0001558370-21-002704 | 10-K | XBRL Viewer | Allied Motion Technologies INC

Amount of pre-tax loss recognized in OCI

on derivatives

Derivatives in cash flow hedging relationships

Year ended December 31,

Interest rate products

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 10, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	0-04041
Entity Registrant Name	ALLIED MOTION TECHNOLOGIES INC
Entity Incorporation, State or Country Code	CO
Entity Tax Identification Number	84-0518115
Entity Address, Address Line One	495 Commerce Drive
Entity Address, City or Town	Amherst
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14228
City Area Code	716
Local Phone Number	242-8634
Title of 12(b) Security	Common stock
Trading Symbol	AMOT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,772,519
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0000046129
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 270,603,764

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 23,131	$ 13,416
Trade receivables, net of provision for credit losses of $382 and allowance for doubtful accounts of $405 at December 31, 2020 and December 31, 2019, respectively	47,377	44,429
Inventories	62,978	53,385
Prepaid expenses and other assets	8,728	4,413
Total current assets	142,214	115,643
Property, plant and equipment, net	55,428	53,008
Deferred income taxes	330	490
Intangible assets, net	65,859	62,497
Goodwill	61,860	52,935
Right of use assets	19,023	16,420
Other long-term assets	4,483	4,835
Total Assets	349,197	305,828
Current liabilities:
Accounts payable	27,668	23,640
Accrued liabilities	24,862	23,001
Total current liabilities	52,530	46,641
Long-term debt	120,079	109,765
Deferred income taxes	4,659	3,399
Pension and post-retirement obligations	5,340	5,139
Right of use liabilities	14,975	13,715
Other long-term liabilities	8,558	7,975
Total liabilities	206,141	186,634
Commitments and contingencies (Note 11)
Stockholders' Equity:
Common stock, no par value, authorized 50,000 shares; 9,754 and 9,599 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively	41,278	37,136
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding
Retained earnings	105,065	92,589
Accumulated other comprehensive loss	(3,287)	(10,531)
Total stockholders' equity	143,056	119,194
Total Liabilities and Stockholders' Equity	$ 349,197	$ 305,828

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Trade receivables, allowance for doubtful accounts (in dollars)	$ 382	$ 405
Trade receivables, provision for credit losses	$ 382
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized shares	50,000	50,000
Common stock, shares issued	9,754	9,599
Common stock, shares outstanding	9,754	9,599
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, authorized shares	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Revenues	$ 366,694	$ 371,084	$ 310,611
Cost of goods sold	258,119	258,500	219,208
Gross profit	108,575	112,584	91,403
Operating costs and expenses:
Selling	15,392	16,536	11,807
General and administrative	38,301	37,688	32,037
Engineering and development	25,487	23,086	19,913
Business development	473	113	762
Amortization of intangible assets	5,928	5,718	3,655
Total operating costs and expenses	85,581	83,141	68,174
Operating income	22,994	29,443	23,229
Other expense, net:
Interest expense	3,716	5,134	2,701
Other expense (income), net	502	468	(153)
Total other expense, net	4,218	5,602	2,548
Income before income taxes	18,776	23,841	20,681
Provision for income taxes	(5,133)	(6,819)	(4,756)
Net income	$ 13,643	$ 17,022	$ 15,925
Basic earnings per share:
Earnings per share	$ 1.44	$ 1.81	$ 1.72
Basic weighted average common shares	9,495	9,398	9,265
Diluted earnings per share:
Earnings per share	$ 1.43	$ 1.80	$ 1.70
Diluted weighted average common shares	9,555	9,461	9,370
Net income	$ 13,643	$ 17,022	$ 15,925
Other comprehensive income:
Foreign currency translation adjustment	8,410	(680)	(3,109)
Change in accumulated income (loss) on derivatives	(1,161)	(711)	238
Pension adjustments	(5)	(622)	(61)
Comprehensive income	$ 20,887	$ 15,009	$ 12,993

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Unamortized Cost of Equity Awards	Retained Earnings	Foreign Currency Translation Adjustment	Accumulated income (loss) on derivatives	Defined Benefit Plan Liability	Total
Balances at Dec. 31, 2017	$ 34,473	$ (3,422)	$ 61,882	$ (4,837)	$ 196	$ (945)	$ 87,347
Balances (in shares) at Dec. 31, 2017	9,427
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 852						852
Stock transactions under employee benefit stock plans (in shares)	26
Issuance of restricted stock, net of forfeitures	$ 3,033	(1,859)					1,174
Issuance of restricted stock, net of forfeitures (in shares)	92
Stock compensation expense		2,115					2,115
Shares withheld for payment of employee payroll taxes	$ (1,579)						(1,579)
Shares withheld for payment of employee payroll taxes (in shares)	(60)
Comprehensive income (loss)				(3,109)	370	(63)	(2,802)
Tax effect					(132)	2	(130)
Net income			15,925				15,925
Dividends to stockholders			(1,089)				(1,089)
Balances at Dec. 31, 2018	$ 36,779	(3,166)	76,718	(7,946)	434	(1,006)	101,813
Balances (in shares) at Dec. 31, 2018	9,485
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 1,089						1,089
Stock transactions under employee benefit stock plans (in shares)	27
Issuance of restricted stock, net of forfeitures	$ 4,520	(4,191)					329
Issuance of restricted stock, net of forfeitures (in shares)	107
Stock compensation expense		2,851					2,851
Shares withheld for payment of employee payroll taxes	$ (746)						(746)
Shares withheld for payment of employee payroll taxes (in shares)	(20)
Comprehensive income (loss)				(680)	(929)	(808)	(2,417)
Tax effect					218	186	404
Net income			17,022				17,022
Dividends to stockholders			(1,151)				(1,151)
Balances at Dec. 31, 2019	$ 41,642	(4,506)	92,589	(8,626)	(277)	(1,628)	$ 119,194
Balances (in shares) at Dec. 31, 2019	9,599						9,599
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 1,252						$ 1,252
Stock transactions under employee benefit stock plans (in shares)	32
Issuance of restricted stock, net of forfeitures	$ 5,223	(4,851)					372
Issuance of restricted stock, net of forfeitures (in shares)	154
Stock compensation expense		3,550					3,550
Shares withheld for payment of employee payroll taxes	$ (1,032)						(1,032)
Shares withheld for payment of employee payroll taxes (in shares)	(31)
Comprehensive income (loss)				8,410	(1,526)	(5)	6,879
Tax effect					365		365
Net income			13,643				13,643
Dividends to stockholders			(1,167)				(1,167)
Balances at Dec. 31, 2020	$ 47,085	$ (5,807)	$ 105,065	$ (216)	$ (1,438)	$ (1,633)	$ 143,056
Balances (in shares) at Dec. 31, 2020	9,754						9,754

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Dividends to stockholder (in dollars per share)	$ 0.12	$ 0.12	$ 0.115

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash Flows From Operating Activities:
Net income	$ 13,643	$ 17,022	$ 15,925
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	15,985	14,857	11,576
Deferred income taxes	(519)	(112)	(76)
Loss on sale of assets	97	247	19
Provision for doubtful accounts	91	(5)	192
Provision for excess and obsolete inventory	1,106	408	682
Provision for warranty	34	210	(13)
Debt issue cost amortization recorded in interest expense	144	174	148
Restricted stock compensation	3,550	3,203	2,643
Other	(521)	21	57
Changes in operating assets and liabilities, net of acquisition:
Trade receivables	2,711	(1,456)	(4,110)
Inventories	(4,686)	70	(17,327)
Prepaid expenses and other assets	(2,264)	(517)	(835)
Accounts payable	(1,874)	(1,809)	6,533
Accrued liabilities	(2,659)	2,217	2,038
Net cash provided by operating activities	24,838	34,530	17,452
Cash Flows From Investing Activities:
Consideration paid for acquisitions, net of cash acquired	(14,728)		(77,413)
Purchase of property and equipment	(9,371)	(14,882)	(14,333)
Net cash used in investing activities	(24,099)	(14,882)	(91,746)
Cash Flows From Financing Activities:
Repayments on lines of credit			(454)
Principal payments of long-term debt	(16,897)	(22,500)	(13,278)
Proceeds from issuance of long-term debt	26,979	9,639	83,163
Payment of debt issuance costs	(401)		(72)
Sale of restricted stock			1,076
Dividends paid to stockholders	(1,160)	(1,170)	(1,079)
Tax withholdings related to net share settlements of restricted stock	(1,032)	(746)	(1,579)
Net cash provided by (used in) financing activities	7,489	(14,777)	67,777
Effect of foreign exchange rate changes on cash	1,487	(128)	(400)
Net increase (decrease) in cash and cash equivalents	9,715	4,743	(6,917)
Cash and cash equivalents at beginning of period	13,416	8,673	15,590
Cash and cash equivalents at end of period	23,131	13,416	8,673
Supplemental disclosure of cash flow information:
Interest paid	3,586	5,342	2,272
Income taxes paid	8,563	2,051	7,014
Property, plant and equipment purchases in accounts payable or accrued expenses	$ 596	$ 378	$ 599

BASIS OF PREPARATION AND PRESENTATION

12 Months Ended

Dec. 31, 2020

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARATION AND PRESENTATION

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Allied Motion Technologies Inc. (“Allied Motion” or the “Company”) is engaged in the business of designing, manufacturing and selling precision and specialty controlled motion components and systems, which include integrated system solutions as well as individual controlled motion products, to a broad spectrum of customers throughout the world primarily for the vehicle, medical, aerospace and defense, and industrial markets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

For business combinations, we record net assets acquired and liabilities assumed at their estimated fair values.

Cash and Cash Equivalents

Cash and cash equivalents include instruments which are readily convertible into cash (original maturities of three months or less) and which are not subject to significant risk of changes in interest rates.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The provision for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional provisions in the future. Activity in the provision for credit losses for 2020 and 2019 was as follows (in thousands):


	December 31, 2020		December 31, 2019
Beginning balance	$	405	$	530
Additional reserves		91		(5)
Write-offs		(123)		(132)
Effect of foreign currency translation		9		12
Ending balance	$	382	$	405

Inventories

Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands):



	December 31, 2020		December 31, 2019
Parts and raw materials	$	44,750	$	35,849
Work-in-process		6,186		6,951
Finished goods		12,042		10,585
	$	62,978	$	53,385

Property, Plant and Equipment

Property, plant and equipment is classified as follows (in thousands):


		December 31,		December 31,
	Useful lives	2020		2019
Land		$	999	$	977
Building and improvements	5 - 39 years		14,169		13,366
Machinery, equipment, tools and dies	3 - 15 years		79,738		58,358
Construction work in progress			6,821		15,536
Furniture, fixtures and other	3 - 10 years		16,313		15,797
			118,040		104,034
Less accumulated depreciation			(62,612)		(51,026)
Property, plant and equipment, net		$	55,428	$	53,008

Depreciation expense is provided using the straight-line method over the estimated useful lives of the assets. Amortization of building improvements is provided using the straight-line method over the life of the lease term or the life of the asset, whichever is shorter. Maintenance and repair costs are charged to operations as incurred. Major additions and improvements are capitalized. The cost and related accumulated depreciation of retired or sold property are removed from the accounts and the resulting gain or loss, if any, is reflected in earnings.

Depreciation expense was $10,057, $9,139 and $7,921 in 2020, 2019 and 2018, respectively.

Intangible Assets

Intangible assets, other than goodwill, are recorded at cost and are amortized over their estimated useful lives using an accelerated or straight-line method which approximates the pattern of expected cash flows over the remaining useful lives of the intangible assets.

Impairment of Long-Lived Assets

The Company reviews the carrying values of its long-lived assets, including property, plant and equipment and intangible assets, on an annual basis and whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Long-lived assets are carried at historical cost if the projected cash flows from their use will recover their carrying amounts on an undiscounted basis and without considering interest. If projected cash flows are less than their carrying value, the long-lived assets must be reduced to their estimated fair value. Considerable judgment is required to project such cash flows and, if required, estimate the fair value of the impaired long-lived assets. The Company did not record any impairment charges for the years ended December 31, 2020, 2019 and 2018.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination.

Goodwill is not amortized, but is reviewed for impairment at least annually or more frequently if impairment indicators arise. The Company has defined one reporting unit that is the same as its operating segment. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than carrying amount, or if significant adverse changes in the Company’s future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, the Company can

elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill.

At October 31, 2020, we performed our annual goodwill impairment test and determined, after performing a qualitative test of the reporting unit, that it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed. The Company did not record any impairment charges for the years ended December 31, 2020, 2019 or 2018.

Other Long-Term Assets

Other long-term assets include securities that the Company has purchased with the intent of funding the deferred compensation arrangements for certain executives of the Company. These items are accounted for at fair value on a recurring basis. Any changes in value are included in net income in the Company’s consolidated statements of income and comprehensive income.

Warranty

The Company offers warranty coverage for its products. The length of the warranty period for its products is generally three months to two years and varies significantly based on the product sold. The Company estimates the costs of repairing products under warranty based on the historical average cost of the repairs. The assumptions used to estimate warranty accruals are re-evaluated periodically in light of actual experience and, when appropriate, the accruals are adjusted. Estimated warranty costs are recorded at the time of sale of the related product, and are considered a cost of goods sold.

Changes in the Company’s reserve for product warranty claims during 2020, 2019 and 2018 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2020		2019		2018
Warranty reserve at beginning of the year	$	1,075	$	971	$	922
Warranty reserves acquired		465		—		117
Provision		34		210		(13)
Warranty expenditures		(97)		(101)		(34)
Effect of foreign currency translation		94		(5)		(21)
Warranty reserve at end of year	$	1,571	$	1,075	$	971

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2020		2019
Compensation and fringe benefits	$	11,184	$	12,967
Warranty reserve		1,571		1,075
Income taxes payable		1,459		2,231
Right of use liabilities		4,666		3,203
Other accrued expenses		5,982		3,525
	$	24,862	$	23,001

Foreign Currency Translation

The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end of period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included in accumulated other comprehensive loss, a component of stockholders’ equity in the accompanying consolidated statements of stockholders’ equity. Revenue and expense transactions use an average rate prevailing during the month of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of each of the operating locations are included in the results of operations as incurred.

Revenue Recognition

Refer to Note 3, Revenue Recognition, for description of the Company’s policies regarding revenue recognition.

Engineering and Development Costs

The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. Engineering and design as well as research and development costs are expensed as incurred.

Basic and Diluted Income per Share

Basic income per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding. Diluted income per share is determined by dividing the net income by the sum of (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of stock awards determined utilizing the treasury stock method.

Basic and diluted weighted-average shares outstanding are as follows (in thousands):



	Year ended December 31,
	2020	2019	2018
Basic weighted average shares outstanding	9,495	9,398	9,265
Dilutive effect of equity awards	60	63	105
Diluted weighted average shares outstanding	9,555	9,461	9,370

For 2020, 2019 and 2018, the anti-dilutive common shares excluded from the calculation of diluted income per share were immaterial.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by and distributions to stockholders.

Fair Value Accounting

Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

The guidance establishes a framework for measuring fair value, which utilizes observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs. These two types of inputs create the following three-level fair value hierarchy:

Level 1: Quoted prices for identical assets or liabilities in active markets.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.

Level 3: Significant inputs to the valuation model that are unobservable.

The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities. The carrying amounts reported in the consolidated balance sheets for these assets approximate fair value because of the immediate or short-term maturities of these financial instruments.

The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of December 31, 2020 and 2019, respectively, by level within the fair value hierarchy (in thousands):


	December 31, 2020
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,347	$	—	$	—
Deferred compensation plan assets		5,386		—		—
Interest rate swaps		—		(1,889)		—


	December 31, 2019
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,099	$	—	$	—
Deferred compensation plan assets		4,690		—		—
Interest rate swaps		—		(363)		—

Derivative Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") No. 815, Derivatives and Hedging ("ASC 815"), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow

hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting.

Income Taxes

The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. A valuation allowance may be provided to the extent management deems it is more likely than not that deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income, in the appropriate taxing jurisdictions, during the periods in which temporary differences, net operating losses and tax credits become realizable. Management believes that it is more likely than not that the Company will realize the benefits of these temporary differences and operating loss and tax credit carryforwards, net of valuation allowances.

It is the Company's policy to include interest and penalties related to income tax liabilities in income tax expense on the consolidated statements of income and comprehensive Income. In addition, the Company records uncertain tax positions in accordance with ASC 740, Income Taxes, ("ASC 740"). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. There were no uncertain tax benefits for the years ended December 31, 2020, 2019 and 2018 and no amounts were recorded for interest and penalties related to unrecognized tax positions for the years ended December 31, 2020, 2019, and 2018.

Pension and Postretirement Welfare Plans

The Company records the service cost component of net benefit costs in Cost of goods sold, Selling, and General and administrative expenses. The interest cost component of net benefit costs is recorded in Interest expense and the remaining components of net benefit costs, amortization of net losses and expected return on plan assets is recorded in Other expense, net.

Concentration of Credit Risk

Trade receivables subject the Company to the potential for credit risk. To reduce this risk, the Company performs evaluations of its customers’ financial condition and creditworthiness at the time of sale, and updates those evaluations when necessary. See Note 13, Segment Information, for additional information regarding customer concentration.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently adopted accounting pronouncements

In June 2016, FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019. The Company adopted this ASU on January 1, 2020 applying the modified retrospective approach and the adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The guidance in ASU 2017-04 eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted this standard on January 1, 2020 on a prospective basis and the adoption did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). The ASU is effective for public entities for fiscal years beginning after December 15, 2019. The Company has not historically had any transfers between Level 1 and Level 2 or assets or liabilities measured at fair value under Level 3. The Company adopted this ASU on January 1, 2020 on a prospective basis and the adoption did not have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides relief for impacted areas as it relates to impending reference rate reform and contains optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other areas or transactions, subject to meeting certain criteria, that are impacted by reference rate reform. This ASU is effective upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. The Company adopted this ASU effective January 1, 2020 on a prospective basis, and the Company has elected the expedients related to the probability of hedged interest payments, regardless of any expected future modification in terms related to reference rate reform, as well as the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Should the Company elect further optional expedients as it relates to reference rate reform, disclosure of those elections will be done in the fiscal period in which the elections are made. The adoption did not have a material impact on its consolidated financial statements.

ACQUISITION

12 Months Ended

Dec. 31, 2020

ACQUISITIONS

ACQUISITIONS

2. ACQUISITIONS

Dynamic Controls

On March 7, 2020, the Company acquired 100% of the issued and outstanding share capital of the Dynamic Controls Group (“Dynamic Controls”), a wholly owned subsidiary of Invacare Corporation, a market-leading designer and manufacturer of equipment for the medical mobility and rehabilitation markets. The purchase price was funded using borrowings under the Amended Revolving Facility (Note 7). The purchase price was subject to adjustments based on a determination of closing net working capital.

Dynamic Controls brings strong leadership and a very experienced electronics and software engineering design team, providing market leading electronic control solutions and products that will further strengthen the Company’s medical market position, as well as enable it to further develop higher level solutions with embedded electronics across our other major served markets.

The Company incurred $473 of transaction costs related to the acquisition of Dynamic Controls in 2020, which are included in business development expenses on the consolidated statements of income and comprehensive income. The Company accounted for the acquisition pursuant to FASB ASC 805, Business Combinations.

The allocation of the purchase price paid for Dynamic Controls is based on estimated fair values of the assets acquired and liabilities assumed of Dynamic Controls as of March 7, 2020 and is as follows (in thousands):


Cash and cash equivalents	$	11,437
Accounts receivable		4,129
Inventory		3,329
Other assets, net		769
Property, plant and equipment		1,185
Right of use assets		2,735
Intangible assets		7,800
Goodwill		6,629
Current liabilities		(7,354)
Lease liabilities		(2,739)
Net deferred income tax liabilities		(1,755)
Net purchase price	$	26,165

During the second quarter of 2020, measurement period adjustments primarily related to deferred income taxes and the true-up of closing net working capital were recognized, which resulted in a reduction of goodwill by $268. During the third quarter of 2020, measurement period adjustments related primarily to tax liabilities were recognized, which resulted in an increase of goodwill by $77. The allocation of the purchase price was finalized during the fourth quarter of 2020.

The intangible assets acquired consist of customer lists of $4,400, technology of $1,900 and a trade name of $1,500, which are being amortized over 16, 13 and 18 years, respectively. Goodwill generated in the acquisition is related to the assembled workforce, synergies between Allied Motion’s other operations and Dynamic Controls that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to integrate each other’s products into more fully integrated system solutions and Allied Motion’s ability to utilize Dynamic Controls’ management knowledge in providing complementary product offerings to the Company’s customers.

The operating results of this acquisition are included in our consolidated financial statements beginning on the date of the acquisition. Included within the consolidated statement of income and comprehensive income for the year ended December 31, 2020, revenues and earnings related to Dynamic Controls were $24,124 and $945, respectively.

The following unaudited pro forma financial information presents the combined results of operations if the Dynamic Controls acquisition had occurred as of January 1, 2019 (in thousands):


	For the year ended
	December 31,
	2020		2019
Revenues	$	371,856	$	401,345
Net income	$	14,255	$	17,779
Earnings per share - basic	$	1.50	$	1.89
Earnings per share - diluted	$	1.49	$	1.88

The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments, together with related income tax effects. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve as a result of this acquisition. The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would have been had these transactions actually occurred on the date presented or to project the combined company’s results of operations or financial position for any future period.

The goodwill resulting from the Dynamic Controls acquisition is not tax deductible.

REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2020

REVENUE RECOGNITION

REVENUE RECOGNITION

3. REVENUE RECOGNITION

Performance Obligations

Performance Obligations Satisfied at a Point in Time

The Company considers control of most products to transfer at a single point in time when control is transferred to the customer, generally when the products are shipped in accordance with an agreement and/or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product.

The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for generally monetary consideration from the customer. The Company considers the customer’s purchase order, and the Company’s corresponding sales order acknowledgment as the contract with the customer. For some customers, control, and a sale, is transferred at a point in time when the product is delivered to a customer.

Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

Nature of Goods and Services

The Company sells component and integrated controlled motion solutions to end customers and original equipment manufacturers (“OEM’s”) through the Company’s own direct sales force and authorized manufacturers’ representatives and distributors. The Company’s products include brushed and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gearmotors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, active and passive filters for power quality and harmonic issues, and other controlled motion-related products. The Company’s target markets include Vehicle, Medical, Aerospace & Defense and Industrial.

Determining the Transaction Price

The majority of the Company’s contracts have an original duration of less than one year. For these contracts, the Company applies the practical expedient and therefore does not consider the effects of the time value of money. For multiyear contracts, the Company uses judgment to determine whether there is a significant financing component. These contracts are generally those in which the customer has made an up-front payment. Contracts that management determines to include a significant financing component are discounted at the Company’s incremental borrowing rate. The Company incurs interest expense and accrues a contract liability. As the Company satisfies performance obligations and recognizes revenue from these contracts, interest expense is recognized simultaneously. Management does not have any contracts that include a significant financing component as of December 31, 2020.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into geographical regions and target markets. The Company determines 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. As noted in Note 13, Segment Information, the Company’s business consists of one reportable segment. The revenues by geography in the table below are revenues derived from the Company’s foreign subsidiaries as provided in Note 13. A reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions is provided in Note 13. The Company’s disaggregated revenues are as follows (in thousands):



	Year ended December 31,
Target Market	2020		2019
Vehicle	$	110,365	$	126,811
Industrial		114,143		124,196
Medical		83,191		51,586
Aerospace & Defense		39,711		47,748
Other		19,284		20,743
Total	$	366,694	$	371,084



	Year ended December 31,
Geography	2020		2019
United States	$	214,203	$	244,347
Europe		126,985		124,914
Asia-Pacific		25,506		1,823
Total	$	366,694	$	371,084

Contract Balances

When the timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Typically, contracts are paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists.

The opening and closing balances of the Company’s contract liability are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Contract liabilities in accrued liabilities	$	898	$	454
Contract liabilities in other long-term liabilities		262		-
	$	1,160	$	454

The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment.

Significant Payment Terms

The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payments are typically due in full within 30-60 days of delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the majority of contracts do not contain variable consideration.

Returns, Refunds, and Warranties

In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The Company establishes provisions for estimated returns and warranties. All contracts include a standard warranty clause to guarantee that the product complies with agreed specifications.

Practical Expedients

Incremental costs of obtaining a contract - the Company elected to expense the incremental costs of obtaining a contract when the amortization period for such contracts would have been one year or less.

Remaining performance obligations - the Company elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its contracts that are one year or less, as the revenue is expected to be recognized within the next year.

Time value of money - the Company elected not to adjust the promised amount of consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays is equal to one year or less.

GOODWILL

12 Months Ended

Dec. 31, 2020

GOODWILL

GOODWILL

4. GOODWILL

The change in the carrying amount of goodwill for 2020 and 2019 is as follows (in thousands):


	2020		2019
Beginning balance	$	52,935	$	52,639
Goodwill acquired (Note 2)		6,629		614
Effect of foreign currency translation		2,296		(318)
Ending balance	$	61,860	$	52,935

The purchase price allocation was finalized for the Dynamic Controls acquisition during the fourth quarter of 2020.

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

INTANGIBLE ASSETS

INTANGIBLE ASSETS

5. INTANGIBLE ASSETS

Intangible assets on the Company’s consolidated balance sheets consist of the following (in thousands):


		December 31, 2020						December 31, 2019
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		amortization		Value		Amount		amortization		Value
Customer lists	8 - 17 years	$	69,833	$	(23,636)	$	46,197	$	64,314	$	(19,311)	$	45,003
Trade name	10 - 19 years		14,055		(5,061)		8,994		12,222		(4,114)		8,108
Design and technologies	10 - 15 years		15,531		(4,874)		10,657		12,927		(3,554)		9,373
Patents	17 years		24		(13)		11		24		(11)		13
Total		$	99,443	$	(33,584)	$	65,859	$	89,487	$	(26,990)	$	62,497

Intangible assets resulting from the acquisition of Dynamic Controls were approximately $7,800 (Note 2). The intangible assets acquired consist of customer lists, technology, and a trade name.

Total amortization expense for intangible assets for the years 2020, 2019 and 2018 was $5,928, $5,718 and $3,655, respectively.

Estimated amortization expense for intangible assets is as follows (in thousands):


	Estimated
	Amortization Expense
2021	$	6,059
2022		6,110
2023		6,127
2024		5,798
2025		5,780
Thereafter		35,985
Total estimated amortization expense	$	65,859

STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2020

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION PLANS

6. STOCK-BASED COMPENSATION PLANS

Stock Incentive Plans

The Company’s Stock Incentive Plans provide for the granting of stock awards, including stock options, stock appreciation rights, and restricted stock, to employees and non-employees, including directors of the Company.

As of December 31, 2020, the Company had 753,187 shares of common stock available for grant under stock incentive plans.

Restricted Stock

The following is a summary of restricted stock grants, fair value and performance based awards:


				Awards with
	Unvested	Weighted average		performance
	restricted stock	grant date fair		vesting
For the year ended December 31,	awards	value		requirements
2020	160,437	$	33.51	100,403
2019	109,530	$	41.95	76,877
2018	64,656	$	35.89	30,603

The value at the date of award is amortized to compensation expense over the related service period, which is generally three years for time vested grants. Short-term performance based grants can be achieved over a period of one year, and long-term performance grants can be earned through December 31, 2022. Earned grants are then subject to either a 3 year or 5 year service period. Shares of non-vested restricted stock are forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards. For performance-based awards, the Company assesses the probability of the achievement of the awards during the year and recognizes expense accordingly.

The following is a summary of restricted stock activity during years 2020, 2019 and 2018:


		Number of
		shares
Balance, December 31, 2017		221,968
Awarded		64,656
Forfeited		(18,867)
Vested		(112,015)
Balance, December 31, 2018		155,742
Awarded		109,530
Forfeited		(3,166)
Vested		(75,404)
Balance, December 31, 2019		186,702
Awarded		160,437
Forfeited		(2,446)
Vested		(106,465)
Balance, December 31, 2020		238,228

The following is a summary of performance based restricted stock activity during years 2020, 2019 and 2018:


		Total performance
		grants
Outstanding, December 31, 2017		37,782
Awarded		30,603
Performance criteria met		(66,525)
Forfeited		(1,860)
Outstanding, December 31, 2018		—
Awarded		76,877
Performance criteria met		(50,852)
Forfeited		(549)
Outstanding, December 31, 2019		25,476
Awarded		100,403
Performance criteria met		(64,384)
Forfeited		(2,155)
Outstanding, December 31, 2020		59,340

The performance criteria and forfeitures in the above table did not occur until the Board of Directors approved them during the March 2021, and February 2020 and 2019 meetings.

Share-Based Compensation Expense

Restricted Stock

During 2020, 2019 and 2018 compensation expense net of forfeitures of $3,550, $3,203 and $2,643 was recorded, respectively. As of December 31, 2020, there was $4,100 of total unrecognized compensation expense related to restricted stock awards, of which approximately $2,236 is expected to be recognized in 2021.

Employee Stock Ownership Plan

The Company sponsors an Employee Stock Ownership Plan (“ESOP”) that covers all non-union U.S. employees who work over 1,000 hours per year. The terms of the ESOP require the Company to make an annual contribution equal to the greater of i) the Board established percentage of pretax income before the contribution (5% in 2020, 2019 and 2018) or ii) the annual interest payable on any loan outstanding to the Company from the ESOP. Company contributions to the Plan accrued for 2020, 2019 and 2018, were $988, $1,189 and $1,090, respectively. These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income.

Defined Contribution Plan

The Company sponsors the Allied Motion 401(k) Tax Advantaged Investment Plan (“401(k)”) which covers substantially all its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2020, 2019 and 2018 this match was 100% per dollar of the first 3% of participant deferral and 50% per dollar of the next 2% contribution, up to 4% of a total 5% participant deferral. Net costs related to this defined contribution plan were $1,774, $1,362 and $1,182 in 2020, 2019 and 2018, respectively.

Dividends

For each of the years ended December 31, 2020 and 2019 a total of $0.12 per share on all outstanding shares was declared and paid, respectively. For the year ended December 31, 2018 a total of $0.115 per share on all outstanding shares was declared and paid. Total dividends paid for the years ended December 31, 2020, 2019 and 2018 were $1,160, $1,170 and $1,079, respectively. Based on the terms of the Company’s Credit Agreement, dividends paid to shareholders are acceptable, subject to the Company’s compliance with the covenants under the Credit Agreement.

DEBT OBLIGATIONS

12 Months Ended

Dec. 31, 2020

DEBT OBLIGATIONS

DEBT OBLIGATIONS

7. DEBT OBLIGATIONS

Debt obligations consisted of the following (in thousands):


	December 31,		December 31,
	2020		2019
Long-term Debt
Revolving Credit Facility, long-term (1)	$	120,656	$	110,085
Unamortized debt issuance costs		(577)		(320)
Long-term debt	$	120,079	$	109,765

(1)	The effective rate of the Revolving Credit Facility is 2.5% at December 31, 2020 including the impact of the Company's interest rate swaps.

Amended Revolving Credit Facility

On February 12, 2020, the Company entered into a First Amended and Restated Credit Agreement (the “Amended Credit Agreement”) for a $225 million revolving credit facility (the “Amended Revolving Facility”). The significant changes made to the Company’s prior credit facility by the Amended Credit Agreement include (i) increasing the maximum principal amount from $175 million to $225 million, (ii) providing for a $75 million accordion amount, (iii) decreasing certain interest-rate margins and fees, and (iv) extending the term to February 2025 from the original term of October 2021. HSBC Bank USA, National Association is the administrative agent, and HSBC Securities (USA) Inc., KeyBank N.A, Wells Fargo Bank, N.A and Citizens Bank, N.A. are joint lead arrangers.

Borrowings under the Amended Revolving Facility bear interest at the LIBOR Rate (as defined in the Amended Credit Agreement) plus a margin of 1.00% to 1.75% or the Prime Rate (as defined in the Amended Credit Agreement) plus a margin of 0% to 0.75%, in each case depending on the Company’s ratio of total funded indebtedness (as defined in the Amended Credit Agreement) to Consolidated trailing twelve-month EBITDA (the “Total Leverage Ratio”). At December 31, 2020, the applicable margin for LIBOR Rate borrowings was 1.625% and the applicable margin for Prime Rate borrowings was 0.625%. In addition, the Company is required to pay a commitment fee of between 0.10% and 0.225% quarterly (0.20% at December 31, 2020) on the unused portion of the Amended Revolving Facility, also based on the Company’s Total Leverage Ratio. The Amended Revolving Facility is secured by substantially all of the Company’s non-realty assets and is fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

The Amended Credit Agreement contains certain financial covenants related to minimum interest coverage and total leverage ratio at the end of each quarter. The Amended Credit Agreement also includes other covenants and restrictions, including limits on the amount of additional indebtedness, and restrictions on the Company’s ability to merge or sell all, or substantially all, of its assets. The Company was in compliance with all covenants at December 31, 2020.

As of December 31, 2020, the unused Amended Revolving Facility was $104,344. The amount available to borrow may be reduced based upon our debt and EBITDA levels, which impacts our covenant calculations.

Other

The China Credit Facility provides credit of $1,467 (Chinese Renminbi 10,000) (“the China Facility”). The China Facility is a demand revolving facility used for working capital and capital equipment needs at the Company’s China operations. The term is annual and may be cancelled at the bank’s discretion. The interest rate shall be agreed upon by the Lender and the Borrower before the Utilization Date (as defined in the China Facility) and shall be specified in the Utilization Request (as defined in the China Facility). Collateral for the facility is a guarantee issued by the Company. There were no borrowings under the China Facility during 2020 or 2019.

Deferred Financing Fees

Deferred financing costs net of accumulated amortization were $577 as of December 31, 2020. These costs will be amortized over the term of the Amended Credit Facility.

DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

8. DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, and foreign exchange risk primarily through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings.

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In February 2017, the Company entered into three interest rate swaps with a combined notional of $40,000 that mature in February 2022. In March 2020, the Company entered into two additional interest rate swaps with a combined notional amount of $20,000 that increases to $60,000 in March 2022 and matures in December 2024.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2020 and 2019, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

The Company estimates that an additional $904 will be reclassified as an increase to interest expense over the next twelve months. Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2020, and 2019 (in thousands):


		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	December 31,
hedging instruments	Location	2020		2019
Interest rate products	Other long-term liabilities	$	1,889	$	363

The table below presents the effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) for the years ended December 31, 2020, 2019 and 2018 (in thousands):




Location of (loss) gain reclassified	Amount of pre-tax (loss) gain reclassified from accumulated OCI into income
from accumulated OCI into income	Year ended December 31,
	2020		2019		2018
Interest expense	$	(637)	$	113	$	6

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income and comprehensive income for the years ended December 31, 2020, 2019 and 2018 (in thousands):



		Total amounts of income and expense line items presented
		that reflect the effects of cash flow hedges recorded
		Year ended December 31,
Derivatives designated as hedging instruments	Income Statement Location	2020		2019		2018
Interest rate products	Interest Expense	$	3,716	$	5,134	$	2,701

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2020 and 2019. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets (in thousands).

Gross amounts

Net amounts of liabilities

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2020

liabilities

balance sheets

instruments

received

Net amount

Derivatives

1,889

—

1,889

—

1,889

Gross amounts

Net amounts of liabilities

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2019

liabilities

balance sheets

instruments

received

Net amount

Derivatives

363

—

363

—

363

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES

INCOME TAXES

9. INCOME TAXES

The provision for income taxes is based on income before income taxes as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Domestic	$	8,478	$	17,188	$	10,894
Foreign		10,298		6,653		9,787
Income before income taxes	$	18,776	$	23,841	$	20,681

Components of the total provision for income taxes are as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Current provision
Domestic	$	2,167	$	4,313	$	1,663
Foreign		3,485		2,618		3,169
Total current provision		5,652		6,931		4,832
Deferred provision
Domestic		288		199		675
Foreign		(807)		(311)		(751)
Total deferred provision		(519)		(112)		(76)
Provision for income taxes	$	5,133	$	6,819	$	4,756

The provision for income taxes differs from the amount determined by applying the federal statutory rate as follows:


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Tax provision, computed at statutory rate	21.0	%	21.0	%	21.0	%
State tax, net of federal impact	4.2	%	4.5	%	3.0	%
Change in valuation allowance	0.0	%	0.3	%	2.8	%
Effect of foreign tax rate differences	4.3	%	1.5	%	3.4	%
Permanent items, other	(0.2)	%	1.4	%	0.8	%
Section 162(m) compensation	2.2	%	1.1	%	0.1	%
R&D Credit	(3.6)	%	(2.5)	%	(0.8)	%
Restricted stock awards	0.6	%	(0.1)	%	(2.3)	%
Effect of Tax Cuts and Jobs Act	(1.3)	%	(0.4)	%	(5.1)	%
Subpart F income	1.3	%	0.0	%	0.0	%
Tax examinations	0.0	%	1.8	%	0.0	%
Other	(1.2)	%	0.0	%	0.1	%
Provision for income taxes	27.3	%	28.6	%	23.0	%

The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Noncurrent deferred tax assets:
Employee benefit plans	$	2,500	$	2,440
Net operating loss and tax credit carryforwards		2,217		1,675
Accrued expenses and reserves		969		795
Other		697		428
Total noncurrent deferred tax assets		6,383		5,338
Valuation allowance		(1,176)		(1,077)
Net noncurrent deferred tax assets:	$	5,207	$	4,261

Net noncurrent deferred tax liabilities:
Property and equipment	$	3,448	$	3,901
Goodwill and intangibles		5,629		2,885
Other		459		384
Total noncurrent deferred tax liabilities	$	9,536	$	7,170

Net deferred tax asset/(deferred tax liability)	$	(4,329)	$	(2,909)

Presented as follows:
Noncurrent deferred income tax assets	$	330	$	490
Noncurrent deferred income tax liabilities		(4,659)		(3,399)
Net deferred tax liability	$	(4,329)	$	(2,909)

As of December 31, 2020, the Company has the following gross carryforwards available:


			Amount
Jurisdiction	Tax Attribute		(in thousands)	Begin to expire
U.S. State	Net Operating Losses ⁽¹⁾	$	4,139	2024
International	Net Operating Losses ⁽¹⁾	$	1,519	2025
International	Net Operating Losses - Unlimited Carryforward ⁽¹⁾	$	718	No expiration
U.S. Federal	Foreign Tax Credits	$	1,003	2027
International	R&D Tax Credits	$	574	2025

(1)

Net operating losses (NOL’s) are presented as pre-tax amounts.

Realization of the Company’s recorded deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses and tax credit carryforwards. The Company generated excess foreign tax credits in 2017 due to the one-time transition tax required by enactment of the Tax Cuts and Jobs Act in the amount of $0.9 million. The Company determined it is more likely than not that it will not realize a tax benefit from these credits. Additionally, the Company has incurred net operating losses in certain states that it is more likely than not will not be realized. The tax effect of these losses is $0.2 million. Therefore, the Company recognized a full valuation allowance related to these foreign tax credits and state net operating losses.

The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. The Company believes that it is more likely than not that it will realize the benefits of its deferred tax assets, net of valuation allowances as of December 31, 2020.

The Company files income tax returns in various U.S. and foreign taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before 2017. With few exceptions, the Company is no longer subject to tax examinations in the foreign jurisdictions for periods prior to 2017. The Company completed an IRS tax audit for tax year 2017 with no adjustments made to taxable income.

In general, it is the practice and intention of the Company to reinvest the earnings of its non-domestic subsidiaries in activities outside the United States. Exceptions may be made on a year-by-year basis to repatriate earnings of certain foreign subsidiaries based on cash needs in the United States. The Company intends to distribute a portion of these foreign earnings which have been previously taxed in the United States. As of December 31, 2020, foreign withholding taxes of $275 have been provided for unremitted earnings of foreign subsidiaries based on the amounts of anticipated distributions. The Company does not intend to distribute the remaining previously taxed earnings resulting from the one-time transition tax under the Tax Cuts and Jobs Act, and has not recorded any deferred taxes related to such amounts. The remaining excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is permanently reinvested, and the determination of any deferred tax liability on this amount is not practicable.

It is the Company’s policy to include interest and penalties related to income tax liabilities in income tax expense on the consolidated statements of income and comprehensive income. In addition, the Company records uncertain tax positions in accordance with ASC 740. ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The were no uncertain tax benefits for the years ended December 31, 2020, 2019 and 2018 and no amounts were recorded for interest and penalties related to unrecognized tax positions for the years ended December 31, 2020, 2019, and 2018.

LEASES

12 Months Ended

Dec. 31, 2020

LEASES

LEASES

10. LEASES

The Company has operating leases for office space, manufacturing equipment, computer equipment and automobiles. The Company did not have any finance leases in 2020 or 2019. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company's lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes.

For the years ended December 31, 2020 and 2019, the components of operating lease expense were as follows (in thousands):


	December 31,			December 31,
	2020			2019
Fixed operating lease expense	$	4,548	$	4,018
Variable operating lease expense	$	547	$	499
Short-term lease expense	$	234	$	234

Supplemental cash flow information related to the Company’s operating leases for the years ended December 31, 2020 and 2019 are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Cash paid for amounts included in the measurement of operating leases	$	4,601	$	4,886
Right of use ("ROU") assets obtained in exchange for operating lease obligations	$	3,626	$	373
ROU assets recorded upon adoption of ASC 842, Leases	$	—	$	20,344
ROU assets obtained in acquisitions (Note 2)	$	2,735	$	—

The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2020 and 2019:


	December 31,
	2020			2019
Weighted average remaining lease term (in years)		6.83			8.27
Weighted average discount rate		2.25	%		2.91	%

The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2020 (in thousands):


2021	$	5,043
2022		4,013
2023		2,935
2024		2,282
2025		2,096
Thereafter		4,606
Total undiscounted cash flows	$	20,975
Less: present value discount		(1,334)
Total lease liabilities	$	19,641

As of December 31, 2020, the Company had no additional significant operating or finance leases that had not yet commenced.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

Severance Benefit Agreements

As of December 31, 2020, the Company has annually renewable severance benefit agreements with key employees which, among other things, provide inducement to the employees to continue to work for the Company during and after any period of a potential change in control of the Company. The agreements provide the employees with specified benefits upon the subsequent severance of employment in the event of change in control of the Company and are effective for 24 months thereafter.

Litigation

The Company is involved in certain actions that have arisen out of the ordinary course of business. Management believes that resolution of the actions will not have a significant adverse effect on the Company’s consolidated financial statements.

DEFERRED COMPENSATION ARRANGEMENTS

12 Months Ended

Dec. 31, 2020

DEFERRED COMPENSATION ARRANGEMENTS

DEFERRED COMPENSATION ARRANGEMENTS

12. DEFERRED COMPENSATION ARRANGEMENTS

The Company has deferred compensation arrangements with certain key members of management. These arrangements provide the Board and its committees with another mechanism to provide pay for performance based incentive compensation to certain executive participants. It also allows for the participants to make certain deferrals into the plan. The amount of the liability is comprised of liabilities from previous contributions. Amounts accrued relating to previous periods are $5,386 and $4,695 as of December 31, 2020 and 2019, respectively, of which $4,329 and $4,695 are included in other long-term liabilities in the consolidated balance sheets at December 31, 2020 and 2019 and $1,057 is included within accrued liabilities as of December 31, 2020, relating to the amounts to be paid in 2021.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2020

SEGMENT INFORMATION

SEGMENT INFORMATION

13. SEGMENT INFORMATION

The Company operates in one segment for the manufacture and marketing of controlled motion products for OEM and end user applications. The Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue.

Financial information related to the foreign subsidiaries is summarized below (in thousands):



	For the year ended December 31,
	2020		2019		2018
Revenues derived from foreign subsidiaries	$	152,491	$	126,737	$	126,104

Identifiable assets outside of the United States are $133,466 and $95,777 as of December 31, 2020 and 2019, respectively.

Revenues derived from foreign subsidiaries and identifiable assets outside of the United States are primarily attributable to Europe, China and New Zealand.

Sales to customers outside of the United States by all subsidiaries were $171,847, $159,365 and $146,835 during 2020, 2019 and 2018, respectively.

For 2020, 2019 and 2018 one customer accounted for 15%, 16% and 19% of revenues, respectively, and as of December 31, 2020 and 2019 for 22% and 17% of trade receivables, respectively.

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2020

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

14. SUBSEQUENT EVENT

On March 10, 2021, the Board of Directors approved a 3-for-2 common stock split to be paid in the form of a stock dividend to holders of record on April 16, 2021. The additional shares are expected to be issued on April 30, 2021. In lieu of fractional shares, shareholders will receive a cash payment based on the closing share price of the common stock on the record date.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2020

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data for each of the four quarters in years 2020 and 2019 is as follows (in thousands, except per share data):


	First		Second		Third		Fourth
Year 2020	Quarter		Quarter		Quarter		Quarter
Revenues	$	92,382	$	86,661	$	94,653	$	92,998
Gross profit		28,042		26,460		28,140		25,933
Net income		4,035		2,896		4,013		2,699
Basic earnings per share		0.43		0.30		0.42		0.28
Diluted earnings per share		0.42		0.30		0.42		0.28


	First		Second		Third		Fourth
Year 2019	Quarter		Quarter		Quarter		Quarter
Revenues	$	93,896	$	92,630	$	96,633	$	87,925
Gross profit		27,662		28,422		30,030		26,470
Net income		4,470		4,445		4,618		3,489
Basic earnings per share		0.48		0.47		0.49		0.37
Diluted earnings per share		0.48		0.47		0.49		0.37

Note: The sum of the quarterly net income per share (basic and diluted) may differ from the annual net income per share (basic and diluted) because of differences in the weighted average number of common shares outstanding and the common shares used in the quarterly and annual computations as well as differences in rounding.

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

For business combinations, we record net assets acquired and liabilities assumed at their estimated fair values.

Cash and Cash Equivalents

Accounts Receivable


	December 31, 2020		December 31, 2019
Beginning balance	$	405	$	530
Additional reserves		91		(5)
Write-offs		(123)		(132)
Effect of foreign currency translation		9		12
Ending balance	$	382	$	405

Inventories

Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands):



	December 31, 2020		December 31, 2019
Parts and raw materials	$	44,750	$	35,849
Work-in-process		6,186		6,951
Finished goods		12,042		10,585
	$	62,978	$	53,385

Property, Plant and Equipment

Property, plant and equipment is classified as follows (in thousands):


		December 31,		December 31,
	Useful lives	2020		2019
Land		$	999	$	977
Building and improvements	5 - 39 years		14,169		13,366
Machinery, equipment, tools and dies	3 - 15 years		79,738		58,358
Construction work in progress			6,821		15,536
Furniture, fixtures and other	3 - 10 years		16,313		15,797
			118,040		104,034
Less accumulated depreciation			(62,612)		(51,026)
Property, plant and equipment, net		$	55,428	$	53,008

Depreciation expense was $10,057, $9,139 and $7,921 in 2020, 2019 and 2018, respectively.

Intangible Assets

Impairment of Long-Lived Assets

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination.

Other Long-Term Assets

Warranty

Changes in the Company’s reserve for product warranty claims during 2020, 2019 and 2018 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2020		2019		2018
Warranty reserve at beginning of the year	$	1,075	$	971	$	922
Warranty reserves acquired		465		—		117
Provision		34		210		(13)
Warranty expenditures		(97)		(101)		(34)
Effect of foreign currency translation		94		(5)		(21)
Warranty reserve at end of year	$	1,571	$	1,075	$	971

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2020		2019
Compensation and fringe benefits	$	11,184	$	12,967
Warranty reserve		1,571		1,075
Income taxes payable		1,459		2,231
Right of use liabilities		4,666		3,203
Other accrued expenses		5,982		3,525
	$	24,862	$	23,001

Foreign Currency Translation

Revenue Recognition

Refer to Note 3, Revenue Recognition, for description of the Company’s policies regarding revenue recognition.

Engineering and Development Costs

Basic and Diluted Income per Share

Basic and diluted weighted-average shares outstanding are as follows (in thousands):



	Year ended December 31,
	2020	2019	2018
Basic weighted average shares outstanding	9,495	9,398	9,265
Dilutive effect of equity awards	60	63	105
Diluted weighted average shares outstanding	9,555	9,461	9,370

For 2020, 2019 and 2018, the anti-dilutive common shares excluded from the calculation of diluted income per share were immaterial.

Comprehensive Income

Fair Value Accounting

Level 1: Quoted prices for identical assets or liabilities in active markets.

Level 3: Significant inputs to the valuation model that are unobservable.


	December 31, 2020
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,347	$	—	$	—
Deferred compensation plan assets		5,386		—		—
Interest rate swaps		—		(1,889)		—


	December 31, 2019
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,099	$	—	$	—
Deferred compensation plan assets		4,690		—		—
Interest rate swaps		—		(363)		—

Derivative Financial Instruments

Income Taxes

Pension and Postretirement Welfare Plans

Concentration of Credit Risk

Use of Estimates

Recently adopted accounting pronouncements

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of activity in the allowance for doubtful accounts


	December 31, 2020		December 31, 2019
Beginning balance	$	405	$	530
Additional reserves		91		(5)
Write-offs		(123)		(132)
Effect of foreign currency translation		9		12
Ending balance	$	382	$	405

Schedule of inventories including costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value

Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands):



	December 31, 2020		December 31, 2019
Parts and raw materials	$	44,750	$	35,849
Work-in-process		6,186		6,951
Finished goods		12,042		10,585
	$	62,978	$	53,385

Schedule of classification of property, plant and equipment

Property, plant and equipment is classified as follows (in thousands):


		December 31,		December 31,
	Useful lives	2020		2019
Land		$	999	$	977
Building and improvements	5 - 39 years		14,169		13,366
Machinery, equipment, tools and dies	3 - 15 years		79,738		58,358
Construction work in progress			6,821		15,536
Furniture, fixtures and other	3 - 10 years		16,313		15,797
			118,040		104,034
Less accumulated depreciation			(62,612)		(51,026)
Property, plant and equipment, net		$	55,428	$	53,008

Schedule of changes in the reserve for product warranty claims

Changes in the Company’s reserve for product warranty claims during 2020, 2019 and 2018 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2020		2019		2018
Warranty reserve at beginning of the year	$	1,075	$	971	$	922
Warranty reserves acquired		465		—		117
Provision		34		210		(13)
Warranty expenditures		(97)		(101)		(34)
Effect of foreign currency translation		94		(5)		(21)
Warranty reserve at end of year	$	1,571	$	1,075	$	971

Schedule of accrued liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2020		2019
Compensation and fringe benefits	$	11,184	$	12,967
Warranty reserve		1,571		1,075
Income taxes payable		1,459		2,231
Right of use liabilities		4,666		3,203
Other accrued expenses		5,982		3,525
	$	24,862	$	23,001

Schedule of basic and diluted weighted-average shares outstanding

Basic and diluted weighted-average shares outstanding are as follows (in thousands):



	Year ended December 31,
	2020	2019	2018
Basic weighted average shares outstanding	9,495	9,398	9,265
Dilutive effect of equity awards	60	63	105
Diluted weighted average shares outstanding	9,555	9,461	9,370

Schedule of financial assets that are accounted for at fair value on a recurring basis


	December 31, 2020
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,347	$	—	$	—
Deferred compensation plan assets		5,386		—		—
Interest rate swaps		—		(1,889)		—


	December 31, 2019
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,099	$	—	$	—
Deferred compensation plan assets		4,690		—		—
Interest rate swaps		—		(363)		—

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2020

ACQUISITIONS

Schedule of unaudited pro forma financial information

The following unaudited pro forma financial information presents the combined results of operations if the Dynamic Controls acquisition had occurred as of January 1, 2019 (in thousands):


	For the year ended
	December 31,
	2020		2019
Revenues	$	371,856	$	401,345
Net income	$	14,255	$	17,779
Earnings per share - basic	$	1.50	$	1.89
Earnings per share - diluted	$	1.49	$	1.88

Dynamic Controls

ACQUISITIONS

Schedule of purchase price allocation and estimated fair value of the assets acquired


Cash and cash equivalents	$	11,437
Accounts receivable		4,129
Inventory		3,329
Other assets, net		769
Property, plant and equipment		1,185
Right of use assets		2,735
Intangible assets		7,800
Goodwill		6,629
Current liabilities		(7,354)
Lease liabilities		(2,739)
Net deferred income tax liabilities		(1,755)
Net purchase price	$	26,165

Schedule of unaudited pro forma financial information


	For the year ended
	December 31,
	2020		2019
Revenues	$	371,856	$	401,345
Net income	$	14,255	$	17,779
Earnings per share - basic	$	1.50	$	1.89
Earnings per share - diluted	$	1.49	$	1.88

REVENUE RECOGNITION (Tables)

12 Months Ended

Dec. 31, 2020

REVENUE RECOGNITION

Schedule of reconciliation of disaggregated revenue by target market and geography



	Year ended December 31,
Target Market	2020		2019
Vehicle	$	110,365	$	126,811
Industrial		114,143		124,196
Medical		83,191		51,586
Aerospace & Defense		39,711		47,748
Other		19,284		20,743
Total	$	366,694	$	371,084



	Year ended December 31,
Geography	2020		2019
United States	$	214,203	$	244,347
Europe		126,985		124,914
Asia-Pacific		25,506		1,823
Total	$	366,694	$	371,084

Schedule of opening and closing balances of the Company's receivables, contract asset, and contract liability

The opening and closing balances of the Company’s contract liability are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Contract liabilities in accrued liabilities	$	898	$	454
Contract liabilities in other long-term liabilities		262		-
	$	1,160	$	454

GOODWILL (Tables)

12 Months Ended

Dec. 31, 2020

GOODWILL

Schedule of change in the carrying amount of goodwill

The change in the carrying amount of goodwill for 2020 and 2019 is as follows (in thousands):


	2020		2019
Beginning balance	$	52,935	$	52,639
Goodwill acquired (Note 2)		6,629		614
Effect of foreign currency translation		2,296		(318)
Ending balance	$	61,860	$	52,935

INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

INTANGIBLE ASSETS

Schedule of intangible assets

Intangible assets on the Company’s consolidated balance sheets consist of the following (in thousands):


		December 31, 2020						December 31, 2019
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		amortization		Value		Amount		amortization		Value
Customer lists	8 - 17 years	$	69,833	$	(23,636)	$	46,197	$	64,314	$	(19,311)	$	45,003
Trade name	10 - 19 years		14,055		(5,061)		8,994		12,222		(4,114)		8,108
Design and technologies	10 - 15 years		15,531		(4,874)		10,657		12,927		(3,554)		9,373
Patents	17 years		24		(13)		11		24		(11)		13
Total		$	99,443	$	(33,584)	$	65,859	$	89,487	$	(26,990)	$	62,497

Schedule of estimated amortization expense for intangible assets

Estimated amortization expense for intangible assets is as follows (in thousands):


	Estimated
	Amortization Expense
2021	$	6,059
2022		6,110
2023		6,127
2024		5,798
2025		5,780
Thereafter		35,985
Total estimated amortization expense	$	65,859

STOCK-BASED COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2020

STOCK-BASED COMPENSATION

Summary of restricted stock grants, fair value and performance based awards


				Awards with
	Unvested	Weighted average		performance
	restricted stock	grant date fair		vesting
For the year ended December 31,	awards	value		requirements
2020	160,437	$	33.51	100,403
2019	109,530	$	41.95	76,877
2018	64,656	$	35.89	30,603

Summary of restricted stock activity


		Number of
		shares
Balance, December 31, 2017		221,968
Awarded		64,656
Forfeited		(18,867)
Vested		(112,015)
Balance, December 31, 2018		155,742
Awarded		109,530
Forfeited		(3,166)
Vested		(75,404)
Balance, December 31, 2019		186,702
Awarded		160,437
Forfeited		(2,446)
Vested		(106,465)
Balance, December 31, 2020		238,228

Summary of performance based restricted stock activity


		Total performance
		grants
Outstanding, December 31, 2017		37,782
Awarded		30,603
Performance criteria met		(66,525)
Forfeited		(1,860)
Outstanding, December 31, 2018		—
Awarded		76,877
Performance criteria met		(50,852)
Forfeited		(549)
Outstanding, December 31, 2019		25,476
Awarded		100,403
Performance criteria met		(64,384)
Forfeited		(2,155)
Outstanding, December 31, 2020		59,340

DEBT OBLIGATIONS (Tables)

12 Months Ended

Dec. 31, 2020

DEBT OBLIGATIONS

Schedule of debt obligations

Debt obligations consisted of the following (in thousands):


	December 31,		December 31,
	2020		2019
Long-term Debt
Revolving Credit Facility, long-term (1)	$	120,656	$	110,085
Unamortized debt issuance costs		(577)		(320)
Long-term debt	$	120,079	$	109,765

(1)	The effective rate of the Revolving Credit Facility is 2.5% at December 31, 2020 including the impact of the Company's interest rate swaps.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
-Topic 942
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-Section 50
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

Schedule of fair value of the Company's derivative financial instruments as well as classification on the condensed consolidated balance sheets


		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	December 31,
hedging instruments	Location	2020		2019
Interest rate products	Other long-term liabilities	$	1,889	$	363

Schedule of effect of cash flow hedge accounting on other comprehensive income (loss) (OCI)

The table below presents the effect of cash flow hedge accounting on other comprehensive income (loss) (OCI) for the years ended December 31, 2020, 2019 and 2018 (in thousands):




Location of (loss) gain reclassified	Amount of pre-tax (loss) gain reclassified from accumulated OCI into income
from accumulated OCI into income	Year ended December 31,
	2020		2019		2018
Interest expense	$	(637)	$	113	$	6

Schedule of effect of the Company's derivative financial instruments on the condensed consolidated statements of income and comprehensive income



		Total amounts of income and expense line items presented
		that reflect the effects of cash flow hedges recorded
		Year ended December 31,
Derivatives designated as hedging instruments	Income Statement Location	2020		2019		2018
Interest rate products	Interest Expense	$	3,716	$	5,134	$	2,701

Schedule of fair value provides the location that derivative assets and liabilities

Gross amounts

Net amounts of liabilities

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2020

liabilities

balance sheets

instruments

received

Net amount

Derivatives

1,889

—

1,889

—

1,889

Gross amounts

Net amounts of liabilities

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2019

liabilities

balance sheets

instruments

received

Net amount

Derivatives

363

—

363

—

363

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAXES

Schedule of provision for income taxes based on income before income taxes

The provision for income taxes is based on income before income taxes as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Domestic	$	8,478	$	17,188	$	10,894
Foreign		10,298		6,653		9,787
Income before income taxes	$	18,776	$	23,841	$	20,681

Schedule of components of the total provision for income taxes

Components of the total provision for income taxes are as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Current provision
Domestic	$	2,167	$	4,313	$	1,663
Foreign		3,485		2,618		3,169
Total current provision		5,652		6,931		4,832
Deferred provision
Domestic		288		199		675
Foreign		(807)		(311)		(751)
Total deferred provision		(519)		(112)		(76)
Provision for income taxes	$	5,133	$	6,819	$	4,756

Schedule of differences in the provision for income taxes from the amount determined by applying the federal statutory rate


	For the year ended
	December 31,		December 31,		December 31,
	2020		2019		2018
Tax provision, computed at statutory rate	21.0	%	21.0	%	21.0	%
State tax, net of federal impact	4.2	%	4.5	%	3.0	%
Change in valuation allowance	0.0	%	0.3	%	2.8	%
Effect of foreign tax rate differences	4.3	%	1.5	%	3.4	%
Permanent items, other	(0.2)	%	1.4	%	0.8	%
Section 162(m) compensation	2.2	%	1.1	%	0.1	%
R&D Credit	(3.6)	%	(2.5)	%	(0.8)	%
Restricted stock awards	0.6	%	(0.1)	%	(2.3)	%
Effect of Tax Cuts and Jobs Act	(1.3)	%	(0.4)	%	(5.1)	%
Subpart F income	1.3	%	0.0	%	0.0	%
Tax examinations	0.0	%	1.8	%	0.0	%
Other	(1.2)	%	0.0	%	0.1	%
Provision for income taxes	27.3	%	28.6	%	23.0	%

Schedule of tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities

The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Noncurrent deferred tax assets:
Employee benefit plans	$	2,500	$	2,440
Net operating loss and tax credit carryforwards		2,217		1,675
Accrued expenses and reserves		969		795
Other		697		428
Total noncurrent deferred tax assets		6,383		5,338
Valuation allowance		(1,176)		(1,077)
Net noncurrent deferred tax assets:	$	5,207	$	4,261

Net noncurrent deferred tax liabilities:
Property and equipment	$	3,448	$	3,901
Goodwill and intangibles		5,629		2,885
Other		459		384
Total noncurrent deferred tax liabilities	$	9,536	$	7,170

Net deferred tax asset/(deferred tax liability)	$	(4,329)	$	(2,909)

Presented as follows:
Noncurrent deferred income tax assets	$	330	$	490
Noncurrent deferred income tax liabilities		(4,659)		(3,399)
Net deferred tax liability	$	(4,329)	$	(2,909)

Summary Of Operating Loss And Tax Credit Carryforwards [Table Text Block]

As of December 31, 2020, the Company has the following gross carryforwards available:


			Amount
Jurisdiction	Tax Attribute		(in thousands)	Begin to expire
U.S. State	Net Operating Losses ⁽¹⁾	$	4,139	2024
International	Net Operating Losses ⁽¹⁾	$	1,519	2025
International	Net Operating Losses - Unlimited Carryforward ⁽¹⁾	$	718	No expiration
U.S. Federal	Foreign Tax Credits	$	1,003	2027
International	R&D Tax Credits	$	574	2025

LEASES (Tables)

12 Months Ended

Dec. 31, 2020

LEASES

Schedule of components of operating lease expense

For the years ended December 31, 2020 and 2019, the components of operating lease expense were as follows (in thousands):


	December 31,			December 31,
	2020			2019
Fixed operating lease expense	$	4,548	$	4,018
Variable operating lease expense	$	547	$	499
Short-term lease expense	$	234	$	234

Schedule of supplemental cash flow information related to the operating leases

Supplemental cash flow information related to the Company’s operating leases for the years ended December 31, 2020 and 2019 are as follows (in thousands):


	December 31,		December 31,
	2020		2019
Cash paid for amounts included in the measurement of operating leases	$	4,601	$	4,886
Right of use ("ROU") assets obtained in exchange for operating lease obligations	$	3,626	$	373
ROU assets recorded upon adoption of ASC 842, Leases	$	—	$	20,344
ROU assets obtained in acquisitions (Note 2)	$	2,735	$	—

Schedule of Lease assets and liabilities and other quantitative information

The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2020 and 2019:


	December 31,
	2020			2019
Weighted average remaining lease term (in years)		6.83			8.27
Weighted average discount rate		2.25	%		2.91	%

Schedule of maturity of the operating lease liabilities

The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2020 (in thousands):


2021	$	5,043
2022		4,013
2023		2,935
2024		2,282
2025		2,096
Thereafter		4,606
Total undiscounted cash flows	$	20,975
Less: present value discount		(1,334)
Total lease liabilities	$	19,641

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

SEGMENT INFORMATION

Schedule of revenue related to foreign subsidiaries

Financial information related to the foreign subsidiaries is summarized below (in thousands):



	For the year ended December 31,
	2020		2019		2018
Revenues derived from foreign subsidiaries	$	152,491	$	126,737	$	126,104

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2020

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Schedule of selected quarterly financial data

Selected quarterly financial data for each of the four quarters in years 2020 and 2019 is as follows (in thousands, except per share data):


	First		Second		Third		Fourth
Year 2020	Quarter		Quarter		Quarter		Quarter
Revenues	$	92,382	$	86,661	$	94,653	$	92,998
Gross profit		28,042		26,460		28,140		25,933
Net income		4,035		2,896		4,013		2,699
Basic earnings per share		0.43		0.30		0.42		0.28
Diluted earnings per share		0.42		0.30		0.42		0.28


	First		Second		Third		Fourth
Year 2019	Quarter		Quarter		Quarter		Quarter
Revenues	$	93,896	$	92,630	$	96,633	$	87,925
Gross profit		27,662		28,422		30,030		26,470
Net income		4,470		4,445		4,618		3,489
Basic earnings per share		0.48		0.47		0.49		0.37
Diluted earnings per share		0.48		0.47		0.49		0.37

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Inventories (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Activity in the allowance for doubtful accounts
Beginning balance	$ 405	$ 530
Additional reserves	91	(5)	$ 192
Writeoffs	(123)	(132)
Effect of foreign currency translation	9	12
Ending balance	382	405	$ 530
Inventories
Parts and raw materials	44,750	35,849
Work-in-process	6,186	6,951
Finished goods	12,042	10,585
Inventories	$ 62,978	$ 53,385

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, plant and equipment
Property, plant and equipment, gross	$ 118,040	$ 104,034
Less accumulated depreciation	(62,612)	(51,026)
Property, plant and equipment, net	55,428	53,008
Depreciation expense	10,057	9,139	$ 7,921
Land
Property, plant and equipment
Property, plant and equipment, gross	999	977
Building and improvements
Property, plant and equipment
Property, plant and equipment, gross	$ 14,169	13,366
Building and improvements \| Minimum
Property, plant and equipment
Useful lives	5 years
Building and improvements \| Maximum
Property, plant and equipment
Useful lives	39 years
Machinery, equipment, tools and dies
Property, plant and equipment
Property, plant and equipment, gross	$ 79,738	58,358
Machinery, equipment, tools and dies \| Minimum
Property, plant and equipment
Useful lives	3 years
Machinery, equipment, tools and dies \| Maximum
Property, plant and equipment
Useful lives	15 years
Construction work in progress
Property, plant and equipment
Property, plant and equipment, gross	$ 6,821	15,536
Furniture, fixtures and other
Property, plant and equipment
Property, plant and equipment, gross	$ 16,313	$ 15,797
Furniture, fixtures and other \| Minimum
Property, plant and equipment
Useful lives	3 years
Furniture, fixtures and other \| Maximum
Property, plant and equipment
Useful lives	10 years

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Goodwill
Number of reporting units \| item	1
Goodwill impairment \| $	$ 0	$ 0	$ 0

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warranty, Accrued Liabilities, and Basic and Diluted Income per Share (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019
Changes in the reserve for product warranty claims
Warranty reserve at beginning of the year	$ 1,075	$ 971	$ 922
Warranty reserves acquired	465		117
Provision	34	210	(13)
Warranty expenditures	(97)	(101)	(34)
Effect of foreign currency translation	94	(5)	(21)
Warranty reserve at end of year	1,571	1,075	971
ACCRUED LIABILITIES
Compensation and fringe benefits				$ 11,184	$ 12,967
Warranty reserve	$ 1,571	$ 971	$ 922	1,571	1,075
Income taxes payable				1,459	2,231
Right of use liabilities				4,666	3,203
Other accrued expenses				$ 5,982	$ 3,525
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]				Accrued liabilities	Accrued liabilities
Accrued liabilities				$ 24,862	$ 23,001
Basic and Diluted Income per Share
Basic weighted average shares outstanding	9,495	9,398	9,265
Dilutive effect of equity awards	60	63	105
Diluted weighted average shares outstanding	9,555	9,461	9,370
Minimum
Warranty
Warranty period	3 months
Maximum
Warranty
Warranty period	2 years

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Accounting (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets (liabilities)
Other long-term assets	$ 4,483	$ 4,835
Recurring basis \| Level 1
Assets (liabilities)
Pension plan assets	6,347	6,099
Other long-term assets	5,386	4,690
Recurring basis \| Level 2
Assets (liabilities)
Interest rate swaps/liabilities	$ (1,889)	$ (363)

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Uncertain tax benefits	$ 0	$ 0	$ 0
Interest and penalties related to unrecognized tax positions	$ 0	$ 0	$ 0

ACQUISITION (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Mar. 07, 2020
ACQUISITIONS
ROU assets obtained in acquisitions (Note 2)	$ 2,735								$ 2,735
Goodwill	61,860				$ 52,935				61,860	$ 52,935	$ 52,639
Revenues	92,998	$ 94,653	$ 86,661	$ 92,382	$ 87,925	$ 96,633	$ 92,630	$ 93,896	366,694	371,084	$ 310,611
Pro forma Condensed Combined Financial Information
Revenues									371,856	401,345
Net income									$ 14,255	$ 17,779
Earnings per share - basic									$ 1.50	$ 1.89
Earnings per share - diluted									$ 1.49	$ 1.88
Dynamic Controls
ACQUISITIONS
Business acquisition percentage of voting interests acquired												100.00%
Transaction costs related to acquisition									$ 473
Cash and cash equivalents												$ 11,437
Accounts receivable												4,129
Inventory												3,329
Other assets, net												769
Property, plant and equipment												1,185
ROU assets obtained in acquisitions (Note 2)												2,735
Intangible assets	7,800								7,800			7,800
Goodwill												6,629
Current liabilities												(7,354)
Lease liabilities												(2,739)
Net deferred income tax liabilities												(1,755)
Net purchase price												$ 26,165
Reduction of Goodwill owing to measurement period adjustments		$ 77	$ 268
Revenues									24,124
Distributed Earnings									945
Dynamic Controls \| Customer lists
ACQUISITIONS
Intangible assets	4,400								$ 4,400
Amortization period (in years)									16 years
Dynamic Controls \| Technology
ACQUISITIONS
Intangible assets	1,900								$ 1,900
Amortization period (in years)									13 years
Dynamic Controls \| Trade name
ACQUISITIONS
Intangible assets	$ 1,500								$ 1,500
Amortization period (in years)									18 years

REVENUE RECOGNITION - Disaggregation of Revenue (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Number of reportable segment \| segment									1
Revenues	$ 92,998	$ 94,653	$ 86,661	$ 92,382	$ 87,925	$ 96,633	$ 92,630	$ 93,896	$ 366,694	$ 371,084	$ 310,611
United States
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									214,203	244,347
Europe
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									126,985	124,914
Asia-Pacific
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									25,506	1,823
Vehicle
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									110,365	126,811
Industrial
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									114,143	124,196
Medical
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									83,191	51,586
Aerospace & Defense
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									39,711	47,748
Other
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues									$ 19,284	$ 20,743

REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
REVENUE RECOGNITION
Contract liabilities in accrued liabilities	$ 898	$ 454
Contract liabilities in other long-term liabilities	262
Contract liabilities	$ 1,160	$ 454

REVENUE RECOGNITION - Practical Expedients (Details)	12 Months Ended
REVENUE RECOGNITION - Practical Expedients (Details)	Dec. 31, 2020
REVENUE RECOGNITION
Incremental costs of obtaining a contract	true
Remaining performance obligations	true
The time value of money	true

GOODWILL (Details) - USD ($) $ in Thousands	12 Months Ended
GOODWILL (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Change in goodwill
Beginning balance	$ 52,935	$ 52,639
Goodwill acquired (Note 2)	6,629	614
Effect of foreign currency translation	2,296	(318)
Ending balance	$ 61,860	$ 52,935

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Mar. 07, 2020
Intangible assets subject to amortization
Gross Amount	$ 99,443	$ 89,487
Accumulated amortization	(33,584)	(26,990)
Net Book Value	65,859	62,497
Amortization expense for intangible assets	5,928	5,718	$ 3,655
Estimated amortization expense
2021	6,059
2022	6,110
2023	6,127
2024	5,798
2025	5,780
Thereafter	35,985
Total estimated amortization expense	65,859
Dynamic Controls
Intangible assets subject to amortization
Intangible assets	7,800			$ 7,800
Customer lists
Intangible assets subject to amortization
Gross Amount	69,833	64,314
Accumulated amortization	(23,636)	(19,311)
Net Book Value	$ 46,197	45,003
Customer lists \| Dynamic Controls
Intangible assets subject to amortization
Estimated Life	16 years
Intangible assets	$ 4,400
Customer lists \| Minimum
Intangible assets subject to amortization
Estimated Life	8 years
Customer lists \| Maximum
Intangible assets subject to amortization
Estimated Life	17 years
Trade name
Intangible assets subject to amortization
Gross Amount	$ 14,055	12,222
Accumulated amortization	(5,061)	(4,114)
Net Book Value	$ 8,994	8,108
Trade name \| Dynamic Controls
Intangible assets subject to amortization
Estimated Life	18 years
Intangible assets	$ 1,500
Trade name \| Minimum
Intangible assets subject to amortization
Estimated Life	10 years
Trade name \| Maximum
Intangible assets subject to amortization
Estimated Life	19 years
Design and technologies
Intangible assets subject to amortization
Gross Amount	$ 15,531	12,927
Accumulated amortization	(4,874)	(3,554)
Net Book Value	$ 10,657	9,373
Design and technologies \| Minimum
Intangible assets subject to amortization
Estimated Life	10 years
Design and technologies \| Maximum
Intangible assets subject to amortization
Estimated Life	15 years
Patents
Intangible assets subject to amortization
Estimated Life	17 years
Gross Amount	$ 24	24
Accumulated amortization	(13)	(11)
Net Book Value	$ 11	$ 13

STOCK-BASED COMPENSATION PLANS - Stock Incentive Plans and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
STOCK-BASED COMPENSATION
Shares of common stock available for grant under stock incentive plans	753,187
Restricted Stock
STOCK-BASED COMPENSATION
Weighted average grant date fair value (in dollars per share)	$ 33.51	$ 41.95	$ 35.89
Service period over which value of the shares is amortized to compensation expense	3 years
Number of Non-vested Restricted Shares
Outstanding at beginning of period (in shares)	186,702	155,742	221,968
Awarded (in shares)	160,437	109,530	64,656
Forfeited (in shares)	(2,446)	(3,166)	(18,867)
Vested (in shares)	(106,465)	(75,404)	(112,015)
Outstanding at end of period (in shares)	238,228	186,702	155,742
Additional disclosures
Stock based compensation expense, net of forfeitures	$ 3,550	$ 3,203	$ 2,643
Unrecognized compensation expense	4,100
Unrecognized compensation expense, expected to be recognized in next fiscal year	$ 2,236
Restricted Stock \| Minimum
STOCK-BASED COMPENSATION
Service period of earned grants	3 years
Restricted Stock \| Maximum
STOCK-BASED COMPENSATION
Service period of earned grants	5 years
Restricted Stock \| Performance based vesting
Number of Non-vested Restricted Shares
Outstanding at beginning of period (in shares)	25,476		37,782
Awarded (in shares)	100,403	76,877	30,603
Performance criteria met (in shares)	(64,384)	(50,852)	(66,525)
Forfeited (in shares)	(2,155)	(549)	(1,860)
Outstanding at end of period (in shares)	59,340	25,476

STOCK-BASED COMPENSATION PLANS - Employee Stock Ownership Plan (Details) - ESOP $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) h / yr	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Employee Stock Ownership Plan
Minimum hours of work per year for employees to be covered under Employee Stock Ownership Plan (ESOP) \| h / yr	1,000
Annual contribution by employer as a percentage of pretax income before the contribution	5.00%	5.00%	5.00%
Company contributions \| $	$ 988	$ 1,189	$ 1,090

STOCK-BASED COMPENSATION PLANS - Defined Contribution Plan and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Contribution Plan
Matching percentage per dollar of the first 3% of participant deferral	100.00%	100.00%	100.00%
First specified percentage of participant deferral upon which employer matches 100% contribution per dollar	3.00%	3.00%	3.00%
Matching percentage per dollar of the next 2% contribution	50.00%	50.00%	50.00%
Next specified percentage of employee contribution upon which employer matches 50% contribution per dollar	2.00%	2.00%	2.00%
Participant deferral (as a percent)	5.00%	5.00%	5.00%
Net costs related to defined contribution plan	$ 1,774	$ 1,362	$ 1,182
Dividends
Dividends paid (in dollars per share)	$ 0.12	$ 0.12	$ 0.115
Total dividends paid	$ 1,160	$ 1,170	$ 1,079
Maximum
Defined Contribution Plan
Specified percentage of employee contribution upon which employer matches contribution	4.00%	4.00%	4.00%

DEBT OBLIGATIONS (Details) ¥ in Thousands	12 Months Ended
DEBT OBLIGATIONS (Details) ¥ in Thousands	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 CNY (¥)	Feb. 12, 2020 USD ($)	Feb. 11, 2020 USD ($)
DEBT OBLIGATIONS
Long-term debt	$ 120,079,000	$ 109,765,000
Unamortized debt issuance costs	(577,000)	(320,000)
Senior Credit Facilities
DEBT OBLIGATIONS
Deferred financing costs net of accumulated amortization	577,000
Revolving Credit Facility
DEBT OBLIGATIONS
Long-term debt	$ 120,656,000	110,085,000
Effective rate (as a percent)	2.50%		2.50%
Amended Revolving Facility
DEBT OBLIGATIONS
Maximum borrowing capacity				$ 225,000,000
Available borrowing capacity				$ 75,000,000
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)	0.20%
Unused amount of credit facility	$ 104,344
Amended Revolving Facility \| Minimum
DEBT OBLIGATIONS
Maximum borrowing capacity					$ 175,000,000
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)	0.10%
Amended Revolving Facility \| Maximum
DEBT OBLIGATIONS
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)	0.225%
Amended Revolving Facility \| LIBOR
DEBT OBLIGATIONS
Applicable margin (as a percent)	1.625%
Amended Revolving Facility \| LIBOR \| Minimum
DEBT OBLIGATIONS
Applicable margin (as a percent)	1.00%
Amended Revolving Facility \| LIBOR \| Maximum
DEBT OBLIGATIONS
Applicable margin (as a percent)	1.75%
Amended Revolving Facility \| Prime Rate
DEBT OBLIGATIONS
Applicable margin (as a percent)	0.625%
Amended Revolving Facility \| Prime Rate \| Minimum
DEBT OBLIGATIONS
Applicable margin (as a percent)	0.00%
Amended Revolving Facility \| Prime Rate \| Maximum
DEBT OBLIGATIONS
Applicable margin (as a percent)	0.75%
China Credit Facility
DEBT OBLIGATIONS
Maximum borrowing capacity	$ 1,467,000		¥ 10,000
Average outstanding borrowings	$ 0	$ 0

DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands	12 Months Ended
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 31, 2020 USD ($) derivative	Feb. 28, 2017 USD ($) instrument
Interest Rate Swaps
Derivative financial instruments
Number of derivative instruments				2	3
Notional amount of interest rate swap derivatives				$ 60,000
Notional amount of interest rate swap derivatives					$ 40,000
Estimated amount to be reclassified as an increase to interest expense	$ 904
Interest Rate Swaps \| Minimum
Derivative financial instruments
Notional amount of interest rate swap derivatives				$ 20,000
Interest rate products \| Derivatives in cash flow hedging relationships
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income
Amount of pre-tax loss recognized in OCI on derivatives	(2,163)	$ (816)
Interest rate products \| Other Liabilities [Member] \| Derivatives designated as hedging instruments
Derivative financial instruments
Fair value of derivative liability	1,889	363
Interest rate products \| Interest income (expense) \| Derivatives designated as hedging instruments
Derivative financial instruments
Hedge ineffectiveness recorded in earnings	3,716	5,134	$ 2,701
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income
Total amounts of income and expense line items presented that reflect the effects of cash flow hedges recorded	3,716	5,134	2,701
Interest rate products \| Interest income (expense) \| Derivatives in cash flow hedging relationships
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income
Amount of pre-tax (loss) gain reclassified from accumulated OCI into income	$ (637)	$ 113	$ 6

DERIVATIVE FINANCIAL INSTRUMENTS - Effects of offsetting (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Gross amounts offset in the consolidated balance sheets
Gross amounts of recognized assets or Gross amounts offset in the condensed consolidated balance sheets	$ 1,889	$ 363
Net amounts of assets/liabilities presented in the consolidated balance sheets	1,889	363
Gross amounts not offset in the consolidated balance sheets
Net amount	$ 1,889
Gross amounts not offset in the consolidated balance sheets
Net amount		$ 363

INCOME TAXES - Tax Effects and Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of components of income before income taxes
Domestic	$ 8,478	$ 17,188	$ 10,894
Foreign	10,298	6,653	9,787
Income before income taxes	18,776	23,841	20,681
Current provision
Domestic	2,167	4,313	1,663
Foreign	3,485	2,618	3,169
Total current provision	5,652	6,931	4,832
Deferred provision
Domestic	288	199	675
Foreign	(807)	(311)	(751)
Total deferred provision	(519)	(112)	(76)
Provision for income taxes	$ 5,133	$ 6,819	$ 4,756
Differences in the provision for income taxes from the amount determined by applying the federal statutory rate
Tax provision, computed at statutory rate (as a percent)	21.00%	21.00%	21.00%
State tax, net of federal impact (as a percent)	4.20%	4.50%	3.00%
Change in valuation allowance (as a percent)	0.00%	0.30%	2.80%
Effect of foreign tax rate differences (as a percent)	4.30%	1.50%	3.40%
Permanent items, other (as a percent)	(0.20%)	1.40%	0.80%
Section 162(m) compensation	2.20%	1.10%	0.10%
R&D Credit (as a percent)	(3.60%)	(2.50%)	(0.80%)
Restricted stock awards (as a percent)	0.60%	(0.10%)	(2.30%)
Effect of Tax Cuts and Jobs Act (as a percent)	(1.30%)	(0.40%)	(5.10%)
Subpart F income (as a percent)	1.30%	0.00%	0.00%
Tax examinations (as a percent)	0.00%	1.80%	0.00%
Other (as a percent)	(1.20%)	0.00%	0.10%
Provision for income taxes (as a percent)	27.30%	28.60%	23.00%
US federal corporate tax rate (as a percent)	21.00%	21.00%	21.00%
Noncurrent deferred tax assets:
Employee benefit plans	$ 2,500	$ 2,440
Net operating loss and tax credit carryforwards	2,217	1,675
Accrued expenses and reserves	969	795
Other	697	428
Total noncurrent deferred tax assets	6,383	5,338
Valuation allowance	(1,176)	(1,077)
Net noncurrent deferred tax assets:	5,207	4,261
Net noncurrent deferred tax liabilities:
Property and equipment	3,448	3,901
Goodwill and intangibles	5,629	2,885
Other	459	384
Total deferred tax liabilities	9,536	7,170
Foreign tax credits	900
Tax effect on net operating losses	200
Noncurrent deferred income tax assets	330	490
Noncurrent deferred income tax assets	(4,659)	(3,399)
Net deferred tax asset/(deferred tax liability)	(4,329)	(2,909)
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries	275
Unrecognized Tax Benefits	0	0	$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	0	$ 0	$ 0
Domestic Tax Authority [Member]
Net noncurrent deferred tax liabilities:
Operating Loss Carryforwards	4,139
Domestic Tax Authority [Member] \| Foreign Tax Credit [Member]
Net noncurrent deferred tax liabilities:
Tax Credit Carryforward, Amount	1,003
Foreign
Net noncurrent deferred tax liabilities:
Operating Loss Carryforwards	1,519
Operating Loss Carryforwards, Unlimited Carryforward	718
Foreign \| R&D Tax Credits
Net noncurrent deferred tax liabilities:
Tax Credit Carryforward, Amount	$ 574

LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Mar. 07, 2020
LEASES
Options to terminate the leases	true
Operating lease option to terminate Period	30 days
Fixed operating lease expense	$ 4,548	$ 4,018
Variable operating lease expense	547	499
Short-term lease expense	234	234
Supplemental cash flow information related to the operating leases
Cash paid for amounts included in the measurement of operating leases	4,601	4,886
Right of use ("ROU") assets obtained in exchange for operating lease obligations	3,626	373
ROU assets recorded upon adoption of ASC 842, Leases		$ 20,344
ROU assets obtained in acquisitions (Note 2)	$ 2,735
Lease assets and liabilities
Right of use liabilities, current, Classification	us-gaap:AccruedLiabilitiesCurrent	us-gaap:AccruedLiabilitiesCurrent
Weighted average remaining lease term	6 years 9 months 29 days	8 years 3 months 7 days
Weighted average discount rate	2.25%	2.91%
Maturity of the operating lease liabilities
2021	$ 5,043
2022	4,013
2023	2,935
2024	2,282
2025	2,096
Thereafter	4,606
Total undiscounted cash flows	20,975
Less: present value discount	(1,334)
Total lease liabilities	$ 19,641
Dynamic Controls
Supplemental cash flow information related to the operating leases
ROU assets obtained in acquisitions (Note 2)			$ 2,735

COMMITMENTS AND CONTINGENCIES (Details)	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details)	Dec. 31, 2020
Severance Benefit Agreements
Severance benefit agreements
Period of specified benefits to key employees Upon the subsequent severance of employment	24 months

DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred compensation arrangements
Amounts accrued	$ 5,386	$ 4,695
Accrued liabilities.
Deferred compensation arrangements
Amount accrued included in accrued liabilities	1,057
Other Long Term Liabilities
Deferred compensation arrangements
Amount accrued included in other long-term liabilities	$ 4,329	$ 4,695

SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment information
Number of operating segments \| segment									1
Identifiable assets	$ 349,197				$ 305,828				$ 349,197	$ 305,828
Revenues derived from foreign subsidiaries	92,998	$ 94,653	$ 86,661	$ 92,382	87,925	$ 96,633	$ 92,630	$ 93,896	$ 366,694	$ 371,084	$ 310,611
Total Revenue
Segment information
Percentage of concentration risk									15.00%	16.00%	19.00%
Trade receivables
Segment information
Percentage of concentration risk									22.00%	17.00%
Outside the United States
Segment information
Identifiable assets	$ 133,466				$ 95,777				$ 133,466	$ 95,777
Revenues derived from foreign subsidiaries									171,847	159,365	$ 146,835
Wholly owned foreign subsidiaries
Segment information
Revenues derived from foreign subsidiaries									$ 152,491	$ 126,737	$ 126,104

SUBSEQUENT EVENTS (Details)	Mar. 10, 2021
Subsequent Event
Common stock split	1.5

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Revenues	$ 92,998	$ 94,653	$ 86,661	$ 92,382	$ 87,925	$ 96,633	$ 92,630	$ 93,896	$ 366,694	$ 371,084	$ 310,611
Gross profit	25,933	28,140	26,460	28,042	26,470	30,030	28,422	27,662	108,575	112,584	91,403
Net income	$ 2,699	$ 4,013	$ 2,896	$ 4,035	$ 3,489	$ 4,618	$ 4,445	$ 4,470	$ 13,643	$ 17,022	$ 15,925
Basic earnings per share	$ 0.28	$ 0.42	$ 0.30	$ 0.43	$ 0.37	$ 0.49	$ 0.47	$ 0.48	$ 1.44	$ 1.81	$ 1.72
Diluted earnings per share	$ 0.28	$ 0.42	$ 0.30	$ 0.42	$ 0.37	$ 0.49	$ 0.47	$ 0.48	$ 1.43	$ 1.80	$ 1.70

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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