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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of Stoneridge, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Intercompany transactions and balances have been eliminated in consolidation. The Company analyzes its ownership interests in accordance with Accounting Standards Codification (“ASC”) “Consolidations (Topic 810)” to determine whether they are a variable interest entity and, if so, whether the Company is the primary beneficiary. Accounting Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including certain self-insured risks and liabilities, 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. Because actual results could differ from those estimates, the Company revises its estimates and assumptions as new information becomes available. Cash and Cash Equivalents The Company’s cash and cash equivalents include actively traded money market funds with short-term investments in marketable securities, primarily U.S. government securities. Cash and cash equivalents are stated at cost, which approximates fair value, due to the highly liquid nature and short-term duration of the underlying securities with original maturities of 90 days or less. Accounts Receivable and Concentration of Credit Risk Revenues are principally generated from the commercial, automotive, off-highway and agricultural vehicle markets. The Company’s largest customers are PACCAR and Traton, primarily related to the Electronics reportable segment and accounted for the following percentages of consolidated net sales:
| 2024 |  | 2023 |  | 2022
PACCAR | 16 | % |  | 16 | % |  | 15 | %
Traton | 13 | % |  | 15 | % |  | 11 | %
Accounts receivable are recorded at the invoice price, net of an estimate of allowance for doubtful accounts and other reserves. Credit losses The Company primarily utilizes historical write-off experience, combined with customer specific considerations and industry and regional economic data to develop the estimate of the allowance for doubtful accounts in accordance with ASC Topic 326, Financial Instruments – Credit Losses (“ASC 326”). These allowances reflect management's estimate of credit losses over the remaining expected life of such assets. If customer specific or economic circumstances change substantially, estimates of the recoverability of amounts due to the Company could be reduced by a material amount. The Company does not have collateral requirements with its customers. Inventories Inventories are valued at the lower of cost (using either the first-in, first-out (“FIFO”) or average cost methods) or net realizable value. The Company evaluates and adjusts as necessary its excess and obsolescence reserve on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. Inventory cost includes material, labor and overhead. Inventories consist of the following:
December 31 |  | 2024 |  | 2023
Raw materials |  | $ | 108,283 |  |  | $ | 142,744 |
Work-in-progress |  | 7,627 |  |  | 11,907 |
Finished goods |  | 35,427 |  |  | 33,107 |
Total inventories, net |  | $ | 151,337 |  |  | $ | 187,758 |
Inventory valued using the FIFO method was $138,420 and $176,033 at December 31, 2024 and 2023, respectively. Inventory valued using the average cost method was $12,917 and $11,725 at December 31, 2024 and 2023, respectively. Long Term Supply Commitment In 2022, the Company entered into a long term supply agreement, as amended, with a supplier for the purchase of certain electronic semiconductor components through December 31, 2030. Pursuant to the agreement, the Company paid capacity deposits of $1,000 in 2022 and 2023, respectively. The capacity deposits are recognized in prepaid and other current assets on our consolidated balance sheet. This long term supply agreement requires the Company to purchase minimum annual volumes while requiring the supplier to sell these components at a fixed price. The Company purchased $3,053, $6,028 and $1,174 of these components during the years ended December 31, 2024, 2023 and 2022, respectively. The Company is required to purchase $5,571, $6,314, $7,463, $8,313, $841 and $1,492 of components in each of the years 2025 through 2030, respectively. Pre-production Costs Related to Long-term Supply Arrangements Engineering, research and development and other design and development costs for products sold on long-term supply arrangements are expensed as incurred unless the Company has a contractual guarantee for reimbursement from the customer which are capitalized as pre-production costs. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company either has title to the assets or has the non-cancelable right to use the assets during the term of the supply arrangement are capitalized in property, plant and equipment and amortized to cost of sales over the shorter of the term of the arrangement or over the estimated useful lives of the assets, typically three to seven years. Costs for molds, dies and other tools used to make products sold on long-term supply arrangements for which the Company has a contractual guarantee to a lump sum reimbursement from the customer are capitalized either as a component of prepaid expenses and other current assets or an investment and other long-term assets, net within the consolidated balance sheets. Capitalized pre-production costs were $13,104 and $12,378 at December 31, 2024 and 2023, respectively, and were recorded as a component of prepaid expenses and other current assets on the consolidated balance sheets. Property, Plant and Equipment Property, plant and equipment are recorded at cost and consist of the following:
December 31 |  | 2024 |  | 2023
Land and land improvements |  | $ | 3,125 |  |  | $ | 3,133 |
Buildings and improvements |  | 29,895 |  |  | 32,097 |
Machinery and equipment |  | 271,465 |  |  | 254,738 |
Office furniture and fixtures |  | 9,272 |  |  | 9,708 |
Tooling |  | 39,184 |  |  | 47,191 |
Information technology |  | 37,512 |  |  | 36,853 |
Vehicles |  | 741 |  |  | 789 |
Leasehold improvements |  | 5,511 |  |  | 5,249 |
Construction in progress |  | 19,773 |  |  | 27,589 |
Total property, plant, and equipment |  | 416,478 |  |  | 417,347 |
Less: accumulated depreciation |  | (318,811) |  |  | (307,221) |
Property, plant and equipment, net |  | $ | 97,667 |  |  | $ | 110,126 |
Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $26,140, $26,697 and $26,687, respectively. Depreciable lives within each property classification are as follows:
Buildings and improvements | 10-40 years
Machinery and equipment | 3-10 years
Office furniture and fixtures | 3-10 years
Tooling | 2-7 years
Information technology | 3-7 years
Vehicles | 3-7 years
Leasehold improvements | shorter of lease term or 3-10 years
Maintenance and repair expenditures that are not considered improvements and do not extend the useful life of the property, plant and equipment are charged to expense as incurred. Expenditures for improvements and major renewals are capitalized. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss on the disposition is recorded in the consolidated statements of operations as a component of selling, general and administrative expenses ("SG&A"). Impairment of Long-Lived or Finite-Lived Assets The Company reviews the carrying value of its long-lived assets and finite-lived intangible assets for impairment when events or circumstances indicate that their carrying value may not be recoverable. Factors the Company considers important that could trigger testing of the related asset groups for an impairment include current period operating or cash flow losses combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses, significant adverse changes in the business climate within a particular business or current expectations that a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life. To test for impairment, the estimated undiscounted cash flows expected to be generated from the use and disposal of the asset or asset group is compared to its carrying value. An asset group is established by identifying the lowest level of cash flows generated by the group of assets that are largely independent of cash flows of other assets. If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment has occurred for the group of assets for which we can identify projected cash flows. If these undiscounted cash flows are less than their respective carrying values, an impairment charge would be recognized to the extent that the carrying values exceed estimated fair values. The estimation of undiscounted cash flows and fair value requires us to make assumptions regarding future operating results over the life of the asset or the life of the primary asset in the asset group. The results of the impairment testing are dependent on these estimates which require judgment. The occurrence of certain events, including changes in economic and competitive conditions, could impact cash flows eventually realized and management’s ability to accurately assess whether an asset is impaired. Goodwill and Other Intangible Assets Goodwill The total purchase price associated with acquisitions is allocated to the acquisition date fair values of identifiable assets acquired and liabilities assumed with the excess purchase price assigned to goodwill. Goodwill was $33,085 and $35,295 at December 31, 2024 and 2023, respectively, all of which relates to the Electronics segment. Goodwill is not amortized, but instead is tested for impairment at least annually, or earlier when events and circumstances indicate that it is more likely than not that such assets have been impaired, by applying a fair value-based test. Goodwill is evaluated at the reporting unit level by comparing the fair value of the reporting unit with its carrying amount including goodwill. An impairment of goodwill exists if the carrying amount of the reporting unit exceeds its fair value. The impairment loss is the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill. In conducting our annual impairment assessment testing, we first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is performed. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if we elect not to perform a qualitative assessment of a reporting unit, we then compare the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The Company utilizes an income approach to estimate the fair value of a reporting unit and a market valuation approach to further support this analysis. The income approach is based on projected debt-free cash flow which is discounted to the present value using discount factors that consider the timing and risk of cash flows. We believe that this approach is appropriate because it provides a fair value estimate based on the reporting unit’s expected long-term operating cash flow performance. This approach also mitigates the impact of cyclical trends that occur in the industry. Fair value is estimated using internally developed forecasts, as well as commercial and discount rate assumptions. The discount rate used is the value-weighted average of our estimated cost of equity and of debt (“cost of capital”) derived using both known and estimated customary market metrics. Our weighted average cost of capital is adjusted to reflect a risk factor, if necessary. Other significant assumptions include terminal value growth rates, terminal value margin rates, future capital expenditures and changes in future working capital requirements. While there are inherent uncertainties related to the assumptions used and to management’s application of these assumptions to this analysis, we believe that the income approach provides a reasonable estimate of the fair value of a reporting unit. The market valuation approach is used to further support our analysis. There was no impairment of goodwill for the years ended December 31, 2024, 2023 or 2022. Goodwill and changes in the carrying amount of goodwill for the Electronics segment for the years ended December 31, 2024 and 2023 were as follows:
| 2024 |  | 2023
Balance at January 1 | $ | 35,295 |  |  | $ | 34,225 |
Currency translation | (2,210) |  |  | 1,070 |
Balance at December 31 | $ | 33,085 |  |  | $ | 35,295 |
The Company’s cumulative goodwill impairment loss since inception was $300,083 at December 31, 2024 and 2023, which includes Stoneridge Brazil’s goodwill impairment in 2014 and goodwill impairment recorded by the Company’s Control Devices segment in 2008 and 2004. Other Intangible Assets Other intangible assets, net at December 31, 2024 and 2023 consisted of the following:
As of December 31, 2024 |  | Acquisition cost |  | Accumulated amortization |  | Net
Customer lists |  | $ | 40,669 |  |  | $ | (26,303) |  |  | $ | 14,366 |
Tradenames |  | 14,444 |  |  | (8,135) |  |  | 6,309 |
Technology and patents |  | 11,657 |  |  | (9,934) |  |  | 1,723 |
Capitalized software development |  | 26,123 |  |  | (8,844) |  |  | 17,279 |
Total |  | $ | 92,893 |  |  | $ | (53,216) |  |  | $ | 39,677 |
As of December 31, 2023 |  | Acquisition cost |  | Accumulated amortization |  | Net
Customer lists |  | $ | 46,393 |  |  | $ | (27,580) |  |  | $ | 18,813 |
Tradenames |  | 17,423 |  |  | (9,118) |  |  | 8,305 |
Technology and patents |  | 13,636 |  |  | (11,098) |  |  | 2,538 |
Capitalized software development |  | 23,023 |  |  | (5,365) |  |  | 17,658 |
Total |  | $ | 100,475 |  |  | $ | (53,161) |  |  | $ | 47,314 |
Other intangible assets, net at December 31, 2024 for customer lists, tradenames, technology and patents, and capitalized software development include $12,463, $2,979, $251 and $15,816, respectively, related to the Electronics segment. Customer lists, tradenames and technology of $1,903, $3,330 and $1,424, respectively, related to the Stoneridge Brazil segment at December 31, 2024. Patents and capitalized software development of $48 and $1,463, respectively, related to the Control Devices segment at December 31, 2024. The Company designs and develops software that will be embedded into certain products and sold to customers. Software development costs are capitalized after the software product development reaches technological feasibility and until the software product becomes available for general release to customers. These intangible assets are amortized using the straight-line method over estimated useful lives generally ranging from three to seven years. The Company recognized $8,127, $6,942 and $7,003 of amortization expense related to intangible assets in 2024, 2023 and 2022, respectively. Amortization expense is included as a component of cost of goods sold ("COGS"), SG&A and design and development ("D&D") on the consolidated statements of operations. Annual amortization expense for intangible assets is estimated to be approximately $7,900 for the year 2025 and approximately $6,300 for the years 2026 through 2029. The weighted-average remaining amortization period is approximately 6 years. There were no intangible impairment charges for the years ended December 31, 2024, 2023 or 2022. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following:
As of December 31 |  | 2024 |  | 2023
Compensation related liabilities |  | $ | 21,171 |  |  | $ | 23,941 |
Product warranty and recall obligations |  | 16,848 |  |  | 14,381 |
Other (A) |  | 28,475 |  |  | 25,881 |
Total accrued expenses and other current liabilities |  | $ | 66,494 |  |  | $ | 64,203 |
_____________________________ (A)“Other” is comprised of miscellaneous accruals, none of which individually contributed a significant portion of the total. Income Taxes The Company accounts for income taxes using the liability method. Deferred income taxes reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not to occur. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized (See Note 6). In making such a determination, the Company considers all available positive and negative evidence, including future release of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. Certain deferred tax assets are dependent on future taxable income to be realized. Release of some or all of a valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. The Company’s policy is to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. The Company adjusts this liability in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or more information becomes available. The Company has made an accounting policy election to reflect GILTI taxes, if any, as a current period tax expense when incurred. Currency Translation The financial statements of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using exchange rates in effect at the period end for assets and liabilities and average exchange rates during each reporting period for the results of operations. Adjustments resulting from translation of financial statements are reflected as a component of accumulated other comprehensive loss in the Company’s consolidated balance sheets. Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the consolidated statements of operations within other (income) expense, net. These foreign currency transaction (gains) losses, including the impact of hedging activities, were $(2,414), $1,226 and $5,534 for the years ended December 31, 2024, 2023 and 2022, respectively. Revenue Recognition and Sales Commitments The Company recognizes revenue when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products and services, which is usually when the parts are shipped or delivered to the customer’s premises. The Company recognizes monitoring service revenues over time, as the services are provided to customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Incidental items that are not significant in the context of the contract are recognized as expense. The Company collects certain taxes and fees on behalf of government agencies and remits such collections on a periodic basis. The taxes are collected from customers but are not included in net sales. Estimated returns are based on historical authorized returns. The Company often enters into agreements with its customers at the beginning of a given vehicle’s expected production life. Once such agreements are entered into, it is the Company’s obligation to fulfill the customers’ purchasing requirements for the entire production life of the vehicle. These agreements are subject to potential renegotiation from time to time, which may affect product pricing. See Note 3 for additional disclosure. Shipping and Handling Costs Shipping and handling costs are included in COGS on the consolidated statements of operations. Product Warranty and Recall Reserves Amounts accrued for product warranty and recall claims are established based on the Company’s best estimate of the amounts necessary to settle existing and future claims on products sold as of the balance sheet dates. These accruals are based on several factors including past experience, production changes, industry developments and various other considerations. Our estimate is based on historical trends of units sold and claim payment amounts, combined with our current understanding of the status of existing claims, forecasts of the resolution of existing claims, expected future claims on products sold and commercial discussions with our customers. The key factors in our estimate are the warranty period and the customer source. The Company can provide no assurances that it will not experience material claims or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued. The current portion of the product warranty and recall reserve is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets. Product warranty and recall includes $10,675 and $7,228 of a long-term liability at December 31, 2024 and 2023, respectively, which is included as a component of other long-term liabilities on the consolidated balance sheets. In 2023, the Company received a demand for arbitration from one of our customers seeking recovery of warranty claims in the amount of 29,340 euro ($32,669), related to past sales of PM sensor products, a product line we exited in 2019. The Company denies responsibility for these claims. Based on our review of the technical and legal merits, we believe these warranty claims lack substantive merit and are significantly overstated. The Company continues to vigorously defend this matter in private arbitration. While no assurances can be made as to the ultimate outcome of this matter, or any other future claims, we do not currently believe a material loss is probable. The following provides a reconciliation of changes in the product warranty and recall reserve:
Year ended December 31, |  | 2024 |  | 2023
Product warranty and recall at beginning of period |  | $ | 21,610 |  |  | $ | 13,477 |
Accruals for warranties established during period |  | 18,479 |  |  | 15,057 |
Aggregate changes in pre-existing liabilities due to claim developments |  | 1,934 |  |  | 1,199 |
Settlements made during the period |  | (13,052) |  |  | (8,639) |
Foreign currency translation |  | (1,448) |  |  | 516 |
Product warranty and recall at end of period |  | $ | 27,523 |  |  | $ | 21,610 |
Design and Development Costs Expenses associated with the development of new products, and changes to existing products, other than capitalized software development costs, are charged to expense as incurred, and are included in the Company’s consolidated statements of operations as a separate component of costs and expenses. These product development costs amounted to $72,174, $71,075 and $65,296 for the years ended December 31, 2024, 2023 and 2022, respectively, or 7.9%, 7.3% and 7.3% of net sales for these respective periods. Research and Development Activities The Company enters into research and development contracts with certain customers, which generally provide for reimbursement of costs. The Company incurred and was reimbursed for contracted research and development costs of $11,883, $18,809 and $23,784 for the years ended December 31, 2024, 2023 and 2022, respectively. Share-Based Compensation At December 31, 2024, the Company had two share-based compensation plans: (1) 2016 Long-Term Incentive Plan for employees and (2) the 2018 Amended and Restated Directors’ Restricted Shares Plan, for non-employee directors. See Note 8 for additional details on share-based compensation plans. Total compensation expense recognized as a component of SG&A expense on the consolidated statements of operations for share-based compensation arrangements was $4,094, $3,322 and $5,942 for the years ended December 31, 2024, 2023 and 2022, respectively. There was no share-based compensation expense capitalized in inventory during 2024, 2023 or 2022. Share-based compensation expense is calculated using estimated volatility and forfeitures based on historical data, future expectations and the expected term of the share-based compensation awards. Financial Instruments and Derivative Financial Instruments Financial instruments, including derivative financial instruments, held by the Company include cash and cash equivalents, accounts receivable, accounts payable, long-term debt and foreign currency forward contracts. The carrying value of cash and cash equivalents, accounts receivable and accounts payable is considered to be representative of fair value because of the short maturity of these instruments. See Note 10 for fair value disclosures of the Company’s financial instruments. Common Shares Held in Treasury The Company accounts for Common Shares held in treasury under the cost method (applied on a FIFO basis) and includes such shares as a reduction of total shareholders’ equity. Loss Per Share Basic loss per share was computed by dividing net loss by the weighted-average number of Common Shares outstanding for each respective period. Diluted earnings per share was calculated by dividing net loss by the weighted-average of all potentially dilutive Common Shares that were outstanding during the periods presented. However, for all periods in which the Company recognized a net loss, the Company did not recognize the effect of the potential dilutive securities as their inclusion would be anti-dilutive. Potential dilutive shares of 202,163, 227,741 and 232,458 for the years ended December 31, 2024, 2023 and 2022, respectively, were excluded from diluted loss per share because the effect would have been anti-dilutive. Actual weighted-average Common Shares outstanding used in calculating basic and diluted net loss per share were as follows:
Year ended December 31, |  | 2024 |  | 2023 |  | 2022
Basic weighted-average Common Shares outstanding |  | 27,595,698 |  | 27,442,984 |  | 27,258,456
Effect of dilutive shares |  | — |  | — |  | —
Diluted weighted-average Common Shares outstanding |  | 27,595,698 |  | 27,442,984 |  | 27,258,456
There were 605,196, 418,834 and 767,593 performance-based right to receive Common Shares outstanding at December 31, 2024, 2023 and 2022, respectively. These performance-based restricted and right to receive Common Shares are included in the computation of diluted earnings per share based on the number of Common Shares that would be issuable if the end of the year were the end of the contingency period. Deferred Financing Costs, net Deferred financing costs are amortized over the life of the related financial instrument using the straight-line method, which approximates the effective interest method. Deferred financing cost amortization and debt discount accretion, for the years ended December 31, 2024, 2023 and 2022 was $725, $1,190 and $1,051, respectively, and is included as a component of interest expense, net in the consolidated statements of operations. In 2022, the Company capitalized $484 of deferred financing costs as a result of entering into Amendment No. 3 to the Fourth Amended and Restated Credit Facility. In connection with Amendment No. 3, the Company wrote off a portion of the previously recorded deferred financing costs of $365 in interest expense, net during the year ended December 31, 2022. In 2023, the Company capitalized $332 of deferred financing costs as a resulting of entering into Amendment No. 4 to the Fourth Amended and Restated Credit Facility. Additionally in 2023, the Company capitalized $1,915 of deferred financing costs and wrote off $309 of previously recorded deferred financing costs as a result of entering into the Fifth Amended and Restated Credit Agreement. See Note 5 to the consolidated financial statements for additional details regarding the Credit Facility and related deferred financing costs. The Company has elected to continue to present deferred financing costs within long-term assets in the Company’s consolidated balance sheets. Deferred financing costs, net, were $1,332 and $2,057, as of December 31, 2024 and 2023, respectively. Changes in Accumulated Other Comprehensive Loss by Component Changes in accumulated other comprehensive loss for the years ended December 31, 2024 and 2023 were as follows:
| Foreign currency translation |  | Unrealized gain (loss) on derivatives |  | Total
Balance at January 1, 2024 | $ | (94,256) |  |  | $ | 1,468 |  |  | $ | (92,788) |
Other comprehensive loss before reclassifications | (25,839) |  |  | (3,700) |  |  | (29,539) |
Amounts reclassified from accumulated other comprehensive loss | — |  |  | 314 |  |  | 314 |
Net other comprehensive loss, net of tax | (25,839) |  |  | (3,386) |  |  | (29,225) |
Balance at December 31, 2024 | $ | (120,095) |  |  | $ | (1,918) |  |  | $ | (122,013) |
Balance at January 1, 2023 | $ | (103,374) |  |  | $ | 232 |  |  | $ | (103,142) |
Other comprehensive income before reclassifications | 9,118 |  |  | 1,817 |  |  | 10,935 |
Amounts reclassified from accumulated other comprehensive loss | — |  |  | (581) |  |  | (581) |
Net other comprehensive income, net of tax | 9,118 |  |  | 1,236 |  |  | 10,354 |
Balance at December 31, 2023 | $ | (94,256) |  |  | $ | 1,468 |  |  | $ | (92,788) |
Reclassifications Certain prior period amounts have been reclassified to conform to their 2024 presentation in the consolidated financial statements. Recently Adopted Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance in ASU 2020-04 provides temporary optional expedient and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”) (also known as the “reference rate reform”). The guidance allows companies to elect not to apply certain modification accounting requirements to contracts affected by the reference rate reform, if certain criteria are met. The guidance also allows companies to elect various optional expedients which would allow them to continue to apply hedge accounting for hedging relationships affected by the reference rate reform, if certain criteria are met. The new standard was effective upon issuance and generally could have been applied to applicable contract modifications through December 31, 2023. In February 2022, the Company amended its credit facility to incorporate hardwired mechanics to permit a future replacement of LIBOR as the interest reference rate without lender consent. The Company has applied the guidance to impacted transactions during the transition period. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures", which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026. Early adoption is permitted. We adopted this ASU retrospectively on December 31, 2024. Refer to Note 13, Segment Reporting for the inclusion of the new required disclosures. Recently Issued Accounting Standards Not Yet Adopted as of December 31, 2024 In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures," which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, companies are required to disclose additional information about income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be adopted on a prospective basis; however, retrospective application is permitted. This ASU will modify the Company's financial statement disclosures, but will not have a significant impact on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures," which requires companies to disclose certain costs and expenses within the notes to the financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact on our annual consolidated financial statement disclosures.

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