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Financial Instruments | 12 Months Ended
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Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Note 13 —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, 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, Czech Koruna 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 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 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 foreign currency and copper commodity hedging instruments, if any, to Cost of sales, in the consolidated statements of income. Cash flows associated with derivatives are reported in Net cash provided by operating activities in the Company’s consolidated 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 and a maturity date of July 2025. This interest rate swap is an undesignated hedge of the Company’s exposure to interest payment fluctuations on a portion of the Revolving Credit Facility borrowings that were drawn for the acquisitions of Alfmeier and Dacheng. The periodic changes in fair value are 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 quart er of 2022. During the year ended December 31, 2022 the Company recognized expense of $3,806 in Foreign currency (loss) gain within the consolidated income statement. Information related to the recurring fair value measurement of derivative financial instruments in the consolidated balance sheet as of December 31, 2023 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 |  | $ | 101,109 |  |  | Other current assets |  | $ | 8,655 |  |  | Other current liabilities |  | $ | — |  |  | $ | 8,655 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Level 2 |  | $ | 100,000 |  |  | Other current assets |  | $ | 2,062 |  |  | Other current liabilities |  | $ | — |  |  | $ | 2,062 |
Information related to the recurring fair value measurement of derivative financial instruments in the consolidated balance sheet as of December 31, 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 |  | $ | 40,063 |  |  | Other current assets |  | $ | 3,791 |  |  | Other current liabilities |  | $ | — |  |  | $ | 3,791 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Level 2 |  | $ | 100,000 |  |  | Other current assets |  | $ | 2,772 |  |  | Other current liabilities |  | $ | — |  |  | $ | 2,772 |
Information related to the effect of derivative instruments in the consolidated statements of income is as follows:
|  |  |  | Year Ended December 31, |
|  | Location |  | 2023 |  |  | 2022 |  |  | 2021 |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Cost of sales – income |  | $ | 8,630 |  |  | $ | 1,458 |  |  | $ | 1,609 |
|  | Other comprehensive (loss) income |  |  | 3,483 |  |  |  | 3,496 |  |  |  | (1,217 | )
Total foreign currency derivatives |  |  |  | $ | 12,113 |  |  | $ | 4,954 |  |  | $ | 392 |
Commodity derivatives |  | Cost of sales – income |  | $ | — |  |  | $ | 19 |  |  | $ | 14 |
|  | Other comprehensive (loss) income |  |  | — |  |  |  | (6 | ) |  |  | 6 |
Total commodity derivatives |  |  |  | $ | — |  |  | $ | 13 |  |  | $ | 20 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives |  | Foreign currency (loss) gain |  | $ | — |  |  | $ | (3,806 | ) |  | $ | — |
Total foreign currency derivatives |  |  |  | $ | — |  |  | $ | (3,806 | ) |  | $ | — |
Interest rate contracts |  | Interest income (expense), net |  | $ | (710 | ) |  | $ | 2,772 |  |  | $ | — |
Total interest rate derivatives |  |  |  | $ | (710 | ) |  | $ | 2,772 |  |  | $ | — |
The Com pany did no t incur any hedge ineffectiveness duri ng the years ended December 31, 2023 and 2022. Accounts Receivable Factoring The Company sells certain customer trade receivables on a non-recourse basis under factoring arrangements with designated financial institutions. The sale of receivables under these agreements is considered an off-balance sheet arrangement to the Company and is accounted for as a true sale and excluded from accounts receivable in the consolidated balance sheets. These factoring arrangements include a deferred purchase price component in which a portion of the purchase price for the receivable is paid by the financial institution in cash upon sale and the remaining portion is recorded as a deferred purchase price receivable and paid at a later date. Deferred purchase price receivables are recorded in Other current assets within the consolidated balance sheets. Cash proceeds received upon the sale of the receivables are included in Net cash provided by operating activities and the cash proceeds received on the deferred purchase price receivables are included in Net cash used in investing activities. All factoring arrangements incorporate customary representations, including representations as to validity of amounts due, completeness of performance obligations and absence of commercial disputes. Receivables factored and availability under receivables factoring agreements balances as of December 31, 2023 and 2022 were as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |
Receivables factored and outstanding |  | $ | 18,532 |  |  | $ | 19,108 |
Amount available under the credit limit |  |  | 5,891 |  |  |  | 5,034 |
Collective factoring limit |  | $ | 24,423 |  |  | $ | 24,142 |
Trade receivables sold and factoring fees incurred during the years ended December 31, 2023 and 2022 were as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022(a) |
Trade receivables sold |  | $ | 135,116 |  |  | $ | 61,482 |
Factoring fees incurred |  |  | 800 |  |  |  | 180 |
(a) Represents trade receivables sold and factoring fees incurred since the acquisition of Alfmeier (acquired on August 1, 2022).

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- 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
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