XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Note 10 – Financial Instruments Derivative Financial Instruments The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities such as copper. Market risks for changes in interest rates relate primarily to its debt obligations under the Second Amended and Restated Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won and Vietnamese Dong. The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting. The Company’s designated hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts which can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to Accumulated other comprehensive loss in the consolidated condensed balance sheets. When the underlying hedge transaction is realized, the gain or loss included in Accumulated other comprehensive loss is recorded in earnings in the consolidated condensed statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. The Company records the ineffective portion of designated foreign currency and copper commodity hedging instruments, if any, to cost of sales in the consolidated condensed statements of income. Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated condensed statements of cash flows. The Company uses an income approach to value derivative instruments, analyzing quoted market prices to calculate the forward values and then discounting such forward values to the present value using benchmark rates at commonly quoted intervals for the instrument’s full term. In the second quarter of 2022, the Company entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100,000. This interest rate swap is an undesignated hedge of the Company’s exposure to interest payment fluctuations on a portion of the Credit Facility borrowings that were drawn for the acquisitions of Alfmeier and Dacheng. The periodic changes in fair value is recognized in Interest expense, net. In the second and third quarter of 2022, the Company entered into forward contracts with a notional amount of $128,319 to hedge the foreign currency risk associated with the forecasted purchase of Alfmeier. These contracts matured and were settled in the third quarter of 2022. During the three and nine months ended September 30, 2022 the Company recognized expense of $4,288 and $3,806, respectively, in Foreign currency (loss) gain within the consolidated condensed income statement. Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of September 30, 2022 is as follows:
|  |  |  |  |  |  | Asset Derivatives |  |  | Liability Derivatives |  |  |  |
|  | Fair Value Hierarchy |  | Notional Amount |  |  | Balance Sheet Location |  | Fair Value |  |  | Balance Sheet Location |  | Fair Value |  |  | Net Asset/ (Liabilities) |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Level 2 |  | $ | 47,040 |  |  | Other current assets |  | $ | 2,216 |  |  | Other current liabilities |  | $ | — |  |  | $ | 2,216 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Level 2 |  | $ | 100,000 |  |  | Other current assets |  | $ | 2,498 |  |  | Other current liabilities |  | $ | — |  |  | $ | 2,498 |
Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of December 31, 2021 is as follows:
|  |  |  |  |  |  | Asset Derivatives |  |  | Liability Derivatives |  |  |  |
|  | Fair Value Hierarchy |  | Notional Amount |  |  | Balance Sheet Location |  | Fair Value |  |  | Balance Sheet Location |  | Fair Value |  |  | Net Asset/ (Liabilities) |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Level 2 |  | $ | 13,974 |  |  | Other current assets |  | $ | 294 |  |  | Other current liabilities |  | $ | — |  |  | $ | 294 |
Commodity hedges |  | Level 2 |  | $ | 309 |  |  | Other current assets |  | $ | 6 |  |  | Other current liabilities |  | $ | — |  |  | $ | 6 |
Information relating to the effect of derivative instruments on our consolidated condensed statements of income and the consolidated condensed statements of comprehensive income is as follows:
|  |  |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | Location |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Cost of sales – income |  | $ | 321 |  |  | $ | 448 |  |  | $ | 807 |  |  | $ | 1,455 |
|  | Other comprehensive (loss) income |  |  | 1,627 |  |  |  | (606 | ) |  |  | 1,921 |  |  |  | (1,335 | )
Total foreign currency derivatives |  |  |  | $ | 1,948 |  |  | $ | (158 | ) |  | $ | 2,728 |  |  | $ | 120 |
Commodity derivatives |  | Cost of sales – income |  | $ | — |  |  | $ | 2 |  |  | $ | 19 |  |  | $ | 2 |
|  | Other comprehensive loss |  |  | — |  |  |  | (44 | ) |  |  | (6 | ) |  |  | (44 | )
Total commodity derivatives |  |  |  | $ | — |  |  | $ | (42 | ) |  | $ | 13 |  |  | $ | (42 | )
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Foreign currency (loss) gain |  | $ | (4,288 | ) |  | $ | — |  |  | $ | (3,806 | ) |  | $ | — |
Total foreign currency derivatives |  |  |  | $ | (4,288 | ) |  | $ | — |  |  | $ | (3,806 | ) |  | $ | — |
Interest rate contracts |  | Interest income (expense), net |  | $ | 3,191 |  |  | $ | — |  |  | $ | 2,498 |  |  | $ | — |
Total interest rate derivatives |  |  |  | $ | 3,191 |  |  | $ | — |  |  | $ | 2,498 |  |  | $ | — |
Accounts Receivable Factoring The Company is party to receivable factoring agreements with unrelated third parties under which we can sell receivables for certain account debtors, on a revolving basis, subject to outstanding balances and concentration limits. The receivable factoring agreements are transferred in their entirety to the acquiring entities and are accounted for as a sale. Some of the agreements, including those assumed through the acquisition of Alfmeier, have deferred purchase price arrangements. As of September 30, 2022, there were $20,221 outstanding receivables transferred under the receivable factoring agreements and our availability under the receivables factoring agreements was $37,976.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration