0001558370-24-002487 | 10-K | XBRL Viewer

Year ended December 31,

Income before income taxes

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Long-Term Assets (Details) $ in Thousands	Dec. 31, 2023 USD ($)
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fair value of derivative assets	$ 2,177

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Retained Earnings	Foreign Currency Translation Adjustments	Accumulated income (loss) on derivatives	Pension Adjustments	Total
Balance at the beginning at Dec. 31, 2020	$ 41,278	$ 105,065	$ (216)	$ (1,438)	$ (1,633)	$ 143,056
Balance at the beginning (in shares) at Dec. 31, 2020	14,632
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 988					988
Stock transactions under employee benefit stock plans (in shares)	32
Issuance of restricted stock, net of forfeitures	$ 102					102
Issuance of restricted stock, net of forfeitures (in shares)	96
Share issuance in connection with acquisitions	$ 23,496					23,496
Share issuance in connection with acquisitions (in shares)	653
Stock-based compensation expense	$ 4,161					4,161
Shares withheld for payment of employee payroll taxes	$ (1,928)					(1,928)
Shares withheld for payment of employee payroll taxes (in shares)	(52)
Comprehensive (loss) income			(7,193)	2,110	997	(4,086)
Tax effect				(492)	(227)	(719)
Net income		24,094				24,094
Dividends to stockholders		(1,402)				(1,402)
Balance at the ending at Dec. 31, 2021	$ 68,097	127,757	(7,409)	180	(863)	187,762
Balance at the ending (in shares) at Dec. 31, 2021	15,361
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 1,217					1,217
Stock transactions under employee benefit stock plans (in shares)	36
Issuance of restricted stock, net of forfeitures	$ (5)					(5)
Issuance of restricted stock, net of forfeitures (in shares)	168
Share issuance in connection with acquisitions	$ 11,103					11,103
Share issuance in connection with acquisitions (in shares)	463
Stock-based compensation expense	$ 5,073					5,073
Shares withheld for payment of employee payroll taxes	$ (1,633)					(1,633)
Shares withheld for payment of employee payroll taxes (in shares)	(50)
Comprehensive (loss) income			(9,516)	7,089	361	(2,066)
Tax effect				(1,713)	(92)	(1,805)
Net income		17,389				17,389
Dividends to stockholders		(1,570)				(1,570)
Balance at the ending at Dec. 31, 2022	$ 83,852	143,576	(16,925)	5,556	(594)	$ 215,465
Balance at the ending (in shares) at Dec. 31, 2022	15,978					15,978
Increase (Decrease) in Stockholders' Equity
Stock transactions under employee benefit stock plans	$ 1,246					$ 1,246
Stock transactions under employee benefit stock plans (in shares)	31
Issuance of restricted stock, net of forfeitures	$ 129					129
Issuance of restricted stock, net of forfeitures (in shares)	107
Share issuance in connection with acquisitions	$ 7,329					7,329
Share issuance in connection with acquisitions (in shares)	250
Stock-based compensation expense	$ 5,477					5,477
Shares withheld for payment of employee payroll taxes	$ (2,096)					(2,096)
Shares withheld for payment of employee payroll taxes (in shares)	(58)
Comprehensive (loss) income			3,669	(2,879)	333	1,123
Tax effect				748	(83)	665
Net income		24,097				24,097
Dividends to stockholders		(1,860)				(1,860)
Balance at the ending at Dec. 31, 2023	$ 95,937	$ 165,813	$ (13,256)	$ 3,425	$ (344)	$ 251,575
Balance at the ending (in shares) at Dec. 31, 2023	16,308					16,308

DEBT OBLIGATIONS

12 Months Ended

Dec. 31, 2023

DEBT OBLIGATIONS

DEBT OBLIGATIONS

7. DEBT OBLIGATIONS

Debt obligations consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Long-term Debt
Revolving Credit Facility, long-term (1)	$	210,120	$	227,060
Unamortized debt issuance costs		(325)		(625)
Finance lease obligations – noncurrent		8,607		9,019
Long-term debt	$	218,402	$	235,454

(1)	The effective rate of the Revolving Credit Facility is 4.96% at December 31, 2023 including the impact of the Company's interest rate swaps.

Amended Revolving Credit Facility

The Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”), dated as of August 23, 2022, includes a $280 million revolving credit facility (the “Amended Revolving Facility”), increased from $225 million in the previous credit agreement. Additionally, the referenced index was amended to be the Term Standard Overnight Financing Rate (“SOFR”), whereas the previous credit agreement utilized the London Interbank Offering Rate (LIBOR) as the referenced interest rate. The Amended Credit Agreement eliminates the previous $75 million accordion feature and maintains the original maturity date of February 2025.

As indicated in Note 15, Subsequent Events, the Company entered into the Third Amended and Restated Credit Agreement dated March 1, 2024.

Borrowings under the Amended Revolving Facility bear interest at an annual rate equal to the Adjusted SOFR (as defined in the Amended Credit Agreement) which is subject to a floor of 0.00% plus an appicable rate ranging from 1.00% to 2.25% (1.625% as of December 31, 2023) based on the Company’s ratio of total funded indebtedness to consolidated trailing twelve-month EBITDA (the “Total Leverage Ratio”). A credit spread adjustment of 0.10% to 0.275% is also carried on the Amended Revolving Facility. In addition, the Company is required to pay a commitment fee of between 0.10% and 0.275% annually 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 includes covenants and restrictions that limit the Company’s ability to incur additional indebtedness, make certain investments, create, incur or assume certain liens, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the Amended Credit Agreement, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The Amended Credit Agreement contains financial covenants that require that the Company maintain a minimum interest coverage ratio of at least 3.0 to 1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 3.5 to 1.0 ratio; provided that the Company may elect to temporarily increase the Leverage Ratio by 0.5x during the twelve-month period following a material acquisition under the Amended Credit Agreement (“acquisition leverage increase”), subject to certain exceptions. The Company was in compliance with all covenants at December 31, 2023 as well as at each quarter end during 2023.

As of December 31, 2023, the unused Amended Revolving Facility was $69,880. The amount available to borrow may be reduced based upon the Company’s debt and EBITDA levels, which impacts its covenant calculations.

Other

The China Credit Facility provides credit of $1,450 (Chinese Renminbi 10,000) (“the China Facility”). The China Facility was a demand revolving facility used for working capital and capital equipment needs at the Company’s China operations. There were no borrowings under the China Facility during 2023 or 2022. The Company closed the China Facility during 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

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,
	2023		2022		2021
Domestic	$	18,630	$	7,707	$	10,642
Foreign		11,070		15,974		12,471
Income before income taxes	$	29,700	$	23,681	$	23,113

Schedule of components of the total income tax provision (benefit)

Components of the total income tax provision (benefit) are as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2023		2022		2021
Current provision
Domestic	$	7,805	$	5,903	$	1,866
Foreign		2,834		4,111		3,288
Total current provision		10,639		10,014		5,154
Deferred benefit
Domestic		(4,087)		(3,915)		649
Foreign		(949)		193		(6,784)
Total deferred benefit		(5,036)		(3,722)		(6,135)
Income tax provision (benefit)	$	5,603	$	6,292	$	(981)

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


	For the year ended
	December 31,		December 31,		December 31,
	2023		2022		2021
Tax provision, computed at statutory rate	21.0	%	21.0	%	21.0	%
State tax, net of federal impact	1.7	%	1.3	%	2.2	%
Change in valuation allowance	(1.5)	%	(0.1)	%	7.2	%
Effect of foreign tax rate differences	1.9	%	3.9	%	3.9	%
Section 162(m) compensation	2.4	%	3.1	%	3.0	%
R&D Credit and incentives	(6.1)	%	(3.9)	%	(2.8)	%
Effect of Tax Cuts and Jobs Act	0.3	%	0.1	%	1.2	%
Subpart F income	0.0	%	(0.1)	%	(1.0)	%
Investment tax credits	0.0	%	0.0	%	(5.6)	%
Net operating loss carryforwards	0.0	%	0.0	%	(37.2)	%
Unrecognized tax benefits	(0.7)	%	0.0	%	4.9	%
Other	(0.1)	%	1.3	%	(1.0)	%
Provision for income taxes	18.9	%	26.6	%	(4.2)	%

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,
	2023		2022
Noncurrent deferred tax assets:
Employee benefit plans	$	2,241	$	2,122
Net operating loss and tax credit carryforwards		7,277		8,277
Accrued expenses and reserves		2,494		1,672
Research and development costs		8,363		4,520
Other		502		328
Total noncurrent deferred tax assets		20,877		16,919
Valuation allowance		(2,648)		(3,031)
Net noncurrent deferred tax assets:	$	18,229	$	13,888

Net noncurrent deferred tax liabilities:
Property and equipment	$	2,949	$	3,187
Goodwill and intangibles		10,754		10,944
Interest rate swap derivatives		1,019		1,678
Other		84		142
Total noncurrent deferred tax liabilities	$	14,806	$	15,951

Net deferred tax asset/(deferred tax liability)	$	3,423	$	(2,063)

Presented as follows:
Noncurrent deferred income tax assets	$	7,760	$	4,199
Noncurrent deferred income tax liabilities		(4,337)		(6,262)
Net deferred tax asset (liability)	$	3,423	$	(2,063)

Schedule of operating loss and tax credit gross carryforwards

As of December 31, 2023, the Company has the following gross carryforwards available (in thousands):


			Amount
Jurisdiction	Tax Attribute		(in thousands)	Begin to expire
U.S. State	Net Operating Losses ⁽¹⁾	$	8,597	2024
International	Net Operating Losses - Unlimited Carryforward ⁽¹⁾	$	20,059	No expiration
U.S. Federal	Foreign Tax Credits	$	1,002	2028
International	Investment Tax Credits	$	919	2030
U.S. Federal	R&D Tax Credits	$	38	2036

(1)

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

Schedule of changes to the unrecognized tax benefit

The summary of changes to the unrecognized tax benefit for the year ended December 31, 2023 is as follows (in thousands):


	December 31,		December 31,		December 31,
	2023		2022		2021
Beginning balance	$	786	$	1,057	$	—
Additions from tax legislation changes for net operating loss carryforwards		—		—		1,125
Reductions related to the lapse of the statute of limitations		(207)		(192)		(68)
Effect of foreign currency translation		7		(79)		—
Ending balance	$	586	$	786	$	1,057

LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
LEASES
Options to terminate the leases	true
Operating lease option to terminate period	30 days
Fixed operating lease expense	$ 6,748	$ 5,507
Variable operating lease expense	646	187
Short-term lease expense	1,375	1,246
Total operating lease expense	8,769	6,940
Supplemental cash flow information related to the operating leases
Cash paid for operating leases	5,765	5,191
Cash paid for interest on finance lease obligations	376	736
Assets acquired under operating leases	6,517	9,592
Assets acquired under finance leases		9,471
Operating lease assets obtained in acquisitions	224	5,053
Lease assets and liabilities
Finance lease assets	$ 8,208
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net
Finance lease obligations, current	$ 412	$ 377
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities, Current	Accrued Liabilities, Current
Finance lease obligations - noncurrent	$ 8,607	$ 9,019
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Long-term Debt, Excluding Current Maturities	Long-term Debt, Excluding Current Maturities
Weighted average remaining lease term (in years)	6 years	6 years 9 months
Weighted average discount rate	4.25%	3.66%
Maturity of the operating lease liabilities
2024	$ 6,085
2025	4,965
2026	4,365
2027	3,726
2028	2,818
Thereafter	5,861
Total undiscounted cash flows	27,820
Less: present value discount	(3,146)
Total lease liabilities	24,674
Maturity of the financing lease liabilities
2024	815
2025	831
2026	848
2027	867
2028	886
Thereafter	7,883
Total undiscounted cash flows	12,130
Less: present value discount	(3,111)
Total lease liabilities	$ 9,019

REVENUE RECOGNITION - Disaggregation of Revenue (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Number of reportable segment \| segment	1
Revenues	$ 578,634	$ 502,988	$ 403,516
Industrial
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	257,004	193,290	135,440
Vehicle
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	133,488	130,436	129,835
Medical
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	84,515	85,113	86,129
Aerospace & Defense
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	78,175	70,193	31,746
Other
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	25,452	23,956	20,366
United States
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	399,224	337,768	239,528
Europe
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	150,608	130,018	129,414
Asia-Pacific
Reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions
Revenues	$ 28,802	$ 35,202	$ 34,574

STOCK-BASED COMPENSATION PLANS - Employee Stock Ownership Plan (Details) - ESOP $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) h / yr	Dec. 31, 2022 USD ($)	Dec. 31, 2021 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 \| $	$ 1,591	$ 1,248	$ 1,206

INCOME TAXES - Tax Effects and Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Components of income before income taxes
Domestic	$ 18,630	$ 7,707	$ 10,642
Foreign	11,070	15,974	12,471
Income before income taxes	29,700	23,681	23,113
Current provision
Domestic	7,805	5,903	1,866
Foreign	2,834	4,111	3,288
Total current provision	10,639	10,014	5,154
Deferred provision
Domestic	(4,087)	(3,915)	649
Foreign	(949)	193	(6,784)
Total deferred (benefit) provision	(5,036)	(3,722)	(6,135)
Income tax provision (benefit)	$ 5,603	$ 6,292	$ (981)
Differences in the provision (benefit) 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)	1.70%	1.30%	2.20%
Change in valuation allowance (as a percent)	(1.50%)	(0.10%)	7.20%
Effect of foreign tax rate differences (as a percent)	1.90%	3.90%	3.90%
Section 162(m) compensation	2.40%	3.10%	3.00%
R&D Credits (as a percent)	(6.10%)	(3.90%)	(2.80%)
Effect of Tax Cuts and Jobs Act (as a percent)	0.30%	0.10%	1.20%
Subpart F income (as a percent)	0.00%	(0.10%)	(1.00%)
Investment tax credits (as a percent)	(0.00%)	(0.00%)	(5.60%)
Net operating loss carryforwards (as a percent)	(0.00%)	(0.00%)	(37.20%)
Unrecognized tax benefits (as a percent)	(0.70%)	0.00%	4.90%
Other (as a percent)	(0.10%)	1.30%	(1.00%)
Provision for income taxes (as a percent)	18.90%	26.60%	(4.20%)
Noncurrent deferred tax assets:
Employee benefit plans	$ 2,241	$ 2,122
Net operating loss and tax credit carryforwards	7,277	8,277
Accrued expenses and reserves	2,494	1,672
Research and development costs	8,363	4,520
Other	502	328
Total noncurrent deferred tax assets	20,877	16,919
Valuation allowance	(2,648)	(3,031)
Net noncurrent deferred tax assets:	18,229	13,888
Net noncurrent deferred tax liabilities:
Property and equipment	2,949	3,187
Goodwill and intangibles	10,754	10,944
Interest rate swap derivatives	1,019	1,678
Other	84	142
Total noncurrent deferred tax liabilities	14,806	15,951
Noncurrent deferred income tax assets	7,760	4,199
Noncurrent deferred income tax liabilities	(4,337)	(6,262)
Net deferred tax asset/(deferred tax liability)	3,423
Net deferred tax asset/(deferred tax liability)		(2,063)
Foreign Tax Credits
Net noncurrent deferred tax liabilities:
Tax Credits Carryforwards		$ 92
Domestic
Net noncurrent deferred tax liabilities:
Net Operating Losses	8,597
Domestic \| Foreign Tax Credits
Net noncurrent deferred tax liabilities:
Tax Credits Carryforwards	1,002
Domestic \| R&D Tax Credits
Net noncurrent deferred tax liabilities:
Tax Credits Carryforwards	38
International
Net noncurrent deferred tax liabilities:
Net Operating Losses - Unlimited Carryforward	20,059
International \| Investment Tax Credits
Net noncurrent deferred tax liabilities:
Tax Credits Carryforwards	$ 919

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, plant and equipment
Property, plant and equipment, gross	$ 160,624	$ 151,860
Less accumulated depreciation	(93,161)	(83,220)
Property, plant and equipment, net	67,463	68,640
Depreciation expense	12,755	12,676	$ 11,862
Land
Property, plant and equipment
Property, plant and equipment, gross	973	965
Building and improvements
Property, plant and equipment
Property, plant and equipment, gross	$ 26,201	$ 25,093
Building and improvements \| Minimum
Property, plant and equipment
Useful lives	5 years	5 years
Building and improvements \| Maximum
Property, plant and equipment
Useful lives	39 years	39 years
Machinery, equipment, tools and dies
Property, plant and equipment
Property, plant and equipment, gross	$ 99,711	$ 89,144
Machinery, equipment, tools and dies \| Minimum
Property, plant and equipment
Useful lives	3 years	3 years
Machinery, equipment, tools and dies \| Maximum
Property, plant and equipment
Useful lives	15 years	15 years
Construction work in progress
Property, plant and equipment
Property, plant and equipment, gross	$ 9,300	$ 14,197
Furniture, fixtures and other
Property, plant and equipment
Property, plant and equipment, gross	$ 24,439	$ 22,461
Furniture, fixtures and other \| Minimum
Property, plant and equipment
Useful lives	3 years	3 years
Furniture, fixtures and other \| Maximum
Property, plant and equipment
Useful lives	10 years	10 years

DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Other long-term liabilities
Deferred compensation arrangements
Amount accrued included in other long-term liabilities	$ 4,305	$ 3,870

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INCOME TAXES
Foreign tax credits		$ 910
Income tax expense (benefit)	$ 5,603	6,292	$ (981)
Reduction in unrecognized tax benefit	207	192	68
Result of the lapse in the statute of limitations	200
Unrecognized tax benefits	600
Other unrecognized tax benefits	586	786	1,057
Interest and penalties related to unrecognized tax positions	0	0	0
Deferred tax liabilities		2,063
Foreign tax credits
INCOME TAXES
Tax credits dividend paid		92
New Zealand \| Foreign tax credits
INCOME TAXES
Reduction in unrecognized tax benefit			68
Foreign
INCOME TAXES
Provision for income taxes	1,328
Foreign withholding taxes remitted			236
Foreign \| New Zealand
INCOME TAXES
Net operating loss carryforwards			8,328
Income tax expense (benefit)			1,125
Foreign \| German
INCOME TAXES
Foreign withholding taxes remitted			$ 1,493
Deferred tax liabilities		$ 0
States
INCOME TAXES
Provision for income taxes	$ 318

DEBT OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands		1 Months Ended	12 Months Ended
DEBT OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands	Mar. 01, 2024 USD ($)	Feb. 29, 2024	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2022 USD ($)
DEBT OBLIGATIONS
Unamortized debt issuance costs				$ (625)		$ (325)
Finance lease obligations - noncurrent				$ 9,019		$ 8,607
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]				Long-term debt	Long-term debt	Long-term debt
Long-term debt				$ 235,454		$ 218,402
Revolving Credit Facility
DEBT OBLIGATIONS
Revolving Credit Facility, long-term				227,060		$ 210,120
Effective rate (as a percent)					4.96%	4.96%
Amended Revolving Facility
DEBT OBLIGATIONS
Maximum borrowing capacity				280,000			$ 225,000
Available borrowing capacity				75,000
Minimum interest coverage ratio			3.00%
Leverage ratio			3.50%
Increase in leverage ratio			0.50%
Unused amount of credit facility						$ 69,880
Amended Revolving Facility \| Minimum
DEBT OBLIGATIONS
Adjusted applicable margin (as a percent)			0.10%
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)			0.10%
Amended Revolving Facility \| Maximum
DEBT OBLIGATIONS
Adjusted applicable margin (as a percent)			0.275%
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)			0.275%
Amended Revolving Facility \| Base Rate
DEBT OBLIGATIONS
Applicable margin (as a percent)			0.00%
Amended Revolving Facility \| Adjusted SOFR
DEBT OBLIGATIONS
Applicable margin (as a percent)			1.625%
Amended Revolving Facility \| Adjusted SOFR \| Minimum
DEBT OBLIGATIONS
Applicable margin (as a percent)			1.00%
Amended Revolving Facility \| Adjusted SOFR \| Maximum
DEBT OBLIGATIONS
Applicable margin (as a percent)			2.25%
Amended Revolving Facility \| Subsequent Event
DEBT OBLIGATIONS
Maximum borrowing capacity	$ 280,000
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)	0.275%
Amended Revolving Facility \| Subsequent Event \| Base Rate \| Minimum
DEBT OBLIGATIONS
Applicable margin (as a percent)		0.25%
Amended Revolving Facility \| Subsequent Event \| Base Rate \| Maximum
DEBT OBLIGATIONS
Applicable margin (as a percent)	1.50%
Amended Revolving Facility \| Subsequent Event \| Adjusted SOFR \| Minimum
DEBT OBLIGATIONS
Applicable margin (as a percent)	1.25%
Amended Revolving Facility \| Subsequent Event \| Adjusted SOFR \| Maximum
DEBT OBLIGATIONS
Applicable margin (as a percent)		2.50%
China Credit Facility
DEBT OBLIGATIONS
Maximum borrowing capacity					¥ 10,000	$ 1,450
Average outstanding borrowings			$ 0	$ 0

DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

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.

Beginning in 2021, the Company began entering into foreign currency contracts with 30-day maturities to hedge its short-term balance sheet exposure, primarily intercompany, that are denominated in currencies (Euro, Mexican Peso, New Zealand Dollar, Chinese Renminbi, Swedish Krona, and Canadian Dollar) other than the subsidiary’s functional currency and are adjusted to current values using period-end exchange rates. The resulting gains or losses are recorded in other (income) expense, net in the consolidated statements of income and comprehensive income. To minimize foreign currency exposure, the Company had foreign currency contracts with notional amounts of $22,193 and $18,891 at December 31, 2023 and 2022, respectively. The foreign currency contracts are recorded in the consolidated balance sheets at fair value and resulting gains or losses are recorded in other expense (income), net in the consolidated statements of income and comprehensive income. During the year ended December 31, 2023, the Company had losses of $281 on foreign currency contracts which is included in other expense (income), net and generally offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other expense (income), net.

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 March 2020, the Company entered into two interest rate swaps with a combined notional amount of $20,000 that increased to $60,000 in March 2022 and mature in December 2024. In March 2022 the Company entered into an additional interest rate swap with a notional amount of $40,000 that matures in December 2026. As of December 31, 2023, the Company holds notional amounts of $100,000 in interest rate derivatives.

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 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

The Company estimates that an additional $3,367 will be reclassified as a reduction to interest expense over the next twelve months. Additionally, the Company does not use derivatives for trading or speculative purposes.

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, 2023 and 2022 (in thousands):


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	December 31,		December 31,
hedging instruments	Location	2023		2022
Foreign currency contracts	Prepaid expenses and other assets	$	54	$	48
Interest rate swaps	Prepaid expenses and other assets		2,254		—
Interest rate swaps	Other long-term assets		2,177		7,236
		$	4,485	$	7,284

The table below presents the effect of cash flow hedge accounting on other comprehensive (loss) income (OCI) for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Amount of pre-tax (gain) loss recognized in OCI
	on derivatives
Derivatives in cash flow hedging relationships	Year ended December 31,
	2023		2022		2021
Interest rate swaps	$	(935)	$	7,621	$	1,180




Location of gain (loss) reclassified	Amount of pre-tax gain (loss) reclassified from accumulated OCI into income
from accumulated OCI into income	Year ended December 31,
	2023		2022		2021
Interest expense	$	3,814	$	532	$	(929)

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, 2023, 2022 and 2021 (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	2023		2022		2021
Interest rate swaps	Interest Expense	$	12,383	$	7,692	$	3,236

The Company does not have any offsetting of derivatives as of December 31, 2023 and 2022.

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.

ACQUISITIONS (Details) $ / shares in Units, $ in Thousands					1 Months Ended	12 Months Ended
ACQUISITIONS (Details) $ / shares in Units, $ in Thousands	Sep. 22, 2023 USD ($)	Jun. 17, 2022 USD ($) $ / shares shares	May 30, 2022 USD ($)	Dec. 30, 2021 USD ($) payment	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($) payment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	May 24, 2022
ACQUISITIONS
Goodwill						$ 131,338	$ 126,366	$ 106,633
Cash paid for acquisition						11,004	44,101	47,254
Increase (decrease) in goodwill						1,356	291
Assets Acquired and Liabilities Assumed
Earnings						24,097	17,389	24,094
Revenues						578,634	502,988	403,516
Amortization of intangible assets						12,313	11,169	6,245
Goodwill						131,338	126,366	106,633
Pro forma Condensed Combined Financial Information
Revenues							513,803	470,589
Income before income taxes							28,032	$ 22,883
Other long-term liabilities
ACQUISITIONS
Fair value of contingent consideration						$ 270	4,100
Customer lists
Assets Acquired and Liabilities Assumed
Estimated Life						14 years 3 months 18 days
Trade name
Assets Acquired and Liabilities Assumed
Estimated Life						13 years 10 months 24 days
FPH Group
ACQUISITIONS
Business acquisition percentage of voting interests acquired			100.00%
Purchase price			$ 41,316
Intangible assets			22,611
Goodwill			15,840
Decrease to inventories						$ 1,080
Increase to purchase price						276
Increase to goodwill						1,356
Assets Acquired and Liabilities Assumed
Cash and cash equivalents			1,755
Trade receivables			3,100
Inventories			3,496
Other assets, net			174
Property, plant, and equipment			624
Operating lease assets			4,165
Intangible assets			22,611
Goodwill			15,840
Other current liabilities			(1,577)
Deferred revenue			(776)
Operating lease liabilities			4,165
Net deferred income tax liabilities			(3,931)
Net purchase price			41,316
FPH Group \| Technology
ACQUISITIONS
Intangible assets			5,731
Assets Acquired and Liabilities Assumed
Intangible assets			$ 5,731
Estimated Life			10 years
FPH Group \| Customer lists
ACQUISITIONS
Intangible assets			$ 16,173
Assets Acquired and Liabilities Assumed
Intangible assets			$ 16,173
Estimated Life			12 years
FPH Group \| Trade name
ACQUISITIONS
Intangible assets			$ 707
Assets Acquired and Liabilities Assumed
Intangible assets			$ 707
Estimated Life			10 years
ThinGap and Airex
ACQUISITIONS
Purchase price		$ 16,527				16,618
Cash paid for acquisition		8,224
Adjustments to purchase price		91				$ 0
Increase in deferred revenue		181
Increase (decrease) in goodwill		272
Shares issued for acquisition		$ 8,303
Number of share issued for consideration \| shares		376,500
Shares subject to indemnification holdback \| shares		29,631
Stock price \| $ / shares		$ 22.05
ThinGap and Airex \| Technology
ACQUISITIONS
Intangible assets		$ 2,000
Assets Acquired and Liabilities Assumed
Intangible assets		$ 2,000
Estimated Life		12 years 6 months
ThinGap and Airex \| Customer lists
ACQUISITIONS
Intangible assets		$ 3,800
Assets Acquired and Liabilities Assumed
Intangible assets		$ 3,800
Estimated Life		10 years
ThinGap and Airex \| Trade name
ACQUISITIONS
Intangible assets		$ 200
Assets Acquired and Liabilities Assumed
Intangible assets		$ 200
Estimated Life		10 years
ThinGap
ACQUISITIONS
Business acquisition percentage of voting interests acquired									100.00%
Airex LLC
ACQUISITIONS
Business acquisition percentage of voting interests acquired		100.00%
Spectrum Controls
ACQUISITIONS
Number of remaining payments \| payment				2		1
Amount payable at each payment				$ 12,500	$ 12,500
Percentage of remaining consideration in cash				50.00%	50.00%
Percentage of remaining consideration in stock				50.00%	50.00%
Spectrum Controls \| Accrued liabilities.
ACQUISITIONS
Amount payable at each payment						$ 12,500	12,500
Spectrum Controls \| Other long-term liabilities
ACQUISITIONS
Amount payable at each payment							$ 12,277
Sierramotion Inc
ACQUISITIONS
Business acquisition percentage of voting interests acquired	100.00%
Purchase price	$ 8,400
Contingent Consideration Payable	2,000
Intangible assets	4,100
Goodwill	2,876
Assets Acquired and Liabilities Assumed
Intangible assets	4,100
Goodwill	$ 2,876

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

Credit Agreement Amendment

On March 1, 2024, the Company entered into a Third Amended and Restated Credit Agreement (the “2024 Amended Credit Agreement”) for a $280 million revolving credit facility (the “2024 Amended Revolving Facility”). The significant changes made to the Company’s existing credit facility by the 2024 Amended Credit Agreement include: i) providing for a $50 million accordion amount and ii) extending the term to March 1, 2029. Additionally, the Company has entered into a $150 million fixed-rate private shelf facility (the “2024 Note Payable Agreement”) under which no note borrowings have occurred to date. These agreements, collectively, are referred to as the “2024 Credit and Note Payable Agreements”.

Borrowings under the 2024 Amended Revolving Facility will bear interest at the Term SOFR Rate (as defined in the 2024 Amended Credit Agreement) plus a margin of 1.25% to 2.50% or the Alternative Base Rate (as defined in the Amended Credit Agreement) plus a margin of 0.25% to 1.50%, in each case depending on the Company’s ratio of Funded Indebtedness (as defined in the 2024 Amended Credit Agreement) to Consolidated EBITDA (the “Leverage Ratio”). In addition, the Company is required to pay a commitment fee of between 0.15% and 0.325% quarterly (currently 0.275%) on the unused portion of the 2024 Amended Revolving Facility, also based on the Company’s Leverage Ratio. The 2024 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.

Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0:1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 4.25:1.0 through December 31, 2024 or greater than 3.75 to 1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio to by 0.5:1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, are subject to certain exceptions.

The 2024 Credit and Note Payable Agreements also include customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, if any representation or warranty made by the Company is false or misleading in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, the occurrence of certain ERISA events, the invalidity of the loan documents or a change in control of the Company. The amounts outstanding under the Amended Revolving Facility may be accelerated upon certain events of default.

Acquisition

On January 11, 2024, the Company acquired 100% of the outstanding shares of SNC Manufacturing Co., Inc. (a Wisconsin corporation) and Acutran de Mexico, S.A. de C.V. (a Mexican corporation), (collectively “SNC”), a premier designer and global manufacturer of electrical transformers serving blue-chip customers in defense, industrial automation, alternative power generation and energy, including electric utilities and renewable energy. The purchase price consisted of $20.0 million in cash paid at closing, subject to customary post-closing working capital adjustments. The Company expects to determine the preliminary purchase price allocation prior to the end of the first quarter of 2024.

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Effective August 23, 2023, Allied Motion Technologies Inc. (“Allied Motion”) changed its name to Allient Inc. (“Allient” or the “Company”). In conjunction with the name change, Allient’s ticker symbol has changed from “AMOT” to “ALNT”. The name change reflects the Company’s evolution of its business to transform from a products-based business in motion control to a solutions-oriented company that addresses its customers’ requirements for Motion, Controls and Power technologies for a multitude of applications.

The Company is engaged in the business of designing, manufacturing, and selling precision motion, control, power and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense 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, net assets acquired, and liabilities assumed are recorded 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 2023 and 2022 was as follows (in thousands):


	December 31, 2023		December 31, 2022
Beginning balance	$	1,192	$	506
Additional reserves		267		803
Write-offs		(225)		(107)
Effect of foreign currency translation		6		(10)
Ending balance	$	1,240	$	1,192

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, 2023		December 31, 2022
Parts and raw materials	$	87,381	$	89,100
Work-in-process		11,456		11,686
Finished goods		18,849		16,322
	$	117,686	$	117,108

Property, Plant and Equipment

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


		December 31,		December 31,
	Useful lives	2023		2022
Land		$	973	$	965
Building and improvements	5 - 39 years		26,201		25,093
Machinery, equipment, tools and dies	3 - 15 years		99,711		89,144
Construction in progress			9,300		14,197
Furniture, fixtures and other	3 - 10 years		24,439		22,461
			160,624		151,860
Less accumulated depreciation			(93,161)		(83,220)
Property, plant, and equipment, net		$	67,463	$	68,640

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 $12,755, $12,676 and $11,862 in 2023, 2022 and 2021, respectively.

Intangible Assets

Intangible assets, other than goodwill, are initially recorded at fair value 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 recorded at their carrying amounts 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. 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, 2023, 2022 or 2021.

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 its 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, 2023, the Company performed its 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 goodwill impairment charges for the years ended December 31, 2023, 2022 or 2021.

Other Long-Term Assets

Other long-term assets include the noncurrent portion of interest rate derivatives of $2,177 that the Company has entered into in response to the variable interest rate exposure on long-term debt, as well as 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 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 2023, 2022 and 2021 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2023		2022		2021
Beginning balance	$	2,160	$	1,869	$	1,571
Warranty reserves acquired		—		45		15
Provision		(296)		(66)		543
Warranty expenditures		243		409		(204)
Effect of foreign currency translation		32		(97)		(56)
Ending balance	$	2,139	$	2,160	$	1,869

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Compensation and fringe benefits	$	17,251	$	15,818
Accrued business acquisition consideration		12,638		12,500
Warranty reserve		2,139		2,160
Income taxes payable		2,483		3,934
Operating lease liabilities – current		5,142		4,224
Finance lease obligations – current		412		377
Contract liabilities		2,137		4,807
Contingent consideration – current		7,720		—
Other accrued expenses		6,566		4,301
	$	56,488	$	48,121

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 other expense (income), net 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 Earnings per Share

Basic earnings per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding. Diluted earnings 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 potential common shares determined utilizing the treasury stock method.

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



	Year ended December 31,
	2023	2022	2021
Basic weighted average shares outstanding	15,963	15,448	14,413
Dilutive effect of potential common shares	309	503	104
Diluted weighted average shares outstanding	16,272	15,951	14,517

For 2023, 2022 and 2021, the anti-dilutive common shares excluded from the calculation of diluted income per share were 22,000, 15,000, and 2,000, respectively.

Comprehensive Income

The Company’s comprehensive income as reported in the Consolidated Statements of Income and Comprehensive Income includes net income, foreign currency translation adjustments, the net change in cash flow hedges, net of tax, and defined benefit plan liability adjustments, net of tax. The Consolidated Statements of Income and Comprehensive Income and Note 13, Accumulated Other Comprehensive Income, contain additional information on the computation of the Company’s comprehensive income.

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, 2023 and 2022, respectively, by level within the fair value hierarchy (in thousands):


	December 31, 2023
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,859	$	—	$	—
Deferred compensation plan assets		4,305		—		—
Foreign currency hedge contracts		—		54		—
Interest rate swaps, net		—		4,431		—
Contingent consideration		—		—		(7,990)


	December 31, 2022
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,324	$	—	$	—
Deferred compensation plan assets		3,870		—		—
Foreign currency hedge contracts		—		48		—
Interest rate swaps, net		—		7,236		—
Contingent consideration		—		—		(4,100)

The contingent consideration fair value measurement represents amounts in connection with the acquisitions of Sierramotion, which has a maximum amount of $2,000, and ALIO, which does not have a maximum amount. The measurements are based on significant inputs not observable in the market and therefore constitute Level 3 inputs within the fair value hierarchy. The contingent consideration at December 31, 2023 for the acquisition of Sierramotion consists of Company stock and was paid in January 2024 at the maximum amount of $2,000. The contingent consideration at December 31, 2023 for the acquisition of ALIO is paid 50% in Company stock and 50% cash, the current portion of which was $5,720 and has been paid in February 2024. Changes to contingent consideration since December 31, 2022 include a $2,000 increase due to the acquisition of Sierramotion in the current period and an increase of $1,890, which is included in business development in the consolidated statements of income and comprehensive income, of the estimated fair value of the ALIO contingent consideration related to updated inputs to the timing of anticipated earnings of the acquired entity. Of the total contingent consideration payable as of December 31, 2023, $7,720 was paid in January and February 2024 and is included in accrued liabilities and $270 is payable, if earned, in the first half of 2025 and included in other long-term liabilities on the consolidated balance sheet as of December 31, 2023. Contingent consideration of $4,100 is included in other long-term liabilities as of December 31, 2022.

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 and incentives 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").

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 14, 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.

Recent Accounting Developments - Not Yet Adopted

In November 2023, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU relates to required disclosures of certain information about reportable segments. The update adds additional required disclosures on an annual basis as well as expands the requirements for quarterly disclosures. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This enhances the disclosures around rate reconciliation, income taxes paid, and other related topics. The standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements.

STOCK-BASED COMPENSATION PLANS - Defined Contribution Plan and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
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	$ 2,590	$ 2,146	$ 1,672
Dividends
Dividends paid (in dollars per share)	$ 0.115	$ 0.100	$ 0.095
Total dividends paid	$ 1,826	$ 1,536	$ 1,371
Maximum
Defined Contribution Plan
Specified percentage of employee contribution upon which employer matches contribution	4.00%	4.00%	4.00%

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

12 Months Ended

Dec. 31, 2023

ACCUMULATED OTHER COMPREHENSIVE INCOME

Schedule of accumulated other comprehensive (Loss) income ("AOCI")

Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the years ended December 31, 2023 and 2022 is comprised of the following:


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2022	$	(594)	$	7,310	$	(1,754)	$	(16,925)	$	(11,963)
Unrealized gain (loss) on cash flow hedges		—		935		(200)		—		735
Amounts reclassified from AOCI		—		(3,814)		948		—		(2,866)
Pension adjustments, net of tax		250		—		—		—		250
Foreign currency translation gain		—		—		—		3,669		3,669
At December 31, 2023	$	(344)	$	4,431	$	(1,006)	$	(13,256)	$	(10,175)


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2021	$	(863)	$	221	$	(41)	$	(7,409)	$	(8,092)
Unrealized gain (loss) on cash flow hedges		—		7,621		(1,782)		—		5,839
Amounts reclassified from AOCI		—		(532)		69		—		(463)
Pension adjustments, net of tax		269		—		—		—		269
Foreign currency translation loss		—		—		—		(9,516)		(9,516)
At December 31, 2022	$	(594)	$	7,310	$	(1,754)	$	(16,925)	$	(11,963)

ACQUISITIONS

12 Months Ended

Dec. 31, 2023

ACQUISITIONS

ACQUISITIONS

2. ACQUISITIONS

Sierramotion

On September 22, 2023, the Company acquired 100% of the ownership interest in Sierramotion Inc. (“Sierramotion”), a company headquartered in California, that specializes in designing and engineering turn-key motion components and mechatronic solutions for robotic, medical, industrial, defense, semiconductor, and other precision applications. The preliminary purchase price for Sierramotion of $8.4 million includes $2.0 million of contingent consideration payable which was paid in January 2024 (Note 1) and at closing consisted of a combination of cash and Company stock. The intangible assets of $4,100 and goodwill of $2,876 are expected to be deductible for tax purposes. The preliminary purchase price allocation is subject to adjustments based on a determination of certain tax matters. Transaction costs for the acquisition were not material. The operating results of this acquisition are included in the consolidated financial statements beginning on the acquisition date and the revenue and earnings in the current year interim periods presented are not material. The revenue and earnings of Sierramotion included within the consolidated statement of income and comprehensive income for the year ended December 31, 2023 is not material.

FPH

On May 30, 2022, the Company acquired 100% of the direct and indirect legal and beneficial ownership of the shares of FPH Group Inc., a corporation incorporated pursuant to the laws of the Province of Ontario and the membership interests of Transtar International, LLC, a Michigan limited liability company, collectively “FPH”. The final purchase price for FPH was $41,316, including a measurement period adjustment during 2023, resulting in a decrease to inventories of $1,080, an increase to purchase price of $276, and an increase to goodwill of $1,356. The final allocation of the purchase price paid for FPH is based on fair values of the assets acquired and liabilities assumed of FPH and is as follows (in thousands):


Cash and cash equivalents	$	1,755
Trade receivables		3,100
Inventories		3,496
Other assets, net		174
Property, plant, and equipment		624
Operating lease assets		4,165
Intangible assets		22,611
Goodwill		15,840
Other current liabilities		(1,577)
Deferred revenue		(776)

Operating lease liabilities		(4,165)
Net deferred income tax liabilities		(3,931)
Net purchase price	$	41,316

The intangible assets acquired consist of customer lists of $16,173, technology of $5,731, and a trade name of $707, which are being amortized over 12, 10 and 10 years, respectively.

ThinGap and Airex

On May 24, 2022, the Company acquired 100% of the outstanding stock of ThinGap, Inc. (“ThinGap”), a privately-owned California headquartered developer and manufacturer of high performance, zero cogging slotless motors for use in aerospace, defense, and medical applications that require precise performance in a compact, yet high-torque-to-volume solutions.

On June 17, 2022, the Company acquired 100% of the membership interests of Airex, LLC (“Airex”), a privately-owned New Hampshire headquartered developer of high precision electromagnetic components and solutions for the aerospace and defense, life sciences, semiconductor, and commercial industrial applications. The purchase price, collectively, for ThinGap and Airex was $16,618.

The initial purchase price, collectively, for ThinGap and Airex was $16,527, comprised of $8,224 in cash funded through borrowings under the Amended Revolving Credit Facility and $8,303 in Company stock (376,500 shares, of which 29,631 shares are subject to an indemnification holdback, at a weighted average stock price of $22.05). Subsequent to the acquisition dates, the Company made measurement period adjustments to the initial purchase price allocation due to adjustments to closing working capital which resulted in an increase of purchase price of $91, an increase in deferred revenue of $181, and an increase to goodwill of $272. There were no measurement period adjustments during 2023 related to the ThinGap and Airex acquisitions. The purchase price allocations of each of these acquisitions are final.

The intangible assets acquired consist of customer lists of $3,800, technology of $2,000 and trade names of $200, which are being amortized over weighted average useful lives of 10, 12.5 and 10 years, respectively. Goodwill generated in the above acquisitions is related to the assembled workforce, synergies with Allient’s other operations that are expected to occur as a result of the combined engineering knowledge, the ability of the operations to integrate products into more fully integrated system solutions and Allient’s ability to utilize ThinGap and Airex management knowledge in providing complementary product offerings to the Company’s customers.

Spectrum Controls

The December 30, 2021 acquisition of Spectrum Controls, Inc. (“Spectrum Controls”) included two deferred acquisition payments of which $12,500 (comprised of 50% cash and 50% Company stock) was paid in January 2023. One remaining payment as of December 31, 2023 of $12,500 was paid in January 2024, comprised of 50% cash and 50% in Company stock. As of December 31, 2023, $12,500 is included in accrued liabilities on the consolidated balance sheet. As of December 31, 2022, $12,500 is included in accrued liabilities and $12,277 is included in other long-term liabilities on the consolidated balance sheet

The estimated fair value of these identifiable intangible assets were based upon discounted cash flow models, which include assumptions such as forecasted cash flows, customer attrition rates, discount rates, and royalty rates. Goodwill generated in the acquisitions are related to the assembled workforce, synergies between Allient’s other operations and the acquired company 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 Allient’s ability to utilize acquired management knowledge in providing complementary product offerings to the Company’s customers.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021.

The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve as a result of these acquisitions. 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.

GOODWILL

12 Months Ended

Dec. 31, 2023

GOODWILL

GOODWILL

4. GOODWILL

The change in the carrying amount of goodwill for 2023 and 2022 is as follows (in thousands):


		December 31,		December 31,
		2023		2022
Beginning balance	$	126,366		106,633
Goodwill acquired		2,876		21,556
Impact of measurement period adjustments of acquisitions (Note 2)		1,356		291
Effect of foreign currency translation		740		(2,114)
Ending balance	$	131,338	$	126,366

The purchase price allocation for Sierramotion is not final as of December 31, 2023. Adjustments to this allocation may result in changes to the amounts recorded for goodwill in future periods. The purchase price allocation was finalized for FPH, ThinGap, and Airex during 2023.

REVENUE RECOGNITION (Tables)

12 Months Ended

Dec. 31, 2023

REVENUE RECOGNITION

Schedule of reconciliation of disaggregated revenue by target market and geography

The Company’s disaggregated revenues are as follows (in thousands):



	Year ended December 31,
Target Market	2023		2022		2021
Industrial	$	257,004	$	193,290	$	135,440
Vehicle		133,488		130,436		129,835
Medical		84,515		85,113		86,129
Aerospace & Defense		78,175		70,193		31,746
Distribution and Other		25,452		23,956		20,366
Total	$	578,634	$	502,988	$	403,516



	Year ended December 31,
Geography	2023		2022		2021
North America (primarily U.S.)	$	399,224	$	337,768	$	239,528
Europe		150,608		130,018		129,414
Asia-Pacific		28,802		35,202		34,574
Total	$	578,634	$	502,988	$	403,516

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,
	2023		2022
Contract liabilities in accrued liabilities	$	2,137	$	4,807
Contract liabilities in other long-term liabilities		8		19
	$	2,145	$	4,826

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Schedule of components of operating lease expense

For the years ended December 31, 2023 and 2022, the components of operating lease expense were as follows (in thousands):


	December 31,			December 31,
	2023			2022
Fixed operating lease expense	$	6,748	$	5,507
Variable operating lease expense		646		187
Short-term lease expense		1,375		1,246
	$	8,769	$	6,940

Schedule of supplemental cash flow information related to the operating leases

Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2023 and 2022 are as follows (in thousands):


	December 31,		December 31,
	2023		2022
Cash paid for operating leases	$	5,765	$	5,191
Cash paid for interest on finance lease obligations	$	376	$	736
Assets acquired under operating leases	$	6,517	$	9,592
Assets acquired under finance leases	$	—	$	9,471
Operating lease assets obtained in acquisitions	$	224	$	5,053

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, 2023 and 2022:


	December 31,
	2023			2022
Weighted average remaining lease term (in years)		6.00			6.75
Weighted average discount rate		4.25	%		3.66	%

Schedule of maturity of the operating lease liabilities

The following table presents the maturity of the Company’s operating and finance lease liabilities as of December 31, 2023 (in thousands):


	Operating Leases		Finance Leases
2024	$	6,085	$	815
2025		4,965		831
2026		4,365		848
2027		3,726		867
2028		2,818		886
Thereafter		5,861		7,883
Total undiscounted cash flows	$	27,820	$	12,130
Less: present value discount		(3,146)		(3,111)
Total lease liabilities	$	24,674	$	9,019

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Accounting - Narratives (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Feb. 29, 2024	Jan. 31, 2024	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Contingent consideration-current	$ 7,720	$ 5,720
Other long-term liabilities
Restructuring Cost and Reserve [Line Items]
Contingent consideration	270			$ 4,100
Accrued liabilities
Restructuring Cost and Reserve [Line Items]
Contingent consideration-current	7,720
Sierramotion Inc
Restructuring Cost and Reserve [Line Items]
Contingent consideration fair value measurement, acquisition	2,000		$ 2,000
Increase in contingent consideration due to current period acquisition	$ 2,000
ALIO
Restructuring Cost and Reserve [Line Items]
Contingent consideration settled in company stock (as percentage)	50.00%
Contingent consideration settled in cash (as percentage)	50.00%
Increase in contingent consideration due to current period acquisition	$ 1,890

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

10. LEASES

The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles. 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.

The Company’s finance lease obligations relate to a manufacturing facility. As of December 31, 2023, finance lease assets of $8,208 are included in property, plant, and equipment, net, finance lease obligations of $412 are included in accrued liabilities, and $8,607 are included in long-term debt on the consolidated balance sheet.

For the years ended December 31, 2023 and 2022, the components of operating lease expense were as follows (in thousands):


	December 31,			December 31,
	2023			2022
Fixed operating lease expense	$	6,748	$	5,507
Variable operating lease expense		646		187
Short-term lease expense		1,375		1,246
	$	8,769	$	6,940

Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2023 and 2022 are as follows (in thousands):


	December 31,		December 31,
	2023		2022
Cash paid for operating leases	$	5,765	$	5,191
Cash paid for interest on finance lease obligations	$	376	$	736
Assets acquired under operating leases	$	6,517	$	9,592
Assets acquired under finance leases	$	—	$	9,471
Operating lease assets obtained in acquisitions	$	224	$	5,053

The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2023 and 2022:


	December 31,
	2023			2022
Weighted average remaining lease term (in years)		6.00			6.75
Weighted average discount rate		4.25	%		3.66	%

The following table presents the maturity of the Company’s operating and finance lease liabilities as of December 31, 2023 (in thousands):


	Operating Leases		Finance Leases
2024	$	6,085	$	815
2025		4,965		831
2026		4,365		848
2027		3,726		867
2028		2,818		886
Thereafter		5,861		7,883
Total undiscounted cash flows	$	27,820	$	12,130
Less: present value discount		(3,146)		(3,111)
Total lease liabilities	$	24,674	$	9,019

The Company leases certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made payments to the lessor of $1,631 and $1,529 during the years ended December 31, 2023 and 2022, respectively. Future minimum lease payments under these leases as of December 31, 2023 are $12,914.

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Accounting (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets (liabilities)
Deferred compensation plan assets	$ 7,425	$ 11,253
Interest rate swaps, net/assets	2,177
Recurring basis \| Level 1
Assets (liabilities)
Pension plan assets	5,859	5,324
Deferred compensation plan assets	4,305	3,870
Recurring basis \| Level 2
Assets (liabilities)
Foreign currency hedge contracts	54	48
Interest rate swaps, net/assets	4,431	7,236
Recurring basis \| Level 3
Assets (liabilities)
Contingent consideration	$ (7,990)	$ (4,100)

LEASES - Related party (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES - Related party (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Lessee, Lease, Description [Line Items]
Lease payments	$ 5,765	$ 5,191
Future minimum lease payments	24,674
Executive Officer
Lessee, Lease, Description [Line Items]
Lease payments	1,631	$ 1,529
Future minimum lease payments	$ 12,914

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 31,901	$ 30,614
Trade receivables, net of provision for credit losses of $1,240 and $1,192 at December 31, 2023 and December 31, 2022, respectively	85,127	76,213
Inventories	117,686	117,108
Prepaid expenses and other assets	13,437	12,072
Total current assets	248,151	236,007
Property, plant, and equipment, net	67,463	68,640
Deferred income taxes	7,760	4,199
Intangible assets, net	111,373	119,075
Goodwill	131,338	126,366
Operating lease assets	24,032	22,807
Other long-term assets	7,425	11,253
Total Assets	597,542	588,347
Current liabilities:
Accounts payable	39,129	39,467
Accrued liabilities	56,488	48,121
Total current liabilities	95,617	87,588
Long-term debt	218,402	235,454
Deferred income taxes	4,337	6,262
Pension and post-retirement obligations	2,679	3,009
Operating lease liabilities	19,532	18,795
Other long-term liabilities	5,400	21,774
Total liabilities	345,967	372,882
Stockholders' Equity:
Common stock, no par value, authorized 50,000 shares; 16,308 and 15,978 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively	95,937	83,852
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding
Retained earnings	165,813	143,576
Accumulated other comprehensive loss	(10,175)	(11,963)
Total stockholders' equity	251,575	215,465
Total Liabilities and Stockholders' Equity	$ 597,542	$ 588,347

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

Severance Benefit Agreements

As of December 31, 2023, the Company has annually renewable employment agreements with certain of its executive officers. Among other things, the agreements provide for payments and other benefits if the employee’s employment terminates under certain circumstances, including the employee’s death, disability, voluntary resignation with good reason and involuntary termination without cause, as well as voluntary resignation with good reason and involuntary termination without cause within 90 days prior to or 24 months following a change in control of the Company.

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.

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2023

ACQUISITIONS

Schedule of unaudited pro forma financial information

The following unaudited pro forma financial information presents the combined results of operations if the FPH, ThinGap, and Airex acquisitions had occurred as of January 1, 2021.

FPH Group

ACQUISITIONS

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


Cash and cash equivalents	$	1,755
Trade receivables		3,100
Inventories		3,496
Other assets, net		174
Property, plant, and equipment		624
Operating lease assets		4,165
Intangible assets		22,611
Goodwill		15,840
Other current liabilities		(1,577)
Deferred revenue		(776)

Operating lease liabilities		(4,165)
Net deferred income tax liabilities		(3,931)
Net purchase price	$	41,316

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Dividends to stockholders (in dollars per share)	$ 0.115	$ 0.100	$ 0.095

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Revenues	$ 578,634	$ 502,988	$ 403,516
Cost of goods sold	394,951	345,729	282,460
Gross profit	183,683	157,259	121,056
Operating costs and expenses:
Selling	24,713	21,877	17,249
General and administrative	58,403	50,677	42,419
Engineering and development	41,665	38,561	27,818
Business development	4,275	3,319	1,299
Amortization of intangible assets	12,313	11,169	6,245
Total operating costs and expenses	141,369	125,603	95,030
Operating income	42,314	31,656	26,026
Other expense, net:
Interest expense	12,383	7,692	3,236
Other expense (income), net	231	283	(323)
Total other expense, net	12,614	7,975	2,913
Income before income taxes	29,700	23,681	23,113
Income tax (provision) benefit	(5,603)	(6,292)	981
Net income	$ 24,097	$ 17,389	$ 24,094
Basic earnings per share:
Earnings per share	$ 1.51	$ 1.13	$ 1.67
Basic weighted average common shares	15,963	15,448	14,413
Diluted earnings per share:
Earnings per share	$ 1.48	$ 1.09	$ 1.66
Diluted weighted average common shares	16,272	15,951	14,517
Net income	$ 24,097	$ 17,389	$ 24,094
Other comprehensive income (loss):
Foreign currency translation adjustment	3,669	(9,516)	(7,193)
Change in accumulated (loss) income on derivatives, net of tax	(2,131)	5,376	1,618
Pension adjustments, net of tax	250	269	770
Comprehensive income	$ 25,885	$ 13,518	$ 19,289

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

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,
	2023		2022		2021
Revenues derived from foreign subsidiaries	$	179,410	$	165,220	$	163,988

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2023

SEGMENT INFORMATION

SEGMENT INFORMATION

14. SEGMENT INFORMATION

The Company operates in one segment for the manufacture and marketing of controlled motion products and solutions 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,
	2023		2022		2021
Revenues derived from foreign subsidiaries	$	179,410	$	165,220	$	163,988

Identifiable foreign fixed assets were $35,751 and $34,879 as of December 31, 2023 and 2022, respectively.

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

Sales to customers outside of the United States by all subsidiaries were $239,897, $214,017 and $185,288 during 2023, 2022, and 2021, respectively.

For 2023, 2022, and 2021 one customer (Customer A) accounted for 10%, 11%, and 15% of revenues, respectively, and one customer (Customer B) accounted for 12% in 2023 and less than 10% in 2022 and 2021.

As of December 31, 2023 and 2022 Customer B accounted for 15% and 10% of trade receivables, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 21
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2023

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.

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 Industrial, Vehicle, Medical, and Aerospace & Defense.

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, 2023.

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 14, 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 14. A reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions is provided in Note 14. The Company’s disaggregated revenues are as follows (in thousands):



	Year ended December 31,
Target Market	2023		2022		2021
Industrial	$	257,004	$	193,290	$	135,440
Vehicle		133,488		130,436		129,835
Medical		84,515		85,113		86,129
Aerospace & Defense		78,175		70,193		31,746
Distribution and Other		25,452		23,956		20,366
Total	$	578,634	$	502,988	$	403,516



	Year ended December 31,
Geography	2023		2022		2021
North America (primarily U.S.)	$	399,224	$	337,768	$	239,528
Europe		150,608		130,018		129,414
Asia-Pacific		28,802		35,202		34,574
Total	$	578,634	$	502,988	$	403,516

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.

Backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog as of December 31, 2023 was $276,093. The Company expects to recognize 85% of these performance obligations within the next twelve months with the remaining amount recognized between one and two years.

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


	December 31,		December 31,
	2023		2022
Contract liabilities in accrued liabilities	$	2,137	$	4,807
Contract liabilities in other long-term liabilities		8		19
	$	2,145	$	4,826

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 as well as balances assumed in acquisitions. In the years ended December 31, 2023 and 2022, the Company recognized revenue of $4,211 and $2,307, respectively, that was included in the opening contract liabilities balance.

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.

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.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 12
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

SUBSEQUENT EVENT (Details) - USD ($) $ in Thousands			1 Months Ended	12 Months Ended
SUBSEQUENT EVENT (Details) - USD ($) $ in Thousands	Mar. 01, 2024	Jan. 11, 2024	Feb. 29, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
SUBSEQUENT EVENT
Cash paid for acquisition				$ 11,004	$ 44,101	$ 47,254
Amended Revolving Facility
SUBSEQUENT EVENT
Maximum borrowing capacity					280,000		$ 225,000
Available borrowing capacity					$ 75,000
Minimum interest coverage ratio				3.00%
Leverage ratio				3.50%
Increase in leverage ratio				0.50%
Amended Revolving Facility \| Minimum
SUBSEQUENT EVENT
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)				0.10%
Amended Revolving Facility \| Maximum
SUBSEQUENT EVENT
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)				0.275%
Amended Revolving Facility \| Adjusted SOFR
SUBSEQUENT EVENT
Applicable margin (as a percent)				1.625%
Amended Revolving Facility \| Adjusted SOFR \| Minimum
SUBSEQUENT EVENT
Applicable margin (as a percent)				1.00%
Amended Revolving Facility \| Adjusted SOFR \| Maximum
SUBSEQUENT EVENT
Applicable margin (as a percent)				2.25%
Amended Revolving Facility \| Base Rate
SUBSEQUENT EVENT
Applicable margin (as a percent)				0.00%
Subsequent Event \| S N C Manufacturing Co Inc
SUBSEQUENT EVENT
Acquired outstanding stock percentage		100.00%
Cash paid for acquisition		$ 20,000
Subsequent Event \| Amended Revolving Facility
SUBSEQUENT EVENT
Maximum borrowing capacity	$ 280,000
Additional Borrowing Capacity	$ 50,000
Commitment fees on unused portion of the Amended Revolving Facility ( as a percent)	0.275%
Subsequent Event \| Amended Revolving Facility \| Minimum
SUBSEQUENT EVENT
Unused commitment fee (as a percent)	0.15%
Subsequent Event \| Amended Revolving Facility \| Maximum
SUBSEQUENT EVENT
Unused commitment fee (as a percent)			0.325%
Subsequent Event \| Amended Revolving Facility \| Adjusted SOFR \| Minimum
SUBSEQUENT EVENT
Applicable margin (as a percent)	1.25%
Subsequent Event \| Amended Revolving Facility \| Adjusted SOFR \| Maximum
SUBSEQUENT EVENT
Applicable margin (as a percent)			2.50%
Subsequent Event \| Amended Revolving Facility \| Base Rate \| Minimum
SUBSEQUENT EVENT
Applicable margin (as a percent)			0.25%
Subsequent Event \| Amended Revolving Facility \| Base Rate \| Maximum
SUBSEQUENT EVENT
Applicable margin (as a percent)	1.50%
Subsequent Event \| Credit And Note Payable 2024
SUBSEQUENT EVENT
Minimum interest coverage ratio	3.00%
Leverage ratio	3.75%
Increase in leverage ratio	0.50%
Subsequent Event \| Credit And Note Payable 2024 \| For Year Ending December Twenty Twenty Four
SUBSEQUENT EVENT
Leverage ratio	4.25%

DEFERRED COMPENSATION ARRANGEMENTS

12 Months Ended

Dec. 31, 2023

DEFERRED COMPENSATION ARRANGEMENTS

DEFERRED COMPENSATION ARRANGEMENTS

12. DEFERRED COMPENSATION ARRANGEMENTS

The Company has a deferred compensation arrangement with its Chief Executive Officer. This arrangement provides the Board and its committees with another mechanism to provide pay for performance based incentive compensation. It also allows for the Chief Executive Officer 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 $4,305 and $3,870 as of December 31, 2023 and 2022, respectively, which is included in other long-term liabilities in the consolidated balance sheets at December 31, 2023 and 2022.

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of activity in the allowance for doubtful accounts

Activity in the provision for credit losses for 2023 and 2022 was as follows (in thousands):


	December 31, 2023		December 31, 2022
Beginning balance	$	1,192	$	506
Additional reserves		267		803
Write-offs		(225)		(107)
Effect of foreign currency translation		6		(10)
Ending balance	$	1,240	$	1,192

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, 2023		December 31, 2022
Parts and raw materials	$	87,381	$	89,100
Work-in-process		11,456		11,686
Finished goods		18,849		16,322
	$	117,686	$	117,108

Schedule of classification of property, plant and equipment

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


		December 31,		December 31,
	Useful lives	2023		2022
Land		$	973	$	965
Building and improvements	5 - 39 years		26,201		25,093
Machinery, equipment, tools and dies	3 - 15 years		99,711		89,144
Construction in progress			9,300		14,197
Furniture, fixtures and other	3 - 10 years		24,439		22,461
			160,624		151,860
Less accumulated depreciation			(93,161)		(83,220)
Property, plant, and equipment, net		$	67,463	$	68,640

Schedule of changes in the reserve for product warranty claims

Changes in the Company’s reserve for product warranty claims during 2023, 2022 and 2021 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2023		2022		2021
Beginning balance	$	2,160	$	1,869	$	1,571
Warranty reserves acquired		—		45		15
Provision		(296)		(66)		543
Warranty expenditures		243		409		(204)
Effect of foreign currency translation		32		(97)		(56)
Ending balance	$	2,139	$	2,160	$	1,869

Schedule of accrued liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Compensation and fringe benefits	$	17,251	$	15,818
Accrued business acquisition consideration		12,638		12,500
Warranty reserve		2,139		2,160
Income taxes payable		2,483		3,934
Operating lease liabilities – current		5,142		4,224
Finance lease obligations – current		412		377
Contract liabilities		2,137		4,807
Contingent consideration – current		7,720		—
Other accrued expenses		6,566		4,301
	$	56,488	$	48,121

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,
	2023	2022	2021
Basic weighted average shares outstanding	15,963	15,448	14,413
Dilutive effect of potential common shares	309	503	104
Diluted weighted average shares outstanding	16,272	15,951	14,517

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


	December 31, 2023
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,859	$	—	$	—
Deferred compensation plan assets		4,305		—		—
Foreign currency hedge contracts		—		54		—
Interest rate swaps, net		—		4,431		—
Contingent consideration		—		—		(7,990)


	December 31, 2022
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,324	$	—	$	—
Deferred compensation plan assets		3,870		—		—
Foreign currency hedge contracts		—		48		—
Interest rate swaps, net		—		7,236		—
Contingent consideration		—		—		(4,100)

REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Performance obligations	$ 276,093
Percentage of performance obligations	85.00%
Contract liabilities in accrued liabilities	$ 2,137	$ 4,807
Contract liabilities in other long-term liabilities	8	19
Contract liabilities	2,145	4,826
Revenue recognized	$ 4,211	$ 2,307
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Performance obligations that are satisfied over periods exceeding	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 \| Minimum
Performance obligations that are satisfied over periods exceeding	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 \| Maximum
Performance obligations that are satisfied over periods exceeding	2 years

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	$ 215,465	$ 187,762	$ 143,056
Balance at the ending	251,575	215,465	187,762
Accumulated Other Comprehensive Income
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	(11,963)	(8,092)
Unrealized (loss) gain on cash flow hedges	735	5,839
Amounts reclassified from AOCI	(2,866)	(463)
Pension adjustments, net of tax	250	269
Foreign currency translation gain	3,669	(9,516)
Balance at the ending	(10,175)	(11,963)	(8,092)
Defined Benefit Plan Liability
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	(594)	(863)	(1,633)
Pension adjustments, net of tax	250	269
Balance at the ending	(344)	(594)	(863)
Cash Flow Hedges
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	7,310	221
Unrealized (loss) gain on cash flow hedges	935	7,621
Amounts reclassified from AOCI	(3,814)	(532)
Balance at the ending	4,431	7,310	221
Tax effect of Cash Flow Hedges
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	(1,754)	(41)
Unrealized (loss) gain on cash flow hedges	(200)	(1,782)
Amounts reclassified from AOCI	948	69
Balance at the ending	(1,006)	(1,754)	(41)
Foreign Currency Translation Adjustments
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance at the beginning	(16,925)	(7,409)	(216)
Foreign currency translation gain	3,669	(9,516)
Balance at the ending	$ (13,256)	$ (16,925)	$ (7,409)

INCOME TAXES

12 Months Ended

Dec. 31, 2023

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,
	2023		2022		2021
Domestic	$	18,630	$	7,707	$	10,642
Foreign		11,070		15,974		12,471
Income before income taxes	$	29,700	$	23,681	$	23,113

Components of the total income tax provision (benefit) are as follows (in thousands):


	For the year ended
	December 31,		December 31,		December 31,
	2023		2022		2021
Current provision
Domestic	$	7,805	$	5,903	$	1,866
Foreign		2,834		4,111		3,288
Total current provision		10,639		10,014		5,154
Deferred benefit
Domestic		(4,087)		(3,915)		649
Foreign		(949)		193		(6,784)
Total deferred benefit		(5,036)		(3,722)		(6,135)
Income tax provision (benefit)	$	5,603	$	6,292	$	(981)

The provision (benefit) 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,
	2023		2022		2021
Tax provision, computed at statutory rate	21.0	%	21.0	%	21.0	%
State tax, net of federal impact	1.7	%	1.3	%	2.2	%
Change in valuation allowance	(1.5)	%	(0.1)	%	7.2	%
Effect of foreign tax rate differences	1.9	%	3.9	%	3.9	%
Section 162(m) compensation	2.4	%	3.1	%	3.0	%
R&D Credit and incentives	(6.1)	%	(3.9)	%	(2.8)	%
Effect of Tax Cuts and Jobs Act	0.3	%	0.1	%	1.2	%
Subpart F income	0.0	%	(0.1)	%	(1.0)	%
Investment tax credits	0.0	%	0.0	%	(5.6)	%
Net operating loss carryforwards	0.0	%	0.0	%	(37.2)	%
Unrecognized tax benefits	(0.7)	%	0.0	%	4.9	%
Other	(0.1)	%	1.3	%	(1.0)	%
Provision for income taxes	18.9	%	26.6	%	(4.2)	%

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,
	2023		2022
Noncurrent deferred tax assets:
Employee benefit plans	$	2,241	$	2,122
Net operating loss and tax credit carryforwards		7,277		8,277
Accrued expenses and reserves		2,494		1,672
Research and development costs		8,363		4,520
Other		502		328
Total noncurrent deferred tax assets		20,877		16,919
Valuation allowance		(2,648)		(3,031)
Net noncurrent deferred tax assets:	$	18,229	$	13,888

Net noncurrent deferred tax liabilities:
Property and equipment	$	2,949	$	3,187
Goodwill and intangibles		10,754		10,944
Interest rate swap derivatives		1,019		1,678
Other		84		142
Total noncurrent deferred tax liabilities	$	14,806	$	15,951

Net deferred tax asset/(deferred tax liability)	$	3,423	$	(2,063)

Presented as follows:
Noncurrent deferred income tax assets	$	7,760	$	4,199
Noncurrent deferred income tax liabilities		(4,337)		(6,262)
Net deferred tax asset (liability)	$	3,423	$	(2,063)

As of December 31, 2023, the Company has the following gross carryforwards available (in thousands):


			Amount
Jurisdiction	Tax Attribute		(in thousands)	Begin to expire
U.S. State	Net Operating Losses ⁽¹⁾	$	8,597	2024
International	Net Operating Losses - Unlimited Carryforward ⁽¹⁾	$	20,059	No expiration
U.S. Federal	Foreign Tax Credits	$	1,002	2028
International	Investment Tax Credits	$	919	2030
U.S. Federal	R&D Tax Credits	$	38	2036

(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. Management considers the scheduled reversal of deferred tax liabilities, projected verifiable future taxable income and tax planning strategies in making this assessment.

Starting in 2022, noncurrent deferred tax assets includes the effects of capitalization and amortization of R&D expenses as required by the 2017 Tax Cuts and Jobs Act. 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 $910 and foreign tax credits were generated in the amount of $92 as a result of a dividend paid from Canada and, at that time, determined it was more likely than not that it will not realize a tax benefit from these credits. The Company has incurred net operating losses in certain states with a tax effected benefit of $318 as of December 31, 2023 that it is more likely than not will not be realized. Additionally, the Company has carryforwards of net operating losses and tax credits generated in foreign jurisdictions and has determined it is more likely than not it would not realize a tax benefit of $1,328 as of December 31, 2023. 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, 2023.

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 2020. With few exceptions, the Company is no longer subject to tax examinations in the foreign jurisdictions for periods prior to 2018.

Due to a New Zealand tax legislation change in 2021 allowing for the use of pre-acquisition net operating loss carryforwards to be utilized on the acquirer's future period tax returns, the Company recognized, in 2021, $8,328 of net operating loss carryforwards generated in pre-acquisition periods by the Dynamic Controls New Zealand entities. The net operating loss carryforwards are now available for use by the Company beginning with the New Zealand tax returns filed for the 2020 tax period. The Company evaluated the tax legislation and considered the tax periods open for adjustment by the tax authorities which include the 2016-2020 tax years and has determined it is more likely than not it will not realize a benefit on $1,125 of the net operating loss carryforwards. The Company reduced the unrecognized tax benefit in 2021 as a result of the seller filing its 2020 New Zealand tax return and utilizing $68 of the net operating loss carryforwards. The Company will adjust this unrecognized tax benefit in light of changing facts and circumstances and with the lapse of the statute of limitations. The lapse of the statute of limitations would be recorded as an adjustment to the provision for income taxes in the period of the statute closure.

The summary of changes to the unrecognized tax benefit for the year ended December 31, 2023 is as follows (in thousands):


	December 31,		December 31,		December 31,
	2023		2022		2021
Beginning balance	$	786	$	1,057	$	—
Additions from tax legislation changes for net operating loss carryforwards		—		—		1,125
Reductions related to the lapse of the statute of limitations		(207)		(192)		(68)
Effect of foreign currency translation		7		(79)		—
Ending balance	$	586	$	786	$	1,057

It is reasonably possible that a reduction of approximately $0.2 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations. As of December 31, 2023, approximately $0.6 million of unrecognized tax benefits would favorably impact the effective tax rate, if recognized.

It is the Company’s policy to include interest and penalties related to income tax liabilities in income tax expense in the consolidated statements of income and comprehensive income. In addition, the Company records uncertain tax positions in accordance with ASC 740. No material interest or penalties related to income tax liabilities were recognized for the years ended December 31, 2023, 2022, and 2021.

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. In 2021, the Company distributed a portion of these

foreign earnings which have been previously taxed in the United States and remitted $236 of foreign withholding taxes.

In 2021, the Company made distributions between its German subsidiaries and remitted $1,493 of foreign withholding taxes. No deferred tax liabilities have been recorded for these distributions as the foreign withholding taxes are refundable on the German income tax return filed in 2022. No further withholding taxes are anticipated to be paid in future years related to this distribution and it is not anticipated to be remitted to the United States.

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 or capital in foreign subsidiaries, 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
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-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 17
-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

INCOME TAXES - Summary of changes to unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Changes to the unrecognized tax benefit
Beginning balance	$ 786	$ 1,057
Additions from tax legislation changes for net operating loss carryforwards			$ 1,125
Reductions related to net operating loss usage on 2020 tax returns	(207)	(192)	(68)
Effect of foreign currency translation	7
Effect of foreign currency translation		(79)
Ending balance	$ 586	$ 786	$ 1,057

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Inventories (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Activity in the allowance for doubtful accounts
Beginning balance	$ 1,192	$ 506
Additional reserves	267	803
Writeoffs	(225)	(107)
Effect of foreign currency translation	6	(10)
Ending balance	1,240	1,192
Inventories
Parts and raw materials	87,381	89,100
Work-in-process	11,456	11,686
Finished goods	18,849	16,322
Inventories	$ 117,686	$ 117,108

DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands	12 Months Ended
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2020 USD ($) derivative
Derivative financial instruments
Term of contract			30 days
Fair value of derivative assets	$ 2,177
Other (income) expense
Derivative financial instruments
Gain (loss) on foreign currency contracts	(281)
Interest Rate Swaps
Derivative financial instruments
Notional amount	100,000				$ 40,000
Number of derivative instruments \| derivative						2
Notional amount of interest rate swap derivatives					$ 60,000	$ 20,000
Estimated amount to be reclassified as an increase to interest expense	3,367
Foreign currency contracts
Derivative financial instruments
Notional amount	22,193	$ 18,891
Derivatives in cash flow hedging relationships \| Interest Rate Swaps
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income
Amount of pre-tax (loss) gain recognized in OCI on derivatives	(935)	7,621		$ 1,180
Derivatives in cash flow hedging relationships \| Interest Rate Swaps \| Interest expense
Effect of derivative financial instruments on the condensed consolidated statement of income and comprehensive income
Amount of pre-tax gain (loss) reclassified from accumulated OCI into income	3,814	532	$ (929)
Derivatives designated as hedging instruments
Derivative financial instruments
Fair value of derivative assets	4,485	7,284
Derivatives designated as hedging instruments \| Interest Rate Swaps \| Interest expense
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	12,383	7,692	$ 3,236
Derivatives designated as hedging instruments \| Interest Rate Swaps \| Prepaid expenses and other assets
Derivative financial instruments
Fair value of derivative assets	2,254
Derivatives designated as hedging instruments \| Interest Rate Swaps \| Other long-term assets
Derivative financial instruments
Fair value of derivative assets	2,177	7,236
Derivatives designated as hedging instruments \| Foreign currency contracts \| Prepaid expenses and other assets
Derivative financial instruments
Fair value of derivative assets	$ 54	$ 48

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

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, net assets acquired, and liabilities assumed are recorded at their estimated fair values.

Cash and Cash Equivalents

Accounts Receivable


	December 31, 2023		December 31, 2022
Beginning balance	$	1,192	$	506
Additional reserves		267		803
Write-offs		(225)		(107)
Effect of foreign currency translation		6		(10)
Ending balance	$	1,240	$	1,192

Inventories


	December 31, 2023		December 31, 2022
Beginning balance	$	1,192	$	506
Additional reserves		267		803
Write-offs		(225)		(107)
Effect of foreign currency translation		6		(10)
Ending balance	$	1,240	$	1,192

Property, Plant and Equipment

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


		December 31,		December 31,
	Useful lives	2023		2022
Land		$	973	$	965
Building and improvements	5 - 39 years		26,201		25,093
Machinery, equipment, tools and dies	3 - 15 years		99,711		89,144
Construction in progress			9,300		14,197
Furniture, fixtures and other	3 - 10 years		24,439		22,461
			160,624		151,860
Less accumulated depreciation			(93,161)		(83,220)
Property, plant, and equipment, net		$	67,463	$	68,640

Depreciation expense was $12,755, $12,676 and $11,862 in 2023, 2022 and 2021, 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 2023, 2022 and 2021 were as follows (in thousands):


	December 31,		December 31,		December 31,
	2023		2022		2021
Beginning balance	$	2,160	$	1,869	$	1,571
Warranty reserves acquired		—		45		15
Provision		(296)		(66)		543
Warranty expenditures		243		409		(204)
Effect of foreign currency translation		32		(97)		(56)
Ending balance	$	2,139	$	2,160	$	1,869

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Compensation and fringe benefits	$	17,251	$	15,818
Accrued business acquisition consideration		12,638		12,500
Warranty reserve		2,139		2,160
Income taxes payable		2,483		3,934
Operating lease liabilities – current		5,142		4,224
Finance lease obligations – current		412		377
Contract liabilities		2,137		4,807
Contingent consideration – current		7,720		—
Other accrued expenses		6,566		4,301
	$	56,488	$	48,121

Foreign Currency Translation


	December 31,		December 31,
	2023		2022
Compensation and fringe benefits	$	17,251	$	15,818
Accrued business acquisition consideration		12,638		12,500
Warranty reserve		2,139		2,160
Income taxes payable		2,483		3,934
Operating lease liabilities – current		5,142		4,224
Finance lease obligations – current		412		377
Contract liabilities		2,137		4,807
Contingent consideration – current		7,720		—
Other accrued expenses		6,566		4,301
	$	56,488	$	48,121

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 Earnings per Share

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



	Year ended December 31,
	2023	2022	2021
Basic weighted average shares outstanding	15,963	15,448	14,413
Dilutive effect of potential common shares	309	503	104
Diluted weighted average shares outstanding	16,272	15,951	14,517

For 2023, 2022 and 2021, the anti-dilutive common shares excluded from the calculation of diluted income per share were 22,000, 15,000, and 2,000, respectively.

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, 2023
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,859	$	—	$	—
Deferred compensation plan assets		4,305		—		—
Foreign currency hedge contracts		—		54		—
Interest rate swaps, net		—		4,431		—
Contingent consideration		—		—		(7,990)


	December 31, 2022
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,324	$	—	$	—
Deferred compensation plan assets		3,870		—		—
Foreign currency hedge contracts		—		48		—
Interest rate swaps, net		—		7,236		—
Contingent consideration		—		—		(4,100)

Derivative Financial Instruments

Income Taxes

Pension and Postretirement Welfare Plans

Concentration of Credit Risk

Use of Estimates

Twinsburg Consolidation

Recent Accounting Developments - Not Yet Adopted

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Trade receivables, provision for credit losses	$ 1,240	$ 1,192
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized shares	50,000	50,000
Common stock, shares issued	16,308	15,978
Common stock, shares outstanding	16,308	15,978
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

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Mar. 05, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	0-04041
Entity Registrant Name	ALLIENT 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	ALNT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
Document Financial Statement Error Correction Flag	false
Entity Shell Company	false
Entity Public Float			$ 546,737,334
Entity Common Stock, Shares Outstanding		16,593,329
Auditor Name	Deloitte & Touche LLP
Auditor Firm ID	34
Auditor Location	Williamsville, New York
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Central Index Key	0000046129
Amendment Flag	false

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Goodwill
Number of reporting units \| item	1
Goodwill impairment \| $	$ 0	$ 0	$ 0

STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION PLANS

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, 2023, the Company had 745,260 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
2023	129,328	$	40.85	74,495
2022	182,497	$	33.21	111,251
2021	109,462	$	32.06	63,432

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. Performance-based grants are generally subject to 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 2023, 2022 and 2021:


		Number of
		shares
Unvested Balance, December 31, 2020		357,342
Awarded		109,462
Vested		(162,419)
Forfeited		(10,808)
Unvested Balance, December 31, 2021		293,577
Awarded		182,497
Vested		(156,847)
Forfeited		(14,280)
Unvested Balance, December 31, 2022		304,947
Awarded		129,328
Vested		(154,208)
Forfeited		(25,957)
Unvested Balance, December 31, 2023		254,110

Share-Based Compensation Expense

During 2023, 2022 and 2021 compensation expense net of forfeitures of $5,477, $5,073 and $4,161 was recorded, respectively. As of December 31, 2023, there was $6,876 of total unrecognized compensation expense related to restricted stock awards, of which approximately $4,890 is expected to be recognized in 2024.

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 2023, 2022, and 2021) or ii) the annual interest payable on any loan outstanding to the Company from the ESOP. Company contributions to the Plan accrued for 2023, 2022 and 2021, were $1,591, $1,248, and $1,206, 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 Allient 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 2023, 2022, and 2021 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 $2,590, $2,146, and $1,672 in 2023, 2022, and 2021, respectively. These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income.

Dividends

For the years ended December 31, 2023, 2022 and 2021 a total of $0.115, $0.100, and $0.095 per share on all outstanding shares was declared and paid, respectively. Total dividends paid for the years ended December 31, 2023, 2022 and 2021 were $1,826, $1,536, and $1,371, 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.

STOCK-BASED COMPENSATION PLANS (Details) - Restricted Stock - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of Non-vested Restricted Shares
Outstanding at beginning of period (in shares)	304,947	293,577	357,342
Awarded (in shares)	129,328	182,497	109,462
Vested (in shares)	(154,208)	(156,847)	(162,419)
Forfeited (in shares)	(25,957)	(14,280)	(10,808)
Outstanding at end of period (in shares)	254,110	304,947	293,577
Performance based vesting
Number of Non-vested Restricted Shares
Awarded (in shares)	74,495	111,251	63,432

INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS

Schedule of intangible assets

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


	Weighted Average	December 31, 2023						December 31, 2022
	Amortization	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Period	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	14.3 years	$	116,831	$	(42,421)	$	74,410	$	112,378	$	(34,377)	$	78,001
Trade name	13.9 years		15,572		(7,916)		7,656		15,320		(6,900)		8,420
Design and technologies	10.6 years		41,480		(12,173)		29,307		41,212		(8,558)		32,654
Total		$	173,883	$	(62,510)	$	111,373	$	168,910	$	(49,835)	$	119,075

Schedule of estimated amortization expense for intangible assets

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


Year ending December 31,	Total
	Estimated
	Amortization Expense
2024	$	12,216
2025		12,200
2026		12,103
2027		11,659
2028		10,929
Thereafter		52,266
Total estimated amortization expense	$	111,373

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash Flows From Operating Activities:
Net income	$ 24,097	$ 17,389	$ 24,094
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	25,068	25,486	18,107
Deferred income taxes	(5,036)	(3,722)	(6,135)
Provision for excess and obsolete inventory	2,487	1,628	534
Stock-based compensation expense	5,477	5,073	4,161
Debt issue cost amortization recorded in interest expense	300	202	141
Other	1,424	393	415
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables	(5,568)	(22,202)	(170)
Inventories	(1,781)	(27,800)	(22,874)
Prepaid expenses and other assets	1,324	887	(3,670)
Accounts payable	(935)	2,791	8,293
Accrued liabilities	(1,819)	5,471	2,506
Net cash provided by operating activities	45,038	5,596	25,402
Cash Flows From Investing Activities:
Consideration paid for acquisitions, net of cash acquired	(11,004)	(44,101)	(47,254)
Purchase of property and equipment	(11,603)	(15,910)	(13,716)
Net cash used in investing activities	(22,607)	(60,011)	(60,970)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt	11,000	74,731	51,379
Principal payments of long-term debt and finance lease obligations	(28,395)	(7,585)	(12,248)
Payment of debt issuance costs		(391)
Dividends paid to stockholders	(1,826)	(1,536)	(1,371)
Tax withholdings related to net share settlements of restricted stock	(2,096)	(1,614)	(1,928)
Net cash (used in) provided by financing activities	(21,317)	63,605	35,832
Effect of foreign exchange rate changes on cash	173	(1,039)	(932)
Net increase (decrease) in cash and cash equivalents	1,287	8,151	(668)
Cash and cash equivalents at beginning of period	30,614	22,463	23,131
Cash and cash equivalents at end of period	$ 31,901	$ 30,614	$ 22,463
Supplemental disclosure of cash flow information:
Stock issued for acquisitions	7,329	11,103	23,496
Property, plant and equipment purchases in accounts payable or accrued expenses	$ 1,427	$ 620	$ 835

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS

INTANGIBLE ASSETS

5. INTANGIBLE ASSETS

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


	Weighted Average	December 31, 2023						December 31, 2022
	Amortization	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Period	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	14.3 years	$	116,831	$	(42,421)	$	74,410	$	112,378	$	(34,377)	$	78,001
Trade name	13.9 years		15,572		(7,916)		7,656		15,320		(6,900)		8,420
Design and technologies	10.6 years		41,480		(12,173)		29,307		41,212		(8,558)		32,654
Total		$	173,883	$	(62,510)	$	111,373	$	168,910	$	(49,835)	$	119,075

Intangible assets resulting from the 2023 acquisition of Sierramotion was $4,100 and from the 2022 acquisitions of FPH, ThinGap, and Airex were $28,611 (Note 2). The intangible assets acquired consist of customer lists, technology, and trade names.

Total amortization expense for intangible assets for the years 2023, 2022 and 2021 was $12,313, $11,169 and $6,245, respectively.

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


Year ending December 31,	Total
	Estimated
	Amortization Expense
2024	$	12,216
2025		12,200
2026		12,103
2027		11,659
2028		10,929
Thereafter		52,266
Total estimated amortization expense	$	111,373

GOODWILL (Tables)

12 Months Ended

Dec. 31, 2023

GOODWILL

Schedule of change in the carrying amount of goodwill

The change in the carrying amount of goodwill for 2023 and 2022 is as follows (in thousands):


		December 31,		December 31,
		2023		2022
Beginning balance	$	126,366		106,633
Goodwill acquired		2,876		21,556
Impact of measurement period adjustments of acquisitions (Note 2)		1,356		291
Effect of foreign currency translation		740		(2,114)
Ending balance	$	131,338	$	126,366

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

SEGMENT INFORMATION (Details) $ in Thousands	12 Months Ended			24 Months Ended
SEGMENT INFORMATION (Details) $ in Thousands	Dec. 31, 2023 USD ($) segment customer	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)
Segment information
Number of operating segments \| segment	1
Identifiable assets	$ 597,542	$ 588,347		$ 588,347
Revenues derived from foreign subsidiaries	$ 578,634	$ 502,988	$ 403,516
Total revenues \| Customer one
Segment information
Number of customers \| customer	1
Total revenues \| Customer Concentration Risk \| Customer one
Segment information
Percentage of concentration risk	10.00%	11.00%	15.00%
Total revenues \| Customer B \| Customer one
Segment information
Percentage of concentration risk	12.00%			10.00%
Trade receivables \| Customer B \| Customer one
Segment information
Percentage of concentration risk	15.00%	10.00%
Europe, China, Mexico, and Asia-Pacific
Segment information
Identifiable assets	$ 35,751	$ 34,879		$ 34,879
Revenues derived from foreign subsidiaries	239,897	214,017	$ 185,288
United States
Segment information
Revenues derived from foreign subsidiaries	399,224	337,768	239,528
Wholly owned foreign subsidiaries
Segment information
Revenues derived from foreign subsidiaries	$ 179,410	$ 165,220	$ 163,988

REVENUE RECOGNITION - Practical Expedients (Details)	12 Months Ended
REVENUE RECOGNITION - Practical Expedients (Details)	Dec. 31, 2023
REVENUE RECOGNITION
Incremental costs of obtaining a contract	true
The time value of money	true

STOCK-BASED COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION PLANS

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
2023	129,328	$	40.85	74,495
2022	182,497	$	33.21	111,251
2021	109,462	$	32.06	63,432

Summary of restricted stock activity


		Number of
		shares
Unvested Balance, December 31, 2020		357,342
Awarded		109,462
Vested		(162,419)
Forfeited		(10,808)
Unvested Balance, December 31, 2021		293,577
Awarded		182,497
Vested		(156,847)
Forfeited		(14,280)
Unvested Balance, December 31, 2022		304,947
Awarded		129,328
Vested		(154,208)
Forfeited		(25,957)
Unvested Balance, December 31, 2023		254,110

ACCUMULATED OTHER COMPREHENSIVE INCOME

12 Months Ended

Dec. 31, 2023

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

13. ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the years ended December 31, 2023 and 2022 is comprised of the following:


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2022	$	(594)	$	7,310	$	(1,754)	$	(16,925)	$	(11,963)
Unrealized gain (loss) on cash flow hedges		—		935		(200)		—		735
Amounts reclassified from AOCI		—		(3,814)		948		—		(2,866)
Pension adjustments, net of tax		250		—		—		—		250
Foreign currency translation gain		—		—		—		3,669		3,669
At December 31, 2023	$	(344)	$	4,431	$	(1,006)	$	(13,256)	$	(10,175)


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2021	$	(863)	$	221	$	(41)	$	(7,409)	$	(8,092)
Unrealized gain (loss) on cash flow hedges		—		7,621		(1,782)		—		5,839
Amounts reclassified from AOCI		—		(532)		69		—		(463)
Pension adjustments, net of tax		269		—		—		—		269
Foreign currency translation loss		—		—		—		(9,516)		(9,516)
At December 31, 2022	$	(594)	$	7,310	$	(1,754)	$	(16,925)	$	(11,963)

GOODWILL - Change in the carrying amount of goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Change in goodwill
Beginning balance	$ 126,366	$ 106,633
Goodwill acquired	2,876	21,556
Impact of measurement period adjustments of acquisitions (Note 2)	1,356	291
Effect of foreign currency translation	740	(2,114)
Ending balance	$ 131,338	$ 126,366

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

STOCK-BASED COMPENSATION PLANS - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
STOCK-BASED COMPENSATION
Shares of common stock available for grant under stock incentive plans	745,260
Additional disclosures
Stock based compensation expense, net of forfeitures	$ 5,477	$ 5,073	$ 4,161
Restricted Stock
STOCK-BASED COMPENSATION
Restricted stock grants	129,328	182,497	109,462
Weighted average grant date fair value (in dollars per share)	$ 40.85	$ 33.21	$ 32.06
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)	304,947	293,577	357,342
Awarded (in shares)	129,328	182,497	109,462
Vested (in shares)	(154,208)	(156,847)	(162,419)
Forfeited (in shares)	(25,957)	(14,280)	(10,808)
Outstanding at end of period (in shares)	254,110	304,947	293,577
Additional disclosures
Stock based compensation expense, net of forfeitures	$ 5,477	$ 5,073	$ 4,161
Unrecognized compensation expense	6,876
Unrecognized compensation expense, expected to be recognized in next fiscal year	$ 4,890
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
STOCK-BASED COMPENSATION
Restricted stock grants	74,495	111,251	63,432
Number of Non-vested Restricted Shares
Awarded (in shares)	74,495	111,251	63,432

DEBT OBLIGATIONS (Tables)

12 Months Ended

Dec. 31, 2023

DEBT OBLIGATIONS

Schedule of debt obligations

Debt obligations consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Long-term Debt
Revolving Credit Facility, long-term (1)	$	210,120	$	227,060
Unamortized debt issuance costs		(325)		(625)
Finance lease obligations – noncurrent		8,607		9,019
Long-term debt	$	218,402	$	235,454

(1)	The effective rate of the Revolving Credit Facility is 4.96% at December 31, 2023 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://www.xbrl.org/2003/role/exampleRef
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+ Details

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business development	$ 4,275	$ 3,319	$ 1,299

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

DERIVATIVE FINANCIAL INSTRUMENTS

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


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	December 31,		December 31,
hedging instruments	Location	2023		2022
Foreign currency contracts	Prepaid expenses and other assets	$	54	$	48
Interest rate swaps	Prepaid expenses and other assets		2,254		—
Interest rate swaps	Other long-term assets		2,177		7,236
		$	4,485	$	7,284

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 (loss) income (OCI) for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Amount of pre-tax (gain) loss recognized in OCI
	on derivatives
Derivatives in cash flow hedging relationships	Year ended December 31,
	2023		2022		2021
Interest rate swaps	$	(935)	$	7,621	$	1,180




Location of gain (loss) reclassified	Amount of pre-tax gain (loss) reclassified from accumulated OCI into income
from accumulated OCI into income	Year ended December 31,
	2023		2022		2021
Interest expense	$	3,814	$	532	$	(929)

Schedule of effect of the Company's derivative financial instruments on the condensed consolidated statements of income and comprehensive (loss) 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	2023		2022		2021
Interest rate swaps	Interest Expense	$	12,383	$	7,692	$	3,236

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Sep. 22, 2023
Intangible assets subject to amortization
Gross Amount	$ 173,883	$ 168,910
Accumulated amortization	(62,510)	(49,835)
Total estimated amortization expense	111,373	119,075
Amortization expense for intangible assets	12,313	11,169	$ 6,245
Estimated amortization expense
2024	12,216
2025	12,200
2026	12,103
2027	11,659
2028	10,929
Thereafter	52,266
Total estimated amortization expense	111,373	119,075
Sierramotion Inc
Intangible assets subject to amortization
Intangible assets				$ 4,100
Intangible assets resulting from the acquisitions	$ 4,100
FPH, ThinGap and Airex
Intangible assets subject to amortization
Intangible assets resulting from the acquisitions		28,611
Customer lists
Intangible assets subject to amortization
Estimated Life	14 years 3 months 18 days
Gross Amount	$ 116,831	112,378
Accumulated amortization	(42,421)	(34,377)
Total estimated amortization expense	74,410	78,001
Estimated amortization expense
Total estimated amortization expense	$ 74,410	78,001
Trade name
Intangible assets subject to amortization
Estimated Life	13 years 10 months 24 days
Gross Amount	$ 15,572	15,320
Accumulated amortization	(7,916)	(6,900)
Total estimated amortization expense	7,656	8,420
Estimated amortization expense
Total estimated amortization expense	$ 7,656	8,420
Design and technologies
Intangible assets subject to amortization
Estimated Life	10 years 7 months 6 days
Gross Amount	$ 41,480	41,212
Accumulated amortization	(12,173)	(8,558)
Total estimated amortization expense	29,307	32,654
Estimated amortization expense
Total estimated amortization expense	$ 29,307	$ 32,654

BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warranty, Accrued Liabilities, and Basic and Diluted Income per Share (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Feb. 29, 2024
Changes in the reserve for product warranty claims
Warranty reserve at beginning of the year	$ 2,160	$ 1,869	$ 1,571
Warranty reserves acquired		45	15
Provision	(296)	(66)	543
Warranty expenditures	243	409	(204)
Effect of foreign currency translation	32	(97)	(56)
Warranty reserve at end of year	2,139	2,160	1,869
ACCRUED LIABILITIES
Compensation and fringe benefits	17,251	15,818
Accrued business acquisition consideration	12,638	12,500
Warranty reserve	2,139	2,160	$ 1,869
Income taxes payable	2,483	3,934
Operating lease liabilities - current	$ 5,142	$ 4,224
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued liabilities	Accrued liabilities
Finance lease obligations, current	$ 412	$ 377
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Contract liabilities	$ 2,137	$ 4,807
Contingent consideration-current	7,720			$ 5,720
Other accrued expenses	6,566	4,301
Accrued liabilities	$ 56,488	$ 48,121
Basic and Diluted Income per Share
Basic weighted average shares outstanding	15,963,000	15,448,000	14,413,000
Dilutive effect of potential common shares	309,000	503,000	104,000
Diluted weighted average shares outstanding	16,272,000	15,951,000	14,517,000
Stock awards excluded from the calculation of diluted income per share (in shares)	22,000	15,000	2,000
Minimum
Warranty
Warranty period	3 months
Maximum
Warranty
Warranty period	2 years

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false