Delaware
(State or other jurisdiction of incorporation or organization)
|
|
27-2228185
(I.R.S. Employer Identification No.)
|
7171 Southwest Parkway, Building 300, Suite 200, Austin, Texas
(Address of principal executive offices)
|
|
78735
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange
on which registered
|
Common Stock, $0.001 par value per share
|
|
THR
|
|
New York Stock Exchange
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
Emerging growth company
o
|
|
Page
|
PART I
|
|
|
|
|
|
PART II
|
|
|
|
|
|
PART III
|
|
|
|
|
|
PART IV
|
|
|
|
|
|
|
|
·
|
Oil & Gas.
Process heating is used to facilitate the processing, transportation and freeze protection of energy products in both upstream and downstream oil and gas applications. According to the International Energy Agency ("IEA"), natural gas supplies 22% of the energy used worldwide, and makes up nearly a quarter of electricity generation, and plays a crucial role as a feedstock for industry. Also, IEA estimates that global oil and gas upstream capital spending will increase over 4% in 2019. The oil and gas end market accounted for approximately 38% of the total market for industrial process heating in 2019, or approximately $1.5 billion in revenue. As global oil prices continue to recover from the recent depression, Thermon is well-positioned to take advantage of the near-to medium-term growth trends associated with this primary end market.
|
·
|
Chemical Processing.
Process heating is required for temperature maintenance and freeze protection in a variety of chemical processing applications. Factors that may impact process heating demand in chemicals end markets include the rapid industrialization of the developing world, a shift in base chemical processing operations to low-cost feedstock regions, a transition of Western chemical processing activities from commodity products to specialty products and environmental compliance. The IEA estimates that new global petrochemicals capacity will account for 33% of oil-demand growth by 2030. We estimate that the chemicals end market (including petrochemical) accounted for approximately 14% of the total market for industrial process heating in 2019, or approximately $560 million in revenue.
|
·
|
Power Generation.
Process heating is required for high-temperature product maintenance, freeze protection and environmental regulation compliance in coal and gas facilities and for safety systems in nuclear facilities. An important driver of demand for process heating solutions for power generation is increasing demand for electricity worldwide. We estimate that the power generation end market accounted for approximately 7% of the total market for industrial process heating in fiscal 2019, or approximately $280 million in revenue. According to the IEA's World Energy Outlook 2018, electricity currently accounts for 19% of final energy consumption, a share that is expected to increase as demand growth for electricity outpaces all other fuels. According to the IEA's World
|
·
|
Transportation.
Process heating is required to safely clear and heat rail switches, melt snow and ice from platforms, and provide comfort heating and defrosting in rolling stock. With over 1.1 million kilometers of operational railway in the world, it is still one of the most economical and safe solutions for passengers and products globally. According to an estimate by IEA based on International Union of Railways ("UIC"), Urban, passenger and freight rail continues to grow on the same curve as global gross domestic product, or GDP. Of this growth, the commercial rail and transit sector represents the largest increase at approximately 8.9% through 2028. We estimate that our transportation industry end markets accounted for approximately 6% of the total market for industrial process heating in fiscal 2019, or approximately $240 million in revenue.
|
•
|
self-regulating and power limiting heating cables, which automatically increase or decrease heat output as pipe temperature changes as well as constant wattage heating cables;
|
•
|
mineral insulated, or "MI," cable, which is a high performance heat tracing cable for generating high temperatures that is typically used in harsh environments;
|
•
|
skin effect trace heater, which can heat lines in excess of 15 miles long from a single power point;
|
•
|
heat traced tube bundles for environmental gas sampling systems;
|
•
|
heat transfer compounds and steam tracers for comprehensive steam tracing solutions;
|
•
|
control and monitoring systems for electric tracing of pipes, tanks, hoppers and instrument sampling systems;
|
•
|
turnkey solutions that provide customers with complete solutions for heat tracing, including design, optimization, installation and ongoing maintenance;
|
•
|
products and services from the THS transaction, which include high efficiency explosion-proof gas catalytic heaters, convection heaters designed for rugged industrial applications, electric heaters engineered for industrial processes and environments, advanced gas and liquid filtration systems and highly efficient heat transfer systems for rail track and switch equipment;
|
•
|
products and services from the Unitemp acquisition, which include heating, sensing, monitoring and controlling tools; and
|
•
|
products from the Sumac acquisition, which include equipment for temporary electric power distribution and lighting products used in energy infrastructure construction projects and maintenance/turnaround projects.
|
•
|
Environmental heating (branded as“Ruffneck” and “Catadyne”) - which provides electric or gas-powered space heating for both hazardous and non-hazardous areas;
|
•
|
Process heating (branded as “Caloritech”) - provides a myriad of highly-engineered heating products to multiple end-markets with the purpose of heating and maintaining a process fluid at specified temperatures. Some products also serve the transportation sector with both radiant and convection-style heating;
|
•
|
Filtration (branded as “3L Filters”) - which provides highly-specialized filtration solutions for the most stringent environments, including the nuclear industry; and
|
•
|
Transportation (branded as “Fastrax” and “Hellfire”) - provides heating applications to both rolling stock (rail cars) and rail infrastructure (track and switch).
|
•
|
changes in a specific country's or region's political, social or economic conditions, particularly in emerging markets;
|
•
|
trade relations between the United States and those foreign countries in which our customers and suppliers have operations, including protectionist measures such as tariffs, import or export licensing requirements and trade sanctions;
|
•
|
restrictions on our ability to own or operate subsidiaries in, expand in and, if necessary, repatriate cash from, foreign jurisdictions;
|
•
|
exchange controls and currency restrictions;
|
•
|
the burden of complying with numerous and potentially conflicting laws;
|
•
|
potentially negative consequences from changes in U.S. and foreign tax laws;
|
•
|
difficulty in staffing and managing (including ensuring compliance with internal policies and controls) geographically widespread operations;
|
•
|
different regulatory regimes controlling the protection of our intellectual property;
|
•
|
difficulty in the enforcement of contractual obligations in non-U.S. jurisdictions and the collection of accounts receivable from foreign accounts; and
|
•
|
transportation delays or interruptions.
|
•
|
risk our confidential manufacturing processes and other trade secreted information that may lead to new and increased entrants and competitors or cause other damage to the business;
|
•
|
expose our customers' facilities and projects to increased safety and security risk;
|
•
|
materially damage business partner and customer relationships;
|
•
|
adversely impact our financial results and expose us to potential risk of loss or litigation; and/or
|
•
|
require us to incur substantial costs or require us to change our business practices;
|
•
|
diversion of management time and attention from daily operations;
|
•
|
difficulties integrating acquired businesses, technologies and personnel into our business;
|
•
|
realization of expected synergies and revenue creation or cross-selling opportunities;
|
•
|
potential loss of key employees, key contractual relationships or key customers of acquired companies or of us; and
|
•
|
assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.
|
•
|
general economic conditions and cyclicality in the end markets we serve;
|
•
|
future growth of energy and chemical processing capital investments;
|
•
|
a material disruption at any of our manufacturing facilities;
|
•
|
delays in our customers' projects for which our products are a component;
|
•
|
the timing of completion of large Greenfield projects;
|
•
|
competition from various other sources providing similar heat tracing products and services, or other alternative technologies, to customers; and
|
•
|
the seasonality of demand for MRO/UE orders, which is typically highest during the second and third fiscal quarters.
|
•
|
quarterly fluctuations in our operating results;
|
•
|
changes in investors' and analysts' perception of the business risks and conditions of our business or our competitors;
|
•
|
our ability to meet the earnings estimates and other performance expectations of financial analysts or investors;
|
•
|
unfavorable commentary or downgrades of our stock by equity research analysts;
|
•
|
the emergence of new sales channels in which we are unable to compete effectively;
|
•
|
disruption to our operations;
|
•
|
fluctuations in the stock prices of our peer companies or in stock markets in general; and
|
•
|
general economic or political conditions.
|
•
|
authorizing our board of directors, without further action by the stockholders, to issue blank check preferred stock;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
authorizing our board of directors, without stockholder approval, to amend our amended and restated bylaws;
|
•
|
limiting the determination of the number of directors on our board of directors and the filling of vacancies or newly created seats on our board of directors to our board of directors then in office; and
|
•
|
subject to certain exceptions, limiting our ability to engage in certain business combinations with an "interested stockholder" for a three-year period following the time that the stockholder became an interested stockholder.
|
|
March 31, 2014
|
March 31, 2015
|
March 31, 2016
|
March 31, 2017
|
March 31, 2018
|
March 31, 2019
|
||||||||||||
Thermon Group Holdings, Inc.
|
$
|
100.00
|
|
$
|
103.84
|
|
$
|
75.75
|
|
$
|
89.91
|
|
$
|
96.68
|
|
$
|
105.74
|
|
iShares Russell 2000 Index
|
$
|
100.00
|
|
$
|
108.49
|
|
$
|
98.18
|
|
$
|
100.10
|
|
$
|
139.27
|
|
$
|
142.36
|
|
Peer Group (a)
|
$
|
100.00
|
|
$
|
87.74
|
|
$
|
98.30
|
|
$
|
139.41
|
|
$
|
136.89
|
|
$
|
141.71
|
|
S&P 600 Small Cap 600 Energy
|
$
|
100.00
|
|
$
|
54.91
|
|
$
|
28.94
|
|
$
|
35.75
|
|
$
|
27.44
|
|
$
|
21.32
|
|
|
|
|
Year Ended March 31,
|
||||||||||||||||||
|
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
(dollars in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sales
|
|
$
|
412,642
|
|
|
$
|
308,609
|
|
|
$
|
264,130
|
|
|
$
|
281,928
|
|
|
$
|
308,578
|
|
|
Cost of sales
|
|
236,702
|
|
|
164,798
|
|
|
152,199
|
|
|
150,613
|
|
|
153,874
|
|
||||||
Gross profit
|
|
$
|
175,940
|
|
|
$
|
143,811
|
|
|
$
|
111,931
|
|
|
$
|
131,315
|
|
|
$
|
154,704
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Marketing, general and administrative and engineering
|
|
106,660
|
|
|
94,615
|
|
|
77,715
|
|
|
80,729
|
|
|
76,868
|
|
|||||
|
Amortization of intangible assets
|
|
20,771
|
|
|
16,458
|
|
|
11,772
|
|
|
12,112
|
|
|
10,775
|
|
|||||
|
Impairment of intangible assets and goodwill (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,713
|
|
|
—
|
|
|||||
Income from operations
|
|
$
|
48,509
|
|
|
$
|
32,738
|
|
|
$
|
22,444
|
|
|
$
|
36,761
|
|
|
$
|
67,061
|
|
|
Interest income
|
|
238
|
|
|
606
|
|
|
566
|
|
|
423
|
|
|
460
|
|
||||||
Interest expense (2)
|
|
(15,714
|
)
|
|
(8,984
|
)
|
|
(3,518
|
)
|
|
(4,142
|
)
|
|
(4,565
|
)
|
||||||
Loss on extinguishment of debt
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other income/(expense) (3)
|
|
109
|
|
|
(5,595
|
)
|
|
(410
|
)
|
|
(676
|
)
|
|
(394
|
)
|
||||||
Income from continuing operations before provision for income taxes
|
|
$
|
33,142
|
|
|
$
|
18,389
|
|
|
$
|
19,082
|
|
|
$
|
32,366
|
|
|
$
|
62,562
|
|
|
Income tax expense
|
|
9,973
|
|
|
5,170
|
|
|
4,098
|
|
|
8,716
|
|
|
13,176
|
|
||||||
Net income
|
|
$
|
23,169
|
|
|
$
|
13,219
|
|
|
$
|
14,984
|
|
|
$
|
23,650
|
|
|
$
|
49,386
|
|
|
Income attributable to non-controlling interests
|
|
413
|
|
|
1,306
|
|
|
343
|
|
|
641
|
|
|
—
|
|
||||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
|
$
|
23,009
|
|
|
$
|
49,386
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic
|
|
0.70
|
|
|
$
|
0.37
|
|
|
$
|
0.45
|
|
|
$
|
0.72
|
|
|
$
|
1.54
|
|
|
|
Diluted
|
|
0.69
|
|
|
0.36
|
|
|
0.45
|
|
|
0.71
|
|
|
1.52
|
|
|||||
Weighted-average shares used in
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
computing net income per
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
common share (thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic
|
|
32,569
|
|
|
32,424
|
|
|
32,302
|
|
|
32,177
|
|
|
32,027
|
|
|||||
|
Diluted
|
|
33,054
|
|
|
32,797
|
|
|
32,633
|
|
|
32,593
|
|
|
32,407
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial and Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Capital expenditures (4)
|
|
11,055
|
|
|
9,072
|
|
|
8,370
|
|
|
12,581
|
|
|
6,075
|
|
|||||
|
Backlog at end of period (5)
|
|
119,956
|
|
|
159,624
|
|
|
106,880
|
|
|
81,242
|
|
|
75,745
|
|
|
|
At March 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
(dollars in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
31,402
|
|
|
$
|
33,879
|
|
|
$
|
42,842
|
|
|
$
|
84,570
|
|
|
$
|
93,774
|
|
Accounts receivable, net
|
|
105,323
|
|
|
94,411
|
|
|
63,719
|
|
|
57,432
|
|
|
60,441
|
|
|||||
Inventory, net
|
|
64,890
|
|
|
63,829
|
|
|
34,020
|
|
|
40,645
|
|
|
41,008
|
|
|||||
Total assets
|
|
655,762
|
|
|
662,477
|
|
|
454,080
|
|
|
468,677
|
|
|
449,757
|
|
|||||
Total debt, principal amount
|
|
206,500
|
|
|
225,000
|
|
|
81,000
|
|
|
94,500
|
|
|
108,000
|
|
|||||
Deferred debt issuance costs
|
|
6,271
|
|
|
7,967
|
|
|
524
|
|
|
888
|
|
|
1,217
|
|
|||||
Total debt, net of deferred debt issuance costs
|
|
200,229
|
|
|
217,033
|
|
|
80,476
|
|
|
93,612
|
|
|
106,783
|
|
|||||
Total equity
|
|
348,949
|
|
|
340,853
|
|
|
312,502
|
|
|
298,701
|
|
|
271,766
|
|
(1)
|
During fiscal 2016, the EMEA segment's financial results were negatively impacted by a $1.7 million impairment charge to Unitemp's goodwill and other intangible assets.
|
(2)
|
Interest expense in fiscal 2019 and 2018 primarily represents interest expense on the term loan B on outstanding principal balances as of March 31, 2019 and 2018 of $206.5 million and $225.0 million, respectively, compared to $81.0 million as of March 31, 2017. Further reductions in fiscal 2017 and thereafter of interest expense were due to the difference in interest rates on our term loan A that carried an interest rate that ranged from 2.87% to 3.62% after giving effect to our interest rate swaps and the interest rate reductions realized from the first and second amendments to our prior credit agreement.
|
(3)
|
Other expense in fiscal 2018 includes a foreign currency transaction loss of $3.3 million in connection with the option contract entered into to secure the THS acquisition purchase price, and a $2.3 million loss related to a derivative contract to hedge a $112.8 million long-term intercompany loan between Canada and the United States for the THS acquisition.
|
(4)
|
Represents capital expenditures less the sales of rental equipment at net book value.
|
(5)
|
Represents the future revenue attributable to signed, but unperformed, purchase orders that set forth specific revenue amounts at the end of the applicable period.
|
|
|
|
|
Fiscal Year Ended March 31,
|
|||||||||||||||||||
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||||||||
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sales
|
|
$
|
412,642
|
|
|
100
|
%
|
|
$
|
308,609
|
|
|
100
|
%
|
|
$
|
264,130
|
|
|
100
|
%
|
||
Cost of sales
|
|
236,702
|
|
|
57
|
|
|
164,798
|
|
|
53
|
|
|
152,199
|
|
|
58
|
|
|||||
Gross profit
|
|
$
|
175,940
|
|
|
43
|
%
|
|
$
|
143,811
|
|
|
47
|
%
|
|
$
|
111,931
|
|
|
42
|
%
|
||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Marketing, general, and administrative and engineering
|
|
102,512
|
|
|
25
|
%
|
|
91,096
|
|
|
30
|
%
|
|
74,313
|
|
|
28
|
%
|
||||
|
Stock compensation expense
|
|
4,148
|
|
|
1
|
|
|
3,519
|
|
|
1
|
|
|
3,402
|
|
|
1
|
|
||||
|
Amortization of intangible assets
|
|
20,771
|
|
|
5
|
|
|
16,458
|
|
|
5
|
|
|
11,772
|
|
|
4
|
|
||||
Income from operations
|
|
$
|
48,509
|
|
|
12
|
%
|
|
$
|
32,738
|
|
|
11
|
%
|
|
$
|
22,444
|
|
|
8
|
%
|
||
Interest expense, net (1)
|
|
(15,476
|
)
|
|
(4
|
)
|
|
(8,754
|
)
|
|
(3
|
)
|
|
(2,952
|
)
|
|
(1
|
)
|
|||||
Other income/(expense) (2)
|
|
109
|
|
|
—
|
|
|
(5,595
|
)
|
|
(2
|
)
|
|
(410
|
)
|
|
—
|
|
|||||
|
Income before provision for income taxes
|
|
$
|
33,142
|
|
|
8
|
%
|
|
$
|
18,389
|
|
|
6
|
%
|
|
$
|
19,082
|
|
|
7
|
%
|
|
Income tax expense
|
|
9,973
|
|
|
2
|
|
|
5,170
|
|
|
2
|
|
|
4,098
|
|
|
2
|
|
|||||
Net income
|
|
$
|
23,169
|
|
|
6
|
%
|
|
$
|
13,219
|
|
|
4
|
%
|
|
$
|
14,984
|
|
|
6
|
%
|
||
Income attributable to non-controlling interest (3)
|
|
413
|
|
|
—
|
%
|
|
1,306
|
|
|
—
|
%
|
|
343
|
|
|
—
|
%
|
|||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
6
|
%
|
|
$
|
11,913
|
|
|
4
|
%
|
|
$
|
14,641
|
|
|
6
|
%
|
(1)
|
Interest expense in fiscal 2019 and 2018 primarily represents interest expense on the term loan B on outstanding principal balances as of March 31, 2019 and 2018 of $206.5 million and $225.0 million, respectively, compared to $81.0 million as of March 31, 2017. Further reductions in fiscal 2017 interest expense were due to the difference in interest rates on our term loan A that carried an interest rate that ranged from 2.87% to 3.62% after giving effect to our interest rate swaps and the interest rate reductions realized from the first and second amendments to our prior credit agreement.
|
(2)
|
Other expense in fiscal 2018 includes a foreign currency transaction loss of $3.3 million in connection with the option contract entered into to secure the THS acquisition purchase price, and a $2.3 million loss related to a
|
(3)
|
Represents a 25% equity interest in Sumac retained by former sellers. Subsequent to July 20, 2018, income attributable to non-controlling equity interest represents 12.5%. See Note 12. "Related Party Transactions" to our consolidated financial statements included in Item 8 of this annual report for further discussion in connection with decrease in retained Sumac equity interest subsequent to March 31, 2018.
|
|
|
|
|
|
Payment Due By Period
|
|
|
||||||||||||||
|
|
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||||||||
Variable rate term loan (1)
|
$
|
206,500
|
|
|
$
|
2,500
|
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
|
$
|
194,000
|
|
||
Interest payments on variable rate term loan (2)
|
54,593
|
|
|
10,086
|
|
|
19,748
|
|
|
19,285
|
|
|
5,474
|
|
|||||||
Borrowings under revolving credit facility (3)
|
11,225
|
|
|
11,225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations (4)
|
20,256
|
|
|
3,941
|
|
|
6,001
|
|
|
4,088
|
|
|
6,226
|
|
|||||||
Information technology services agreements (5)
|
2,244
|
|
|
1,123
|
|
|
1,121
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
294,818
|
|
|
$
|
28,875
|
|
|
$
|
31,870
|
|
|
$
|
28,373
|
|
|
$
|
205,700
|
|
(1)
|
Consists of quarterly scheduled principal payments commencing April 1, 2018 under our new term loan B credit facility of $0.6 million through July 31, 2024, with the remaining principal balance being settled with a lump-sum
|
(2)
|
Consists of estimated future term loan interest payments under our credit facility based on our current interest rate as of March 31, 2019.
|
(3)
|
Consists of borrowings under our revolving line of credit facility. As of March 31, 2019, the interest rate on outstanding borrowings was 4.57%.
|
(4)
|
We enter into operating leases in the normal course of business. Our operating leases include the leases on certain of our manufacturing and warehouse facilities, in addition to certain offices of our affiliates.
|
(5)
|
Represents the future annual service fees associated with certain information technology service agreements with several vendors.
|
|
March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
$
|
31,402
|
|
|
$
|
33,879
|
|
|
$
|
42,842
|
|
Restricted cash included in prepaid expenses and other current assets
|
1,624
|
|
|
1,703
|
|
|
1,202
|
|
|||
Restricted cash included in other long term assets
|
815
|
|
|
745
|
|
|
248
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
33,841
|
|
|
$
|
36,327
|
|
|
$
|
44,292
|
|
|
|
|
Year Ended March 31,
|
|||||||||||
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
||
|
Interest expense, net
|
|
15,476
|
|
|
8,754
|
|
|
2,952
|
|
||||
|
Income tax expense
|
|
9,973
|
|
|
5,170
|
|
|
4,098
|
|
||||
|
Depreciation and amortization
|
|
29,965
|
|
|
24,420
|
|
|
17,832
|
|
||||
|
Stock-based compensation
|
|
4,148
|
|
|
3,519
|
|
|
3,402
|
|
||||
|
Income attributable to non-controlling interest in Sumac
|
|
413
|
|
|
1,306
|
|
|
343
|
|
||||
|
Consolidation of operating footprint in Canada
|
|
757
|
|
|
—
|
|
|
—
|
|
||||
|
THS acquisition related foreign exchange losses
|
|
—
|
|
|
5,594
|
|
|
—
|
|
||||
|
THS acquisition related expenses
|
|
—
|
|
|
4,093
|
|
|
—
|
|
||||
Adjusted EBITDA
|
|
$
|
83,488
|
|
|
$
|
64,769
|
|
|
$
|
43,268
|
|
|
|
|
|
|||||||||||
|
|
|
Year ended March 31,
|
|||||||||||
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income available to Thermon Group Holdings, Inc.
|
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
|
Consolidation of operating footprint in Canada
|
|
|
757
|
|
|
—
|
|
|
—
|
|
||||
THS acquisition related expense
|
|
|
—
|
|
|
4,093
|
|
|
—
|
|
||||
THS acquisition related foreign exchange losses
|
|
|
—
|
|
|
5,594
|
|
|
—
|
|
||||
Tax reform related expense
|
|
|
—
|
|
|
1,014
|
|
|
—
|
|
||||
Acceleration of unamortized debt costs
|
|
|
394
|
|
|
880
|
|
|
—
|
|
||||
Release of deferred tax liability for undistributed foreign earnings and uncertain tax positions
|
|
|
—
|
|
|
(554
|
)
|
|
(555
|
)
|
||||
Amortization of intangible assets
|
|
|
20,771
|
|
|
16,458
|
|
|
11,772
|
|
||||
Tax effect of financial adjustments
|
|
|
(5,499
|
)
|
|
(6,947
|
)
|
|
(3,626
|
)
|
||||
Adjusted net income (non-GAAP) (1)
|
|
|
$
|
39,179
|
|
|
$
|
32,451
|
|
|
$
|
22,232
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted-fully diluted earnings per common share (non-GAAP) (1)
|
|
|
$
|
1.19
|
|
|
$
|
0.99
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fully-diluted common shares - non-GAAP basis (thousands)
|
|
|
33,054
|
|
|
32,797
|
|
|
32,633
|
|
|
|
Year Ended March 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash provided by operating activities
|
|
$
|
23,227
|
|
|
$
|
22,913
|
|
|
$
|
26,483
|
|
Less: Purchases of property, plant and equipment, net of rental equipment sales
|
|
(11,055
|
)
|
|
(9,072
|
)
|
|
(8,020
|
)
|
|||
Free cash flow provided
|
|
$
|
12,172
|
|
|
$
|
13,841
|
|
|
$
|
18,463
|
|
|
Page
|
Audited Financial Statements of Thermon Group Holdings, Inc. and its Consolidated Subsidiaries
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
412,642
|
|
|
$
|
308,609
|
|
|
$
|
264,130
|
|
Cost of sales
|
|
236,702
|
|
|
164,798
|
|
|
152,199
|
|
|||
Gross profit
|
|
175,940
|
|
|
143,811
|
|
|
111,931
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Marketing, general and administrative and engineering
|
|
106,660
|
|
|
94,615
|
|
|
77,715
|
|
|||
Amortization of intangible assets
|
|
20,771
|
|
|
16,458
|
|
|
11,772
|
|
|||
Income from operations
|
|
48,509
|
|
|
32,738
|
|
|
22,444
|
|
|||
Other income/(expenses):
|
|
|
|
|
|
|
||||||
Interest income
|
|
238
|
|
|
606
|
|
|
566
|
|
|||
Interest expense
|
|
(15,714
|
)
|
|
(8,984
|
)
|
|
(3,518
|
)
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
|||
Other income/(expense)
|
|
109
|
|
|
(5,595
|
)
|
|
(410
|
)
|
|||
Income before provision for income taxes
|
|
33,142
|
|
|
18,389
|
|
|
19,082
|
|
|||
Income tax expense
|
|
9,973
|
|
|
5,170
|
|
|
4,098
|
|
|||
Net income
|
|
23,169
|
|
|
13,219
|
|
|
14,984
|
|
|||
Income attributable to non-controlling interests
|
|
413
|
|
|
1,306
|
|
|
343
|
|
|||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
Foreign currency translation adjustment
|
|
(13,233
|
)
|
|
12,030
|
|
|
(4,536
|
)
|
|||
Derivative valuation, net of tax
|
|
—
|
|
|
34
|
|
|
791
|
|
|||
Other
|
|
825
|
|
|
(270
|
)
|
|
(21
|
)
|
|||
Total comprehensive income
|
|
$
|
10,348
|
|
|
$
|
23,707
|
|
|
$
|
10,875
|
|
Net income per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.70
|
|
|
$
|
0.37
|
|
|
$
|
0.45
|
|
Diluted
|
|
0.69
|
|
|
0.36
|
|
|
0.45
|
|
|||
Weighted-average shares used in computing net income per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
32,568,541
|
|
|
32,423,581
|
|
|
32,301,661
|
|
|||
Diluted
|
|
33,054,304
|
|
|
32,797,351
|
|
|
32,633,281
|
|
|
March 31,
2019 |
|
March 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
31,402
|
|
|
$
|
33,879
|
|
Investments
|
—
|
|
|
1,022
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $987 and $1,231 as of March 31, 2019 and 2018, respectively
|
105,323
|
|
|
94,411
|
|
||
Inventories, net
|
64,890
|
|
|
63,829
|
|
||
Contract assets
|
26,454
|
|
|
16,114
|
|
||
Prepaid expenses and other current assets
|
7,320
|
|
|
9,054
|
|
||
Income tax receivable
|
4,389
|
|
|
1,885
|
|
||
Total current assets
|
239,778
|
|
|
220,194
|
|
||
Property, plant and equipment, net
|
74,955
|
|
|
74,485
|
|
||
Goodwill
|
204,995
|
|
|
210,566
|
|
||
Intangible assets, net
|
126,596
|
|
|
151,434
|
|
||
Deferred income taxes
|
3,829
|
|
|
3,425
|
|
||
Other long term assets
|
5,609
|
|
|
2,373
|
|
||
Total assets
|
$
|
655,762
|
|
|
$
|
662,477
|
|
Liabilities and equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
22,705
|
|
|
$
|
22,995
|
|
Accrued liabilities
|
27,848
|
|
|
22,810
|
|
||
Current portion of long term debt
|
2,500
|
|
|
2,500
|
|
||
Borrowings under revolving credit facility
|
11,225
|
|
|
—
|
|
||
Contract liabilities
|
6,814
|
|
|
8,143
|
|
||
Income taxes payable
|
1,961
|
|
|
5,952
|
|
||
Total current liabilities
|
73,053
|
|
|
62,400
|
|
||
Long-term debt, net of current maturities and deferred debt issuance costs and debt discounts of $6,271 and $7,967 as of March 31, 2019 and 2018, respectively
|
197,729
|
|
|
214,533
|
|
||
Deferred income taxes
|
28,139
|
|
|
34,252
|
|
||
Other noncurrent liabilities
|
7,892
|
|
|
10,439
|
|
||
Total liabilities
|
306,813
|
|
|
321,624
|
|
||
Equity
|
|
|
|
||||
Common stock: $.001 par value; 150,000,000 authorized; 32,624,200 and 32,492,339 shares issued and outstanding at March 31, 2019 and 2018, respectively
|
33
|
|
|
32
|
|
||
Preferred stock: $.001 par value; 10,000,000 authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
223,040
|
|
|
222,622
|
|
||
Accumulated other comprehensive loss
|
(48,949
|
)
|
|
(36,541
|
)
|
||
Retained earnings
|
170,621
|
|
|
148,812
|
|
||
Total Thermon Group Holdings, Inc. shareholders' equity
|
344,745
|
|
|
334,925
|
|
||
Non-controlling interests
|
4,204
|
|
|
5,928
|
|
||
Total equity
|
348,949
|
|
|
340,853
|
|
||
Total liabilities and equity
|
$
|
655,762
|
|
|
$
|
662,477
|
|
|
|
|
Common Stock Outstanding
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Non-controlling Interests
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||
Balances at March 31, 2016
|
32,222,720
|
|
|
$
|
32
|
|
|
$
|
216,701
|
|
|
$
|
122,258
|
|
|
$
|
4,279
|
|
|
$
|
(44,569
|
)
|
|
$
|
298,701
|
|
||
Issuance of common stock in exercise of stock options
|
43,121
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
||||||||
Issuance of restricted stock as deferred compensation to employees and directors
|
19,824
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock as deferred compensation to employees
|
47,179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock as deferred compensation to named executive officers
|
32,709
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
3,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,402
|
|
||||||||
Excess tax deduction from stock options
|
—
|
|
|
—
|
|
|
(1,069
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,069
|
)
|
||||||||
Net income available to Thermon Group Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
14,641
|
|
|
—
|
|
|
—
|
|
|
14,641
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,536
|
)
|
|
(4,536
|
)
|
||||||||
Interest rate swap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
791
|
|
|
791
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
||||||||
Income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|
—
|
|
|
343
|
|
||||||||
Balances at March 31, 2017
|
32,365,553
|
|
|
$
|
32
|
|
|
$
|
219,284
|
|
|
$
|
136,899
|
|
|
$
|
4,622
|
|
|
$
|
(48,335
|
)
|
|
$
|
312,502
|
|
||
Issuance of common stock in exercise of stock options
|
42,636
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||||||
Issuance of common stock as deferred compensation to directors
|
20,216
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock as deferred compensation to employees
|
43,445
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock as deferred compensation to executive officers
|
20,489
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
3,519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,519
|
|
||||||||
Repurchase of employee stock units on vesting
|
—
|
|
|
—
|
|
|
(481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(481
|
)
|
||||||||
Net income available to Thermon Group Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
11,913
|
|
|
—
|
|
|
—
|
|
|
11,913
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,030
|
|
|
12,030
|
|
||||||||
Interest rate swap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(270
|
)
|
|
(270
|
)
|
||||||||
Income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,306
|
|
|
—
|
|
|
1,306
|
|
||||||||
Balances at March 31, 2018
|
32,492,339
|
|
|
$
|
32
|
|
|
$
|
222,622
|
|
|
$
|
148,812
|
|
|
$
|
5,928
|
|
|
$
|
(36,541
|
)
|
|
$
|
340,853
|
|
||
Issuance of common stock in exercise of stock options
|
37,906
|
|
|
—
|
|
|
396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
396
|
|
||||||||
Issuance of common stock as deferred compensation to directors
|
20,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock as deferred compensation to employees
|
51,775
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Issuance of common stock as deferred compensation to executive officers
|
22,116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
4,148
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,148
|
|
||||||||
Repurchase of employee stock units on vesting
|
—
|
|
|
—
|
|
|
(598
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(598
|
)
|
||||||||
Net income available to Thermon Group Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
22,756
|
|
|
—
|
|
|
—
|
|
|
22,756
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,233
|
)
|
|
(13,233
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
825
|
|
|
825
|
|
||||||||
Remeasurement of non-controlling interest
|
—
|
|
|
—
|
|
|
(3,528
|
)
|
|
—
|
|
|
3,528
|
|
|
—
|
|
|
—
|
|
||||||||
Purchase of non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,665
|
)
|
|
—
|
|
|
(5,665
|
)
|
||||||||
Distribution to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(947
|
)
|
|
—
|
|
|
—
|
|
|
(947
|
)
|
||||||||
Income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
413
|
|
|
—
|
|
|
413
|
|
||||||||
Balances at March 31, 2019
|
32,624,200
|
|
|
$
|
33
|
|
|
$
|
223,040
|
|
|
$
|
170,621
|
|
|
$
|
4,204
|
|
|
$
|
(48,949
|
)
|
|
$
|
348,949
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Operating activities
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
23,169
|
|
|
$
|
13,219
|
|
|
$
|
14,984
|
|
Adjustment to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
29,965
|
|
|
24,420
|
|
|
17,832
|
|
|||
Amortization of debt costs
|
1,756
|
|
|
1,657
|
|
|
390
|
|
|||
Amortization of inventory step-up
|
170
|
|
|
869
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
376
|
|
|
—
|
|
|||
Stock compensation expense
|
4,148
|
|
|
3,519
|
|
|
3,402
|
|
|||
Deferred income taxes
|
(5,552
|
)
|
|
(11,337
|
)
|
|
(3,262
|
)
|
|||
Long term cross currency swap
|
(3,313
|
)
|
|
1,540
|
|
|
—
|
|
|||
Reserve (release) for uncertain tax positions
|
1,136
|
|
|
—
|
|
|
(128
|
)
|
|||
Remeasurement loss/(gain) on intercompany balances
|
4,147
|
|
|
(773
|
)
|
|
152
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(14,541
|
)
|
|
(13,818
|
)
|
|
(5,212
|
)
|
|||
Inventories
|
(3,432
|
)
|
|
(9,059
|
)
|
|
6,579
|
|
|||
Contract assets
|
(11,990
|
)
|
|
(6,067
|
)
|
|
2,599
|
|
|||
Other current and non-current assets
|
(370
|
)
|
|
(1,627
|
)
|
|
(527
|
)
|
|||
Accounts payable
|
(21
|
)
|
|
2,003
|
|
|
(4,608
|
)
|
|||
Accrued liabilities and non-current liabilities
|
4,076
|
|
|
13,950
|
|
|
(3,173
|
)
|
|||
Income taxes payable and receivable
|
(6,121
|
)
|
|
4,041
|
|
|
(2,545
|
)
|
|||
Net cash provided by operating activities
|
$
|
23,227
|
|
|
$
|
22,913
|
|
|
$
|
26,483
|
|
Investing activities
|
|
|
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
$
|
(12,036
|
)
|
|
$
|
(10,008
|
)
|
|
$
|
(8,370
|
)
|
Sales of rental equipment
|
981
|
|
|
936
|
|
|
350
|
|
|||
Proceeds from the sale of property, plant and equipment
|
33
|
|
|
13
|
|
|
811
|
|
|||
Cash paid for acquisitions, net of cash acquired
|
—
|
|
|
(202,693
|
)
|
|
—
|
|
|||
Purchase of investments
|
—
|
|
|
(8,123
|
)
|
|
(44,786
|
)
|
|||
Proceeds from the sale of investments
|
952
|
|
|
53,406
|
|
|
—
|
|
|||
Net cash used in investing activities
|
$
|
(10,070
|
)
|
|
$
|
(166,469
|
)
|
|
$
|
(51,995
|
)
|
Financing activities
|
|
|
|
|
|
|
|
||||
Proceeds from senior secured notes
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
Payments on long term debt and revolving credit facility
|
(40,323
|
)
|
|
(116,000
|
)
|
|
(13,500
|
)
|
|||
Proceeds from revolving credit facility
|
33,241
|
|
|
10,000
|
|
|
—
|
|
|||
Issuance costs associated with debt financing
|
—
|
|
|
(9,698
|
)
|
|
—
|
|
|||
Purchase of shares from non-controlling interests
|
(5,665
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to non-controlling interest
|
(947
|
)
|
|
—
|
|
|
—
|
|
|||
Lease financing
|
(205
|
)
|
|
(264
|
)
|
|
(257
|
)
|
|||
Issuance of common stock including exercise of stock options
|
396
|
|
|
383
|
|
|
168
|
|
|||
Loss from excess tax deduction from option exercises
|
—
|
|
|
—
|
|
|
(448
|
)
|
|||
Repurchase of employee stock units on vesting
|
(598
|
)
|
|
(481
|
)
|
|
(621
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
(14,101
|
)
|
|
$
|
133,940
|
|
|
$
|
(14,658
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
(1,542
|
)
|
|
1,651
|
|
|
(1,516
|
)
|
|||
Change in cash and cash equivalents
|
$
|
(2,486
|
)
|
|
$
|
(7,965
|
)
|
|
$
|
(41,686
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
|
36,327
|
|
|
44,292
|
|
|
85,978
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
33,841
|
|
|
$
|
36,327
|
|
|
$
|
44,292
|
|
Cash paid for interest and income taxes
|
|
|
|
|
|
||||||
Interest
|
$
|
13,959
|
|
|
$
|
7,348
|
|
|
$
|
3,085
|
|
Income taxes paid
|
22,260
|
|
|
7,728
|
|
|
9,280
|
|
|||
Income tax refunds received
|
900
|
|
|
818
|
|
|
—
|
|
Balance at March 31, 2016
|
|
|
$
|
656
|
|
|
|
Reduction in reserve
|
|
|
307
|
|
|
|
Write-off of uncollectible accounts
|
|
|
(445
|
)
|
|
Balance at March 31, 2017
|
|
|
518
|
|
||
|
Additions to reserve
|
|
|
787
|
|
|
|
Write-off of uncollectible accounts
|
|
|
(74
|
)
|
|
Balance at March 31, 2018
|
|
|
1,231
|
|
||
|
Additions to reserve
|
|
|
354
|
|
|
|
Write-off of uncollectible accounts
|
|
|
(598
|
)
|
|
Balance at March 31, 2019
|
|
|
$
|
987
|
|
|
|
|
Useful Lives in Years
|
||
Land improvements
|
|
|
15
|
-
|
20
|
Buildings and improvements
|
|
|
10
|
-
|
40
|
Machinery and equipment
|
|
|
3
|
-
|
25
|
Office furniture and equipment
|
|
|
3
|
-
|
10
|
Internally developed software
|
|
|
5
|
-
|
7
|
|
March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
$
|
31,402
|
|
|
$
|
33,879
|
|
|
$
|
42,842
|
|
Restricted cash included in prepaid expenses and other current assets
|
1,624
|
|
|
1,703
|
|
|
1,202
|
|
|||
Restricted cash included in other long term assets
|
815
|
|
|
745
|
|
|
248
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
33,841
|
|
|
$
|
36,327
|
|
|
$
|
44,292
|
|
•
|
Level 1 — uses quoted prices in active markets for identical assets or liabilities we have the ability to access.
|
•
|
Level 2 — uses observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment.
|
|
March 31, 2019
|
|
March 31, 2018
|
|
|
||||||||||||
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Valuation Technique
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Outstanding principal amount of senior secured credit facility
|
$
|
206,500
|
|
|
$
|
206,500
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
Level 2 - Market Approach
|
Outstanding borrowings from revolving line of credit
|
$
|
11,225
|
|
|
$
|
11,225
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 2 - Market Approach
|
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||
|
Fair Value
|
|
Fair Value
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Foreign exchange contract forwards
|
$
|
8
|
|
|
$
|
53
|
|
|
$
|
229
|
|
|
$
|
25
|
|
Consideration to or on behalf of sellers at close
|
$
|
204,596
|
|
Fair value of total consideration transferred
|
$
|
204,596
|
|
Assets acquired:
|
|
||
Cash
|
$
|
1,534
|
|
Accounts receivable
|
14,351
|
|
|
Inventories
|
20,085
|
|
|
Other current assets
|
1,181
|
|
|
Property, plant and equipment
|
29,464
|
|
|
Identifiable intangible assets
|
79,002
|
|
|
Goodwill
|
85,637
|
|
|
Total assets
|
231,254
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
6,832
|
|
|
Other non-current liabilities
|
500
|
|
|
Non-current deferred tax liability
|
19,326
|
|
|
Total liabilities
|
26,658
|
|
|
Total consideration
|
$
|
204,596
|
|
|
Amortization period
|
|
Gross Carrying Amount at March 31, 2019
|
|
Accumulated Amortization
|
|
Net Carrying Amount at March 31, 2019
|
|
Gross Carrying Amount at March 31, 2018
|
|
Accumulated Amortization
|
|
Net Carrying Amount at March 31, 2018
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Products
|
10 years
|
|
$
|
62,343
|
|
|
$
|
8,832
|
|
|
$
|
53,511
|
|
|
$
|
64,611
|
|
|
$
|
2,692
|
|
|
$
|
61,919
|
|
Customer relationships
|
17 years
|
|
10,763
|
|
|
897
|
|
|
9,866
|
|
|
11,155
|
|
|
273
|
|
|
10,882
|
|
||||||
Backlog
|
1 year
|
|
3,117
|
|
|
3,117
|
|
|
—
|
|
|
3,230
|
|
|
1,346
|
|
|
1,884
|
|
||||||
Total
|
|
|
$
|
76,223
|
|
|
$
|
12,846
|
|
|
$
|
63,377
|
|
|
$
|
78,996
|
|
|
$
|
4,311
|
|
|
$
|
74,685
|
|
|
Provisional Fair Value
|
|
Final Fair Value
|
||||
Inventories
|
$
|
20,489
|
|
|
$
|
20,085
|
|
Other current assets
|
731
|
|
|
1,181
|
|
||
Goodwill
|
87,540
|
|
|
85,637
|
|
||
Current liabilities
|
6,255
|
|
|
6,832
|
|
||
Non-current deferred tax liability
|
22,121
|
|
|
19,326
|
|
|
Contract Assets
|
Contract Liabilities
|
||||
Balance as of April 1, 2018
|
$
|
16,114
|
|
$
|
(8,143
|
)
|
|
|
|
||||
Revenue recognized under contracts
|
157,357
|
|
7,679
|
|
||
Billed amounts to customers
|
(147,017
|
)
|
(6,350
|
)
|
||
Total activity
|
$
|
10,340
|
|
$
|
1,329
|
|
|
|
|
||||
Balance as of March 31, 2019
|
$
|
26,454
|
|
$
|
(6,814
|
)
|
|
|
Fiscal Year Ended March 31, 2019
|
||||||||||
|
|
Revenues recognized at point in time
|
|
Revenues recognized over time
|
|
Total
|
||||||
United States and Latin America
|
|
$
|
71,865
|
|
|
$
|
93,783
|
|
|
$
|
165,648
|
|
Canada
|
|
102,997
|
|
|
24,395
|
|
|
127,392
|
|
|||
Europe, Middle East and Africa
|
|
46,210
|
|
|
31,298
|
|
|
77,508
|
|
|||
Asia-Pacific
|
|
26,534
|
|
|
15,560
|
|
|
42,094
|
|
|||
Total revenues
|
|
$
|
247,606
|
|
|
$
|
165,036
|
|
|
$
|
412,642
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Basic net income per common share
|
|
|
|
|
|
|
||||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
Weighted-average common shares outstanding
|
|
32,568,541
|
|
|
32,423,581
|
|
|
32,301,661
|
|
|||
Basic net income per common share
|
|
$
|
0.70
|
|
|
$
|
0.37
|
|
|
$
|
0.45
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Diluted net income per common share
|
|
|
|
|
|
|
|
|
||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
22,756
|
|
|
$
|
11,913
|
|
|
$
|
14,641
|
|
Weighted-average common shares outstanding
|
|
32,568,541
|
|
|
32,423,581
|
|
|
32,301,661
|
|
|||
Common share equivalents:
|
|
|
|
|
|
|
||||||
Stock options issued
|
|
235,802
|
|
|
218,693
|
|
|
216,041
|
|
|||
Restricted and performance stock units issued
|
|
249,961
|
|
|
155,077
|
|
|
115,579
|
|
|||
Weighted average shares outstanding – dilutive
|
|
33,054,304
|
|
|
32,797,351
|
|
|
32,633,281
|
|
|||
Diluted net income per common share
|
|
$
|
0.69
|
|
|
$
|
0.36
|
|
|
$
|
0.45
|
|
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
32,892
|
|
|
$
|
31,516
|
|
Work in process
|
5,696
|
|
|
7,186
|
|
||
Finished goods
|
28,501
|
|
|
27,204
|
|
||
|
67,089
|
|
|
65,906
|
|
||
Valuation reserves
|
(2,199
|
)
|
|
(2,077
|
)
|
||
Inventories, net
|
$
|
64,890
|
|
|
$
|
63,829
|
|
Balance at March 31, 2016
|
|
$
|
1,287
|
|
|
|
Additions in reserve
|
|
348
|
|
|
|
Charged to reserve
|
|
(306
|
)
|
|
Balance at March 31, 2017
|
|
1,329
|
|
||
|
Additions in reserve
|
|
721
|
|
|
|
Charged to reserve
|
|
27
|
|
|
Balance at March 31, 2018
|
|
2,077
|
|
||
|
Additions in reserve
|
|
166
|
|
|
|
Charged to reserve
|
|
(44
|
)
|
|
Balance at March 31, 2019
|
|
$
|
2,199
|
|
|
|
2019
|
|
2018
|
||||
Land, buildings and improvements
|
|
$
|
51,834
|
|
|
$
|
50,808
|
|
Machinery and equipment
|
|
23,685
|
|
|
24,182
|
|
||
Office furniture and equipment
|
|
21,660
|
|
|
20,818
|
|
||
Internally developed software
|
|
4,979
|
|
|
4,069
|
|
||
Construction in progress
|
|
2,995
|
|
|
2,183
|
|
||
Property, plant and equipment at cost
|
|
105,153
|
|
|
102,060
|
|
||
Accumulated depreciation
|
|
(30,198
|
)
|
|
(27,575
|
)
|
||
Property, plant and equipment, net
|
|
$
|
74,955
|
|
|
$
|
74,485
|
|
|
|
|
|
|
|
|
United States
|
|
Canada
|
|
Europe
|
|
Asia
|
|
Total
|
||||||||||
Balance as of March 31, 2017
|
|
$
|
52,016
|
|
|
$
|
43,444
|
|
|
$
|
18,437
|
|
|
$
|
8,624
|
|
|
$
|
122,521
|
|
Goodwill acquired
|
|
—
|
|
|
85,156
|
|
|
—
|
|
|
—
|
|
|
85,156
|
|
|||||
Foreign currency translation impact
|
|
—
|
|
|
167
|
|
|
2,722
|
|
|
—
|
|
|
2,889
|
|
|||||
Balance as of March 31, 2018
|
|
$
|
52,016
|
|
|
$
|
128,767
|
|
|
$
|
21,159
|
|
|
$
|
8,624
|
|
|
$
|
210,566
|
|
Allocation of Goodwill
|
|
10,709
|
|
|
(10,709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase price adjustment
|
|
—
|
|
|
481
|
|
|
—
|
|
|
—
|
|
|
481
|
|
|||||
Foreign currency translation impact
|
|
—
|
|
|
(4,157
|
)
|
|
(1,895
|
)
|
|
—
|
|
|
(6,052
|
)
|
|||||
Balance as of March 31, 2019
|
|
$
|
62,725
|
|
|
$
|
114,382
|
|
|
$
|
19,264
|
|
|
$
|
8,624
|
|
|
$
|
204,995
|
|
|
|
Gross Carrying Amount at March 31, 2019
|
|
Accumulated Amortization
|
|
Net Carrying Amount at March 31, 2019
|
|
Gross Carrying Amount at March 31, 2018
|
|
Accumulated Amortization
|
|
Net Carrying Amount at March 31, 2018
|
||||||||||||
Products
|
|
$
|
62,343
|
|
|
$
|
8,832
|
|
|
$
|
53,511
|
|
|
$
|
64,611
|
|
|
$
|
2,719
|
|
|
$
|
61,892
|
|
Trademarks
|
|
44,819
|
|
|
1,052
|
|
|
43,767
|
|
|
46,156
|
|
|
832
|
|
|
45,324
|
|
||||||
Developed technology
|
|
9,854
|
|
|
4,464
|
|
|
5,390
|
|
|
10,160
|
|
|
4,106
|
|
|
6,054
|
|
||||||
Customer relationships
|
|
110,802
|
|
|
87,319
|
|
|
23,483
|
|
|
113,378
|
|
|
77,646
|
|
|
35,732
|
|
||||||
Certifications
|
|
445
|
|
|
—
|
|
|
445
|
|
|
458
|
|
|
—
|
|
|
458
|
|
||||||
Other
|
|
5,742
|
|
|
5,742
|
|
|
—
|
|
|
5,863
|
|
|
3,889
|
|
|
1,974
|
|
||||||
Total
|
|
$
|
234,005
|
|
|
$
|
107,409
|
|
|
$
|
126,596
|
|
|
$
|
240,626
|
|
|
$
|
89,192
|
|
|
$
|
151,434
|
|
2020
|
|
$
|
17,742
|
|
2021
|
|
9,388
|
|
|
2022
|
|
8,366
|
|
|
2023
|
|
8,363
|
|
|
2024
|
|
7,674
|
|
|
Thereafter
|
|
32,016
|
|
|
Total
|
|
$
|
83,549
|
|
|
March 31,
2019 |
|
March 31,
2018 |
||||
Accrued employee compensation and related expenses
|
$
|
18,109
|
|
|
$
|
16,449
|
|
Accrued interest
|
1,172
|
|
|
1,154
|
|
||
Customer prepayment
|
783
|
|
|
519
|
|
||
Warranty reserve
|
365
|
|
|
300
|
|
||
Professional fees
|
2,326
|
|
|
1,854
|
|
||
Sales tax payable
|
2,185
|
|
|
1,546
|
|
||
Other
|
2,908
|
|
|
988
|
|
||
Total accrued current liabilities
|
$
|
27,848
|
|
|
$
|
22,810
|
|
|
March 31,
2019 |
|
March 31,
2018 |
||||
Variable Rate Term Loan, due October 2024, net of deferred debt issuance costs and debt discounts of $6,271 and $7,967 as of March 31, 2019 and 2018, respectively
|
$
|
200,229
|
|
|
$
|
217,033
|
|
Less current portion
|
(2,500
|
)
|
|
(2,500
|
)
|
||
|
$
|
197,729
|
|
|
$
|
214,533
|
|
2020
|
|
$
|
2,500
|
|
2021
|
|
2,500
|
|
|
2022
|
|
2,500
|
|
|
2023
|
|
2,500
|
|
|
2024
|
|
2,500
|
|
|
2025
|
|
194,000
|
|
|
Total
|
|
$
|
206,500
|
|
2020
|
|
$
|
3,941
|
|
2021
|
|
3,143
|
|
|
2022
|
|
2,858
|
|
|
2023
|
|
2,568
|
|
|
2024
|
|
1,520
|
|
|
Thereafter
|
|
6,226
|
|
|
|
|
$
|
20,256
|
|
2020
|
|
$
|
1,123
|
|
2021
|
|
1,041
|
|
|
2022
|
|
80
|
|
|
|
|
$
|
2,244
|
|
Balance at March 31, 2016
|
|
$
|
460
|
|
|
|
Reserve for warranties issued during the period
|
|
143
|
|
|
|
Settlements made during the period
|
|
(303
|
)
|
|
Balance at March 31, 2017
|
|
$
|
300
|
|
|
|
Reserve for warranties issued during the period
|
|
281
|
|
|
|
Settlements made during the period
|
|
(281
|
)
|
|
Balance at March 31, 2018
|
|
$
|
300
|
|
|
|
Reserve for warranties issued during the period
|
|
300
|
|
|
|
Settlements made during the period
|
|
(235
|
)
|
|
Balance at March 31, 2019
|
|
$
|
365
|
|
|
|
|
Options Outstanding
|
|||||
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|||
Balance at March 31, 2016
|
|
433,726
|
|
|
$
|
8.07
|
|
|
|
Granted
|
|
28,499
|
|
|
19.64
|
|
|
|
Exercised
|
|
(47,484
|
)
|
|
6.77
|
|
|
|
Forfeited
|
|
(2,802
|
)
|
|
19.58
|
|
|
Balance at March 31, 2017
|
|
411,939
|
|
|
$
|
8.94
|
|
|
|
Exercised
|
|
(42,956
|
)
|
|
7.00
|
|
|
|
Forfeited
|
|
(1,412
|
)
|
|
19.83
|
|
|
Balance at March 31, 2018
|
|
367,571
|
|
|
$
|
9.12
|
|
|
|
Exercised
|
|
(37,906
|
)
|
|
10.44
|
|
|
|
Forfeited
|
|
(279
|
)
|
|
21.52
|
|
|
Balance at March 31, 2019
|
|
329,386
|
|
|
$
|
8.96
|
|
|
|
|
Unvested Options
|
||||||
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
||||
Balance at March 31, 2016
|
|
$
|
40,810
|
|
|
$
|
7.39
|
|
|
|
Granted
|
|
28,499
|
|
|
19.64
|
|
||
|
Vested
|
|
(28,678
|
)
|
|
6.93
|
|
||
|
Forfeited
|
|
(2,802
|
)
|
|
7.53
|
|
||
Balance at March 31, 2017
|
|
$
|
37,829
|
|
|
$
|
8.86
|
|
|
|
Vested
|
|
(17,417
|
)
|
|
6.93
|
|
||
|
Forfeited
|
|
(1,412
|
)
|
|
19.83
|
|
||
Balance at March 31, 2018
|
|
$
|
19,000
|
|
|
$
|
5.89
|
|
|
|
Vested
|
|
(9,500
|
)
|
|
5.89
|
|
||
Balance at March 31, 2019
|
|
$
|
9,500
|
|
|
$
|
5.89
|
|
|
|
Options Outstanding
|
|
Options Vested and Exercisable
|
||||||||||||||||||||||
Exercise Price
|
|
Number Outstanding
|
|
Weighted Average Contractual Life (Years)
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value at March 31, 2019
|
|
Number Vested and Exercisable
|
|
Weighted Average Contractual Life (Years)
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value at March 31, 2019
|
||||||||||
$5.20
|
|
216,952
|
|
|
1.55
|
|
$
|
5.20
|
|
|
$
|
4,189,343
|
|
|
216,952
|
|
|
1.55
|
|
$
|
5.20
|
|
|
$
|
4,189,343
|
|
$9.82
|
|
13,339
|
|
|
1.91
|
|
9.82
|
|
|
195,950
|
|
|
13,339
|
|
|
1.91
|
|
9.82
|
|
|
195,950
|
|
||||
$12.00
|
|
40,690
|
|
|
2.09
|
|
12.00
|
|
|
508,407
|
|
|
40,690
|
|
|
2.09
|
|
12.00
|
|
|
508,407
|
|
||||
$19.64
|
|
28,499
|
|
|
7.76
|
|
19.64
|
|
|
138,790
|
|
|
18,999
|
|
|
7.76
|
|
19.64
|
|
|
92,525
|
|
||||
$21.52
|
|
29,906
|
|
|
3.34
|
|
21.52
|
|
|
89,689
|
|
|
29,906
|
|
|
3.34
|
|
21.52
|
|
|
89,689
|
|
||||
$5.20-$21.52
|
|
329,386
|
|
|
2.33
|
|
$
|
8.96
|
|
|
$
|
5,122,179
|
|
|
319,886
|
|
|
2.17
|
|
$
|
8.64
|
|
|
$
|
5,075,914
|
|
|
Restricted Stock Units
|
|
Number of Shares
|
|
Weighted Average Grant Fair Value
|
|||
Balance of unvested units at March 31, 2016
|
|
192,221
|
|
|
$
|
23.36
|
|
|
|
Granted
|
|
135,855
|
|
|
18.65
|
|
|
|
Released
|
|
(111,611
|
)
|
|
22.74
|
|
|
|
Forfeited
|
|
(8,319
|
)
|
|
21.25
|
|
|
Balance of unvested units at March 31, 2017
|
|
208,146
|
|
|
$
|
20.64
|
|
|
|
Granted
|
|
119,302
|
|
|
19.16
|
|
|
|
Released
|
|
(88,084
|
)
|
|
21.51
|
|
|
|
Forfeited
|
|
(10,252
|
)
|
|
20.05
|
|
|
Balance of unvested units at March 31, 2018
|
|
229,112
|
|
|
$
|
19.55
|
|
|
|
Granted
|
|
115,378
|
|
|
23.44
|
|
|
|
Released
|
|
(101,874
|
)
|
|
19.93
|
|
|
|
Forfeited
|
|
(5,591
|
)
|
|
19.98
|
|
|
Balance of unvested units at March 31, 2019
|
|
237,025
|
|
|
$
|
21.26
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Foreign currency transaction gain/(expense)
|
|
$
|
353
|
|
|
$
|
(5,629
|
)
|
|
$
|
(176
|
)
|
Loss on foreign exchange forwards
|
|
(125
|
)
|
|
(96
|
)
|
|
(453
|
)
|
|||
Other income/(expense)
|
|
(119
|
)
|
|
130
|
|
|
219
|
|
|||
|
|
$
|
109
|
|
|
$
|
(5,595
|
)
|
|
$
|
(410
|
)
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Current provision:
|
|
|
|
|
|
|
|||||||
|
Federal provision
|
|
$
|
3,507
|
|
|
$
|
3,937
|
|
|
$
|
1,588
|
|
|
Foreign provision
|
|
11,951
|
|
|
12,768
|
|
|
6,341
|
|
|||
|
State provision
|
|
681
|
|
|
301
|
|
|
155
|
|
|||
Deferred provision:
|
|
|
|
|
|
|
|||||||
|
Federal deferred benefit
|
|
(2,083
|
)
|
|
(8,506
|
)
|
|
(1,907
|
)
|
|||
|
Foreign deferred benefit
|
|
(3,964
|
)
|
|
(3,178
|
)
|
|
(2,025
|
)
|
|||
|
State deferred benefit
|
|
(119
|
)
|
|
(152
|
)
|
|
(54
|
)
|
|||
Total provision for income taxes
|
|
$
|
9,973
|
|
|
$
|
5,170
|
|
|
$
|
4,098
|
|
|
|
|
March 31,
|
||||||
|
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
|||||
|
|
|
|
|
|||||
|
Accrued liabilities and reserves
|
|
$
|
2,489
|
|
|
$
|
1,987
|
|
|
Stock option compensation
|
|
1,072
|
|
|
821
|
|
||
|
Foreign deferred benefits
|
|
2,915
|
|
|
3,575
|
|
||
|
Net operating loss carry-forward
|
|
1,440
|
|
|
1,688
|
|
||
|
Inventories
|
|
385
|
|
|
371
|
|
||
|
Interest limitation
|
|
359
|
|
|
—
|
|
||
|
Capitalized transaction costs
|
|
178
|
|
|
207
|
|
||
|
Foreign tax credit carry forward
|
|
149
|
|
|
104
|
|
||
|
Valuation allowance
|
|
(605
|
)
|
|
(878
|
)
|
||
Total deferred tax assets
|
|
$
|
8,382
|
|
|
$
|
7,875
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|||||
Intangible assets
|
|
$
|
(7,847
|
)
|
|
$
|
(9,498
|
)
|
|
Intangible assets - foreign
|
|
(20,980
|
)
|
|
(25,674
|
)
|
|||
Property, plant and equipment
|
|
(3,245
|
)
|
|
(2,522
|
)
|
|||
Prepaid expenses
|
|
(39
|
)
|
|
(104
|
)
|
|||
Unrealized loss on hedge
|
|
—
|
|
|
(45
|
)
|
|||
Undistributed foreign earnings
|
|
(581
|
)
|
|
(859
|
)
|
|||
Total deferred tax liabilities
|
|
$
|
(32,692
|
)
|
|
$
|
(38,702
|
)
|
|
|
|
|
|
|
|
||||
Net deferred tax asset (liability)
|
|
$
|
(24,310
|
)
|
|
$
|
(30,827
|
)
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
U.S.
|
|
|
$
|
44
|
|
|
$
|
(13,568
|
)
|
|
$
|
(83
|
)
|
Non-U.S.
|
|
|
33,098
|
|
|
31,957
|
|
|
19,165
|
|
|||
Income from continuing operations
|
|
$
|
33,142
|
|
|
$
|
18,389
|
|
|
$
|
19,082
|
|
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Notional U.S. federal income tax expense at statutory rate
|
|
$
|
6,960
|
|
|
$
|
5,792
|
|
|
$
|
6,679
|
|
||
Adjustments to reconcile to the income tax provision:
|
|
|
|
|
|
|
||||||||
|
Rate difference-international subsidiaries
|
|
1,366
|
|
|
(1,769
|
)
|
|
(2,622
|
)
|
||||
Transition tax for United States tax reform
|
|
(1,118
|
)
|
|
5,125
|
|
|
—
|
|
|||||
|
Impact on deferred tax liability for statutory rate change
|
|
—
|
|
|
(5,849
|
)
|
|
—
|
|
||||
Impact of U.S. global intangible tax
|
|
946
|
|
|
—
|
|
|
—
|
|
|||||
|
Undistributed foreign earnings
|
|
313
|
|
|
1,786
|
|
|
—
|
|
||||
U.S. state income tax provision, net
|
|
408
|
|
|
111
|
|
|
45
|
|
|||||
|
Charges/(benefits) related to uncertain tax positions
|
|
1,137
|
|
|
(533
|
)
|
|
(128
|
)
|
||||
|
Non-deductible charges
|
|
517
|
|
|
758
|
|
|
296
|
|
||||
|
Foreign purchase price adjustment
|
|
—
|
|
|
—
|
|
|
(379
|
)
|
||||
|
Change in valuation allowance
|
|
(280
|
)
|
|
219
|
|
|
490
|
|
||||
|
Other, net
|
|
(276
|
)
|
|
(470
|
)
|
|
(283
|
)
|
||||
Provision for income taxes
|
|
$
|
9,973
|
|
|
$
|
5,170
|
|
|
$
|
4,098
|
|
|
Year Ended
|
Year Ended
|
||||
|
March 31,
2019 |
March 31,
2018 |
||||
Transition Tax (provisional)
|
$
|
—
|
|
$
|
5,126
|
|
Net impact on U.S. deferred tax assets and liabilities (provisional)
|
—
|
|
(6,030
|
)
|
||
Benefit on final calculation of Transition Tax
|
(1,118
|
)
|
—
|
|
||
Net changes in deferred tax liability associated with anticipated repatriation taxes (provisional)
|
—
|
|
1,704
|
|
||
Net discrete impacts of the enactment of the Tax Act
|
$
|
(1,118
|
)
|
$
|
800
|
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
533
|
|
|
Additions for tax positions of prior years
|
|
1,137
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
|
—
|
|
|
(533
|
)
|
|||
Reserve for uncertain income taxes
|
|
$
|
1,137
|
|
|
$
|
—
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Sales to External Customers:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
165,648
|
|
|
$
|
114,548
|
|
|
$
|
119,791
|
|
Canada
|
|
127,392
|
|
|
94,427
|
|
|
41,721
|
|
|||
Europe, Middle East and Africa
|
|
77,508
|
|
|
68,352
|
|
|
71,133
|
|
|||
Asia-Pacific
|
|
42,094
|
|
|
31,282
|
|
|
31,485
|
|
|||
|
|
$
|
412,642
|
|
|
$
|
308,609
|
|
|
$
|
264,130
|
|
Inter-segment Sales:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
52,662
|
|
|
$
|
50,155
|
|
|
$
|
45,966
|
|
Canada
|
|
6,231
|
|
|
7,294
|
|
|
3,610
|
|
|||
Europe, Middle East and Africa
|
|
3,406
|
|
|
1,614
|
|
|
1,580
|
|
|||
Asia-Pacific
|
|
859
|
|
|
1,668
|
|
|
1,407
|
|
|||
|
|
$
|
63,158
|
|
|
$
|
60,731
|
|
|
$
|
52,563
|
|
Depreciation Expense:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
4,935
|
|
|
$
|
4,326
|
|
|
$
|
3,632
|
|
Canada
|
|
3,616
|
|
|
3,019
|
|
|
1,933
|
|
|||
Europe, Middle East and Africa
|
|
466
|
|
|
476
|
|
|
301
|
|
|||
Asia-Pacific
|
|
177
|
|
|
141
|
|
|
194
|
|
|||
|
|
$
|
9,194
|
|
|
$
|
7,962
|
|
|
$
|
6,060
|
|
Amortization of Intangibles:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
5,841
|
|
|
$
|
6,018
|
|
|
$
|
5,860
|
|
Canada
|
|
12,515
|
|
|
7,979
|
|
|
3,538
|
|
|||
Europe, Middle East and Africa
|
|
1,351
|
|
|
1,398
|
|
|
1,310
|
|
|||
Asia-Pacific
|
|
1,064
|
|
|
1,063
|
|
|
1,064
|
|
|||
|
|
$
|
20,771
|
|
|
$
|
16,458
|
|
|
$
|
11,772
|
|
Income from Operations:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
16,421
|
|
|
$
|
484
|
|
|
$
|
5,359
|
|
Canada
|
|
20,601
|
|
|
26,198
|
|
|
8,040
|
|
|||
Europe, Middle East and Africa
|
|
11,295
|
|
|
6,842
|
|
|
9,095
|
|
|||
Asia-Pacific
|
|
5,847
|
|
|
4,111
|
|
|
4,512
|
|
|||
Unallocated:
|
|
|
|
|
|
|
|
|
|
|||
Public company costs
|
|
(1,507
|
)
|
|
(1,378
|
)
|
|
(1,160
|
)
|
|||
Stock compensation
|
|
(4,148
|
)
|
|
(3,519
|
)
|
|
(3,402
|
)
|
|||
|
|
$
|
48,509
|
|
|
$
|
32,738
|
|
|
$
|
22,444
|
|
|
|
|
|
|
|
|
||||||
|
|
March 31, 2019
|
|
March 31, 2018
|
|
|
||||||
Fixed Assets:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
40,691
|
|
|
$
|
37,112
|
|
|
|
||
Canada
|
|
30,045
|
|
|
33,076
|
|
|
|
||||
Europe, Middle East and Africa
|
|
3,497
|
|
|
3,567
|
|
|
|
||||
Asia-Pacific
|
|
722
|
|
|
730
|
|
|
|
||||
|
|
$
|
74,955
|
|
|
$
|
74,485
|
|
|
|
||
Total Assets:
|
|
|
|
|
|
|
|
|
||||
United States and Latin America
|
|
$
|
230,149
|
|
|
$
|
213,099
|
|
|
|
||
Canada
|
|
298,233
|
|
|
317,635
|
|
|
|
||||
Europe, Middle East and Africa
|
|
84,214
|
|
|
89,379
|
|
|
|
||||
Asia-Pacific
|
|
43,166
|
|
|
42,364
|
|
|
|
||||
|
|
$
|
655,762
|
|
|
$
|
662,477
|
|
|
|
|
|
Year Ended March 31, 2019
|
|
Year Ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Capital Expenditures:
|
|
|
|
|
|
|
||||||
United States and Latin America
|
|
$
|
8,432
|
|
|
$
|
4,257
|
|
|
$
|
3,882
|
|
Canada
|
|
2,753
|
|
|
5,295
|
|
|
3,286
|
|
|||
Europe, Middle East and Africa
|
|
612
|
|
|
118
|
|
|
1,074
|
|
|||
Asia-Pacific
|
|
239
|
|
|
338
|
|
|
128
|
|
|||
|
|
$
|
12,036
|
|
|
$
|
10,008
|
|
|
$
|
8,370
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31, 2019
|
|
December 31, 2018
|
|
September 30, 2018
|
|
June 30, 2018
|
||||||||
Sales
|
|
$
|
114,230
|
|
|
$
|
119,356
|
|
|
$
|
90,154
|
|
|
$
|
88,902
|
|
Gross Profit
|
|
44,969
|
|
|
50,883
|
|
|
40,359
|
|
|
39,729
|
|
||||
Income from operations
|
|
13,710
|
|
|
17,887
|
|
|
8,672
|
|
|
8,240
|
|
||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
6,768
|
|
|
$
|
9,719
|
|
|
$
|
3,227
|
|
|
$
|
3,042
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
Diluted
|
|
0.20
|
|
|
0.29
|
|
|
0.10
|
|
|
0.09
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
||||||||
Sales
|
|
$
|
102,582
|
|
|
$
|
92,660
|
|
|
$
|
61,631
|
|
|
$
|
51,736
|
|
Gross Profit
|
|
46,823
|
|
|
42,214
|
|
|
30,960
|
|
|
23,814
|
|
||||
Income from operations
|
|
13,553
|
|
|
10,210
|
|
|
7,417
|
|
|
1,558
|
|
||||
Net income available to Thermon Group Holdings, Inc.
|
|
$
|
6,057
|
|
|
$
|
599
|
|
|
$
|
4,778
|
|
|
$
|
479
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.19
|
|
|
$
|
0.02
|
|
|
$
|
0.15
|
|
|
$
|
0.01
|
|
Diluted
|
|
0.18
|
|
|
0.02
|
|
|
0.15
|
|
|
0.01
|
|
•
|
the Company intends to hire additional personnel within the Corporate Accounting and Internal Control departments to assist with risk assessment, technical accounting and reporting matters;
|
•
|
incremental reviews related to the EMEA segment’s project revenue accounting will be performed within the Corporate Accounting department on a quarterly basis;
|
•
|
additional policies and procedures will be implemented around risk assessment when there are changes in the Company’s business, including the adoption of new accounting pronouncements, which may include engagement of third party assistance; and
|
•
|
at the direction and oversight of the Audit Committee, management will create a deficiency remediation plan, whereby all identified control deficiencies will be tracked and followed up on through their ultimate remediation. Management will report the progress made with respect to the remediation of each matter to the Audit Committee on a periodic basis.
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding equity awards
|
|
Weighted-average exercise price of outstanding options
|
|
Number of securities remaining available for future issuances under equity compensation plans (1)
|
|||||
|
|
|
|
|
|
|
|||||
Equity compensation plans
approved by security holders (2)
|
|
329,386
|
|
|
(3)
|
|
|
1,433,871
|
|
||
Equity plans not approved by security holders (4)
|
|
230,291
|
|
|
$
|
5.47
|
|
|
—
|
|
(1)
|
Excludes securities reflected in the column entitled "Number of securities to be issued upon exercise of outstanding equity awards."
|
(2)
|
On April 8, 2011, our board of directors and pre-IPO stockholders approved the Thermon Group Holdings, Inc. 2011 Long-Term Incentive Plan ("2011 LTIP"). The 2011 LTIP authorized the issuance of 2,893,341 equity awards.
|
(3)
|
At
March 31, 2019
, the Company had outstanding under the LTIP: (i) 99,095 stock options, with a weighted average exercise price of $17.07, (ii) 237,025 unvested restricted stock units, with a weighted average grant date fair value of $21.26, and (iii) 227,434 performance units (assuming satisfaction of the performance metric at target and 449,562 at maximum), with a weighted average grant date fair value of $21.49.
|
(4)
|
The 2010 Thermon Group Holdings, Inc. Restricted Stock and Stock Option Plans (the "2010 Plan") was approved by our board of directors on July 28, 2010. The 2010 Plan authorized the issuance of 2,767,171 equity awards and provides for the grant of non-qualified stock options and restricted stock. In connection with our May 2011 IPO, all 2,757,524 of the unvested stock options that were then outstanding under the 2010 Plan became fully vested and exercisable. The 2010 Plan will terminate as of the earlier of (i) the date on which all equity awards under the 2010 Plan have been issued, (ii) the termination of the 2010 Plan by our board of directors, or (iii) the tenth anniversary of the effective date of the 2010 Plan; however, no further grants or equity awards will be made under the 2010 Plan. Under the 2010 Plan, the compensation committee of our board of directors has the authority to designate participants in the plan, determine the form of awards, the number of shares subject to individual awards, and the terms and conditions, including the vesting schedule, of each award granted under the 2010 Plan. The term of any option shall be fixed by the compensation committee and shall not exceed ten years from the date of grant. At
March 31, 2019
, the Company had outstanding under the 2010 Plan 230,291 non-qualified stock options, with a weighted average exercise price of $5.47.
|
1.
|
Financial Statements:
Included herein at pages 50 through 84
|
2.
|
Financial Statement Schedules
: None. Financial statement schedules have been omitted because the required information is included in our consolidated financial statements contained elsewhere in this annual report.
|
3.
|
Exhibits:
See the Exhibit Index below. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this annual report is identified in the Exhibit Index by a single asterisk following its exhibit number.
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in such agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments.
|
|
||
Exhibit
Number
|
|
Description
|
|
|
|
2.1+
|
|
|
|
|
|
2.2+
|
|
|
|
|
|
2.3
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2*
|
|
|
|
|
|
10.1
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5†
|
|
|
|
|
|
10.6†
|
|
|
|
|
|
10.7†
|
|
|
|
|
|
10.8†
|
|
|
|
|
|
10.9†
|
|
|
|
|
|
10.10†
|
|
|
|
|
|
10.11†
|
|
|
|
|
|
|
||
Exhibit
Number |
|
Description
|
|
|
|
10.12†
|
|
|
|
|
|
10.13†
|
|
|
|
|
|
10.14†
|
|
|
|
|
|
10.15†
|
|
|
|
|
|
10.16†*
|
|
|
|
|
|
10.17†
|
|
|
|
|
|
10.18†
|
|
|
|
|
|
10.19†
|
|
|
|
|
|
10.20†
|
|
|
|
|
|
10.21†
|
|
|
|
|
|
10.22†
|
|
|
|
|
|
10.23†
|
|
|
|
|
|
10.24†
|
|
|
|
|
|
10.25†
|
|
|
|
|
|
10.26†
|
|
|
|
|
|
10.27†
|
|
|
|
|
|
10.28†
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
|
||
Exhibit
Number |
|
Description
|
|
|
|
32.2*
|
|
|
|
|
|
101*
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Shareholders'/Members' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements
|
|
THERMON GROUP HOLDINGS, INC. (registrant)
|
|
Date: June 12, 2019
|
By:
|
/s/ Jay Peterson
|
|
|
Jay Peterson
|
|
|
Chief Financial Officer, Senior Vice President, Finance and Assistant Secretary
(Principal Financial and Principal Accounting Officer)
|
Date
|
|
Title
|
|
|
Signatures
|
June 12, 2019
|
|
President and Chief Executive Officer
|
|
By:
|
/s/ Bruce Thames
|
|
|
(Principal Executive Officer); Director
|
|
|
Bruce Thames
|
|
|
|
|
|
|
June 12, 2019
|
|
Chief Financial Officer, Senior Vice President, Finance and Assistant Secretary
|
|
By:
|
/s/ Jay Peterson
|
|
|
(Principal Financial and Principal Accounting Officer)
|
|
|
Jay Peterson
|
|
|
|
|
|
|
June 12, 2019
|
|
Chairman of the Board
|
|
By:
|
/s/ Charles A. Sorrentino
|
|
|
|
|
|
Charles A. Sorrentino
|
|
|
|
|
|
|
June 12, 2019
|
|
Director
|
|
By:
|
/s/ Linda Dalgetty
|
|
|
|
|
|
Linda Dalgetty
|
|
|
|
|
|
|
June 12, 2019
|
|
Director
|
|
By:
|
/s/ Marcus J. George
|
|
|
|
|
|
Marcus J. George
|
|
|
|
|
|
|
June 12, 2019
|
|
Director
|
|
By:
|
/s/ Kevin J. McGinty
|
|
|
|
|
|
Kevin J. McGinty
|
|
|
|
|
|
|
June 12, 2019
|
|
Director
|
|
By:
|
/s/ John T. Nesser III
|
|
|
|
|
|
John T. Nesser III
|
|
|
|
|
|
|
June 12, 2019
|
|
Director
|
|
By:
|
/s/ Michael W. Press
|
|
|
|
|
|
Michael W. Press
|
|
|
|
|
|
|
•
|
Voting Rights
. Each outstanding share of Common Stock entitles its holder to one vote on all matters submitted to a vote of the Company’s stockholders, including the election of directors. There are no cumulative voting rights. Directors of the Company will be elected by a plurality of the votes cast in the election of directors. Generally, all other matters to be voted on by stockholders must be approved by a majority of the votes which could be cast by the holders of shares of Common Stock present in person or represented by proxy and entitled to vote.
|
•
|
Dividends
. Subject to the rights of the holders of any Preferred Stock which may be outstanding from time to time, the holders of Common Stock are entitled to receive dividends as, when and if dividends are declared by the Board of Directors of the Company (the “Board”) out of assets legally available for the payment of dividends.
|
•
|
Liquidation
. In the event of a liquidation, dissolution or winding up of the Company’s affairs, whether voluntary or involuntary, after payment of the Company’s liabilities and obligations to creditors and any holders of Preferred Stock, the Company’s remaining assets will be distributed ratably among the holders of shares of Common Stock on a per share basis.
|
•
|
Other Rights and Preferences
. The holders of Common Stock have no preemptive, conversion or subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock. The Common Stock is not subject to liability for further calls or to assessments by the Company.
|
•
|
Merger
. In the event the Company merges or consolidates with or into another entity, holders of each share of Common Stock will be entitled to receive the same per share consideration.
|
•
|
authorize the Board, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, and with respect to each series, to fix the number of shares constituting that series and establish the rights and other terms of that series;
|
•
|
require that actions to be taken by the stockholders may be taken only at an annual or special meeting of the Company’s stockholders and not by written consent;
|
•
|
specify that special meetings of the Company’s stockholders can be called only by the Board, the Chairman of the Board, the Company’s chief executive officer or the Company’s president;
|
•
|
establish advance notice procedures for stockholders to submit nominations of candidates for election to the Board and other proposals to be brought before a stockholders meeting;
|
•
|
provide that the Bylaws may be amended by the Board without stockholder approval;
|
•
|
allow the Board to establish the size of the Board by action of the Board, subject to a minimum of three members;
|
•
|
provide that vacancies on the Board or newly created directorships resulting from an increase in the number of directors may be filled only by a majority of directors then in office, even though less than a quorum;
|
•
|
do not give the holders of Common Stock cumulative voting rights with respect to the election of directors; and
|
•
|
prohibit the Company from engaging in certain business combinations with any interested stockholder (as defined below) unless specified conditions are satisfied as described below under “Business Combinations under Section 203 of the DGCL.”
|
•
|
prior to the time that person became an interested stockholder, the Board approved either the business combination or the transaction which resulted in the person becoming an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the person becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction commenced, excluding certain shares; or
|
•
|
at or subsequent to the time the person became an interested stockholder, the business combination is approved by the Board and by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
|
(i)
|
The Company shall pay Executive the Base Salary and any accrued employment benefit as required by applicable law (such accrued benefit, for clarity, not to include any Annual Bonus, which is addressed in clause (ii) below), each pro-rated through Executive’s employment termination date;
|
(ii)
|
The Company shall pay Executive any Annual Bonus earned from a prior year but not yet paid and any portion of the Annual Bonus from the current fiscal year that is payable pursuant to Section 6 above, each payable in accordance with Section 6;
|
(iii)
|
The Company shall pay Executive for any unreimbursed business expenses incurred by Executive through Executive’s last day of employment pursuant to Section 8 above; and
|
(iv)
|
Provided that (A) Executive delivers to the Company within sixty days following Executive’s termination of employment a release of claims in form and substance satisfactory to the Company, and (B) does not otherwise violate this Agreement prior to or
|
(i)
|
the acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its Subsidiaries, or any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any entity with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity's governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or
|
(ii)
|
the consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or
|
(iii)
|
a complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company.
|
Thomas Cerovski
|
THERMON HOLDING CORP.
|
|
/s/ Thomas Cerovski
|
|
By: /s/ Bruce A. Thames
|
Name of Subsidiary
|
|
State or Other Jurisdiction of Incorporation or Organization
|
|
|
Thermon Holding Corp.
|
|
Delaware
|
|
CCI Thermal Technologies Delaware Inc. d/b/a Thermon Heating Systems, Inc.
|
|
Delaware
|
|
CCI Thermal Technologies Texas Inc. d/b/a Thermon Heating Systems, Inc.
|
|
Texas
|
|
CCI Thermal Technologies Colorado Inc. d/b/a Thermon Heating Systems, Inc.
|
|
Colorado
|
|
Thermon Canada Inc.
|
|
Nova Scotia, Canada
|
|
Thermon Power Solutions, Inc.
|
|
Alberta, Canada
|
|
Thermon Canada Services, Inc.
|
|
Alberta, Canada
|
|
Thermon Heating Systems, Inc.
|
|
Alberta, Canada
|
|
Thermon Industries, Inc.
|
|
Texas
|
|
1962235 Alberta Ltd.
|
|
Canada
|
|
Thermon, Inc.
|
|
Texas
|
|
Thermon Heat Tracing Services, Inc.
|
|
Texas
|
|
Thermon Heat Tracing Services-I, Inc.
|
|
Texas
|
|
Industrial Process Insulation, Inc.
|
|
Texas
|
|
Thermon Heat Tracing Services-II, Inc.
|
|
Louisiana
|
|
Thermon Latinoamericana, S. de R.L. de C.V.
|
|
Mexico DF, Mexico
|
|
Thermon Soluções de Aquecimento LTDA
|
|
Brazil
|
|
Thermon Australia Pty. Ltd.
|
|
Australia
|
|
Thermon Far East, Ltd.
|
|
Japan
|
|
Thermon India Pvt. Ltd.
|
|
India
|
|
Thermon Heat Tracing and Engineering (Shanghai) Co. Ltd.
|
|
China
|
|
Thermon Korea, Ltd.
|
|
Korea
|
|
Thermon Europe B.V.
|
|
Netherlands
|
|
Thermon Deutschland GmbH
|
|
Germany
|
|
OOO Thermon Eurasia
|
|
Russian Federation
|
|
Thermon France SAS
|
|
France
|
|
Thermon U.K. Ltd.
|
|
United Kingdom
|
|
Thermon South Africa Pty. Ltd.
|
|
South Africa
|
|
Thermon Middle East, WLL
|
|
Bahrain
|
/s/ KPMG LLP
|
|
|
|
Austin, Texas
|
|
June 12, 2019
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Thermon Group Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: June 12, 2019
|
|
|
|
By:
|
/s/ Bruce Thames
|
|
Name:
|
Bruce Thames
|
|
Title:
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Thermon Group Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: June 12, 2019
|
|
|
|
By:
|
/s/ Jay Peterson
|
|
Name:
|
Jay Peterson
|
|
Title:
|
Chief Financial Officer, Senior Vice President, Finance and Assistant Secretary
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: June 12, 2019
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By:
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/s/ Bruce Thames
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Name:
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Bruce Thames
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Title:
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President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: June 12, 2019
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By:
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/s/ Jay Peterson
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Name:
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Jay Peterson
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Title:
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Chief Financial Officer, Senior Vice President, Finance and Assistant Secretary
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