
19,992
|
|
|
19,925
|
|
|
60,221
|
|
|
60,596
|
|
||||
Research & development
|
3,296
|
|
|
3,611
|
|
|
9,953
|
|
|
10,715
|
|
||||
Restructuring
|
182
|
|
|
877
|
|
|
608
|
|
|
877
|
|
||||
Other expense (income), net
|
321
|
|
|
201
|
|
|
249
|
|
|
276
|
|
||||
(Loss) income from operations
|
(640
|
)
|
|
756
|
|
|
(1,583
|
)
|
|
1,722
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
142
|
|
|
161
|
|
|
427
|
|
|
472
|
|
||||
Interest income
|
(56
|
)
|
|
(40
|
)
|
|
(192
|
)
|
|
(80
|
)
|
||||
(Loss) income before income taxes
|
(726
|
)
|
|
635
|
|
|
(1,818
|
)
|
|
1,330
|
|
||||
Income tax expense
|
657
|
|
|
962
|
|
|
666
|
|
|
1,479
|
|
||||
Net loss
|
$
|
(1,383
|
)
|
|
$
|
(327
|
)
|
|
$
|
(2,484
|
)
|
|
$
|
(149
|
)
|
|
|
|
|
|
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||||||||
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Per share data:
|
|
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|
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|
|
|
||||
Basic loss per share:
|
$
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(0.11
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted loss per share:
|
$
|
(0.11
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share:
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Net loss
|
$
|
(1,383
|
)
|
|
$
|
(327
|
)
|
|
$
|
(2,484
|
)
|
|
$
|
(149
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(368
|
)
|
|
(7,169
|
)
|
|
531
|
|
|
(1,641
|
)
|
||||
Retirement plans related adjustments
|
3,031
|
|
|
1,748
|
|
|
4,333
|
|
|
1,736
|
|
||||
Unrealized gain (loss) on cash flow hedges
|
78
|
|
|
(751
|
)
|
|
210
|
|
|
(433
|
)
|
||||
Other comprehensive income (loss) before tax
|
2,741
|
|
|
(6,172
|
)
|
|
5,074
|
|
|
(338
|
)
|
||||
Income tax expense (benefit)
|
322
|
|
|
(506
|
)
|
|
427
|
|
|
324
|
|
||||
Other comprehensive income (loss), net of tax
|
2,419
|
|
|
(5,666
|
)
|
|
4,647
|
|
|
(662
|
)
|
||||
Total comprehensive income (loss)
|
$
|
1,036
|
|
|
$
|
(5,993
|
)
|
|
$
|
2,163
|
|
|
$
|
(811
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
|
(Unaudited)
|
||||||
Operating activities
|
|
|
|
|
|
||
Net loss
|
$
|
(2,484
|
)
|
|
$
|
(149
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
6,095
|
|
|
6,831
|
|
||
Debt issuance costs amortization
|
98
|
|
|
101
|
|
||
Deferred income taxes
|
(705
|
)
|
|
(284
|
)
|
||
Loss (gain) on sale of assets
|
23
|
|
|
(1
|
)
|
||
Unrealized foreign currency transaction loss (gain)
|
219
|
|
|
(4
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
9,761
|
|
|
6,015
|
|
||
Inventories
|
(9,458
|
)
|
|
(8,688
|
)
|
||
Other assets
|
(2,301
|
)
|
|
(1,432
|
)
|
||
Accounts payable
|
(586
|
)
|
|
990
|
|
||
Customer deposits
|
(1,604
|
)
|
|
3,494
|
|
||
Accrued expenses
|
(3,338
|
)
|
|
2,161
|
|
||
Accrued pension and postretirement liabilities
|
(65
|
)
|
|
(13
|
)
|
||
Net cash (used in) provided by operating activities
|
(4,345
|
)
|
|
9,021
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Capital expenditures
|
(1,543
|
)
|
|
(3,103
|
)
|
||
Proceeds from sales of assets
|
38
|
|
|
38
|
|
||
Net cash used in investing activities
|
(1,505
|
)
|
|
(3,065
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Proceeds from short-term notes payable to bank
|
35,974
|
|
|
24,937
|
|
||
Repayments of short-term notes payable to bank
|
(35,974
|
)
|
|
(24,937
|
)
|
||
Repayments of long-term debt
|
(3,186
|
)
|
|
(3,245
|
)
|
||
Dividends paid
|
(792
|
)
|
|
(781
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(201
|
)
|
||
Net cash used in financing activities
|
(3,978
|
)
|
|
(4,227
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
513
|
|
||
Net (decrease) increase in cash
|
(9,831
|
)
|
|
2,242
|
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
32,774
|
|
|
16,293
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
22,943
|
|
|
$
|
18,535
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|
Level of Fair Value Hierarchy
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
22,943
|
|
|
$
|
22,943
|
|
|
$
|
32,774
|
|
|
$
|
32,774
|
|
|
Level 1
|
Restricted cash
|
3,423
|
|
|
3,423
|
|
|
2,192
|
|
|
2,192
|
|
|
Level 1
|
||||
Foreign currency forward contracts
|
414
|
|
|
414
|
|
|
163
|
|
|
163
|
|
|
Level 2
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Variable interest rate debt
|
8,625
|
|
|
8,625
|
|
|
11,606
|
|
|
11,606
|
|
|
Level 2
|
||||
Foreign currency forward contracts
|
264
|
|
|
264
|
|
|
418
|
|
|
418
|
|
|
Level 2
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Raw materials and purchased components
|
$
|
35,104
|
|
|
$
|
34,438
|
|
Work-in-process
|
37,878
|
|
|
33,682
|
|
||
Finished products
|
47,368
|
|
|
42,112
|
|
||
Inventories, net
|
$
|
120,350
|
|
|
$
|
110,232
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Foreign currency forwards designated as hedges:
|
|
|
|
|
|
||
Other current assets
|
$
|
246
|
|
|
$
|
49
|
|
Accrued expenses
|
(179
|
)
|
|
(222
|
)
|
||
Foreign currency forwards not designated as hedges:
|
|
|
|
|
|
||
Other current assets
|
168
|
|
|
114
|
|
||
Accrued expenses
|
(85
|
)
|
|
(196
|
)
|
||
Foreign currency forwards, net
|
$
|
150
|
|
|
$
|
(255
|
)
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Land, buildings and improvements
|
$
|
83,821
|
|
|
$
|
82,201
|
|
Machinery, equipment and fixtures
|
78,951
|
|
|
79,176
|
|
||
Office furniture, equipment and vehicles
|
22,798
|
|
|
22,689
|
|
||
Construction in progress
|
126
|
|
|
238
|
|
||
|
185,696
|
|
|
184,304
|
|
||
Accumulated depreciation
|
(126,032
|
)
|
|
(122,279
|
)
|
||
Property, plant and equipment, net
|
$
|
59,664
|
|
|
$
|
62,025
|
|
|
MMS
|
|
ATA
|
|
Total
|
||||||
Goodwill
|
$
|
32,434
|
|
|
$
|
6,620
|
|
|
$
|
39,054
|
|
Accumulated impairment losses
|
(32,434
|
)
|
|
—
|
|
|
(32,434
|
)
|
|||
Balance at December 31, 2015
|
—
|
|
|
6,620
|
|
|
6,620
|
|
|||
|
|
|
|
|
|
||||||
Goodwill
|
32,434
|
|
|
6,620
|
|
|
39,054
|
|
|||
Currency translation adjustments
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||
Accumulated impairment losses
|
(32,434
|
)
|
|
—
|
|
|
(32,434
|
)
|
|||
Balance at September 30, 2016
|
$
|
—
|
|
|
$
|
6,612
|
|
|
$
|
6,612
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Gross amortizable intangible assets:
|
|
|
|
|
|
||
Technical know-how
|
$
|
12,962
|
|
|
$
|
12,956
|
|
Customer lists
|
8,997
|
|
|
9,011
|
|
||
Land rights
|
2,601
|
|
|
2,672
|
|
||
Patents, trade names, drawings, and other
|
4,353
|
|
|
4,393
|
|
||
Total gross amortizable intangible assets
|
28,913
|
|
|
29,032
|
|
||
|
|
|
|
||||
Accumulated amortization:
|
|
|
|
|
|
||
Technical know-how
|
(7,295
|
)
|
|
(6,833
|
)
|
||
Customer lists
|
(1,639
|
)
|
|
(1,315
|
)
|
||
Land rights
|
(303
|
)
|
|
(271
|
)
|
||
Patents, trade names, drawings, and other
|
(3,458
|
)
|
|
(3,406
|
)
|
||
Total accumulated amortization
|
(12,695
|
)
|
|
(11,825
|
)
|
||
Amortizable intangible assets, net
|
16,218
|
|
|
17,207
|
|
||
|
|
|
|
||||
Indefinite lived intangible assets:
|
|
|
|
|
|
||
Trade names
|
11,184
|
|
|
10,811
|
|
||
|
|
|
|
||||
Intangible assets other than goodwill, net
|
$
|
27,402
|
|
|
$
|
28,018
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance at the beginning of period
|
$
|
3,824
|
|
|
$
|
4,037
|
|
|
$
|
3,802
|
|
|
$
|
3,891
|
|
Warranties issued
|
568
|
|
|
682
|
|
|
1,649
|
|
|
2,081
|
|
||||
Warranty settlement costs
|
(533
|
)
|
|
(620
|
)
|
|
(1,680
|
)
|
|
(2,068
|
)
|
||||
Changes in accruals for pre-existing warranties
|
(141
|
)
|
|
(11
|
)
|
|
(77
|
)
|
|
64
|
|
||||
Currency translation adjustments
|
14
|
|
|
(109
|
)
|
|
38
|
|
|
11
|
|
||||
Balance at the end of period
|
$
|
3,732
|
|
|
$
|
3,979
|
|
|
$
|
3,732
|
|
|
$
|
3,979
|
|
|
Total Costs Expected to be Incurred
|
|
Costs Recognized for Three Months Ended September 30, 2016
|
Costs Recognized for the Nine Months Ended September 30, 2016
|
Cumulative Costs Recognized to Date
|
||||||||
MMS Segment:
|
|
|
|
|
|
||||||||
Employee termination costs
|
$
|
260
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
255
|
|
Other related costs
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||
Total MMS Segment
|
260
|
|
|
—
|
|
—
|
|
255
|
|
||||
ATA Segment:
|
|
|
|
|
|
||||||||
Employee termination costs
|
3,323
|
|
|
—
|
|
269
|
|
3,314
|
|
||||
Facility exit costs
|
137
|
|
|
68
|
|
114
|
|
114
|
|
||||
Other related costs
|
605
|
|
|
114
|
|
225
|
|
483
|
|
||||
Total ATA Segment
|
4,065
|
|
|
182
|
|
608
|
|
3,911
|
|
||||
Total:
|
|
|
|
|
|
||||||||
Employee termination costs
|
3,583
|
|
|
—
|
|
269
|
|
3,569
|
|
||||
Facility exit costs
|
137
|
|
|
68
|
|
114
|
|
114
|
|
||||
Other related costs
|
605
|
|
|
114
|
|
225
|
|
483
|
|
||||
Total Company
|
$
|
4,325
|
|
|
$
|
182
|
|
$
|
608
|
|
$
|
4,166
|
|
|
Segment
|
|
Total
|
||||||||
|
MMS
|
|
ATA
|
|
|||||||
Balance at December 31, 2015
|
$
|
167
|
|
|
$
|
1,242
|
|
|
$
|
1,409
|
|
Restructuring charges:
|
|
|
|
|
|
||||||
Employee termination costs
|
—
|
|
|
269
|
|
|
269
|
|
|||
Facility exit costs
|
—
|
|
|
114
|
|
|
114
|
|
|||
Other related costs
|
—
|
|
|
225
|
|
|
225
|
|
|||
Total restructuring charges for the period
|
—
|
|
|
608
|
|
|
608
|
|
|||
|
|
|
|
|
|
||||||
Cash expenditures
|
(14
|
)
|
|
(1,539
|
)
|
|
(1,553
|
)
|
|||
Foreign currency translation adjustment
|
—
|
|
|
40
|
|
|
40
|
|
|||
Balance at September 30, 2016
|
$
|
153
|
|
|
$
|
351
|
|
|
$
|
504
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
566
|
|
|
$
|
484
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
1,662
|
|
|
1,673
|
|
|
19
|
|
|
19
|
|
||||
Expected return on plan assets
|
(2,305
|
)
|
|
(2,395
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(64
|
)
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of transition asset
|
(78
|
)
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss (gain)
|
951
|
|
|
772
|
|
|
(14
|
)
|
|
(13
|
)
|
||||
Net periodic cost
|
$
|
1,497
|
|
|
$
|
436
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
1,695
|
|
|
$
|
1,475
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Interest cost
|
5,010
|
|
|
5,024
|
|
|
57
|
|
|
56
|
|
||||
Expected return on plan assets
|
(6,942
|
)
|
|
(7,208
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(191
|
)
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of transition asset
|
(234
|
)
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss (gain)
|
2,850
|
|
|
2,334
|
|
|
(42
|
)
|
|
(38
|
)
|
||||
Net periodic cost
|
$
|
2,953
|
|
|
$
|
1,323
|
|
|
$
|
24
|
|
|
$
|
27
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Restricted stock/unit awards (“RSA”)
|
$
|
67
|
|
|
$
|
63
|
|
|
$
|
190
|
|
|
$
|
264
|
|
Performance share incentives (“PSI”)
|
—
|
|
|
1
|
|
|
—
|
|
|
(61
|
)
|
||||
Total stock based compensation
|
$
|
67
|
|
|
$
|
64
|
|
|
$
|
190
|
|
|
$
|
203
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||||||||||
|
RSAs
|
|
PSIs
|
|
RSAs
|
|
PSIs
|
||||||||
Unrecognized compensation cost (in thousands)
|
$
|
159
|
|
|
$
|
529
|
|
|
$
|
349
|
|
|
$
|
1,192
|
|
|
|
|
|
|
|
|
|
||||||||
Expected weighted-average recognition period for unrecognized compensation
cost (in years)
|
0.63
|
|
|
1.32
|
|
|
1.20
|
|
|
1.16
|
|
|
Three Months ended September 30, 2016
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
21,359
|
|
|
$
|
(67,815
|
)
|
|
$
|
(29
|
)
|
|
$
|
(46,485
|
)
|
Other comprehensive (loss) income before reclassifications
|
(368
|
)
|
|
1,471
|
|
|
204
|
|
|
1,307
|
|
||||
Less (loss) income reclassified from AOCI
|
—
|
|
|
(1,560
|
)
|
|
126
|
|
|
(1,434
|
)
|
||||
Net other comprehensive (loss) income
|
(368
|
)
|
|
3,031
|
|
|
78
|
|
|
2,741
|
|
||||
Income taxes
|
256
|
|
|
53
|
|
|
13
|
|
|
322
|
|
||||
Ending balance, net of tax
|
$
|
20,735
|
|
|
$
|
(64,837
|
)
|
|
$
|
36
|
|
|
$
|
(44,066
|
)
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
30,487
|
|
|
$
|
(64,418
|
)
|
|
$
|
134
|
|
|
$
|
(33,797
|
)
|
Other comprehensive (loss) income before
reclassifications |
(7,169
|
)
|
|
1,087
|
|
|
(893
|
)
|
|
(6,975
|
)
|
||||
Less (loss) income reclassified from AOCI
|
—
|
|
|
(661
|
)
|
|
(142
|
)
|
|
(803
|
)
|
||||
Net other comprehensive (loss) income
|
(7,169
|
)
|
|
1,748
|
|
|
(751
|
)
|
|
(6,172
|
)
|
||||
Income taxes
|
(625
|
)
|
|
218
|
|
|
(99
|
)
|
|
(506
|
)
|
||||
Ending balance, net of tax
|
$
|
23,943
|
|
|
$
|
(62,888
|
)
|
|
$
|
(518
|
)
|
|
$
|
(39,463
|
)
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
20,529
|
|
|
$
|
(69,100
|
)
|
|
$
|
(142
|
)
|
|
$
|
(48,713
|
)
|
Other comprehensive income (loss) before reclassifications
|
531
|
|
|
1,185
|
|
|
320
|
|
|
2,036
|
|
||||
Less (loss) income reclassified from AOCI
|
—
|
|
|
(3,148
|
)
|
|
110
|
|
|
(3,038
|
)
|
||||
Net other comprehensive income
|
531
|
|
|
4,333
|
|
|
210
|
|
|
5,074
|
|
||||
Income taxes
|
325
|
|
|
70
|
|
|
32
|
|
|
427
|
|
||||
Ending balance, net of tax
|
$
|
20,735
|
|
|
$
|
(64,837
|
)
|
|
$
|
36
|
|
|
$
|
(44,066
|
)
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
Foreign
currency translation adjustments |
|
Retirement
plans related adjustments |
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Accumulated
other
comprehensive
loss
|
||||||||
Beginning balance, net of tax
|
$
|
25,913
|
|
|
$
|
(64,570
|
)
|
|
$
|
(144
|
)
|
|
$
|
(38,801
|
)
|
Other comprehensive loss before reclassifications
|
(1,641
|
)
|
|
(258
|
)
|
|
(396
|
)
|
|
(2,295
|
)
|
||||
Less (loss) income reclassified from AOCI
|
—
|
|
|
(1,994
|
)
|
|
37
|
|
|
(1,957
|
)
|
||||
Net other comprehensive (loss) income
|
(1,641
|
)
|
|
1,736
|
|
|
(433
|
)
|
|
(338
|
)
|
||||
Income taxes
|
329
|
|
|
54
|
|
|
(59
|
)
|
|
324
|
|
||||
Ending balance, net of tax
|
$
|
23,943
|
|
|
$
|
(62,888
|
)
|
|
$
|
(518
|
)
|
|
$
|
(39,463
|
)
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
Affected line item on the Consolidated Statements of Operations
|
||||||||||||
Details of AOCI components
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$
|
39
|
|
|
$
|
(119
|
)
|
|
$
|
62
|
|
|
$
|
26
|
|
|
Sales
|
|
|
87
|
|
|
(23
|
)
|
|
48
|
|
|
11
|
|
|
Other expense (income), net
|
||||
|
|
126
|
|
|
(142
|
)
|
|
110
|
|
|
37
|
|
|
Total before tax
|
||||
|
|
21
|
|
|
(25
|
)
|
|
18
|
|
|
7
|
|
|
Income taxes
|
||||
|
|
$
|
147
|
|
|
$
|
(167
|
)
|
|
$
|
128
|
|
|
$
|
44
|
|
|
Net of tax
|
Retirement plans related adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
$
|
64
|
|
|
$
|
79
|
|
|
$
|
191
|
|
|
$
|
241
|
|
|
(a)
|
Amortization of transition asset
|
|
78
|
|
|
19
|
|
|
234
|
|
|
61
|
|
|
(a)
|
||||
Settlement loss
|
|
(765
|
)
|
|
—
|
|
|
(765
|
)
|
|
—
|
|
|
(a)
|
||||
Amortization of actuarial loss
|
|
(937
|
)
|
|
(759
|
)
|
|
(2,808
|
)
|
|
(2,296
|
)
|
|
(a)
|
||||
|
|
(1,560
|
)
|
|
(661
|
)
|
|
(3,148
|
)
|
|
(1,994
|
)
|
|
Total before tax
|
||||
|
|
228
|
|
|
47
|
|
|
396
|
|
|
143
|
|
|
Income taxes
|
||||
|
|
$
|
(1,332
|
)
|
|
$
|
(614
|
)
|
|
$
|
(2,752
|
)
|
|
$
|
(1,851
|
)
|
|
Net of tax
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
||||||
Net loss applicable to common shareholders
|
$
|
(1,383
|
)
|
|
$
|
(327
|
)
|
|
$
|
(2,484
|
)
|
|
$
|
(149
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted loss per share — weighted average shares
|
12,835
|
|
|
12,793
|
|
|
12,815
|
|
|
12,770
|
|
|
Three Months ended September 30, 2016
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
52,089
|
|
|
$
|
15,270
|
|
|
$
|
(148
|
)
|
|
$
|
67,211
|
|
Depreciation and amortization
|
1,433
|
|
|
498
|
|
|
—
|
|
|
1,931
|
|
||||
Segment income (loss)
|
(984
|
)
|
|
1,847
|
|
|
|
|
|
863
|
|
||||
Capital expenditures
|
433
|
|
|
118
|
|
|
|
|
551
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
60,856
|
|
|
$
|
16,005
|
|
|
$
|
(56
|
)
|
|
$
|
76,805
|
|
Depreciation and amortization
|
1,643
|
|
|
553
|
|
|
—
|
|
|
2,196
|
|
||||
Segment income
|
895
|
|
|
1,083
|
|
|
—
|
|
|
1,978
|
|
||||
Capital expenditures
|
983
|
|
|
127
|
|
|
—
|
|
|
1,110
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
158,718
|
|
|
$
|
46,773
|
|
|
$
|
(273
|
)
|
|
$
|
205,218
|
|
Depreciation and amortization
|
4,353
|
|
|
1,562
|
|
|
|
|
|
5,915
|
|
||||
Segment income (loss)
|
(1,864
|
)
|
|
5,342
|
|
|
|
|
|
3,478
|
|
||||
Capital expenditures
|
1,119
|
|
|
424
|
|
|
|
|
|
1,543
|
|
||||
Segment assets
(1)
|
226,618
|
|
|
48,341
|
|
|
|
|
|
274,959
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||
Sales
|
$
|
180,042
|
|
|
$
|
48,904
|
|
|
$
|
(657
|
)
|
|
$
|
228,289
|
|
Depreciation and amortization
|
4,881
|
|
|
1,738
|
|
|
|
|
|
6,619
|
|
||||
Segment income
|
1,729
|
|
|
4,137
|
|
|
|
|
|
5,866
|
|
||||
Capital expenditures
|
2,229
|
|
|
874
|
|
|
|
|
|
3,103
|
|
||||
Segment assets
(1)
|
239,594
|
|
|
49,566
|
|
|
|
|
|
289,160
|
|
(1)
|
Segment assets primarily consist of restricted cash, accounts receivable, inventories, prepaid and other assets, property, plant and equipment, and intangible assets. Unallocated assets primarily include, cash and cash equivalents, corporate property, plant and equipment, deferred income taxes, and other non-current assets.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Segment income
|
$
|
863
|
|
|
$
|
1,978
|
|
|
$
|
3,478
|
|
|
$
|
5,866
|
|
Unallocated corporate expense
|
(1,503
|
)
|
|
(1,222
|
)
|
|
(5,061
|
)
|
|
(4,144
|
)
|
||||
Interest expense, net
|
(86
|
)
|
|
(121
|
)
|
|
(235
|
)
|
|
(392
|
)
|
||||
(Loss) income before income taxes
|
$
|
(726
|
)
|
|
$
|
635
|
|
|
$
|
(1,818
|
)
|
|
$
|
1,330
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Total segment assets
|
$
|
274,959
|
|
|
$
|
274,334
|
|
Unallocated assets
|
27,890
|
|
|
36,801
|
|
||
Total assets
|
$
|
302,849
|
|
|
$
|
311,135
|
|
|
|
Three Months Ended
September 30, |
|
$
Change
|
|
%
Change |
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
$
Change |
|
%
Change |
||||||||||||||||
Sales
|
|
$
|
67,211
|
|
|
$
|
76,805
|
|
|
$
|
(9,594
|
)
|
|
(12.5
|
)%
|
|
$
|
205,218
|
|
|
$
|
228,289
|
|
|
$
|
(23,071
|
)
|
|
(10.1
|
)%
|
Gross profit
|
|
23,151
|
|
|
25,370
|
|
|
(2,219
|
)
|
|
(8.7
|
)%
|
|
69,448
|
|
|
74,186
|
|
|
(4,738
|
)
|
|
(6.4
|
)%
|
||||||
% of sales
|
|
34.4
|
%
|
|
33.0
|
%
|
|
1.4
|
|
pts.
|
|
33.8
|
%
|
|
32.5
|
%
|
|
1.3
|
|
|
pts.
|
|||||||||
Selling, general and administrative expenses
|
|
19,992
|
|
|
19,925
|
|
|
67
|
|
|
—
|
%
|
|
60,221
|
|
|
60,596
|
|
|
(375
|
)
|
|
(0.6
|
)%
|
||||||
% of sales
|
|
29.7
|
%
|
|
25.9
|
%
|
|
3.8
|
|
pts.
|
|
29.3
|
%
|
|
26.5
|
%
|
|
2.8
|
|
|
pts.
|
|||||||||
Research & development
|
|
3,296
|
|
|
3,611
|
|
|
(315
|
)
|
|
(8.7
|
)%
|
|
9,953
|
|
|
10,715
|
|
|
(762
|
)
|
|
(7.1
|
)%
|
||||||
Restructuring
|
|
182
|
|
|
877
|
|
|
(695
|
)
|
|
(79.2
|
)%
|
|
608
|
|
|
877
|
|
|
(269
|
)
|
|
(30.7
|
)%
|
||||||
Other expense (income), net
|
|
321
|
|
|
201
|
|
|
120
|
|
|
59.7
|
%
|
|
249
|
|
|
276
|
|
|
(27
|
)
|
|
(9.8
|
)%
|
||||||
(Loss) income from operations
|
|
(640
|
)
|
|
756
|
|
|
(1,396
|
)
|
|
(184.7
|
)%
|
|
(1,583
|
)
|
|
1,722
|
|
|
(3,305
|
)
|
|
(191.9
|
)%
|
||||||
% of sales
|
|
(1.0
|
)%
|
|
1.0
|
%
|
|
(2.0
|
)
|
pts.
|
|
(0.8
|
)%
|
|
0.8
|
%
|
|
(1.6
|
)
|
|
pts.
|
|||||||||
Interest expense, net
|
|
86
|
|
|
121
|
|
|
(35
|
)
|
|
(28.9
|
)%
|
|
235
|
|
|
392
|
|
|
(157
|
)
|
|
(40.1
|
)%
|
||||||
(Loss) income before income taxes
|
|
(726
|
)
|
|
635
|
|
|
(1,361
|
)
|
|
(214.3
|
)%
|
|
(1,818
|
)
|
|
1,330
|
|
|
(3,148
|
)
|
|
(236.7
|
)%
|
||||||
Income tax expense
|
|
657
|
|
|
962
|
|
|
(305
|
)
|
|
(31.7
|
)%
|
|
666
|
|
|
1,479
|
|
|
(813
|
)
|
|
(55.0
|
)%
|
||||||
Net loss
|
|
$
|
(1,383
|
)
|
|
$
|
(327
|
)
|
|
$
|
(1,056
|
)
|
|
322.9
|
%
|
|
$
|
(2,484
|
)
|
|
$
|
(149
|
)
|
|
$
|
(2,335
|
)
|
|
1,567.1
|
%
|
% of sales
|
|
(2.1)%
|
|
(0.4
|
)%
|
|
(1.7
|
)
|
pts.
|
|
(1.2
|
)%
|
|
(0.1
|
)%
|
|
(1.1
|
)
|
pts.
|
|
Three Months Ended
September 30, |
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||||||||
Sales to customers in:
|
|||||||||||||||||||||||||||
North America
|
$
|
24,780
|
|
|
$
|
24,661
|
|
|
$
|
119
|
|
|
0.5%
|
|
$
|
62,924
|
|
|
$
|
80,039
|
|
|
$
|
(17,115
|
)
|
|
(21.4)%
|
Europe
|
18,271
|
|
|
21,569
|
|
|
(3,298
|
)
|
|
(15.3)%
|
|
64,355
|
|
|
66,553
|
|
|
(2,198
|
)
|
|
(3.3)%
|
||||||
Asia and other
|
24,160
|
|
|
30,575
|
|
|
(6,415
|
)
|
|
(21.0)%
|
|
77,939
|
|
|
81,697
|
|
|
(3,758
|
)
|
|
(4.6)%
|
||||||
Total
|
$
|
67,211
|
|
|
$
|
76,805
|
|
|
$
|
(9,594
|
)
|
|
(12.5)%
|
|
$
|
205,218
|
|
|
$
|
228,289
|
|
|
$
|
(23,071
|
)
|
|
(10.1)%
|
|
Three Months Ended
September 30, |
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||||||||||
Sales
|
$
|
52,089
|
|
|
$
|
60,856
|
|
|
$
|
(8,767
|
)
|
|
(14.4
|
)%
|
|
$
|
158,718
|
|
|
$
|
180,042
|
|
|
$
|
(21,324
|
)
|
|
(11.8
|
)%
|
Segment (loss) income
|
(984
|
)
|
|
895
|
|
|
(1,879
|
)
|
|
(209.9
|
)%
|
|
(1,864
|
)
|
|
1,729
|
|
|
(3,593
|
)
|
|
(207.8
|
)%
|
|
Three Months Ended
September 30, |
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
||||||||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||||||||||
Sales
|
$
|
15,270
|
|
|
$
|
16,005
|
|
|
$
|
(735
|
)
|
|
(4.6
|
)%
|
|
$
|
46,773
|
|
|
$
|
48,904
|
|
|
$
|
(2,131
|
)
|
|
(4.4
|
)%
|
Segment income
|
1,847
|
|
|
1,083
|
|
|
764
|
|
|
70.5
|
%
|
|
5,342
|
|
|
4,137
|
|
|
1,205
|
|
|
29.1
|
%
|
|
Three Months ended September 30, 2016
|
|
Three Months Ended September 30, 2015
|
||||||||||||||||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||||||||||
Sales
|
$
|
52,089
|
|
|
$
|
15,270
|
|
|
$
|
(148
|
)
|
|
$
|
67,211
|
|
|
$
|
60,856
|
|
|
$
|
16,005
|
|
|
$
|
(56
|
)
|
|
$
|
76,805
|
|
Segment (loss) income
|
(984
|
)
|
|
1,847
|
|
|
|
|
|
863
|
|
|
895
|
|
|
1,083
|
|
|
|
|
|
1,978
|
|
||||||||
Unallocated corporate
expense
|
|
|
|
|
|
|
|
|
|
(1,503
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,222
|
)
|
||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
(121
|
)
|
||||||||
(Loss) income before
income taxes
|
|
|
|
|
|
|
|
|
|
$
|
(726
|
)
|
|
|
|
|
|
|
|
$
|
635
|
|
|
Nine Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||||||||||
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
|
MMS
|
|
ATA
|
|
Inter-Segment
Eliminations
|
|
Total
|
||||||||||||||||
Sales
|
$
|
158,718
|
|
|
$
|
46,773
|
|
|
$
|
(273
|
)
|
|
$
|
205,218
|
|
|
$
|
180,042
|
|
|
$
|
48,904
|
|
|
$
|
(657
|
)
|
|
$
|
228,289
|
|
Segment (loss) income
|
(1,864
|
)
|
|
5,342
|
|
|
|
|
3,478
|
|
|
1,729
|
|
|
4,137
|
|
|
—
|
|
|
5,866
|
|
|||||||||
Unallocated corporate
expense
|
|
|
|
|
|
|
|
|
|
(5,061
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,144
|
)
|
||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
(235
|
)
|
|
|
|
|
|
|
|
|
|
|
(392
|
)
|
||||||||
(Loss) income before
income taxes
|
|
|
|
|
|
|
|
|
|
$
|
(1,818
|
)
|
|
|
|
|
|
|
|
$
|
1,330
|
|
|
|
Nine Months Ended
September 30, |
|
||||||
|
|
2016
|
|
2015
|
|
||||
Net cash (used in) provided by operating activities
|
|
$
|
(4,345
|
)
|
|
$
|
9,021
|
|
|
Net cash used in investing activities
|
|
$
|
(1,505
|
)
|
|
$
|
(3,065
|
)
|
|
Net cash used in financing activities
|
|
$
|
(3,978
|
)
|
|
$
|
(4,227
|
)
|
|
|
|
HARDINGE INC.
|
|
|
|
Registrant
|
|
|
|
||
November 2, 2016
|
|
By:
|
/s/ Richard L. Simons
|
Date
|
|
|
Richard L. Simons
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
November 2, 2016
|
|
By:
|
/s/ Douglas J. Malone
|
Date
|
|
|
Douglas J. Malone
|
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
•
|
being active for any person, partnership, corporation or other business organization or entity other than the Company that is in the same business of producing, selling or otherwise providing grinding machines;
|
•
|
alienating, or in the case of the two years after employment,
soliciting existing customers of the Company.
|
Date:
|
November 2, 2016
|
/s/ Richard L. Simons
|
|
|
Richard L. Simons
|
|
|
President and Chief Executive Officer
|
|
|
|
Date:
|
November 2, 2016
|
/s/ Douglas J. Malone
|
|
|
Douglas J. Malone
|
|
|
Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
/s/ Richard L. Simons
|
|
Richard L. Simons
|
|
President and Chief Executive Officer
|
|
November 2, 2016
|
|
|
|
|
|
/s/ Douglas J. Malone
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Douglas J. Malone
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Vice President and Chief Financial Officer
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(Principal Financial Officer)
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November 2, 2016
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