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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 7/24/20 Altra Industrial Motion Corp. 10-Q 6/30/20 86:11M ActiveDisclosure/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 1.03M
2: EX-10.2 Material Contract HTML 95K
3: EX-10.3 Material Contract HTML 57K
4: EX-10.4 Material Contract HTML 63K
5: EX-10.5 Material Contract HTML 57K
6: EX-31.1 Certification -- §302 - SOA'02 HTML 29K
7: EX-31.2 Certification -- §302 - SOA'02 HTML 29K
8: EX-32.1 Certification -- §906 - SOA'02 HTML 27K
9: EX-32.2 Certification -- §906 - SOA'02 HTML 27K
16: R1 Document and Entity Information HTML 79K
17: R2 Condensed Consolidated Balance Sheets HTML 121K
18: R3 Condensed Consolidated Balance Sheets HTML 36K
(Parenthetical)
19: R4 Condensed Consolidated Statements of Operations HTML 100K
20: R5 Condensed Consolidated Statements of Comprehensive HTML 52K
Income
21: R6 Condensed Consolidated Statements of Cash Flows HTML 117K
22: R7 Condensed Consolidated Statements of Stockholders' HTML 75K
Equity
23: R8 Condensed Consolidated Statements of Stockholders' HTML 27K
Equity (Parenthetical)
24: R9 Organization and Nature of Operations HTML 28K
25: R10 Basis of Presentation HTML 29K
26: R11 Recent Accounting Standards HTML 39K
27: R12 Revenue Recognition HTML 146K
28: R13 Fair Value of Financial Instruments HTML 35K
29: R14 Changes in Accumulated Other Comprehensive HTML 92K
Income/(Loss) by Component
30: R15 Net Income per Share HTML 87K
31: R16 Inventories HTML 44K
32: R17 Goodwill and Intangible Assets HTML 148K
33: R18 Warranty Costs HTML 44K
34: R19 Debt HTML 79K
35: R20 Stockholders' Equity HTML 71K
36: R21 Restructuring, Asset Impairment, and Transition HTML 152K
Expenses
37: R22 Segments, Concentrations and Geographic HTML 304K
Information
38: R23 Derivative Financial Instruments HTML 76K
39: R24 Commitments and Contingencies HTML 36K
40: R25 Subsequent Events HTML 28K
41: R26 Basis of Presentation (Policies) HTML 109K
42: R27 Revenue Recognition (Tables) HTML 140K
43: R28 Changes in Accumulated Other Comprehensive HTML 91K
Income/(Loss) by Component (Tables)
44: R29 Net Income per Share (Tables) HTML 86K
45: R30 Inventories (Tables) HTML 45K
46: R31 Goodwill and Intangible Assets (Tables) HTML 141K
47: R32 Warranty Costs (Tables) HTML 44K
48: R33 Debt (Tables) HTML 71K
49: R34 Stockholders' Equity (Tables) HTML 66K
50: R35 Restructuring, Asset Impairment, and Transition HTML 152K
Expenses (Tables)
51: R36 Segments, Concentrations and Geographic HTML 291K
Information (Tables)
52: R37 Derivative Financial Instruments (Tables) HTML 70K
53: R38 Organization and Nature of Operations - Additional HTML 27K
Information (Detail)
54: R39 Revenue Recognition - Additional Information HTML 26K
(Detail)
55: R40 Revenue Recognition - Disaggregates Revenue for HTML 48K
Each Reportable Segment and Geographic Region
(Detail)
56: R41 Revenue Recognition - Summary of Opening and HTML 38K
Closing Balances of Contract Liability and
Accounts Receivable (Detail)
57: R42 Fair Value of Financial Instruments - Additional HTML 42K
Information (Details)
58: R43 Changes in Accumulated Other Comprehensive HTML 53K
Income/(Loss) by Component - Reconciliation of
Changes in Accumulated Other Comprehensive
Income/(Loss) by Component (Detail)
59: R44 Net Income per Share - Reconciliation of Basic to HTML 58K
Diluted Net Income per Share (Detail)
60: R45 Inventories - Summary of Inventories (Detail) HTML 33K
61: R46 Goodwill and Intangible Assets - Additional HTML 55K
Information (Detail)
62: R47 Goodwill and Intangible Assets - Changes in HTML 38K
Goodwill (Detail)
63: R48 Goodwill and Intangible Assets - Other Intangible HTML 48K
Assets (Detail)
64: R49 Goodwill and Intangible Assets - Other Intangible HTML 28K
Assets (Parenthetical) (Detail)
65: R50 Warranty Costs - Additional Information (Detail) HTML 30K
66: R51 Warranty Costs - Changes in Carrying Amount of HTML 32K
Accrued Product Warranty Costs (Detail)
67: R52 Debt - Outstanding Debt Obligations (Detail) HTML 46K
68: R53 Debt - Additional Information (Detail) HTML 118K
69: R54 Stockholders' Equity - Additional Information HTML 62K
(Detail)
70: R55 Stockholders' Equity - Company's Restricted Stock HTML 63K
Grants and Stock Options (Detail)
71: R56 Restructuring, Asset Impairment, and Transition HTML 50K
Expenses - Additional Information (Detail)
72: R57 Restructuring, Asset Impairment, and Transition HTML 42K
Expenses - Reconciliation of Accrued Restructuring
Costs (Detail)
73: R58 Restructuring, Asset Impairment, and Transition HTML 46K
Expenses - Summary of Reconciliation of
Restructuring Expense by Segment (Detail)
74: R59 Segments, Concentrations and Geographic HTML 27K
Information - Additional Information (Detail)
75: R60 Segments, Concentrations and Geographic HTML 77K
Information - Segment Financial Information and
Reconciliation of Segments Revenue to Unaudited
Condensed Consolidated Revenue (Detail)
76: R61 Segments, Concentrations and Geographic HTML 44K
Information - Reconciliation of Segment Assets to
Consolidated Assets (Detail)
77: R62 Segments, Concentrations and Geographic HTML 40K
Information - Net Sales to Third Parties by
Geographic Region (Detail)
78: R63 Derivative Financial Instruments - Additional HTML 78K
Information (Detail)
79: R64 Derivative Financial Instruments - Summary of HTML 30K
Impact of Cross-Currency Swaps to AOCIL and
Consolidated Statements of Operations (Detail)
80: R65 Derivative Financial Instruments - Summary of Fair HTML 42K
Value Level 2 Inputs of Company's Derivatives
(Detail)
81: R66 Commitments and Contingencies - Additional HTML 27K
Information (Detail)
82: R67 Subsequent Events - Additional Information HTML 36K
(Detail)
84: XML IDEA XML File -- Filing Summary XML 155K
15: XML XBRL Instance -- aimc-10q_20200630_htm XML 2.95M
83: EXCEL IDEA Workbook of Financial Reports XLSX 95K
11: EX-101.CAL XBRL Calculations -- aimc-20200630_cal XML 161K
12: EX-101.DEF XBRL Definitions -- aimc-20200630_def XML 529K
13: EX-101.LAB XBRL Labels -- aimc-20200630_lab XML 1.08M
14: EX-101.PRE XBRL Presentations -- aimc-20200630_pre XML 897K
10: EX-101.SCH XBRL Schema -- aimc-20200630 XSD 158K
85: JSON XBRL Instance as JSON Data -- MetaLinks 345± 538K
86: ZIP XBRL Zipped Folder -- 0001564590-20-033403-xbrl Zip 238K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i 10-Q
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i ☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended i June 30, 2020
or
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i ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: i 001-33209
i ALTRA INDUSTRIAL MOTION CORP.
(Exact name of registrant as specified in its charter)
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i Delaware |
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i 61-1478870 |
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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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i 02184 |
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(Address of principal executive offices) |
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(Zip Code) |
( i 781) i 917-0600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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i Common Stock, $0.001 par value |
i AIMC |
i NASDAQ Global Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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☒ |
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Accelerated filer |
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☐ |
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Non-accelerated filer |
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☐ |
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Smaller reporting company |
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i ☐ |
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Emerging growth company |
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i ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i ☐ No ☒
As of July 21, 2020, there were i 64,655,978 outstanding shares of the registrant’s common stock, $0.001 par value per share.
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Page # |
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Item 1. |
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1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Notes to Unaudited Condensed Consolidated Interim Financial Statements |
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7 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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23 |
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Item 3. |
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35 |
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Item 4. |
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35 |
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Item 1. |
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36 |
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Item 1A. |
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36 |
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Item 2. |
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36 |
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Item 3. |
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36 |
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Item 4. |
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36 |
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Item 5. |
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37 |
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Item 6. |
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37 |
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38 |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALTRA INDUSTRIAL MOTION CORP.
Condensed Consolidated Balance Sheets
Amounts in millions, except share amounts
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
i 220.1 |
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$ |
i 167.3 |
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Trade receivables, less allowance for credit losses of $ i 5.7 and $ i 5.1 million at June 30, 2020 and December 31, 2019, respectively |
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i 230.6 |
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i 243.2 |
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Inventories |
|
|
i 223.1 |
|
|
|
i 222.5 |
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Income tax receivable |
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|
i 6.4 |
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i 5.2 |
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Prepaid expenses and other current assets |
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|
i 35.8 |
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i 29.1 |
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Total current assets |
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i 716.0 |
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|
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i 667.3 |
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Property, plant and equipment, net |
|
|
i 339.7 |
|
|
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i 354.4 |
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Goodwill |
|
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i 1,543.0 |
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|
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i 1,694.9 |
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Intangible assets, net |
|
|
i 1,450.4 |
|
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|
i 1,502.4 |
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Deferred income taxes |
|
|
i 1.0 |
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|
i 3.0 |
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Other non-current assets |
|
|
i 9.2 |
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|
|
i 25.1 |
|
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Operating lease right of use assets |
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|
i 41.4 |
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i 36.6 |
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Total assets |
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$ |
i 4,100.7 |
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$ |
i 4,283.7 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
i 140.1 |
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$ |
i 154.7 |
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Accrued payroll |
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|
i 57.3 |
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|
|
i 58.3 |
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Accruals and other current liabilities |
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i 75.7 |
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i 82.0 |
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Income tax payable |
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|
i 11.9 |
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i 13.2 |
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Current portion of long-term debt |
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i 17.0 |
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i 18.0 |
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Operating lease liabilities |
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i 13.0 |
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i 13.5 |
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Total current liabilities |
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i 315.0 |
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|
i 339.7 |
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Long-term debt - less current portion |
|
|
i 1,535.6 |
|
|
|
i 1,563.8 |
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Deferred income taxes |
|
|
i 368.2 |
|
|
|
i 369.1 |
|
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Pension liabilities |
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|
i 30.5 |
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i 30.8 |
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Long-term taxes payable |
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i 2.7 |
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i 4.5 |
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Other long-term liabilities |
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i 9.8 |
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i 28.8 |
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Operating lease liabilities, net of current portion |
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i 30.4 |
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i 24.7 |
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Commitments and Contingencies (Note 16) |
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Stockholders’ equity: |
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Common stock ($ i i 0.001 / par value per share, i i 120,000,000 / shares authorized, i i 64,575,115 / and i i 64,222,603 / shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively) |
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i 0.1 |
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i 0.1 |
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Additional paid-in capital |
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i 1,701.8 |
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i 1,696.7 |
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Retained earnings |
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i 206.7 |
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i 315.4 |
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Accumulated other comprehensive loss |
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( i 100.1 |
) |
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( i 89.9 |
) |
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Total stockholders’ equity |
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i 1,808.5 |
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i 1,922.3 |
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Total liabilities and stockholders’ equity |
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$ |
i 4,100.7 |
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$ |
i 4,283.7 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
1
ALTRA INDUSTRIAL MOTION CORP.
Condensed Consolidated Statements of Operations
Amounts in millions, except per share data
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Quarter Ended |
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Year to Date Ended |
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||||||||||
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||||||||
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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||||
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Net sales |
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$ |
i 400.8 |
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$ |
i 466.5 |
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$ |
i 835.0 |
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$ |
i 949.3 |
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Cost of sales |
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i 257.4 |
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i 299.5 |
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i 538.6 |
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i 607.4 |
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Gross profit |
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i 143.4 |
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i 167.0 |
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i 296.4 |
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i 341.9 |
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Operating expenses: |
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Selling, general and administrative expenses |
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i 75.8 |
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i 92.0 |
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i 162.9 |
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i 182.9 |
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Impairment of goodwill and intangible asset |
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— |
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— |
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i 147.5 |
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— |
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Research and development expenses |
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i 14.0 |
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i 14.7 |
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i 28.8 |
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i 30.0 |
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Restructuring costs |
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i 1.5 |
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i 3.2 |
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i 3.1 |
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i 5.5 |
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i 91.3 |
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i 109.9 |
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i 342.3 |
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i 218.4 |
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(Loss)/Income from operations |
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i 52.1 |
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i 57.1 |
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( i 45.9 |
) |
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i 123.5 |
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Other non-operating income and expense: |
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Interest expense, net |
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i 18.8 |
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i 18.6 |
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i 36.2 |
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i 38.4 |
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Other non-operating expense, net |
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i 2.5 |
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i 0.4 |
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i 1.1 |
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i 1.5 |
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i 21.3 |
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i 19.0 |
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i 37.3 |
|
|
|
i 39.9 |
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(Loss)/Income before income taxes |
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|
i 30.8 |
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|
i 38.1 |
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( i 83.2 |
) |
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|
i 83.6 |
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Provision for income taxes |
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|
i 9.1 |
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|
i 9.1 |
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i 11.8 |
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i 19.4 |
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Net (loss)/income |
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$ |
i 21.7 |
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$ |
i 29.0 |
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$ |
( i 95.0 |
) |
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$ |
i 64.2 |
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Weighted average shares, basic |
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|
i 64.6 |
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|
i 64.3 |
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|
i 64.5 |
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|
i 64.3 |
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Weighted average shares, diluted |
|
|
i 64.7 |
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|
i 64.5 |
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i 64.5 |
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|
i 64.5 |
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Net (loss)/income per share: |
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Basic |
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$ |
i 0.34 |
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$ |
i 0.45 |
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$ |
( i 1.47 |
) |
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$ |
i 1.00 |
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Diluted |
|
$ |
i 0.34 |
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$ |
i 0.45 |
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$ |
( i 1.47 |
) |
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$ |
i 1.00 |
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Cash dividend declared per share |
|
$ |
i 0.04 |
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$ |
i 0.17 |
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$ |
i 0.21 |
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$ |
i 0.34 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
2
ALTRA INDUSTRIAL MOTION CORP.
Condensed Consolidated Statements of Comprehensive Income
(Amounts in millions)
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Quarter Ended |
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Year to Date Ended |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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||||
|
Net Income/(loss) |
|
$ |
i 21.7 |
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$ |
i 29.0 |
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$ |
( i 95.0 |
) |
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$ |
i 64.2 |
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Other Comprehensive income: |
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Foreign currency translation adjustment |
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|
i 27.2 |
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i 4.9 |
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( i 31.1 |
) |
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( i 7.6 |
) |
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Change in pension liability adjustment |
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— |
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— |
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( i 0.1 |
) |
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( i 0.3 |
) |
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Non-cash amortization of interest rate swap expense, net of tax |
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|
i 1.7 |
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— |
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i 1.7 |
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— |
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Change in fair value of derivative financial instruments, net of tax |
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|
( i 0.2 |
) |
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( i 14.0 |
) |
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|
i 19.3 |
|
|
|
( i 2.5 |
) |
|
Total other comprehensive income/(loss): |
|
|
i 28.7 |
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|
|
( i 9.1 |
) |
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( i 10.2 |
) |
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|
( i 10.4 |
) |
|
Comprehensive income/(loss) |
|
$ |
i 50.4 |
|
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$ |
i 19.9 |
|
|
$ |
( i 105.2 |
) |
|
$ |
i 53.8 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
3
ALTRA INDUSTRIAL MOTION CORP.
Condensed Consolidated Statements of Cash Flows
(Amounts in millions)
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Year to Date Ended |
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|||||
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||||
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(Unaudited) |
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(Unaudited) |
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||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Net (loss)/income |
|
$ |
( i 95.0 |
) |
|
$ |
i 64.2 |
|
|
Adjustments to reconcile net income to net operating cash flows: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
i 29.3 |
|
|
|
i 28.9 |
|
|
Amortization of intangible assets |
|
|
i 34.8 |
|
|
|
i 35.4 |
|
|
Amortization of deferred financing costs |
|
|
i 2.3 |
|
|
|
i 2.3 |
|
|
Accretion of debt discount |
|
|
i 0.2 |
|
|
|
— |
|
|
Non-cash amortization of interest rate swap expense |
|
|
i 2.2 |
|
|
|
— |
|
|
Impairment of goodwill and intangible asset |
|
|
i 147.5 |
|
|
|
— |
|
|
Payment for interest rate swap settlement |
|
|
( i 34.7 |
) |
|
|
— |
|
|
(Gain)/Loss on foreign currency, net |
|
|
( i 0.1 |
) |
|
|
i 0.8 |
|
|
Loss on disposal and other |
|
|
— |
|
|
|
i 0.2 |
|
|
Stock-based compensation |
|
|
i 7.1 |
|
|
|
i 7.0 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
Trade receivables |
|
|
i 10.9 |
|
|
|
( i 10.2 |
) |
|
Inventories |
|
|
( i 3.6 |
) |
|
|
( i 6.3 |
) |
|
Accounts payable, accrued payroll, accruals and current liabilities |
|
|
( i 10.8 |
) |
|
|
( i 20.2 |
) |
|
Other current assets and liabilities |
|
|
( i 14.6 |
) |
|
|
( i 4.5 |
) |
|
Other operating assets and liabilities |
|
|
( i 1.8 |
) |
|
|
( i 1.5 |
) |
|
Net cash provided by operating activities |
|
|
i 73.7 |
|
|
|
i 96.1 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
( i 17.3 |
) |
|
|
( i 24.1 |
) |
|
A&S acquisition purchase price adjustment |
|
|
— |
|
|
|
( i 13.5 |
) |
|
Proceeds from cross currency interest rate swap settlement |
|
|
i 56.2 |
|
|
|
i 0.3 |
|
|
Net cash provided by (used in) investing activities |
|
|
i 38.9 |
|
|
|
( i 37.3 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Borrowing under Revolving Credit Facility |
|
|
i 100.0 |
|
|
|
— |
|
|
Payments on Revolving Credit Facility |
|
|
( i 100.0 |
) |
|
|
— |
|
|
Payments on Term Loan Facility |
|
|
( i 30.0 |
) |
|
|
( i 50.0 |
) |
|
Dividend payments |
|
|
( i 22.3 |
) |
|
|
( i 22.0 |
) |
|
Net payments on financing leases, mortgages, and other obligations |
|
|
( i 0.2 |
) |
|
|
( i 0.5 |
) |
|
Net proceeds/(payments) from China debt |
|
|
( i 0.6 |
) |
|
|
i 2.4 |
|
|
Shares surrendered for tax withholding |
|
|
( i 2.0 |
) |
|
|
( i 2.3 |
) |
|
Net cash used in financing activities |
|
|
( i 55.1 |
) |
|
|
( i 72.4 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
( i 4.7 |
) |
|
|
( i 1.8 |
) |
|
Net change in cash and cash equivalents |
|
|
i 52.8 |
|
|
|
( i 15.4 |
) |
|
Cash and cash equivalents at beginning of period |
|
|
i 167.3 |
|
|
|
i 169.0 |
|
|
Cash and cash equivalents at end of period |
|
$ |
i 220.1 |
|
|
$ |
i 153.6 |
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
Interest paid on borrowings |
|
$ |
i 31.7 |
|
|
$ |
i 35.3 |
|
|
Income taxes paid |
|
$ |
i 22.8 |
|
|
$ |
i 24.4 |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
4
ALTRA INDUSTRIAL MOTION CORP.
Condensed Consolidated Statements of Stockholders’ Equity
Amounts in millions
(Unaudited)
|
|
|
Common Stock |
|
|
Shares |
|
|
Additional Paid in Capital |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Total |
|
||||||
|
Balance at January 1, 2020 |
|
$ |
i 0.1 |
|
|
|
i 64.2 |
|
|
$ |
i 1,696.7 |
|
|
$ |
i 315.4 |
|
|
$ |
( i 89.9 |
) |
|
$ |
i 1,922.3 |
|
|
Stock-based compensation and vesting of restricted stock, net of withholdings |
|
|
— |
|
|
|
i 0.4 |
|
|
|
i 5.1 |
|
|
|
— |
|
|
|
— |
|
|
|
i 5.1 |
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 95.0 |
) |
|
|
— |
|
|
|
( i 95.0 |
) |
|
Dividends declared, $ i i 0.21 / per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 13.7 |
) |
|
|
— |
|
|
|
( i 13.7 |
) |
|
Change in fair value of derivative financial instruments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 19.3 |
|
|
|
i 19.3 |
|
|
Non-cash amortization of interest rate swap expense, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i 1.7 |
|
|
|
i 1.7 |
|
|
Minimum pension adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 0.1 |
) |
|
|
( i 0.1 |
) |
|
Cumulative foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 31.1 |
) |
|
|
( i 31.1 |
) |
|
Balance at June 30, 2020 |
|
$ |
i 0.1 |
|
|
|
i 64.6 |
|
|
$ |
i 1,701.8 |
|
|
$ |
i 206.7 |
|
|
$ |
( i 100.1 |
) |
|
$ |
i 1,808.5 |
|
|
Balance at March 31, 2020 |
|
$ |
i 0.1 |
|
|
|
i 64.6 |
|
|
$ |
i 1,698.1 |
|
|
$ |
i 187.7 |
|
|
$ |
( i 128.8 |
) |
|
$ |
i 1,757.1 |
|
|
Stock-based compensation and vesting of restricted stock, net of withholdings |
|
|
— |
|
|
|
— |
|
|
|
i 3.7 |
|
|
|
— |
|
|
|
— |
|
|
|
i 3.7 |
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 21.7 |
|
|
|
— |
|
|
|
i 21.7 |
|
|
Dividends declared, $ i i 0.04 / per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2.7 |
) |
|
|
— |
|
|
|
( i 2.7 |
) |
|
Change in fair value of derivative financial instruments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 0.2 |
) |
|
|
( i 0.2 |
) |
|
Non-cash amortization of interest rate swap expense, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i 1.7 |
|
|
|
i 1.7 |
|
|
Minimum pension adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Cumulative foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 27.2 |
|
|
|
i 27.2 |
|
|
Balance at June 30, 2020 |
|
$ |
i 0.1 |
|
|
|
i 64.6 |
|
|
$ |
i 1,701.8 |
|
|
$ |
i 206.7 |
|
|
$ |
( i 100.1 |
) |
|
$ |
i 1,808.5 |
|
5
|
|
|
Common Stock |
|
|
Shares |
|
|
Additional Paid in Capital |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Total |
|
||||||
|
Balance at January 1, 2019 |
|
$ |
i 0.1 |
|
|
|
i 64.2 |
|
|
$ |
i 1,687.1 |
|
|
$ |
i 232.6 |
|
|
$ |
( i 71.6 |
) |
|
$ |
i 1,848.2 |
|
|
Stock-based compensation and vesting of restricted stock, net of withholdings |
|
|
— |
|
|
|
i 0.1 |
|
|
|
i 4.7 |
|
|
|
— |
|
|
|
— |
|
|
|
i 4.7 |
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 64.2 |
|
|
|
— |
|
|
|
i 64.2 |
|
|
Dividends declared, $ i i 0.34 / per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 22.3 |
) |
|
|
— |
|
|
|
( i 22.3 |
) |
|
Change in fair value of derivative financial instruments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2.5 |
) |
|
|
( i 2.5 |
) |
|
Minimum pension adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 0.3 |
) |
|
|
( i 0.3 |
) |
|
Cumulative foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 7.6 |
) |
|
|
( i 7.6 |
) |
|
Balance at June 30, 2019 |
|
$ |
i 0.1 |
|
|
|
i 64.3 |
|
|
$ |
i 1,691.8 |
|
|
$ |
i 274.5 |
|
|
$ |
( i 82.0 |
) |
|
$ |
i 1,884.4 |
|
|
Balance at March 31, 2019 |
|
$ |
i 0.1 |
|
|
|
i 64.3 |
|
|
$ |
i 1,688.5 |
|
|
$ |
i 256.7 |
|
|
$ |
( i 72.9 |
) |
|
$ |
i 1,872.4 |
|
|
Stock-based compensation and vesting of restricted stock, net of withholdings |
|
|
— |
|
|
|
— |
|
|
|
i 3.3 |
|
|
|
— |
|
|
|
— |
|
|
|
i 3.3 |
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 29.0 |
|
|
|
— |
|
|
|
i 29.0 |
|
|
Dividends declared, $ i i 0.17 / per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 11.2 |
) |
|
|
— |
|
|
|
( i 11.2 |
) |
|
Change in fair value of derivative financial instruments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 14.0 |
) |
|
|
( i 14.0 |
) |
|
Minimum pension adjustment, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Cumulative foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 4.9 |
|
|
|
i 4.9 |
|
|
Balance at June 30, 2019 |
|
$ |
i 0.1 |
|
|
|
i 64.3 |
|
|
$ |
i 1,691.8 |
|
|
$ |
i 274.5 |
|
|
$ |
( i 82.0 |
) |
|
$ |
i 1,884.4 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
6
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
i
1. Organization and Nature of Operations
Headquartered in Braintree, Massachusetts, Altra Industrial Motion Corp. (the “Company,” “Altra,” “we,” or “our”) is a leading global designer, producer and marketer of a wide range of electro-mechanical power transmission and motion control products. The Company brings together strong brands with production facilities in i seventeen countries. Altra’s leading brands include Ameridrives Couplings, Bauer Gear Motor, Bibby Turboflex, Boston Gear, Delroyd Worm Gear, Formsprag Clutch, Guardian Couplings, Huco, Industrial Clutch, Inertia Dynamics, Jacobs Vehicle Systems, Kilian Manufacturing, Kollmorgen, Lamiflex Couplings, Marland Clutch, Matrix, Nuttall Gear, Portescap, Stieber Clutch, Stromag, Svendborg Brakes, TB Wood’s, Thomson, Twiflex, Warner Electric, Warner Linear, and Wichita Clutch.
/
i
2. i Basis of Presentation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States, or GAAP. These statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2020 (the “2019 Annual Report on Form 10-K”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position and cash flows for the interim periods presented. The results are not necessarily indicative of future results. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.
/
i
3. Recent Accounting Standards
iRecent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the use of the current expected credit loss impairment model to estimate credit losses on certain types of financial instruments, including trade receivables. The model requires an estimate of expected credit losses, measured over the contractual life of an asset, that considers information about past events, current conditions and a forecast of future economic conditions. The Company adopted the standard on January 1, 2020. The adoption of the standard did not have a material impact on our consolidated financial statements.
As a result of the adoption of ASU 2016-13, the Company has updated its significant accounting policy related to trade account receivables and allowances for credit losses as of March 31, 2020 from what was previously disclosed in our audited financial statements for the year ended December 31, 2019 as follows:
All trade account receivables are reported net of allowances for credit losses. The allowances for credit losses represent management’s best estimate of the credit losses expected from our trade account receivables over the life of the underlying assets. Assets with similar risk characteristics are pooled together for determination of their current expected credit losses. We regularly perform detailed reviews of our pooled assets to evaluate the collectability of receivables based on a combination of past, current, and future financial and qualitative factors that may affect customers’ ability to pay. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements. The Company adopted the standard on January 1, 2020. The adoption of the standard did not have a material impact on our consolidated financial statements.
/
7
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This ASU provides relief from certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The relief provided by this ASU is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The optional amendments are effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the effect of the adoption of this standard to the Company.
i
4. Revenue Recognition
We sell our products through i three primary commercial channels: original equipment manufacturers (OEMs), industrial distributors and direct to end users. Each of our segments sells similar products, which are balanced across end-user industries including, without limitation, energy, food processing, general industrial, material handling, mining, transportation, industrial automation, robotics, medical devices, and turf & garden.
As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment from the Company’s manufacturing site or delivery to the customer’s named location. In determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. In certain circumstances, the Company manufactures customized product without alternative use for its customers, which would generally result in the transfer of control over time. The Company has evaluated the amount of revenue subject to recognition over time and concluded that it is immaterial.
i
The following table disaggregates our revenue for each reportable segment. The Company believes that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
i 196.3 |
|
|
$ |
i 234.9 |
|
|
$ |
i 413.0 |
|
|
$ |
i 469.8 |
|
|
Automation & Specialty |
|
|
i 205.8 |
|
|
|
i 233.3 |
|
|
|
i 424.4 |
|
|
|
i 482.4 |
|
|
Inter-segment eliminations |
|
|
( i 1.3 |
) |
|
|
( i 1.7 |
) |
|
|
( i 2.4 |
) |
|
|
( i 2.9 |
) |
|
Net sales |
|
$ |
i 400.8 |
|
|
$ |
i 466.5 |
|
|
$ |
i 835.0 |
|
|
$ |
i 949.3 |
|
Net sales by geographic region based on point of shipment origin are as follows:
|
|
|
Net Sales |
|
|||||||||||||
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
North America (primarily U.S.) |
|
$ |
i 205.8 |
|
|
$ |
i 269.8 |
|
|
$ |
i 451.1 |
|
|
$ |
i 542.8 |
|
|
Europe excluding Germany |
|
|
i 71.3 |
|
|
|
i 79.9 |
|
|
|
i 146.1 |
|
|
|
i 161.7 |
|
|
Germany |
|
|
i 44.1 |
|
|
|
i 56.8 |
|
|
|
i 96.6 |
|
|
|
i 119.0 |
|
|
Asia and other |
|
|
i 79.6 |
|
|
|
i 60.0 |
|
|
|
i 141.2 |
|
|
|
i 125.8 |
|
|
Total |
|
$ |
i 400.8 |
|
|
$ |
i 466.5 |
|
|
$ |
i 835.0 |
|
|
$ |
i 949.3 |
|
The payment terms and conditions in our customer contracts vary. In some cases, customers will partially prepay for their goods; in other cases, after appropriate credit evaluations, payment will be due in arrears. In addition, there are constraints that cause variability in the ultimate consideration to be recognized. These constraints typically include early payment discounts, volume rebates, rights of return, surcharges, and other customer considerations.
/
8
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
A contract asset is created when the Company satisfies a performance obligation by transferring a promised good to the customer. Contract assets may represent conditional or unconditional rights to consideration. A right is conditional, and recorded as a contract asset, if, for example, the Company must first satisfy another performance obligation in the contract before it is entitled to payment from the customer. Contract assets are transferred to accounts receivable once the right becomes unconditional. A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. If the Company receives a customer payment prior to satisfying a performance obligation or in excess of estimates of what the Company expects to be entitled to, the payment is recorded as a contract liability. Contracts with payment in arrears are recognized as receivables.
i The opening and closing balances of the Company’s contract liability and accounts receivable as of the year to date period ended June 30, 2020 are as follows:
|
|
|
Deferred Revenue (Current) |
|
|
Accounts Receivable |
|
||
|
Beginning - January 1, 2020 |
|
$ |
i 8.4 |
|
|
$ |
i 243.2 |
|
|
Closing - June 30, 2020 |
|
|
i 12.5 |
|
|
|
i 230.6 |
|
|
Increase/(Decrease) |
|
$ |
i 4.1 |
|
|
$ |
( i 12.6 |
) |
|
|
|
Deferred Revenue (Current) |
|
|
Accounts Receivable |
|
||
|
Beginning - January 1, 2019 |
|
$ |
i 7.4 |
|
|
$ |
i 259.8 |
|
|
Closing - June 30, 2019 |
|
|
i 8.1 |
|
|
|
i 269.6 |
|
|
Increase/(Decrease) |
|
$ |
i 0.7 |
|
|
$ |
i 9.8 |
|
In the six-month period ended June 30, 2020, substantially all outstanding revenue has been recognized related to contract liabilities outstanding at January 1, 2020.
i
5. Fair Value of Financial Instruments
i
Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:
|
|
• |
Level 1- Quoted prices in active markets for identical assets or liabilities. |
|
|
• |
Level 2- Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived. |
|
|
• |
Level 3- Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. |
The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents and are classified as Level 1.
The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of the Company or the financial counterparty to perform. For interest rate and cross currency swaps, the significant inputs to these models are interest rate curves for discounting future cash flows and are adjusted for credit risk. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows and exchange rate curves of the foreign currency for translating future cash flows. See additional discussion of the Company’s use of financial instruments including cross-currency swaps and interest rate swaps included in Note 15.
/9
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
The carrying values of financial instruments, including cash equivalents, accounts payable, and other accrued liabilities are carried at cost, which approximates fair value. Debt under the Altra Credit Agreement (as defined herein) is comprised of the Altra Term Loan Facility and the Altra Revolving Credit Facility (both as defined herein). The carrying amount of the Altra Term Loan Facility was $ i 1,160.0 million and the estimated fair value of the Altra Term Loan Facility was $ i 1,113.6 million at June 30, 2020. There is currently i no debt under the Altra Revolving Credit Facility. Further, the Altra Credit Agreement was negotiated in October 2018 and there have not been any significant changes in our credit rating. The carrying amount of the Notes (as defined herein) was $ i 400 million and the estimated fair value of the Notes was $ i 416.0 million at June 30, 2020.
i
6. Changes in Accumulated Other Comprehensive Income/(Loss) by Component
iThe following is a reconciliation of changes in accumulated other comprehensive income/(loss) by component for the periods presented:
|
|
|
Gains and (Losses) on Cash Flow Hedges |
|
|
Non-cash amortization of interest rate swap expense |
|
|
Defined Benefit Pension Plans |
|
|
Cumulative Foreign Currency Translation Adjustment |
|
|
Total |
|
|||||
|
Accumulated Other Comprehensive (Loss) by Component, January 1, 2020 |
|
$ |
( i 3.0 |
) |
|
|
— |
|
|
$ |
( i 1.5 |
) |
|
$ |
( i 85.4 |
) |
|
$ |
( i 89.9 |
) |
|
Net current-period Other Comprehensive Income (Loss) |
|
|
i 19.3 |
|
|
|
i i 1.7 / |
|
|
|
( i 0.1 |
) |
|
|
( i 31.1 |
) |
|
|
( i 10.2 |
) |
|
Accumulated Other Comprehensive Income (Loss) by component, June 30, |
|
$ |
i 16.3 |
|
|
$ |
i 1.7 |
|
|
$ |
( i 1.6 |
) |
|
$ |
( i 116.5 |
) |
|
$ |
( i 100.1 |
) |
|
|
|
Gains and (Losses) on Cash Flow Hedges |
|
|
Defined Benefit Pension Plans |
|
|
Cumulative Foreign Currency Translation Adjustment |
|
|
Total |
|
||||
|
Accumulated Other Comprehensive (Loss) by Component, January 1, 2019 |
|
$ |
( i 12.9 |
) |
|
$ |
( i 0.2 |
) |
|
$ |
( i 58.5 |
) |
|
$ |
( i 71.6 |
) |
|
Net current-period Other Comprehensive Income (Loss) |
|
|
( i 2.5 |
) |
|
|
( i 0.3 |
) |
|
|
( i 7.6 |
) |
|
|
( i 10.4 |
) |
|
Accumulated Other Comprehensive (Loss) by Component, June 30, 2019 |
|
$ |
( i 15.4 |
) |
|
$ |
( i 0.5 |
) |
|
$ |
( i 66.1 |
) |
|
$ |
( i 82.0 |
) |
/ /
10
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
i
7. Net Income per Share
iBasic earnings per share is based on the weighted average number of shares of common stock outstanding, and diluted earnings per share is based on the weighted average number of shares of common stock outstanding and all potentially dilutive common stock equivalents outstanding. Common stock equivalents are included in the per share calculations when the effect of their inclusion is dilutive.
iThe following is a reconciliation of basic to diluted net income per share:
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income/(loss) |
|
$ |
i 21.7 |
|
|
$ |
i 29.0 |
|
|
$ |
( i 95.0 |
) |
|
$ |
i 64.2 |
|
|
Shares used in net income per common share - basic |
|
|
i 64.6 |
|
|
|
i 64.3 |
|
|
|
i 64.5 |
|
|
|
i 64.3 |
|
|
Incremental shares of unvested restricted common stock |
|
|
i 0.1 |
|
|
|
i 0.2 |
|
|
|
— |
|
|
|
i 0.2 |
|
|
Shares used in net income per common share - diluted |
|
|
i 64.7 |
|
|
|
i 64.5 |
|
|
|
i 64.5 |
|
|
|
i 64.5 |
|
|
Shares excluded as their inclusion would be anti-dilutive |
|
|
— |
|
|
|
— |
|
|
|
i 0.1 |
|
|
|
— |
|
|
Earnings/(Loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income |
|
$ |
i 0.34 |
|
|
$ |
i 0.45 |
|
|
$ |
( i 1.47 |
) |
|
$ |
i 1.00 |
|
|
Diluted net income |
|
$ |
i 0.34 |
|
|
$ |
i 0.45 |
|
|
$ |
( i 1.47 |
) |
|
$ |
i 1.00 |
|
/ / /
i
8. Inventories
iInventories at June 30, 2020 and December 31, 2019 consisted of the following:
|
|
|
|
|
|
||||
|
Raw materials |
|
$ |
i 105.3 |
|
|
$ |
i 104.2 |
|
|
Work in process |
|
|
i 22.7 |
|
|
|
i 22.4 |
|
|
Finished goods |
|
|
i 95.1 |
|
|
|
i 95.9 |
|
|
|
|
$ |
i 223.1 |
|
|
$ |
i 222.5 |
|
/ /
i
9. Goodwill and Intangible Assets
The Company conducts an annual impairment review of goodwill and indefinite-lived intangible assets in October of each year, unless events occur which trigger the need for an interim impairment review. The 2019 annual goodwill impairment review indicated that the JVS reporting unit’s fair value exceeded its carrying value by less than i 10%. All other reporting units had fair values that exceeded their carrying value by i 10% or more.
During the first quarter of 2020, the Company considered the economic impact of the COVID-19 pandemic to be a triggering event for the JVS business unit and, as a result, the Company performed an interim impairment review. As a result of both the COVID-19 related economic downturn and its impact on JVS’s anticipated financial results, the Company concluded that it was more likely than not that the JVS reporting unit’s carrying value exceeded its fair value and performed an interim impairment review for both JVS’s goodwill and tradename intangible asset. As a result of the interim impairment testing performed on March 31, 2020, the Company recorded non-cash impairment charges of $ i 8.4 million and $ i 139.1 million for indefinite-lived intangible assets and goodwill, respectively.
/
11
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
The Company estimated the fair value of the JVS reporting unit using both the discounted cash flow model and the market approach. The Company estimated the value of JVS’s indefinite-lived tradename intangible asset using a discounted cash flow model. The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate.
Key assumptions developed by management and used in the interim quantitative analysis included the following:
|
|
• |
Near-term revenue declines in 2020; |
|
|
• |
Adjusted profit margins over the projection period, due to revenue adjustments and maintained investment in the business; and |
|
|
• |
Market-based discount rates. |
|
|
• |
Reduced EBITDA multiple, due to current market conditions. |
During the second quarter of 2020, the Company again considered the economic impact of the COVID-19 pandemic on the reporting units and determined there was no triggering event to further evaluate for potential impairment. For all reporting units, the Company concluded that it was more likely than not that their fair value continued to exceed their carrying value as of June 30, 2020. However, depending on its duration and the severity of its economic impact, the COVID-19 pandemic may trigger additional interim impairment reviews in future periods.
i
Changes in goodwill from January 1, 2020 through June 30, 2020 were as follows:
|
|
|
Power Transmission Technologies |
|
|
Automation & Specialty |
|
|
Total |
|
|||
|
Net goodwill balance January 1, 2020 |
|
$ |
i 410.1 |
|
|
$ |
i 1,284.8 |
|
|
$ |
i 1,694.9 |
|
|
Goodwill impairment charge |
|
|
— |
|
|
|
( i 139.1 |
) |
|
|
( i 139.1 |
) |
|
Impact of changes in foreign currency |
|
|
( i 1.0 |
) |
|
|
( i 11.8 |
) |
|
|
( i 12.8 |
) |
|
Net goodwill balance June 30, 2020 |
|
$ |
i 409.1 |
|
|
$ |
i 1,133.9 |
|
|
$ |
i 1,543.0 |
|
i
Other intangible assets as of June 30, 2020 and December 31, 2019 consisted of the following:
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
Cost |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Cost |
|
|
Accumulated Amortization |
|
|
Net |
|
||||||
|
Other intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets not subject to amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tradenames and trademarks (1) |
|
$ |
i 249.8 |
|
|
$ |
— |
|
|
$ |
i 249.8 |
|
|
$ |
i 260.0 |
|
|
$ |
— |
|
|
$ |
i 260.0 |
|
|
In-process research and development |
|
|
i 16.0 |
|
|
|
— |
|
|
|
i 16.0 |
|
|
|
i 16.0 |
|
|
|
— |
|
|
|
i 16.0 |
|
|
Intangible assets subject to amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships |
|
|
i 1,179.8 |
|
|
|
i 161.2 |
|
|
|
i 1,018.6 |
|
|
|
i 1,187.7 |
|
|
|
i 137.8 |
|
|
|
i 1,049.9 |
|
|
Product technology and patents |
|
|
i 210.1 |
|
|
|
i 44.1 |
|
|
|
i 166.0 |
|
|
|
i 210.0 |
|
|
|
i 33.5 |
|
|
|
i 176.5 |
|
|
Total intangible assets |
|
$ |
i 1,655.7 |
|
|
$ |
i 205.3 |
|
|
$ |
i 1,450.4 |
|
|
$ |
i 1,673.7 |
|
|
$ |
i 171.3 |
|
|
$ |
i 1,502.4 |
|
/
12
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
|
(1) |
The change in Cost of Tradenames and trademarks is a result of the $ i 8.4 million impairment charge in the quarter-end March 31, 2020 related to the JVS reporting unit. |
The Company recorded $ i 17.3 million and $ i 17.6 million of amortization expense in the quarters ended June 30, 2020 and 2019, respectively; and, recorded $ i 34.8 million and $ i 35.4 million of amortization expense in the year to date periods ended June 30, 2020 and 2019, respectively.
The estimated amortization expense for intangible assets is approximately $ i 35.9 million for the remainder of 2020, $ i i i i 70.7 / / / million in each of the next four years and then $ i 865.9 million thereafter.
i
10. i Warranty Costs
The contractual warranty period of the Company's products generally ranges from i three months to i two years with certain warranties extending for longer periods. Estimated expenses related to product warranties are accrued at the time products are sold to customers and are recorded in accruals and other current liabilities on the unaudited condensed consolidated balance sheets. Estimates are established using historical information as to the nature, frequency and average costs of warranty claims.
i Changes in the carrying amount of accrued product warranty costs for each of the quarters ended June 30, 2020 and 2019 are as follows:
|
|
|
|
|
|
||||
|
Balance at beginning of period |
|
$ |
i 10.0 |
|
|
$ |
i 9.4 |
|
|
Accrued current period warranty expense |
|
|
i 2.0 |
|
|
|
i 2.0 |
|
|
Payments and adjustments |
|
|
( i 2.8 |
) |
|
|
( i 1.2 |
) |
|
Balance at end of period |
|
$ |
i 9.2 |
|
|
$ |
i 10.2 |
|
/
i
11. Debt
iOutstanding debt obligations at June 30, 2020 and December 31, 2019 were as follows.
|
|
|
|
|
|
||||
|
Debt: |
|
|
|
|
|
|
|
|
|
Term loan |
|
$ |
i 1,160.0 |
|
|
$ |
i 1,190.0 |
|
|
Revolving Credit Facility |
|
|
— |
|
|
|
— |
|
|
Notes |
|
|
i 400.0 |
|
|
|
i 400.0 |
|
|
Mortgages and other |
|
|
i 12.6 |
|
|
|
i 13.5 |
|
|
Finance leases |
|
|
i 0.3 |
|
|
|
i 0.5 |
|
|
Total gross debt |
|
|
i 1,572.9 |
|
|
|
i 1,604.0 |
|
|
Less: debt discount and deferred financing costs |
|
|
( i 20.3 |
) |
|
|
( i 22.2 |
) |
|
Total debt, net of debt discount and deferred financing costs |
|
|
i 1,552.6 |
|
|
|
i 1,581.8 |
|
|
Less: current portion of long-term debt |
|
|
( i 17.0 |
) |
|
|
( i 18.0 |
) |
|
Total long-term debt, net of unaccreted discount |
|
$ |
i 1,535.6 |
|
|
$ |
i 1,563.8 |
|
/
/
13
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
2018 Credit Agreement and Notes
On October 1, 2018 (the “A&S Closing Date”), upon the closing of the combination (the “Fortive Transaction”) of Altra with i four operating companies from Fortive Corporation’s (“Fortive”) Automation & Specialty platform (the “A&S Business”), the Company assumed $ i 400 million aggregate principal amount of i 6.125% senior notes due 2026 (the “Notes”). The Notes will mature on i October 1, 2026. i Interest on the Notes accrues from October 1, 2018, and the first interest payment date on the Notes was on i April 1, 2019. i The Notes may be redeemed at the option of the issuer on or after i October 1, 2023 / . / The Notes are guaranteed on a senior unsecured basis by the Company and certain of its domestic subsidiaries.
On the A&S Closing Date, the Company entered into a new Credit Agreement (the “Altra Credit Agreement”). The Altra Credit Agreement provides for a seven-year senior secured term loan in an aggregate principal amount of $ i 1,340.0 million (the “Altra Term Loan Facility”) and a five-year senior secured revolving credit facility in an aggregate committed principal amount of $ i 300.0 million (the “Altra Revolving Credit Facility” and together with the Altra Term Loan Facility, the “Altra Credit Facilities”). The proceeds of the Altra Term Loan Facility were used to (i) consummate Fortive’s transfer of certain non-U.S assets, liabilities and entities constituting a portion of the A&S Business to certain subsidiaries of Altra, and the Altra subsidiaries’ assumption of substantially all of the liabilities associated with the transferred assets (the “Direct Sales”), (ii) repay in full and extinguish all outstanding indebtedness for borrowed money under the 2015 Credit Agreement (as defined herein) and (iii) pay certain fees, costs, and expenses in connection with the consummation of the Fortive Transaction. The proceeds of the Altra Revolving Credit Facility will be used for working capital and general corporate purposes.
The Altra Credit Facilities are guaranteed on a senior secured basis by the Company and certain of its domestic subsidiaries, subject to certain customary exceptions.
i Borrowings under the Altra Term Loan Facility will bear interest at a per annum rate equal to a “Eurocurrency Rate” plus i 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a “Base Rate” plus i 1.00%, in the case of Base Rate borrowings. / i Borrowings under the Altra Revolving Credit Facility will initially bear interest at a per annum rate equal to a Eurocurrency Rate plus i 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a Base Rate plus i 1.00%, in the case of Base Rate borrowings / , and thereafter will bear interest at a per annum rate equal to a Eurocurrency Rate or Base Rate, as applicable, plus an interest rate spread determined by reference to a pricing grid based on the Company’s senior secured net leverage ratio. In addition, i the Company will be required to pay fees that will fluctuate between i 0.250% per annum to i 0.375% per annum on the unused amount of the Altra Revolving Credit Facility, based upon the Company’s senior secured net leverage ratio / . The interest rate on the Term Loan Facility was i 2.174% at June 30, 2020.
The Altra Credit Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including limitations on liens, investments, restricted payments, additional indebtedness and asset sales and mergers. In addition, the Altra Credit Agreement requires that Altra maintain a specified maximum senior secured leverage ratio and a specified minimum interest coverage ratio. The obligations of the borrowers of the Altra Credit Facilities under the Altra Credit Agreement may be accelerated upon customary events of default, including non-payment of principal, interest, fees and other amounts, inaccuracy of representation and warranties, violation of covenants, cross default and cross acceleration, voluntary and involuntary bankruptcy or insolvency proceedings, inability to pay debts as they become due, material judgments, ERISA events, actual or asserted invalidity of security documents or guarantees and change in control.
The Company incurred $ i 29.9 million in issuance costs, which are amortized over the term of the debt as an adjustment to the effective interest rate on the outstanding borrowings.
The Company provided notice to the administrative agent of the Altra Credit Agreement on March 9, 2020 and March 16, 2020 to draw down $ i 50 million and $ i 50 million, respectively, under the Altra Revolving Credit Facility. At that time, the Company had increased its borrowings under the Altra Revolving Credit Facility as a precautionary action in order to increase its cash position and enhance its financial flexibility during this period of uncertainty in the global markets resulting from COVID-19. On April 14, 2020, the Company provided notice to the administrative agent of the Altra Credit Agreement to repay $ i 50 million outstanding under the Altra Revolving Credit Facility. On April 27 2020 and May, 27, 2020 the Company provided notice to the administrative agent to repay $ i 15 million and $ i 35 million, respectively, which were outstanding under the Altra Revolving Credit Facility. As of the period ended June 30, 2020, all outstanding borrowings under the Altra Revolving Credit Facility have been repaid.
14
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
As of June 30, 2020, the Company had $ i 1,160.0 million outstanding on the Altra Credit Agreement. As of June 30, 2020 and December 31, 2019, the Company had $ i 5.2 million and $ i 4.4 million in letters of credit outstanding, respectively. The Company had $ i 294.8 million available to borrow under the Altra Credit Facilities at June 30, 2020.
Mortgages and Other Agreements
The Company’s subsidiaries in Europe have entered into certain long-term fixed rate term loans that are generally secured by local property, plant and equipment. i The debt has interest rates that range from i 1.79% to i 2.5%, with various quarterly and monthly installments through 2028. /
Financing Leases
The Company leases certain equipment under finance lease arrangements, whose obligations are included in both short-term and long-term debt. Finance lease obligations amounted to approximately $ i 0.3 million and $ i 0.5 million at June 30, 2020 and December 31, 2019, respectively. Finance lease right of use assets are included in property, plant and equipment with the related amortization recorded as depreciation expense.
i
12. Stockholders’ Equity
Common Stock
Effective October 1, 2018, the Company amended its Articles of Incorporation to increase the number of authorized shares of Altra common stock from i 90.0 million shares to i 120.0 million shares. As of June 30, 2020 and December 31, 2019, there were i i 64,575,115 / and i i 64,222,603 / shares of common stock issued and outstanding, respectively.
Preferred Stock
On December 20, 2006, the Company amended and restated its certificate of incorporation authorizing i 10.0 million shares of undesignated Preferred Stock (“Preferred Stock”). The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations and powers, preferences, rights, qualifications, limitations and restrictions as determined by the Company’s Board of Directors. There was i i i i no / / / Preferred Stock issued or outstanding at June 30, 2020 or December 31, 2019.
Restricted Common Stock
The 2014 Omnibus Incentive Plan (the “2014 Plan”) was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. The 2014 Plan provides for various forms of stock-based compensation to our directors, executive personnel and other key employees and consultants. Under the 2014 Plan, the remaining total number of shares of common stock available for delivery pursuant to the grant of awards (“Awards”) was i 4.5 million as of June 30, 2020.
The restricted shares and restricted stock units issued pursuant to the 2014 Plan generally vest ratably over a period ranging from immediately to i five years from the date of grant, provided, that the vesting of the restricted shares or restricted stock units may accelerate upon the occurrence of certain events. Common stock awarded under the 2014 Plan is generally subject to restrictions on transfer, repurchase rights, and other limitations and rights as set forth in the applicable award agreements. The fair value of the shares repurchased are measured based on the share price on the date of grant.
The 2014 Plan permits the Company to grant, among other things, restricted stock, restricted stock units, stock options and performance share awards to key employees. Certain awards include vesting based upon achievement of specified performance criteria. Compensation expense recorded (in selling, general and administrative expense) during the quarters ended June 30, 2020 and 2019 was $ i 3.8 million and $ i 3.5 million, respectively. Compensation expense recorded (in selling, general and administrative expense) during the year to date period ended June 30, 2020 and 2019 was $ i 7.1 million and $ i 7.0 million, respectively. The Company recognizes stock-based compensation expense on a straight-line basis for the shares vesting ratably under the plan and uses the graded-vesting method of recognizing stock-based compensation expense for the performance share awards based on the probability of the specific performance metrics being achieved over the requisite service period.
/15
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
i
The following tables set forth the activity of the Company’s restricted stock grants and stock options to date:
|
|
|
Shares |
|
|
Weighted- average fair value |
|
||
|
Shares unvested January 1, 2020 |
|
|
i 786.3 |
|
|
$ |
i 35.69 |
|
|
Shares granted |
|
|
i 325.6 |
|
|
|
i 34.58 |
|
|
Shares for which restrictions lapsed |
|
|
( i 175.1 |
) |
|
|
i 38.06 |
|
|
Shares unvested June 30, 2020 |
|
|
i 936.8 |
|
|
$ |
i 34.93 |
|
|
|
|
Shares |
|
|
Weighted- average fair value |
|
||
|
Options unvested January 1, 2020 |
|
|
i 271.7 |
|
|
$ |
i 30.65 |
|
|
Options granted |
|
|
i 214.5 |
|
|
|
i 34.78 |
|
|
Options exercised |
|
|
— |
|
|
|
— |
|
|
Options outstanding June 30, 2020 |
|
|
i 486.2 |
|
|
$ |
i 32.47 |
|
|
Quantity ending exercisable balance |
|
|
i 66.4 |
|
|
$ |
i 30.65 |
|
Total remaining unrecognized compensation cost is approximately $ i 25.6 million as of June 30, 2020, and will be recognized over a weighted average remaining period of i three years. The intrinsic value of these awards, as of June 30, 2020, was $ i 27.6 million. Grant date fair value is based on the quoted price of the stock on the date of grant.
i
13. Restructuring, Asset Impairment, and Transition Expenses
From time to time, the Company has initiated various restructuring programs and incurred severance and other restructuring costs.
During 2017, the Company commenced a restructuring plan (“2017 Altra Plan”) as a result of the Company’s purchase of Stromag and to rationalize its global renewable energy business. The actions taken pursuant to the 2017 Altra Plan included reducing headcount, facility consolidations and the elimination of certain costs. The expenses for the quarter and year to date period ended June 30, 2020 were approximately $ i 0.3 million, and $ i 0.5 million, respectively, and were composed of severance and other restructuring costs. The Company does not expect to incur any additional material costs as a result of the 2017 Altra Plan.
During 2019, the Company commenced a restructuring plan (“2019 Altra Plan”) to drive efficiencies, reduce the number of facilities and optimize its operating margin. The Company expects to incur approximately $ i 10 - $ i 15 million in restructuring expenses under the 2019 Altra Plan over the next i three years, primarily related headcount reductions and plant consolidations. The expenses for the quarter and year to date period ended June 30, 2020 were $ i i 1.2 / million and $ i i 2.6 / million, respectively, and were composed of severance and consolidation costs.
iThe following is a reconciliation of the accrued restructuring costs between January 1, 2020 and June 30, 2020.
|
|
|
2017 Altra Plan |
|
|
2019 Altra Plan |
|
|
Total All Plans |
|
|||
|
Balance at January 1, 2020 |
|
$ |
i 1.5 |
|
|
$ |
i 2.6 |
|
|
$ |
i 4.1 |
|
|
Restructuring expense incurred |
|
|
i 0.2 |
|
|
|
i 1.4 |
|
|
|
i 1.6 |
|
|
Cash payments |
|
|
( i 0.4 |
) |
|
|
( i 1.4 |
) |
|
|
( i 1.8 |
) |
|
Balance at March 31, 2020 |
|
|
i 1.3 |
|
|
|
i 2.6 |
|
|
|
i 3.9 |
|
|
Restructuring expense incurred |
|
|
i 0.3 |
|
|
|
i 1.2 |
|
|
|
i 1.5 |
|
|
Cash payments |
|
|
( i 0.6 |
) |
|
|
( i 1.1 |
) |
|
|
( i 1.7 |
) |
|
Balance at June 30, 2020 |
|
|
i 1.0 |
|
|
|
i 2.7 |
|
|
|
i 3.7 |
|
/ /
16
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
The following is a reconcilation of the accrued restructuring costs between January 1, 2019 and June 30, 2019.
|
|
|
2017 Altra Plan |
|
|
2019 Altra Plan |
|
|
Total All Plans |
|
|||
|
Balance at January 1, 2019 |
|
$ |
i 2.0 |
|
|
$ |
— |
|
|
$ |
i 2.0 |
|
|
Restructuring expense incurred |
|
|
i 1.0 |
|
|
|
i 1.3 |
|
|
|
i 2.3 |
|
|
Cash payments |
|
|
( i 1.5 |
) |
|
|
( i 0.5 |
) |
|
|
( i 2.0 |
) |
|
Balance at March 31, 2019 |
|
|
i 1.5 |
|
|
|
i 0.8 |
|
|
|
i 2.3 |
|
|
Restructuring expense incurred |
|
|
i 1.8 |
|
|
|
i 1.4 |
|
|
|
i 3.2 |
|
|
Cash payments |
|
|
( i 2.0 |
) |
|
|
( i 0.7 |
) |
|
|
( i 2.7 |
) |
|
Balance at June 30, 2019 |
|
|
i 1.3 |
|
|
|
i 1.5 |
|
|
|
i 2.8 |
|
i
The following is a reconciliation of restructuring expense by segment for the year to date period ended June 30, 2020.
|
|
|
2017 Altra Plan |
|
|
2019 Altra Plan |
|
|
Total All Plans |
|
|||
|
Power Transmission Technologies |
|
$ |
i 0.5 |
|
|
$ |
i 0.6 |
|
|
$ |
i 1.1 |
|
|
Automation & Specialty |
|
|
— |
|
|
|
i 2.0 |
|
|
|
i 2.0 |
|
|
Total restructuring expense at June 30, 2020 |
|
$ |
i 0.5 |
|
|
$ |
i 2.6 |
|
|
$ |
i 3.1 |
|
The following is a reconciliation of restructuring expense by segment for the year to date period ended June 30, 2019
|
|
|
2017 Altra Plan |
|
|
2019 Altra Plan |
|
|
Total All Plans |
|
|||
|
Power Transmission Technologies |
|
$ |
i 2.8 |
|
|
$ |
i 0.1 |
|
|
$ |
i 2.9 |
|
|
Automation & Specialty |
|
|
— |
|
|
|
i 2.6 |
|
|
|
i 2.6 |
|
|
Total restructuring expense at June 30, 2019 |
|
$ |
i 2.8 |
|
|
$ |
i 2.7 |
|
|
$ |
i 5.5 |
|
The total accrued restructuring reserve as of June 30, 2020, and as of June 30, 2019 relate primarily to severance and consolidation costs under the 2017 Altra Plan and the 2019 Altra Plan and are recorded in accruals and other liabilities on the accompanying unaudited condensed consolidated balance sheet.
i14. Segments, Concentrations and Geographic Information
Segments
The internal reporting structure used by our Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of income from operations. Our operations are organized in i two reporting segments that are aligned with key product types and end markets served, Power Transmission Technologies (“PTT”) and Automation & Specialty (“A&S”):
|
|
• |
Power Transmission Technologies - PTT. This segment includes the following key product offerings: |
|
|
o |
Couplings, Clutches & Brakes. Couplings are the interface between two shafts, which enable power to be transmitted from one shaft to the other. Clutches in this segment are devices that use mechanical, hydraulic, pneumatic, or friction type connections to facilitate engaging or disengaging two rotating members. Brakes are combinations of interacting parts that work to slow or stop machinery. Products in this segment are generally used in heavy industrial applications and energy markets. |
|
|
o |
Electromagnetic Clutches & Brakes. Products in this segment include brakes and clutches that are used to electronically slow, stop, engage or disengage equipment utilizing electromagnetic friction type connections. Products in this segment are used in industrial and commercial markets including agricultural machinery, material handling, motion control, and turf & garden. |
17
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
|
|
o |
Gearing. Gears are utilized to reduce the speed and increase the torque of an electric motor or engine to the level required to drive a particular piece of equipment. Gears produced by the Company are primarily utilized in industrial applications. |
|
|
• |
Automation & Specialty – A&S. This segment includes the following key brands: |
|
|
o |
Kollmorgen: Provides rotary precision motion solutions, including servo motors, stepper motors, high performance electronic drives and motion controllers and related software, and precision linear actuators. These products are used in advanced material handling, aerospace and defense, factory automation, medical, packaging, printing, semiconductor, robotic and other applications. |
|
|
o |
Portescap: Provides high-efficiency miniature motors and motion control products, including brush and brushless DC motors, can stack motors and disc magnet motors. These products are used in medical, industrial power tool and general industrial equipment applications. |
|
|
o |
Thomson: Provides systems that enable and support the transition of rotary motion to linear motion. Products include linear bearings, guides, glides, lead and ball screws, industrial linear actuators, clutch brakes, precision gears, resolvers and inductors. These products are used in factory automation, medical, mobile off-highway, material handling, food processing and other niche applications. |
|
|
o |
Jacobs Vehicle Systems (JVS): Provides heavy-duty diesel engine brake systems and valve actuation mechanisms for the commercial vehicle market, including compression release, bleeder and exhaust brakes, including the “Jake Brake” engine braking system. These products are primarily used in heavy duty Class 8 truck applications. |
i
Segment financial information and a reconciliation of segment results to unaudited condensed consolidated results are as follows:
|
|
|
Quarters Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
i 196.3 |
|
|
$ |
i 234.9 |
|
|
$ |
i 413.0 |
|
|
$ |
i 469.8 |
|
|
Automation & Specialty |
|
|
i 205.8 |
|
|
|
i 233.3 |
|
|
|
i 424.4 |
|
|
|
i 482.4 |
|
|
Inter-segment eliminations |
|
|
( i 1.3 |
) |
|
|
( i 1.7 |
) |
|
|
( i 2.4 |
) |
|
|
( i 2.9 |
) |
|
Net sales |
|
$ |
i 400.8 |
|
|
$ |
i 466.5 |
|
|
$ |
i 835.0 |
|
|
$ |
i 949.3 |
|
|
Income/(loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
i 23.9 |
|
|
$ |
i 31.9 |
|
|
$ |
i 49.5 |
|
|
$ |
i 60.8 |
|
|
Automation & Specialty |
|
|
i 26.0 |
|
|
|
i 31.8 |
|
|
|
( i 92.6 |
) |
|
|
i 72.4 |
|
|
Corporate expenses (1) |
|
|
i 3.7 |
|
|
|
( i 3.4 |
) |
|
|
i 0.3 |
|
|
|
( i 4.2 |
) |
|
Restructuring costs |
|
|
( i 1.5 |
) |
|
|
( i 3.2 |
) |
|
|
( i 3.1 |
) |
|
|
( i 5.5 |
) |
|
Income/(loss) from operations |
|
$ |
i 52.1 |
|
|
$ |
i 57.1 |
|
|
$ |
( i 45.9 |
) |
|
$ |
i 123.5 |
|
|
Other non-operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
|
i 18.8 |
|
|
|
i 18.6 |
|
|
|
i 36.2 |
|
|
|
i 38.4 |
|
|
Other non-operating expense, net |
|
|
i 2.5 |
|
|
|
i 0.4 |
|
|
|
i 1.1 |
|
|
|
i 1.5 |
|
|
Total non-operating expense |
|
$ |
i 21.3 |
|
|
$ |
i 19.0 |
|
|
$ |
i 37.3 |
|
|
$ |
i 39.9 |
|
|
Income/(loss) before income taxes |
|
|
i 30.8 |
|
|
|
i 38.1 |
|
|
|
( i 83.2 |
) |
|
|
i 83.6 |
|
|
Provision for income taxes |
|
|
i 9.1 |
|
|
|
i 9.1 |
|
|
|
i 11.8 |
|
|
|
i 19.4 |
|
|
Net income/(loss) |
|
$ |
i 21.7 |
|
|
$ |
i 29.0 |
|
|
$ |
( i 95.0 |
) |
|
$ |
i 64.2 |
|
|
(1) |
Certain expenses are maintained at the corporate level and not allocated to the segments. These include various administrative expenses related to the Company’s corporate headquarters, depreciation on capitalized software costs, non-capitalizable software implementation costs and acquisition related expenses. |
18
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
i
Selected information by segment (continued)
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
i 8.2 |
|
|
$ |
i 8.3 |
|
|
$ |
i 16.4 |
|
|
$ |
i 16.7 |
|
|
Automation & Specialty |
|
|
i 22.9 |
|
|
|
i 23.2 |
|
|
|
i 46.2 |
|
|
|
i 46.2 |
|
|
Corporate |
|
|
i 0.9 |
|
|
|
i 0.7 |
|
|
|
i 1.5 |
|
|
|
i 1.4 |
|
|
Total depreciation and amortization |
|
$ |
i 32.0 |
|
|
$ |
i 32.2 |
|
|
$ |
i 64.1 |
|
|
$ |
i 64.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
|
|
|
|
|
|
|
|
$ |
i 1,045.7 |
|
|
$ |
i 1,089.2 |
|
|
Automation & Specialty |
|
|
|
|
|
|
|
|
|
|
i 2,920.1 |
|
|
|
i 3,170.3 |
|
|
Corporate (2) |
|
|
|
|
|
|
|
|
|
|
i 134.9 |
|
|
|
i 98.3 |
|
|
Total assets |
|
|
|
|
|
|
|
|
|
$ |
i 4,100.7 |
|
|
$ |
i 4,357.8 |
|
|
(2) |
Corporate assets are primarily cash and cash equivalents, tax related asset accounts, certain capitalized software costs, and property, plant and equipment. |
Net sales to third parties by geographic region are as follows:
|
|
|
Net Sales |
|
|||||||||||||
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
North America (primarily U.S.) |
|
$ |
i 205.8 |
|
|
$ |
i 269.8 |
|
|
$ |
i 451.1 |
|
|
$ |
i 542.8 |
|
|
Europe excluding Germany |
|
|
i 71.3 |
|
|
|
i 79.9 |
|
|
|
i 146.1 |
|
|
|
i 161.7 |
|
|
Germany |
|
|
i 44.1 |
|
|
|
i 56.8 |
|
|
|
i 96.6 |
|
|
|
i 119.0 |
|
|
Asia and other |
|
|
i 79.6 |
|
|
|
i 60.0 |
|
|
|
i 141.2 |
|
|
|
i 125.8 |
|
|
Total |
|
$ |
i 400.8 |
|
|
$ |
i 466.5 |
|
|
$ |
i 835.0 |
|
|
$ |
i 949.3 |
|
/
Net sales to third parties are attributed to the geographic regions based on the country in which the shipment originates. Amounts attributed to the geographic regions for property, plant and equipment are based on the location of the entity, which holds such assets.
19
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
i
15. Derivative Financial Instruments
The Company may manage changes in market conditions related to interest on debt obligations and foreign currency exposures by entering into derivative instruments, including interest rate and foreign currency swap agreements. All derivative instruments are recognized as either assets or liabilities on the balance sheet at fair value at the end of each period. The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of Altra or the financial counterparty to perform. For interest rate swaps, the significant inputs to these models are interest rate curves for discounting future cash flows that are adjusted for credit risk. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. For designated hedging relationships, the Company formally documents the hedging relationship consistent with the requirements of ASC 815, Derivatives.
Cross Currency Interest Rate Swaps
In December 2018, the Company entered into cross-currency swap agreements to hedge its net investment in Euro-denominated assets against future volatility in the exchange rate between the U.S. dollar and the Euro. By doing so, the Company synthetically converted a portion of its U.S. dollar-based long-term debt into Euro-denominated long-term debt. The agreements originally had a five-year maturity at notional amounts declining from $ i 600.0 million to $ i 360.0 million over the contract period. The terms of the swap agreements provided for the Company to receive net interest payments at a fixed rate of i 4.8255% and pay Euros at rates ranging from i 2.19% to i 2.315%. At inception, the cross-currency swaps were designated as net investment hedges.
For net investment hedges, changes in the fair value of the effective portion of the derivatives’ gains or losses are reported as foreign currency translation gains or losses in accumulated other comprehensive income (loss) (“AOCIL”). The gains or losses on the net investment hedges reported in AOCIL are reclassified to earnings in the period in which earnings are affected by the underlying item, such as a disposal or substantial liquidations of the entities being hedged.
During the first quarter of 2020, the global economy declined substantially due to the impact of COVID-19. This decline resulted in a significant increase in the value of the U.S. dollar. The appreciation of the U.S. dollar resulted in the Company’s cross currency interest rate swaps being substantially in-the-money. Given the increased cash value of the hedges and the Company’s overall desire to strengthen its cash position, the Company terminated the cross-currency interest rate swaps during the first quarter of 2020. The Company received the cash value of the cross-currency interest rate swaps of approximately $ i 56.2 million upon termination. In addition, the Company paid the interest owed and received the interest due, resulting in the recognition of approximately $ i 3.3 million in net interest income and paid termination fees of approximately $ i 0.9 million. Through the date of the termination of the cross-currency interest rate swaps, the Company recorded a gain in AOCIL of approximately $ i 31.3 million, net of $ i 9.9 million of tax, compared to $ i 19.8 million, net of $ i 3.6 million of tax, during the year to date period ended June 30, 2020, and year to date period ended December 31, 2019, respectively.
i
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Description (in millions) |
|
Gain/(Loss) Recognized in AOCI |
|
|||||
|
Cross currency swap agreements, net of tax |
|
$ |
i 31.3 |
|
|
$ |
i 19.8 |
|
/
Interest Rate Swaps
In January 2017, the Company entered into an interest rate swap agreement to fix the variable interest rate payable on a portion of its outstanding borrowings. This interest rate swap matured on i January 31, 2020.
In December 2018, the Company entered into an interest rate swap agreement to manage the cash flow risk caused by interest rate changes on the forecasted interest payments expected to occur related to a portion of its outstanding borrowings under the Altra Credit Agreement for a notional value of $ i 600 million at i 4.8255%.
/
20
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
The interest rate swap agreement was designed to manage exposure to interest rates on the Company’s variable rate indebtedness and was recognized on the balance sheet at fair value. The Company designated this interest rate swap agreement as a cash flow hedge and changes in the fair value of the swap were recognized in other comprehensive income until the hedged items were recognized in earnings.
During the second quarter of 2020, the Company terminated the interest rate swap agreement. The Company paid the cash value of the interest rate swaps of approximately $ i 34.7 million upon termination. In addition, the Company paid the interest owed and received the interest due, resulting in the recognition of approximately $ i 0.1 million in net interest expense and paid termination fees of approximately $ i 0.1 million. Through the date of the termination of the interest rate swap, the Company recorded a loss in AOCIL of approximately $ i 11.9 million, net of $ i 3.8 million of tax benefit, compared to $ i 9.8 million, net of $ i 1.7 million of tax benefit, during the year to date period ended June 30, 2020, and year to date period ended December 31, 2019, respectively. The loss on the interest rate swap reported in AOCIL will be reclassified to earnings in future periods when the hedged transaction affects earnings or if it is determined that it is probable that the hedged transaction will not occur. The Company reclassified approximately $ i 3.2 million and $ i 0.5 million of AOCIL into interest expense for the quarters ended June 30, 2020 and June 30, 2019, respectively. The Company reclassified $ i 4.8 million and $ i 1.0 million of AOCIL into interest expense for the year to date periods ended June 30, 2020 and June 30, 2019, respectively. Approximately $ i i 2.2 / million of the AOCIL reclassified to interest expense for the quarter and year to date period ended June 30, 2020 represents non-cash amortization due to the termination of the interest rate swap.
i
The following table summarizes the location and fair value, using Level 2 inputs (see Note 6 for a description of the fair value levels), of the Company's derivatives designated and not designated as hedging instruments in the unaudited condensed consolidated balance sheets (in millions).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Location |
|
|
|
|
||||
|
Designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
Cross currency swap agreements |
|
Other long-term (assets) |
|
$ |
— |
|
|
$ |
( i 15.0 |
) |
|
Interest rate swap agreement |
|
Other long-term (assets) |
|
|
— |
|
|
|
( i 0.0 |
) |
|
Interest rate swap agreement |
|
Other long-term liabilities |
|
|
— |
|
|
|
i 19.0 |
|
|
|
|
|
|
$ |
— |
|
|
$ |
i 4.0 |
|
i
16. Commitments and Contingencies
General Litigation
The Company is involved in various pending legal proceedings arising out of the ordinary course of business. These proceedings primarily involve commercial claims, product liability claims, personal injury claims, and workers’ compensation claims. With respect to these proceedings, management believes that the Company will prevail, has adequate insurance coverage or has established appropriate reserves to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adversely to the Company, there could be a material adverse effect on the results of operations, cash flows, or financial condition of the Company. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. For matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses, individually and in the aggregate, will not have a material effect on our unaudited condensed consolidated financial statements.
Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates. We will continue to consider the applicable guidance in ASC 450-20, based on the facts known at the time of our future filings, as it relates to legal contingencies, and will adjust our disclosures as may be required under the guidance.
21
ALTRA INDUSTRIAL MOTION CORP.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in millions, unless otherwise noted
There were i i no / material amounts accrued in the accompanying unaudited condensed consolidated balance sheets for potential litigation as of June 30, 2020 or December 31, 2019.
The Company also risks exposure to product liability claims in connection with products it has sold and those sold by businesses that the Company acquired. Although in some cases third parties have retained responsibility for product liability claims relating to products manufactured or sold prior to the acquisition of the relevant business and in other cases the persons from whom the Company has acquired a business may be required to indemnify the Company for certain product liability claims subject to certain caps or limitations on indemnification, the Company cannot assure that those third parties will in fact satisfy their obligations with respect to liabilities retained by them or their indemnification obligations. If those third parties become unable to or otherwise do not comply with their respective obligations including indemnity obligations, or if certain product liability claims for which the Company is obligated were not retained by third parties or are not subject to these indemnities, the Company could become subject to significant liabilities or other adverse consequences. Moreover, even in cases where third parties retain responsibility for product liability claims or are required to indemnify the Company, significant claims arising from products that have been acquired could have a material adverse effect on the Company’s ability to realize the benefits from an acquisition, could result in the reduction of the value of goodwill that the Company recorded in connection with an acquisition, or could otherwise have a material adverse effect on the Company’s business, financial condition, or operations.
Environmental
There is contamination at some of the Company’s current facilities, primarily related to historical operations at those sites, for which the Company could be liable for the investigation and remediation under certain environmental laws. The potential for contamination also exists at other of the Company’s current or former sites, based on historical uses of those sites. The Company currently is not undertaking any material remediation or investigations and the costs or liability in connection with potential contamination conditions at these facilities cannot be predicted at this time because the potential existence of contamination has not been investigated or not enough is known about the environmental conditions or likely remedial requirements. Currently, other parties with contractual liability are addressing or have plans or obligations to address those contamination conditions that may pose a material risk to human health, safety or the environment. In addition, while the Company attempts to evaluate the risk of liability associated with these facilities at the time the Company acquired them, there may be environmental conditions currently unknown to the Company relating to prior, existing or future sites or operations or those of predecessor companies whose liabilities the Company may have assumed or acquired which could have a material adverse effect on the Company’s business.
The Company is being indemnified, or expects to be indemnified, by third parties subject to certain caps or limitations on the indemnification, for certain environmental costs and liabilities associated with certain owned or operated sites. Accordingly, based on the indemnification and the experience with similar sites of the environmental consultants who the Company has hired, the Company does not expect such costs and liabilities to have a material adverse effect on its business, operations or earnings. The Company cannot assure you, however, that those third parties will in fact satisfy their indemnification obligations. If those third parties become unable to, or otherwise do not, comply with their respective indemnity obligations, or if certain contamination or other liability for which the Company is obligated is not subject to these indemnities, the Company could become subject to significant liabilities.
From time to time, the Company is notified that it is a potentially responsible party and may have liability in connection with off-site disposal facilities. To date, the Company has generally resolved matters involving off-site disposal facilities for a nominal sum but there can be no assurance that the Company will be able to resolve pending or future matters in a similar fashion.
i
17. Subsequent Events
On i July 22, 2020 the Company declared a dividend of $ i 0.04 per share for the quarter ended September 30, 2020, payable on i October 2, 2020 to stockholders of record as of i September 18, 2020.
/
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company’s current estimates, expectations and projections about the Company’s future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning the Company’s possible future results of operations including revenue, costs of goods sold, gross margin, future profitability, future economic improvement, business and growth strategies, financing plans, expected leverage levels, the Company’s competitive position and the effects of competition, the projected growth of the industries in which we operate, and the Company’s ability to consummate strategic acquisitions and other transactions. In addition, all statements regarding the anticipated effects of the novel coronavirus, or COVID-19, pandemic and the responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business, customers, end markets, results of operations and financial condition and anticipated actions to be taken by management to sustain the Company during the economic uncertainty caused by the pandemic and related governmental and business actions, as well as other statements that are not strictly historic in nature are forward looking. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “plan,”” may,” “project,” “should,” “will,” “would,” and similar expressions or variations. These forward-looking statements are based upon information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Important factors that could cause the Company’s actual results to differ materially from the results referred to in the forward-looking statements the Company makes in this report include:
|
|
• |
the scope and duration of the COVID-19 global pandemic and its impact on global economic systems, our employees, sites, operations, customers, and supply chain; |
|
|
• |
the effects of intense competition in the markets in which we operate; |
|
|
• |
the cyclical nature of the markets in which we operate; |
|
|
• |
the loss of independent distributors on which we rely; |
|
|
• |
changes in market conditions in which we operate that would influence the value of the Company’s stock; |
|
|
• |
the Company’s ability to achieve its business plans, including with respect to an uncertain economic environment; |
|
|
• |
the risks associated with international operations, including currency risks; |
|
|
• |
the risks associated with and potential impacts of new trade policies, legislations, treaties, and tariffs both in and outside of the United States; |
|
|
• |
the Company’s ability to retain existing customers and our ability to attract new customers for growth of our business; |
|
|
• |
the effects of the loss or bankruptcy of or default by any significant customer, suppliers, or other entity relevant to the Company’s operations; |
|
|
• |
political and economic conditions globally, nationally, regionally, and in the markets in which we operate; |
|
|
• |
natural disasters, war, civil unrest, terrorism, fire, floods, tornadoes, earthquakes, hurricanes, pandemics, including, but not limited to, the COVID-19 pandemic, or other matters beyond the Company’s control; |
|
|
• |
the Company’s risk of loss not covered by insurance; |
|
|
• |
the accuracy of estimated forecasts of original equipment manufacturer (“OEM”) customers and the impact of the current global and European economic environment on our customers; |
|
|
• |
the risks associated with certain minimum purchase agreements we have with suppliers; |
|
|
• |
disruption of our supply chain; |
|
|
• |
fluctuations in the costs of raw materials used in our products; |
|
|
• |
the outcome of litigation to which the Company is a party from time to time, including product liability claims; |
|
|
• |
work stoppages and other labor issues; |
23
|
|
• |
changes in employment, environmental, tax and other laws, including enactment of the 2017 Tax Act, and changes in the enforcement of laws; |
|
|
• |
the Company’s ability to attract and retain key executives and other personnel; |
|
|
• |
the Company’s ability to successfully pursue the Company’s development activities and successfully integrate new operations and systems, including the realization of revenues, economies of scale, cost savings, and productivity gains associated with such operations; |
|
|
• |
the Company’s ability to obtain or protect intellectual property rights and avoid infringing on the intellectual property rights of others; |
|
|
• |
the risks associated with the portion of the Company’s total assets comprised of goodwill and indefinite lived intangibles; |
|
|
• |
changes in market conditions that would result in the impairment of goodwill or other assets of the Company; |
|
|
• |
changes in accounting rules and standards, audits, compliance with the Sarbanes-Oxley Act, and regulatory investigations; |
|
|
• |
the effects of changes to critical accounting estimates; |
|
|
• |
changes in volatility of the Company’s stock price and the risk of litigation following a decline in the price of the Company’s stock; |
|
|
• |
failure of the Company’s operating equipment or information technology infrastructure, including cyber-attacks or other security breaches, and failure to comply with data privacy laws or regulations; |
|
|
• |
the Company’s ability to implement and maintain its Enterprise Resource Planning (ERP) system; |
|
|
• |
the Company’s access to capital, credit ratings, indebtedness, and ability to raise additional capital and operate under the terms of the Company’s debt obligations; |
|
|
• |
the risks associated with the Company’s debt; |
|
|
• |
the risks associated with the Company’s exposure to variable interest rates and foreign currency exchange rates; |
|
|
• |
the risks associated with interest rate swap contracts; |
|
|
• |
the risks associated with transitioning from LIBOR to a replacement alternative reference rate; |
|
|
• |
the risks associated with the Company’s being subject to tax laws and regulations in various jurisdictions; |
|
|
• |
the risks associated with the Company’s exposure to renewable energy markets; |
|
|
• |
the risks related to regulations regarding conflict minerals; |
|
|
• |
the risks associated with the volatility and disruption in the global financial markets; |
|
|
• |
the Company’s ability to successfully execute, manage and integrate key acquisitions and mergers, including Altra’s purchase of Stromag (the “Stromag Acquisition”), and the business combination (the “Fortive Transaction”) of the Company with four operating companies from Fortive Corporation’s (“Fortive”) Automation & Specialty platform (the “A&S Business”); |
|
|
• |
other risks associated with the Fortive Transaction, including: |
|
|
o |
lost sales and customers as a result of customers of Altra or the A&S Business deciding not do so business with us; |
|
|
o |
risks associated with managing a larger and more complex business; |
|
|
o |
integrating personnel of Altra and the A&S Business while maintaining focus on providing consistent, high-quality products and service to customers; |
|
|
o |
the loss of key employees; |
|
|
o |
unanticipated issues in integrating manufacturing, logistics, information, communications and other systems; |
|
|
o |
possible inconsistencies in standards, controls, procedures, policies and compensation structures; |
|
|
o |
the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002; and |
24
|
|
o |
potential unknown liabilities and unforeseen expenses associated with the Fortive Transaction; |
|
|
• |
the Company’s ability to achieve the efficiencies, savings and other benefits anticipated from our cost reduction, margin improvement, restructuring, plant consolidation and other business optimization initiatives; |
|
|
• |
the risk associated with the United Kingdom’s vote to leave the European Union; and |
|
|
• |
other factors, risks, and uncertainties referenced in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” set forth in this document. |
ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS REPORT. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT ANY EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS REPORT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR ANY PERSON ACTING ON THE COMPANY’S BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED OR REFERRED TO IN THIS SECTION AND IN OUR RISK FACTORS SET FORTH (1) IN THE SECTION TITLED “RISK FACTORS,” SET FORTH IN PART II, ITEM 1A OF THIS QUARTERLY REPORT ON FORM 10-Q; (2) IN PART I, ITEM 1A OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2019, FILED WITH THE SEC ON FEBRUARY 27, 2020; AND (3) IN THE COMPANY’S OTHER SEC FILINGS.
The following discussion of the financial condition and results of operations of Altra Industrial Motion Corp. and its subsidiaries should be read together with (1) the unaudited condensed consolidated financial statements of Altra Industrial Motion Corp. and its subsidiaries and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements of Altra Industrial Motion Corp. and its subsidiaries and the related notes and management’s discussion and analysis of financial conditions and results of operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ materially from the results referred to in the forward-looking statements, see “Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Unless the context requires otherwise, the terms “Altra,” “Altra Industrial Motion Corp.,” “the Company,” “we,” “us,” and “our” refer to Altra Industrial Motion Corp. and its subsidiaries.
General
We are a leading global designer, producer and marketer of a wide range of electromechanical power transmission motion control products. Our technologies are used in various motion related applications and across a wide variety of high-volume manufacturing and non-manufacturing processes in which reliability and precision are critical to avoid costly down time and enhance the overall efficiency of operations.
We market our products under well recognized and established brands, which have been in existence for an average of over 85 years. We serve a diversified group of customers comprised of over 1,000 direct original equipment manufacturers (“OEMs”) including GE, Honeywell and Siemens, and also benefit from established, long-term relationships with leading industrial distributors, including Applied Industrial Technologies, Grainger, Kaman Corporation and Motion Industries. Many of our customers operate globally across a large number of industries, ranging from transportation, turf and agriculture, energy and mining to factory automation, medical and robotics. Our relationships with these customers often span multiple decades, which we believe reflects the high level of performance, quality and service we deliver, supplemented by the breadth of our offering, vast geographic footprint and our ability to rapidly develop custom solutions for complex customer requirements.
Our website is www.altramotion.com. By following the link “Investor Relations” and then “SEC Filings” on our website, you can access our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which we make available free of charge, as soon as reasonably practicable after such forms are filed with or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Quarterly Report on Form 10-Q.
Business Outlook
Our future financial performance depends, in large part, on conditions in the markets that we serve and on conditions in the U.S., European, and global economies in general. During the quarter ended June 30, 2020, the impact of the COVID-19 pandemic continued to affect our results of operations as we experienced temporary facility shutdowns, lower factory utilization rates, and some secondary impacts on customer demand. In the second quarter, the Company’s Pandemic Response Team continued to identify and
25
assess risks and develop countermeasures following guidance from national, state and local governmental and health authorities. In addition, the Company’s Business Continuity Task Force continued to work to ensure continuity of supply for its customers and to facilitate reopening manufacturing facilities impacted by the pandemic. During the second quarter, Altra experienced minimal supply chain disruption and the vast majority of our material manufacturing facilities continued to be operational at levels required to meet customer demand. In addition, during the second quarter we also took several proactive measures to protect the Company’s balance sheet and strengthen its liquidity position, including:
|
|
• |
Accelerating cost reductions through furloughs, merit increase suspensions, executive wage rollbacks, discretionary spending reductions, corporate travel suspension, and service provider and other expense reductions. |
|
|
• |
Leveraging government work programs and tax deferrals and extensions to the extent they do not incur interest rate fees or penalties. |
The COVID-19 pandemic and its effects on the economic environment remain extremely fluid and it is difficult to predict with certainty what unforeseen circumstances may develop as we progress through the remainder of the year. As a result, we will continue to proceed cautiously by managing our cost structure and cash flows and prioritizing debt reduction. In addition, we are implementing strategic plans to best position Altra to adapt to these changing conditions and to continue to serve our customers and community.
Critical Accounting Policies
The preparation of our unaudited condensed consolidated financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make judgments, assumptions and estimates that affect our reported amounts of assets, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We base our estimates on past experiences and other assumptions we believe to be appropriate, and we evaluate these estimates on an on-going basis. See the discussion of critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2019. Except as otherwise noted below, there have been no changes in the identification or application of the Company’s critical accounting policies during the quarter ended June 30, 2020.
Impairment of Goodwill and Indefinite-Lived Intangible Assets
The Company conducts an annual impairment review of goodwill and indefinite-lived intangible assets in October of each year, unless events occur which trigger the need for an interim impairment review. The 2019 annual goodwill impairment review indicated that the JVS reporting unit’s fair value exceeded its carrying value by less than 10%. All other reporting units had fair values that exceeded their carrying value by 10% or more.
During the first quarter of 2020 the Company considered the economic impact of the COVID-19 pandemic to be a triggering event for the JVS business unit and, as a result, the Company performed an interim impairment review. As a result of both the COVID-19 related economic downturn and its impact on JVS’s anticipated financial results, the Company concluded that it was more likely than not that the JVS reporting unit’s carrying value exceeds its fair value and performed an interim impairment review for both JVS’s goodwill and tradename intangible asset. As a result, on March 31, 2020, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for goodwill and indefinite-lived intangible assets, respectively.
The Company estimated the fair value of the JVS reporting unit using both the discounted cash flow model and the market approach. The Company estimated the value of JVS’s indefinite-lived tradename intangible asset using a discounted cash flow model. The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate.
Key assumptions developed by management and used in the interim quantitative analysis included the following:
|
|
• |
Near-term revenue declines in 2020; |
|
|
• |
Adjusted profit margins over the projection period, due to revenue adjustments and maintained investment in the business; and |
26
|
|
• |
Market-based discount rates. |
|
|
• |
Reduced EBITDA multiple, due to current market conditions. |
During the second quarter of 2020, the Company again considered the economic impact of the COVID-19 pandemic on the reporting units and determined there was no triggering event. For all reporting units, the Company concluded that it was more likely than not that their fair value continued to exceed their carrying value as of June 30, 2020. However, depending on its duration and the severity of its economic impact, the COVID-19 pandemic may trigger additional interim impairment reviews in future periods.
Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. Altra has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on the Company’s unaudited condensed consolidated financial statements for the period ended June 30, 2020.
Trade Account Receivables
As a result of the adoption of ASU 2016-13, the Company has updated its significant accounting policy related to trade account receivables and allowances for credit losses from what was previously disclosed in our audited financial statements for the year ended December 31, 2019 as follows:
All trade account receivables are reported net of allowances for credit losses. The allowances for credit losses represent management’s best estimate of the credit losses expected from our trade account receivables over the life of the underlying assets. Assets with similar risk characteristics are pooled together for determination of their current expected credit losses. We regularly perform detailed reviews of our pooled assets to evaluate the collectability of receivables based on a combination of past, current, and future financial and qualitative factors that may affect customers’ ability to pay. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected.
Recent Accounting Standards
See Part 1, Notes to Unaudited Condensed Consolidated Interim Financial Statements, Note 3 – Recent Accounting Standards.
Results of Operations
(Amounts in millions, unless otherwise noted)
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net sales |
|
$ |
400.8 |
|
|
$ |
466.5 |
|
|
$ |
835.0 |
|
|
$ |
949.3 |
|
|
Cost of sales |
|
|
257.4 |
|
|
|
299.5 |
|
|
|
538.6 |
|
|
|
607.4 |
|
|
Gross profit |
|
|
143.4 |
|
|
|
167.0 |
|
|
|
296.4 |
|
|
|
341.9 |
|
|
Gross profit percentage |
|
|
35.8 |
% |
|
|
35.8 |
% |
|
|
35.5 |
% |
|
|
36.0 |
% |
|
Selling, general and administrative expenses |
|
|
75.8 |
|
|
|
92.0 |
|
|
|
162.9 |
|
|
|
182.9 |
|
|
Impairment of Goodwill and Intangible Asset |
|
|
— |
|
|
|
— |
|
|
|
147.5 |
|
|
|
— |
|
|
Research and development expenses |
|
|
14.0 |
|
|
|
14.7 |
|
|
|
28.8 |
|
|
|
30.0 |
|
|
Restructuring costs |
|
|
1.5 |
|
|
|
3.2 |
|
|
|
3.1 |
|
|
|
5.5 |
|
|
Income/(loss) from operations |
|
|
52.1 |
|
|
|
57.1 |
|
|
|
(45.9 |
) |
|
|
123.5 |
|
|
Interest expense, net |
|
|
18.8 |
|
|
|
18.6 |
|
|
|
36.2 |
|
|
|
38.4 |
|
|
Other non-operating expense, net |
|
|
2.5 |
|
|
|
0.4 |
|
|
|
1.1 |
|
|
|
1.5 |
|
|
Income/(loss) before income taxes |
|
|
30.8 |
|
|
|
38.1 |
|
|
|
(83.2 |
) |
|
|
83.6 |
|
|
Provision for income taxes |
|
|
9.1 |
|
|
|
9.1 |
|
|
|
11.8 |
|
|
|
19.4 |
|
|
Net income/(loss) |
|
$ |
21.7 |
|
|
$ |
29.0 |
|
|
$ |
(95.0 |
) |
|
$ |
64.2 |
|
27
Quarter Ended June 30, 2020 compared with Quarter Ended June 30, 2019
(Amounts in millions, unless otherwise noted)
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Net sales |
|
$ |
400.8 |
|
|
$ |
466.5 |
|
|
$ |
(65.7 |
) |
|
|
(14.1 |
)% |
Net SalesThe decrease in net sales during the quarter ended June 30, 2020 is primarily due to the overall economic decline due to the effects of the COVID-19 pandemic, and a decline in sales in our oil and gas end market, as a result of the reduction in oil prices globally. Changes in foreign exchange had an unfavorable impact on net sales of $7.1 million, primarily driven by the Euro and Chinese Renminbi. This was partially offset by price which had a favorable impact of $3.2 million for the quarter ended June 30, 2020.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Gross profit |
|
$ |
143.4 |
|
|
$ |
167.0 |
|
|
$ |
(23.6 |
) |
|
|
(14.1 |
)% |
|
Gross profit as a percent of sales |
|
|
35.8 |
% |
|
|
35.8 |
% |
|
|
|
|
|
|
|
|
Gross Profit Gross profit decreased during the quarter ended June 30, 2020, primarily due to the economic impact of the COVID-19 pandemic including a decrease in sales levels, costs associated with temporary shutdowns of our manufacturing facilities and shutdowns of operations of our customers and suppliers. Changes in foreign exchange had an unfavorable impact on gross profit of $2.8 million, primarily driven by the Euro and Chinese Renminbi. We have taken actions to reduce our expenses and maximize near-term profitability; however, we expect our 2020 gross profit as a percentage of sales to decrease when compared to 2019.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Selling, general and administrative expense (“SG&A”) |
|
$ |
75.8 |
|
|
$ |
92.0 |
|
|
$ |
(16.2 |
) |
|
|
(17.6 |
)% |
|
SG&A as a percent of sales |
|
|
18.9 |
% |
|
|
19.7 |
% |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses The decrease in SG&A during the quarter ended June 30, 2020 was primarily due to cost reduction actions which began during the quarter ended March 31, 2020 and continued during the current quarter. Our cost reduction efforts were focused on compensation reductions, and the elimination of non-critical expenses, including travel, which decreased our overall SG&A costs. During the remainder of 2020 we expect our SG&A costs to increase as certain temporary cost reductions terminate.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Research and development expenses (“R&D”) |
|
$ |
14.0 |
|
|
$ |
14.7 |
|
|
$ |
(0.7 |
) |
|
|
(4.8 |
)% |
Research and development expense Research and development expenses decreased for the quarter ended June 30, 2020 when compared to the quarter ended June 30, 2019 primarily due to cost reduction actions which began during the quarter. The decrease is partially offset by the unfavorable impact of foreign exchange of $0.1 million, primarily driven by the Euro. We expect R&D costs to be approximately 2.5% - 3.5% of sales in future periods.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Restructuring costs |
|
$ |
1.5 |
|
|
$ |
3.2 |
|
|
$ |
(1.7 |
) |
|
|
(53.1 |
)% |
28
Restructuring costs. During the quarter ended September 30, 2017, we commenced a restructuring plan (“2017 Altra Plan”) as a result of the Stromag Acquisition and to rationalize our global renewable energy business. The actions taken pursuant to the 2017 Altra Plan included reducing headcount, facility consolidations and the elimination of certain costs. The total 2017 Altra Plan savings are in line with our expectations. We do not expect to incur any additional material costs as a result of the 2017 Altra Plan.
During 2019, we commenced a restructuring plan (“2019 Altra Plan”) to drive efficiencies, reduce the number of facilities and optimize our operating margin. We expect to incur $10 - $15 million in restructuring expenses under the 2019 Plan over the next three years, primarily related to headcount reductions and plant consolidations. We achieved savings of $0.3 million during the quarter ended June 30, 2020 under the 2019 Altra Plan and estimate additional future savings during 2020 to be approximately $3.2 million. The cost savings for the quarter ended June 30, 2020 were recognized as reductions in SG&A expense of approximately $0.3 million.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Interest expense, net |
|
$ |
18.8 |
|
|
$ |
18.6 |
|
|
$ |
0.2 |
|
|
|
1.1 |
% |
Interest expenseInterest expense increased for the quarter ended June 30, 2020 compared to the prior year period primarily due to the impact of the termination of our interest rate and cross currency interest rate swap agreements. As of June 30, 2020, the Company recorded approximately $2.2 million of non-cash interest expense related to the termination of the interest rate swap. This was partially offset by the impact of debt paydowns of approximately $110.0 million since the second quarter of 2019, and lower average interest rates.
|
Amounts in millions, except percentage data |
|
Quarter Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Provision for income taxes |
|
$ |
9.1 |
|
|
$ |
9.1 |
|
|
$ |
— |
|
|
|
0.0 |
% |
|
Provision for income taxes as a percent of income before income taxes |
|
|
29.5 |
% |
|
|
23.9 |
% |
|
|
|
|
|
|
|
|
Provision for Income Taxes The provision for income tax as a percentage of income before income taxes increased for the quarter ended June 30, 2020 as compared to the quarter ended June 30, 2019. The increase in the 2020 provision for income tax as a percent of income before income taxes is due to the impact of a $2.0 million of withholding tax paid as a result of a dividend from one of our foreign subsidiaries. We expect our provision for income taxes before discrete items to be approximately 21% to 23% for the full year 2020.
Year to Date Ended June 30, 2020 compared with Year to Date Ended June 30, 2019
(Amounts in millions, unless otherwise noted)
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Net sales |
|
$ |
835.0 |
|
|
$ |
949.3 |
|
|
$ |
(114.3 |
) |
|
|
(12.0 |
)% |
Net SalesThe decrease in net sales during the year to date period ended June 30, 2020 is primarily due to a decline in sales in our oil and gas end market, as a result of the decline in oil prices globally, and the overall economic decline due to the effects of the COVID-19 pandemic. Changes in foreign exchange had an unfavorable impact on net sales of $14.2 million, primarily driven by the Euro and Chinese Renminbi. This was partially offset by price which had a favorable impact of $6.3 million for the year to date period ended June 30, 2020.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Gross profit |
|
$ |
296.4 |
|
|
$ |
341.9 |
|
|
$ |
(45.5 |
) |
|
|
(13.3 |
)% |
|
Gross profit as a percent of sales |
|
|
35.5 |
% |
|
|
36.0 |
% |
|
|
|
|
|
|
|
|
29
Gross Profit Gross profit as a percentage of net sales decreased during the year to date period ended June 30, 2020, primarily due to the economic impact of the COVID-19 pandemic including a decrease in sales levels, costs associated with temporary shutdowns of our manufacturing facilities and shutdowns of operations of our customers and suppliers. Changes in foreign exchange had an unfavorable impact on gross profit of $5.5 million, primarily driven by the Euro and Chinese Renminbi. We have taken actions to reduce our expenses and maximize near-term profitability; however, we expect our 2020 gross profit as a percentage of sales to decrease when compared to 2019.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Selling, general and administrative expense (“SG&A”) |
|
$ |
162.9 |
|
|
$ |
182.9 |
|
|
$ |
(20.0 |
) |
|
|
(10.9 |
)% |
|
SG&A as a percent of sales |
|
|
19.5 |
% |
|
|
19.3 |
% |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses The decrease in SG&A during the year to date period ended June 30, 2020 was primarily due to cost reduction actions which began during the quarter ended March 31, 2020 and continued during the current period. Our cost reduction efforts were focused on compensation reductions, and the elimination of non-critical expenses, including travel, which decreased our SG&A costs. However, due to the decrease in sales, SG&A as a percent of sales increased despite our cost reductions. During the remainder of 2020 we expect our SG&A costs to increase as certain temporary cost reductions terminate.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Research and development expenses (“R&D”) |
|
$ |
28.8 |
|
|
$ |
30.0 |
|
|
$ |
(1.2 |
) |
|
|
(4.0 |
)% |
Research and development expense Research and development expenses decreased for the year to date period ended June 30, 2020 when compared to the year to date period ended June 30, 2019. The decrease is mainly due to cost reduction actions which began during the year as a response to the COVID-19 pandemic partially offset by the unfavorable impact of foreign exchange of $0.3 million, primarily driven by the Euro. We expect R&D costs to be approximately 2.5% - 3.5% of sales in future periods.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Restructuring costs |
|
$ |
3.1 |
|
|
$ |
5.5 |
|
|
$ |
(2.4 |
) |
|
|
(43.6 |
)% |
Restructuring costs. During the quarter ended September 30, 2017, we commenced a restructuring plan (“2017 Altra Plan”) as a result of the Stromag Acquisition and to rationalize our global renewable energy business. The actions taken pursuant to the 2017 Altra Plan included reducing headcount, facility consolidations and the elimination of certain costs. The total 2017 Altra Plan savings are in line with our expectations. We do not expect to incur any additional material costs as a result of the 2017 Altra Plan.
During 2019, we commenced a restructuring plan (“2019 Altra Plan”) to drive efficiencies, reduce the number of facilities and optimize our operating margin. We expect expenses related to workforce reductions, lease termination costs and other facility rationalization costs. We expect to incur $10 - $15 million in restructuring expenses under the 2019 Plan over the next 3 years, primarily related to plant consolidation and headcount reductions. We achieved savings of $0.6 million during the year to date period June 30, 2020 under the 2019 Altra Plan and estimate additional future savings during 2020 to be approximately $3.2 million. The cost savings for the year to date period ended June 30, 2020 were recognized as improvements in SG&A and Cost of Sales of approximately $0.4 million and $0.1 million, respectively.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Interest expense, net |
|
$ |
36.2 |
|
|
$ |
38.4 |
|
|
$ |
(2.2 |
) |
|
|
(5.7 |
)% |
Interest expenseInterest expense decreased for the year to date period ended June 30, 2020 compared to the prior year period primarily due to debt paydowns of approximately $160.0 million since the fourth quarter of 2018. We expect our interest expense in 2020 to decrease as a result of additional principal payments, resulting in lower average outstanding borrowings, as well as lower average interest rates. This will be partially offset by non-cash interest expense as a result of the termination of the interest rate
30
swap. As of June 30, 2020, the Company recorded approximately $2.2 million of non-cash interest expense related to the termination of the interest rate swap.
|
Amounts in millions, except percentage data |
|
Year to Date Ended |
|
|||||||||||||
|
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
|
Provision for income taxes |
|
$ |
11.8 |
|
|
$ |
19.4 |
|
|
$ |
(7.6 |
) |
|
|
(39.2 |
)% |
|
Provision for income taxes as a percent of income before income taxes |
|
|
(14.2 |
)% |
|
|
23.2 |
% |
|
|
|
|
|
|
|
|
Provision for Income Taxes The provision for income tax as a percentage of income before income taxes decreased for the year to date period ended June 30, 2020 as compared to the year to date period ended June 30, 2019. The decrease in the 2020 provision for income tax as a percent of income before income taxes is due to the impact of the $139.1 million non-cash impairment charge recorded at the JVS reporting unit in the United States and China. This was partially offset by the impact of a $2.8 million discrete item related to changes in tax rates for the JVS reporting unit in China, and the impact of $2.0 million of withholding tax paid as a result of a dividend from a foreign subsidiary. We expect our provision for income taxes before discrete items to be approximately 21% to 23% for the full year 2020.
Segment Performance.
(Amounts in millions unless otherwise noted)
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
196.3 |
|
|
$ |
234.9 |
|
|
$ |
413.0 |
|
|
$ |
469.8 |
|
|
Automation & Specialty |
|
|
205.8 |
|
|
|
233.3 |
|
|
|
424.4 |
|
|
|
482.4 |
|
|
Inter-segment eliminations |
|
|
(1.3 |
) |
|
|
(1.7 |
) |
|
|
(2.4 |
) |
|
|
(2.9 |
) |
|
Net sales |
|
$ |
400.8 |
|
|
$ |
466.5 |
|
|
$ |
835.0 |
|
|
$ |
949.3 |
|
|
(Loss)/Income from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
23.9 |
|
|
$ |
31.9 |
|
|
$ |
49.5 |
|
|
$ |
60.8 |
|
|
Automation & Specialty |
|
|
26.0 |
|
|
|
31.8 |
|
|
|
(92.6 |
) |
|
|
72.4 |
|
|
Corporate expenses (1) |
|
|
3.7 |
|
|
|
(3.4 |
) |
|
|
0.3 |
|
|
|
(4.2 |
) |
|
Restructuring costs |
|
|
(1.5 |
) |
|
|
(3.2 |
) |
|
|
(3.1 |
) |
|
|
(5.5 |
) |
|
(Loss)/Income from operations |
|
$ |
52.1 |
|
|
$ |
57.1 |
|
|
$ |
(45.9 |
) |
|
$ |
123.5 |
|
|
(1) |
Certain expenses are maintained at the corporate level and not allocated to the segments. These include various administrative expenses related to the Company’s corporate headquarters, depreciation on capitalized software costs, non-capitalizable software implementation costs and acquisition related expenses. |
Power Transmission Technologies
Net sales in the Power Transmission Technologies segment were $196.3 million and $413.0 million in the quarter and year to date periods ended June 30, 2020, respectively. The decrease of approximately $38.6 million or 16%, and $56.8 million or 12% from the quarter and year to date periods ended June 30, 2019, respectively, is primarily due to the overall economic decline as a result of the COVID-19 pandemic and its impact on our turf and garden, agricultural, and oil and gas end markets. In addition, changes in foreign exchange had an unfavorable impact on net sales of $3.6 million and $7.1 million, for the quarter and year to date periods ended June 30, 2020, respectively, primarily driven by the Euro and Chinese Renminbi. Income from operations for the quarter and year to date periods ended June 30, 2020 was $23.9 million, a decrease of 25%, and $49.5 million, a decrease of 18.5%, respectively, which is primarily driven by the decline in sales.
31
Automation & Specialty
Net sales in the Automation and Specialty segment were $205.8 million and $424.4 million in the quarter and year to date periods ended June 30, 2020, respectively. The decrease of approximately $27.5 million, or 11.7%, and $58.0 million, or 12% from the quarter and year to date periods ended June 30, 2019 is primarily due to the overall economic decline as a result of the COVID-19 pandemic, partially offset by modest growth in the class 8 heavy duty trucking end market, factory automation and the aerospace and defense end markets. In addition, changes in foreign exchange had an unfavorable impact on net sales of $3.5 million and $7.1 million, for the quarter and year to date periods ended June 30, 2020, respectively, primarily driven by the Euro and Chinese Renminbi. The Automation & Specialty segment had income from operations for the quarter ended June 30, 2020 of $26.0 million, a decrease of 18%, primarily driven by the sales decline. The Automation and Specialty segment had a loss from operations for the year to date period ended June 30, 2020, due to the non-cash impairment charge recorded at the JVS reporting unit during the quarter ended March 31, 2020. As a result of both the COVID-19 related economic downturn and its impact on the JVS reporting units anticipated financial results, the Company concluded that it was more likely than not that the JVS reporting unit’s carrying value exceeded its fair value and performed an interim impairment review for both JVS’s goodwill and tradename intangible assets, during the quarter ended March 30, 2020. As a result, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for goodwill and indefinite-lived intangible assets, respectively, in the quarter ended March 31, 2020.
Liquidity and Capital Resources
Overview
We finance our capital and working capital requirements through a combination of cash flows from operating activities and borrowings under the Altra Revolving Credit Facility. At June 30, 2020, we had the ability under the Altra Revolving Credit Facility (as defined herein) to borrow an additional $294.8 million subject to satisfying customary conditions. We expect that our primary ongoing requirements for cash will be for working capital, debt service, capital expenditures, acquisitions, pensions, dividends and share repurchases.
On October 1, 2018 (the “A&S Closing Date”), we consummated the Fortive Transaction. The aggregate purchase price for the A&S Business was approximately $2,855.7 million, subject to certain post-closing adjustments, and consisted of (i) $1,400.0 million of cash transferred to Fortive and (ii) shares of Altra common stock received by Fortive shareholders valued at approximately $1,455.7 million. The value of the common stock was based on the closing stock price on the A&S Closing Date of $41.59. We financed the cash portion of the Fortive Transaction with the Altra Credit Facilities (as defined herein).
We believe, based on current and projected levels of cash flows from operating activities, together with our ability to borrow under the Altra Revolving Credit Facility (as defined herein), we have sufficient liquidity to make required payments of interest on our debt, to make amortization payments under the Altra Credit Facilities (as defined herein), to fund our operating needs, to fund working capital and capital expenditure requirements and to comply with the financial ratios in our debt agreements. However, it is difficult to predict the severity and duration of the economic decline due to the impact of the COVID-19 pandemic but we have taken several proactive measures to protect our balance sheet and strengthen our liquidity position, as discussed above under “Business Outlook.”
In the event additional funds are needed for operations, we could attempt to obtain new debt and/or refinance existing debt, or attempt to raise capital in the equity markets. There can be no assurance however that additional debt or equity financing will be available on commercially acceptable terms, if at all.
Notes
On September 26, 2018, Stevens Holding Company, Inc., a wholly owned subsidiary of the Company (“Stevens Holding”), announced the pricing of $400.0 million aggregate principal amount of Stevens Holding’s 6.125% senior notes due 2026 (the “Notes”) in a private debt offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933 (the “Private Placement”). On October 1, 2018, the Private Placement closed, and Stevens Holding sold $150.0 million aggregate principal amount of the Notes (the “Primary Notes”) and an unaffiliated selling securityholder sold $250.0 million aggregate principal amount of the Notes (the “Selling Securityholder Notes”). The Notes will mature on October 1, 2026. Interest on the Notes accrues from October 1, 2018, and the first interest payment date on the Notes was April 1, 2019. The Notes may be redeemed at the option of Stevens Holding on or after October 1, 2023, in the manner and at the redemption prices specified in the indenture governing the Notes, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption. The Notes are guaranteed on a senior unsecured basis by Altra and certain of its domestic subsidiaries.
32
The unaffiliated selling securityholder received the Selling Securityholder Notes from Fortive prior to the closing of the Private Placement in exchange for certain outstanding Fortive debt held or acquired by the unaffiliated selling securityholder. Stevens Holding used the net proceeds of the Primary Notes to fund a dividend payment to Fortive prior to the consummation of the Merger, and Stevens Holding did not receive any proceeds from the sale of the Selling Securityholder Notes.
Altra Credit Agreement
On the A&S Closing Date, Altra entered into the Altra Credit Agreement with certain subsidiaries of Altra, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and a syndicate of lenders. The Altra Credit Agreement provides for a seven-year senior secured term loan to Altra in an aggregate principal amount of $1,340.0 million (the “Altra Term Loan Facility”) and a five-year senior secured revolving credit facility provided to Altra and certain of its subsidiaries in an aggregate committed principal amount of $300.0 million (the “Altra Revolving Credit Facility” and together with the Altra Term Loan Facility, the “Altra Credit Facilities”). The proceeds of the Altra Term Loan Facility were used to (i) consummate the Direct Sales, (ii) repay in full and extinguish all outstanding indebtedness for borrowed money under the 2015 Credit Agreement and (iii) pay certain fees, costs, and expenses in connection with the consummation of the Fortive Transaction. Any proceeds of the Altra Term Loan Facility not so used may be used for general corporate purposes. The proceeds of the Altra Revolving Credit Facility will be used for working capital and general corporate purposes.
The Altra Credit Facilities are guaranteed on a senior secured basis by Altra and by each direct or indirect wholly owned domestic subsidiary of Altra, subject to certain customary exceptions.
Borrowings under the Altra Term Loan Facility will bear interest at a per annum rate equal to a “Eurocurrency Rate” plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a “Base Rate” plus 1.00%, in the case of Base Rate borrowings. Borrowings under the Altra Revolving Credit Facility will initially bear interest at a per annum rate equal to a Eurocurrency Rate plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a Base Rate plus 1.00%, in the case of Base Rate borrowings, and thereafter will bear interest at a per annum rate equal to a Eurocurrency Rate or Base Rate, as applicable, plus an interest rate spread determined by reference to a pricing grid based on Altra’s senior secured net leverage ratio. In addition, Altra will be required to pay fees that will fluctuate between 0.250% per annum to 0.375% per annum on the unused amount of the Altra Revolving Credit Facility, based upon Altra’s senior secured net leverage ratio. The interest rate on the Altra Term Loan Facility was 2.174% at June 30, 2020.
The Company provided notice to the administrative agent of the Altra Credit Agreement on March 9, 2020 and March 16, 2020 to draw down $50 million and $50 million, respectively, under the Altra Revolving Credit Facility. At that time, the Company had increased its borrowings under the Altra Revolving Credit Facility as a precautionary action in order to increase its cash position and enhance its financial flexibility during this period of uncertainty in the global markets resulting from COVID-19. On April 14, 2020, the Company provided notice to the administrative agent of the Altra Credit Agreement to repay $50 million outstanding under the Altra Revolving Credit Facility. On April 27 2020 and May, 27, 2020 the Company provided notice to the administrative agent to repay $15 million and $35 million, respectively, which were outstanding under the Altra Revolving Credit Facility. As of the period ended June 30, 2020, all outstanding borrowings under the Altra Revolving Credit Facility have been repaid.
As of June 30, 2020, the Company had $1,160.0 million outstanding on the Altra Credit Agreement. As of June 30, 2020 and December 31, 2019, the Company had $5.2 million and $4.4 million in letters of credit outstanding, respectively. The Company had $294.8 million available to borrow under the Altra Credit Facilities at June 30, 2020.
Revolving borrowings and issuances of letters of credit under the Altra Revolving Credit Facility are subject to the satisfaction of customary conditions, including the accuracy of representations and warranties and the absence of defaults.
The Altra Credit Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including limitations on liens, investments, restricted payments, additional indebtedness and asset sales and mergers. In addition, the Altra Credit Agreement requires that Altra maintain a specified maximum senior secured leverage ratio and a specified minimum interest coverage ratio. The obligations of the borrowers of the Altra Credit Facilities under the Altra Credit Agreement may be accelerated upon customary events of default, including non-payment of principal, interest, fees and other amounts, inaccuracy of representation and warranties, violation of covenants, cross default and cross acceleration, voluntary and involuntary bankruptcy or insolvency proceedings, inability to pay debts as they become due, material judgments, ERISA events, actual or asserted invalidity of security documents or guarantees and change in control.
33
Borrowings
The following is a summary of our borrowings as of June 30, 2020 and June 30, 2019, respectively:
|
|
|
Amounts in millions |
|
|||||
|
|
|
|
|
|
||||
|
Debt: |
|
|
|
|
|
|
|
|
|
Term loan |
|
$ |
1,160.0 |
|
|
$ |
1,270.0 |
|
|
Revolving Credit Facility |
|
|
— |
|
|
|
— |
|
|
Notes |
|
|
400.0 |
|
|
|
400.0 |
|
|
Mortgages and other |
|
|
12.6 |
|
|
|
15.2 |
|
|
Finance leases |
|
|
0.3 |
|
|
|
0.5 |
|
|
Total debt |
|
$ |
1,572.9 |
|
|
$ |
1,685.7 |
|
Cash and Cash Equivalents
The following is a summary of our cash balances and cash flows (in millions) as of and for the year to date periods ended June 30, 2020 and June 30, 2019, respectively:
|
|
|
|
|
|
|
Change |
|
|||||
|
Cash and cash equivalents at the beginning of the period |
|
$ |
167.3 |
|
|
$ |
169.0 |
|
|
$ |
(1.7 |
) |
|
Cash flows provided by operating activities |
|
|
73.7 |
|
|
|
96.1 |
|
|
|
(22.4 |
) |
|
Cash flows provided by (used in) investing activities |
|
|
38.9 |
|
|
|
(37.3 |
) |
|
|
76.2 |
|
|
Cash flows provided used in financing activities |
|
|
(55.1 |
) |
|
|
(72.4 |
) |
|
|
17.3 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(4.7 |
) |
|
|
(1.8 |
) |
|
|
(2.9 |
) |
|
Cash and cash equivalents at the end of the period |
|
$ |
220.1 |
|
|
$ |
153.6 |
|
|
$ |
66.5 |
|
Cash Flows for 2020
Net cash provided by operating activities was approximately $73.7 million for the year to date period ended June 30, 2020. This was generated by a net loss of $95.0 million offset by the net impact of the add-back of certain items including non-cash depreciation, amortization of intangible assets, stock-based compensation, amortization of deferred financing costs, non-cash loss on foreign currency, the payment from interest rate swap hedge settlement of approximately $34.7 million and the non-cash impairment charge to goodwill and intangible assets which totaled approximately $188.6 million. This was partially offset by a use of cash from a net increase in assets and liabilities of approximately $19.9 million.
Net cash provided by investing activities for the year to date period ended June 30, 2020 increased approximately $76.2 million compared to the period ended June 30, 2019, primarily due to the cross currency interest rate swap settlement proceeds of approximately $56.2 million received during the second quarter of 2020.
Net cash used in financing activities for the year to date period ended June 30, 2020 as compared to the period ended June 30, 2019 decreased by $17.3 million, primarily as a result of the decrease in payments on the Term Loan Facility compared to the prior year.
We intend to use our remaining cash and cash equivalents and cash flow from operations to provide for our working capital needs, to service our debt, including principal payments, for capital expenditures, for pension funding, and to pay dividends to our stockholders. As of June 30, 2020 we have approximately $117.1 million of cash and cash equivalents held by foreign subsidiaries. We believe, based on current and projected levels of cash flows from operating activities, together with our ability to borrow under the Altra Revolving Credit Facility, we have sufficient liquidity to make required payments of interest on our debt, to make amortization payments under the Altra Credit Facilities, to fund our operating needs, to fund working capital and capital expenditure requirements and to comply with the financial ratios in our debt agreements. However, it is difficult to predict the severity and duration of the economic decline due to the impact of the COVID-19 pandemic and any potential resulting impact to our cash flows.
34
Contractual Obligations
There were no material changes in our contractual obligations during the period ended June 30, 2020.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risk factors such as fluctuating interest rates, changes in foreign currency rates, and changes in commodity prices. Since the beginning of the fiscal year, we have terminated our interest rate swap agreements and cross-currency interest rate swap agreements. However, there is no material change to our sensitivity analyses and other quantitative and qualitative disclosures regarding our market risk set forth in our Annual Report on Form 10-K for the year ended December 31, 2019.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of June 30, 2020, our management, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, such as this Quarterly Report on Form 10-Q, is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of June 30, 2020, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our fiscal quarter ended June 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
35
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, party to various legal proceedings arising out of our business. During the reporting period, there have been no material changes to the description of legal proceedings set forth in our Annual Report on Form 10-K for the year ended December 31, 2019.
Item 1A. Risk Factors
The reader should carefully consider the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission. Those risk factors described elsewhere in this report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2019 are not the only ones we face, but are considered to be the most material. These risk factors could cause our actual results to differ materially from those stated in forward looking statements contained in this Form 10-Q and elsewhere. All risk factors stated in our Annual Report on Form 10-K for the year ended December 31, 2019 are incorporated herein by reference.
During the reporting period, except as noted below, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Recent Sales of Unregistered Equity Securities
None.
(b) Use of Proceeds
None.
(c) Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
36
Item 6. Exhibits
The following exhibits are filed as part of this report:
|
Exhibit Number |
|
Description |
|
|
|
|
|
3.1(1) |
|
|
|
|
|
|
|
3.2(2) |
|
Second Amended and Restated Certificate of Incorporation of the Registrant |
|
|
|
|
|
3.3(3) |
|
|
|
|
|
|
|
10.1(4) |
|
Altra Industrial Motion Corp. Omnibus Incentive Plan, as amended and restated † |
|
|
|
|
|
10.2* |
|
|
|
|
|
|
|
10.3* |
|
|
|
|
|
|
|
10.4* |
|
|
|
|
|
|
|
10.5* |
|
|
|
|
|
|
|
31.1* |
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
31.2* |
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
32.1** |
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
32.2** |
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
101* |
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Operations, (ii) the Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss), (iii) the Unaudited Condensed Consolidated Balance Sheet, (iv) the Unaudited Condensed Consolidated Statement of Cash Flows, (v) the Unaudited Consolidated Statement of Stockholders’ Equity and (vi) Notes to Unaudited Condensed Consolidated Interim Financial Statements. |
|
|
|
|
|
104 |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in iXBRL and contained in Exhibit 101. |
|
** |
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. |
|
† |
Management contract or compensatory plan or arrangement |
|
(1) |
Incorporated by reference to Altra Industrial Motion Corp.’s Current Report on Form 8-K, filed with the SEC on October 1, 2018. |
|
(2) |
Incorporated by reference to Altra Industrial Motion Corp.’s (formerly known as Altra Holdings, Inc.) Amendment No. 4 to Registration Statement on Form S-1/A filed with the SEC on December 4, 2006. |
|
(3) |
Incorporated by reference to Altra Industrial Motion Corp.’s Current Report on Form 8-K, filed with the SEC on October 27, 2008. |
|
(4) |
Incorporated by reference to Annex A filed with Altra Industrial Motion Corp.’s Proxy Statement, filed with the Securities and Exchange Commission on March 26, 2020. |
37
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
ALTRA INDUSTRIAL MOTION CORP. |
|
|
|
|
|
|
By: |
|
|
|
Name: |
|
|
|
Title |
Chairman and Chief Executive Officer |
|
|
|
(Principal Executive Officer)
|
|
By: |
/s/ Christian Storch |
|
|
|
Name: |
|
|
|
Title: |
Vice President and Chief Financial Officer |
|
|
|
(Principal Financial Officer)
|
|
By: |
||
|
|
Name: |
|
|
|
Title: |
Vice President of Finance, Corporate Controller and Treasurer |
|
|
|
(Principal Accounting Officer) |
38
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 10/1/26 | ||||
| 10/1/23 | ||||
| 12/31/22 | ||||
| 10/2/20 | ||||
| 9/30/20 | ||||
| 9/18/20 | ||||
| Filed on: | 7/24/20 | 8-K | ||
| 7/22/20 | ||||
| 7/21/20 | ||||
| For Period end: | 6/30/20 | |||
| 4/14/20 | 8-K | |||
| 3/31/20 | 10-Q | |||
| 3/30/20 | ||||
| 3/27/20 | ||||
| 3/26/20 | DEF 14A | |||
| 3/16/20 | 4, 8-K | |||
| 3/12/20 | 4 | |||
| 3/9/20 | ||||
| 2/27/20 | 10-K | |||
| 1/31/20 | ||||
| 1/1/20 | ||||
| 12/31/19 | 10-K, SD | |||
| 6/30/19 | 10-Q | |||
| 4/1/19 | ||||
| 3/31/19 | 10-Q | |||
| 1/1/19 | ||||
| 10/1/18 | 3, 8-K, 8-K/A, SC 13G | |||
| 9/26/18 | 425, 8-K | |||
| 9/30/17 | 10-Q | |||
| 10/27/08 | 8-K | |||
| 12/20/06 | 4, 8-K | |||
| 12/4/06 | S-1/A | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 3/01/23 Altra Industrial Motion Corp. 10-K 12/31/22 123:22M Donnelley … Solutions/FA 2/28/22 Altra Industrial Motion Corp. 10-K 12/31/21 131:33M Donnelley … Solutions/FA 2/26/21 Altra Industrial Motion Corp. 10-K 12/31/20 126:21M ActiveDisclosure/FA |