UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2019
or
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________ to ___________
Commission File Number 1-8462
GRAHAM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
16-1194720 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
20 Florence Avenue, Batavia, New York |
14020 |
(Address of principal executive offices) |
(Zip Code) |
585-343-2216
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, Par Value $0.10 Per Share |
|
GHM |
|
NYSE |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
|
Accelerated filer |
☒ |
Non-accelerated filer |
☐ |
|
Smaller reporting company |
☐ |
Emerging growth company |
☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of October 30, 2019, there were outstanding 9,883,017 shares of the registrant’s common stock, par value $.10 per share.
Graham Corporation and Subsidiaries
Index to Form 10-Q
As of September 30, 2019 and March 31, 2019 and for the Three and Six-Month Periods Ended September 30, 2019 and 2018
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Page |
Part I. |
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Item 1. |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
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Item 3. |
26 |
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Item 4. |
27 |
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Part II. |
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Item 6. |
28 |
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29 |
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2
GRAHAM CORPORATION AND SUBSIDIARIES
FORM 10-Q
SEPTEMBER 30, 2019
PART I – FINANCIAL INFORMATION
3
GRAHAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(Amounts in thousands, except per share data) |
|
|
(Amounts in thousands, except per share data) |
|
||||||||||
Net sales |
|
$ |
21,643 |
|
|
$ |
21,441 |
|
|
$ |
42,236 |
|
|
$ |
50,992 |
|
Cost of products sold |
|
|
16,695 |
|
|
|
15,214 |
|
|
|
32,574 |
|
|
|
37,623 |
|
Gross profit |
|
|
4,948 |
|
|
|
6,227 |
|
|
|
9,662 |
|
|
|
13,369 |
|
Other expenses and income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
3,847 |
|
|
|
4,718 |
|
|
|
8,403 |
|
|
|
9,269 |
|
Selling, general and administrative – amortization |
|
|
— |
|
|
|
60 |
|
|
|
11 |
|
|
|
119 |
|
Other expense |
|
|
— |
|
|
|
— |
|
|
|
523 |
|
|
|
— |
|
Other income |
|
|
(87 |
) |
|
|
(206 |
) |
|
|
(174 |
) |
|
|
(412 |
) |
Interest income |
|
|
(363 |
) |
|
|
(351 |
) |
|
|
(762 |
) |
|
|
(640 |
) |
Interest expense |
|
|
4 |
|
|
|
1 |
|
|
|
7 |
|
|
|
3 |
|
Total other expenses and income |
|
|
3,401 |
|
|
|
4,222 |
|
|
|
8,008 |
|
|
|
8,339 |
|
Income before provision for income taxes |
|
|
1,547 |
|
|
|
2,005 |
|
|
|
1,654 |
|
|
|
5,030 |
|
Provision for income taxes |
|
|
342 |
|
|
|
178 |
|
|
|
367 |
|
|
|
880 |
|
Net income |
|
$ |
1,205 |
|
|
$ |
1,827 |
|
|
$ |
1,287 |
|
|
$ |
4,150 |
|
Per share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.12 |
|
|
$ |
0.19 |
|
|
$ |
0.13 |
|
|
$ |
0.42 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.12 |
|
|
$ |
0.19 |
|
|
$ |
0.13 |
|
|
$ |
0.42 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
9,883 |
|
|
|
9,832 |
|
|
|
9,869 |
|
|
|
9,810 |
|
Diluted |
|
|
9,885 |
|
|
|
9,848 |
|
|
|
9,872 |
|
|
|
9,826 |
|
Dividends declared per share |
|
$ |
0.11 |
|
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
$ |
0.19 |
|
See Notes to Condensed Consolidated Financial Statements.
4
GRAHAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(Amounts in thousands) |
|
|
(Amounts in thousands) |
|
||||||||||
Net income |
|
$ |
1,205 |
|
|
$ |
1,827 |
|
|
$ |
1,287 |
|
|
$ |
4,150 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(136 |
) |
|
|
(134 |
) |
|
|
(223 |
) |
|
|
(333 |
) |
Defined benefit pension and other postretirement plans net of income tax expense of $54 and $48, for the three months ended September 30, 2019 and 2018, respectively, and $109 and $97 for the six months ended September 30, 2019 and 2018, respectively |
|
|
195 |
|
|
|
170 |
|
|
|
389 |
|
|
|
340 |
|
Total other comprehensive income |
|
|
59 |
|
|
|
36 |
|
|
|
166 |
|
|
|
7 |
|
Total comprehensive income |
|
$ |
1,264 |
|
|
$ |
1,863 |
|
|
$ |
1,453 |
|
|
$ |
4,157 |
|
See Notes to Condensed Consolidated Financial Statements.
5
GRAHAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
September 30, |
|
|
March 31, |
|
||
|
|
2019 |
|
|
2019 |
|
||
|
|
(Amounts in thousands, except per share data) |
|
|||||
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,882 |
|
|
$ |
15,021 |
|
Investments |
|
|
61,914 |
|
|
|
62,732 |
|
Trade accounts receivable, net of allowances ($26 and $33 at September 30 and March 31, 2019, respectively) |
|
|
12,120 |
|
|
|
17,582 |
|
Unbilled revenue |
|
|
13,036 |
|
|
|
7,522 |
|
Inventories |
|
|
23,597 |
|
|
|
24,670 |
|
Prepaid expenses and other current assets |
|
|
1,165 |
|
|
|
1,333 |
|
Income taxes receivable |
|
|
840 |
|
|
|
1,073 |
|
Assets held for sale |
|
|
— |
|
|
|
4,850 |
|
Total current assets |
|
|
124,554 |
|
|
|
134,783 |
|
Property, plant and equipment, net |
|
|
16,761 |
|
|
|
17,071 |
|
Prepaid pension asset |
|
|
4,702 |
|
|
|
4,267 |
|
Operating lease assets |
|
|
312 |
|
|
|
— |
|
Other assets |
|
|
135 |
|
|
|
149 |
|
Total assets |
|
$ |
146,464 |
|
|
$ |
156,270 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of capital lease obligations |
|
$ |
50 |
|
|
$ |
51 |
|
Accounts payable |
|
|
7,617 |
|
|
|
12,405 |
|
Accrued compensation |
|
|
5,273 |
|
|
|
5,126 |
|
Accrued expenses and other current liabilities |
|
|
2,443 |
|
|
|
2,933 |
|
Customer deposits |
|
|
29,609 |
|
|
|
30,847 |
|
Operating lease liabilities |
|
|
148 |
|
|
|
— |
|
Liabilities held for sale |
|
|
— |
|
|
|
3,525 |
|
Total current liabilities |
|
|
45,140 |
|
|
|
54,887 |
|
Capital lease obligations |
|
|
71 |
|
|
|
95 |
|
Operating lease liabilities |
|
|
157 |
|
|
|
— |
|
Deferred income tax liability |
|
|
1,283 |
|
|
|
1,056 |
|
Accrued pension liability |
|
|
704 |
|
|
|
662 |
|
Accrued postretirement benefits |
|
|
614 |
|
|
|
604 |
|
Total liabilities |
|
|
47,969 |
|
|
|
57,304 |
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value, 500 shares authorized |
|
|
— |
|
|
|
— |
|
Common stock, $.10 par value, 25,500 shares authorized, 10,699 and 10,650 shares issued and 9,883 and 9,843 shares outstanding at September 30 and March 31, 2019, respectively |
|
|
1,070 |
|
|
|
1,065 |
|
Capital in excess of par value |
|
|
25,714 |
|
|
|
25,277 |
|
Retained earnings |
|
|
92,979 |
|
|
|
93,847 |
|
Accumulated other comprehensive loss |
|
|
(8,667 |
) |
|
|
(8,833 |
) |
Treasury stock (816 and 807 shares at September 30 and March 31, 2019, respectively) |
|
|
(12,601 |
) |
|
|
(12,390 |
) |
Total stockholders’ equity |
|
|
98,495 |
|
|
|
98,966 |
|
Total liabilities and stockholders’ equity |
|
$ |
146,464 |
|
|
$ |
156,270 |
|
See Notes to Condensed Consolidated Financial Statements.
6
GRAHAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Six Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Operating activities: |
|
(Dollar amounts in thousands) |
|
|||||
Net income |
|
$ |
1,287 |
|
|
$ |
4,150 |
|
Adjustments to reconcile net income to net cash (used) provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
980 |
|
|
|
980 |
|
Amortization |
|
|
11 |
|
|
|
119 |
|
Amortization of unrecognized prior service cost and actuarial losses |
|
|
498 |
|
|
|
437 |
|
Equity-based compensation expense |
|
|
412 |
|
|
|
534 |
|
Loss on disposal or sale of property, plant and equipment |
|
|
— |
|
|
|
30 |
|
Loss on sale of Energy Steel & Supply Co. |
|
|
87 |
|
|
|
— |
|
Deferred income taxes |
|
|
119 |
|
|
|
207 |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,287 |
|
|
|
2,656 |
|
Unbilled revenue |
|
|
(5,514 |
) |
|
|
(5,276 |
) |
Inventories |
|
|
990 |
|
|
|
3,652 |
|
Prepaid expenses and other current and non-current assets |
|
|
109 |
|
|
|
(679 |
) |
Income taxes receivable |
|
|
233 |
|
|
|
(303 |
) |
Operating lease assets |
|
|
138 |
|
|
|
— |
|
Prepaid pension asset |
|
|
(435 |
) |
|
|
(576 |
) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
(4,721 |
) |
|
|
(6,097 |
) |
Accrued compensation, accrued expenses and other current and non-current liabilities |
|
|
(268 |
) |
|
|
1,086 |
|
Customer deposits |
|
|
(1,116 |
) |
|
|
4,096 |
|
Operating lease liabilities |
|
|
(64 |
) |
|
|
— |
|
Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits |
|
|
52 |
|
|
|
59 |
|
Net cash (used) provided by operating activities |
|
|
(1,915 |
) |
|
|
5,075 |
|
Investing activities: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(679 |
) |
|
|
(367 |
) |
Proceeds from the sale of Energy Steel & Supply Co. |
|
|
602 |
|
|
|
— |
|
Purchase of investments |
|
|
(82,414 |
) |
|
|
(64,611 |
) |
Redemption of investments at maturity |
|
|
83,232 |
|
|
|
45,023 |
|
Net cash provided (used) by investing activities |
|
|
741 |
|
|
|
(19,955 |
) |
Financing activities: |
|
|
|
|
|
|
|
|
Principal repayments on capital lease obligations |
|
|
(25 |
) |
|
|
(52 |
) |
Issuance of common stock |
|
|
— |
|
|
|
171 |
|
Dividends paid |
|
|
(2,075 |
) |
|
|
(1,868 |
) |
Purchase of treasury stock |
|
|
(230 |
) |
|
|
(146 |
) |
Net cash used by financing activities |
|
|
(2,330 |
) |
|
|
(1,895 |
) |
Effect of exchange rate changes on cash |
|
|
(187 |
) |
|
|
(303 |
) |
Net decrease in cash and cash equivalents, including cash classified within current assets held for sale |
|
|
(3,691 |
) |
|
|
(17,078 |
) |
Plus: Net decrease in cash classified within current assets held for sale |
|
|
552 |
|
|
|
— |
|
Net decrease in cash and cash equivalents |
|
|
(3,139 |
) |
|
|
(17,078 |
) |
Cash and cash equivalents at beginning of period |
|
|
15,021 |
|
|
|
40,456 |
|
Cash and cash equivalents at end of period |
|
$ |
11,882 |
|
|
$ |
23,378 |
|
See Notes to Condensed Consolidated Financial Statements.
7
GRAHAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
SIX MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(Unaudited)
|
|
Common Stock |
|
|
Capital in |
|
|
|
|
|
|
Accumulated Other |
|
|
|
|
|
|
Total |
|
||||||||
|
|
|
|
|
|
Par |
|
|
Excess of |
|
|
Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders' |
|
||||||
|
|
Shares |
|
|
Value |
|
|
Par Value |
|
|
Earnings |
|
|
Loss |
|
|
Stock |
|
|
Equity |
|
|||||||
Balance at April 1, 2019 |
|
|
10,650 |
|
|
$ |
1,065 |
|
|
$ |
25,277 |
|
|
$ |
93,847 |
|
|
$ |
(8,833 |
) |
|
$ |
(12,390 |
) |
|
$ |
98,966 |
|
Cumulative effect of change in accounting principle |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(80 |
) |
|
|
|
|
|
|
|
|
|
|
(80 |
) |
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82 |
|
|
|
107 |
|
|
|
|
|
|
|
189 |
|
Issuance of shares |
|
|
83 |
|
|
|
8 |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Forfeiture of shares |
|
|
(34 |
) |
|
|
(3 |
) |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(988 |
) |
|
|
|
|
|
|
|
|
|
|
(988 |
) |
Recognition of equity-based compensation expense |
|
|
|
|
|
|
|
|
|
|
88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88 |
|
Purchase of treasury stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(230 |
) |
|
|
(230 |
) |
Balance at June 30, 2019 |
|
|
10,699 |
|
|
|
1,070 |
|
|
|
25,360 |
|
|
|
92,861 |
|
|
|
(8,726 |
) |
|
|
(12,620 |
) |
|
|
97,945 |
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,205 |
|
|
|
59 |
|
|
|
|
|
|
|
1,264 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,087 |
) |
|
|
|
|
|
|
|
|
|
|
(1,087 |
) |
Recognition of equity-based compensation expense |
|
|
|
|
|
|
|
|
|
|
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
324 |
|
Issuance of treasury stock |
|
|
|
|
|
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
49 |
|
Balance at September 30, 2019 |
|
|
10,699 |
|
|
$ |
1,070 |
|
|
$ |
25,714 |
|
|
$ |
92,979 |
|
|
$ |
(8,667 |
) |
|
$ |
(12,601 |
) |
|
$ |
98,495 |
|
|
|
Common Stock |
|
|
Capital in |
|
|
|
|
|
|
Accumulated Other |
|
|
|
|
|
|
Total |
|
||||||||
|
|
|
|
|
|
Par |
|
|
Excess of |
|
|
Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders' |
|
||||||
|
|
Shares |
|
|
Value |
|
|
Par Value |
|
|
Earnings |
|
|
Loss |
|
|
Stock |
|
|
Equity |
|
|||||||
Balance at April 1, 2018 |
|
|
10,579 |
|
|
$ |
1,058 |
|
|
$ |
23,826 |
|
|
$ |
99,011 |
|
|
$ |
(8,250 |
) |
|
$ |
(12,296 |
) |
|
$ |
103,349 |
|
Cumulative effect of change in accounting principle |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,022 |
) |
|
|
|
|
|
|
|
|
|
|
(1,022 |
) |
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,323 |
|
|
|
(29 |
) |
|
|
|
|
|
|
2,294 |
|
Issuance of shares |
|
|
59 |
|
|
|
6 |
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(885 |
) |
|
|
|
|
|
|
|
|
|
|
(885 |
) |
Recognition of equity-based compensation expense |
|
|
|
|
|
|
|
|
|
|
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
260 |
|
Purchase of treasury stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(146 |
) |
|
|
(146 |
) |
Balance at June 30, 2018 |
|
|
10,638 |
|
|
|
1,064 |
|
|
|
24,182 |
|
|
|
99,427 |
|
|
|
(8,279 |
) |
|
|
(12,442 |
) |
|
|
103,952 |
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,827 |
|
|
|
36 |
|
|
|
|
|
|
|
1,863 |
|
Issuance of shares |
|
|
4 |
|
|
|
|
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(983 |
) |
|
|
|
|
|
|
|
|
|
|
(983 |
) |
Recognition of equity-based compensation expense |
|
|
|
|
|
|
|
|
|
|
274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
274 |
|
Issuance of treasury stock |
|
|
|
|
|
|
|
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
32 |
|
|
|
79 |
|
Balance at September 30, 2018 |
|
|
10,642 |
|
|
$ |
1,064 |
|
|
$ |
24,572 |
|
|
$ |
100,271 |
|
|
$ |
(8,243 |
) |
|
$ |
(12,410 |
) |
|
$ |
105,254 |
|
See Notes to Condensed Consolidated Financial Statements.
8
GRAHAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in thousands, except per share data)
NOTE 1 – BASIS OF PRESENTATION:
Graham Corporation's (the "Company's") Condensed Consolidated Financial Statements include its wholly-owned foreign subsidiaries located in Suzhou, China and Ahmedabad, India. During the fiscal year ended March 31, 2019 ("fiscal 2019") the Company decided to divest of its wholly-owned domestic subsidiary, Energy Steel & Supply Co. ("Energy Steel"), located in Lapeer, Michigan. The sale of Energy Steel was completed in June 2019 and the accompanying Condensed Consolidated Financial Statements include the results of operations of Energy Steel for the period April 1, 2018 through June 23, 2019. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, each as promulgated by the U.S. Securities and Exchange Commission. The Company's Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for complete financial statements. The unaudited Condensed Consolidated Balance Sheet as of March 31, 2019 presented herein was derived from the Company’s audited Consolidated Balance Sheet as of March 31, 2019. For additional information, please refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 fiscal 2019. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included in the Company's Condensed Consolidated Financial Statements.
The Company's results of operations and cash flows for the three and six months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the current fiscal year, which ends March 31, 2020 ("fiscal 2020").
NOTE 2 – REVENUE RECOGNITION:
The Company accounts for revenue in accordance with Accounting Standard Codification 606, “Revenue from Contracts with Customers” (“ASC 606”), which it adopted on April 1, 2018 using the modified retrospective approach.
The Company recognizes revenue on contracts when or as it satisfies a performance obligation by transferring control of the product to the customer. For contracts in which revenue is recognized upon shipment, control is generally transferred when products are shipped, title is transferred, significant risks of ownership have transferred, the Company has rights to payment, and rewards of ownership pass to the customer. For contracts in which revenue is recognized over time, control is generally transferred as the Company creates an asset that does not have an alternative use to the Company and the Company has an enforceable right to payment for the performance completed to date.
The following table presents the Company’s revenue disaggregated by product line and geographic area:
9
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
Product Line |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Heat transfer equipment |
|
$ |
6,479 |
|
|
$ |
6,173 |
|
|
$ |
14,331 |
|
|
$ |
10,331 |
|
Vacuum equipment |
|
|
8,733 |
|
|
|
7,842 |
|
|
|
14,263 |
|
|
|
25,058 |
|
All other |
|
|
6,431 |
|
|
|
7,426 |
|
|
|
13,642 |
|
|
|
15,603 |
|
Net sales |
|
$ |
21,643 |
|
|
$ |
21,441 |
|
|
$ |
42,236 |
|
|
$ |
50,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia |
|
$ |
1,018 |
|
|
$ |
1,876 |
|
|
$ |
4,237 |
|
|
$ |
4,625 |
|
Canada |
|
|
1,896 |
|
|