Power Solutions International, Inc 10-Q for FY2021 Q2

Power Solutions International, Inc. (PSIX)

10-Q 2021-08-11 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Power Solutions International, Inc filed this 10-Q on August 11, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $111.48M; up 19.8% from $93.06M a year earlier
Net loss: $15.57M; compared with a net loss of $17.74M a year earlier
Diluted EPS: -$0.68; compared with -$0.78 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware		33-0963637
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
201 Mittel Drive, Wood Dale, IL		60191
(Address of Principal Executive Offices)		(Zip Code)
(630) 350-9400
(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
None	—	—
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share


		Page
PART I – FINANCIAL INFORMATION
	Forward-Looking Statements	3
Item 1.	Financial Statements	4
	Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	4
	Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)	5
	Consolidated Statements of Stockholders’ (Deficit) Equity for the three and six months ended June 30, 2021 and 2020 (Unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
	Signatures	38


(in thousands, except par values)	As of June 30, 2021		As of December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	5,503	$	20,968
Restricted cash	2,949		3,299
Accounts receivable, net of allowances of $3,896 and $3,701 as of June 30, 2021 and December 31, 2020, respectively	59,578		60,148
Income tax receivable	4,273		3,708
Inventories, net	129,262		108,213
Prepaid expenses and other current assets	7,926		6,351

Total current assets	209,491		202,687
Property, plant and equipment, net	19,162		20,181
Intangible assets, net	9,052		10,319
Goodwill	29,835		29,835

Other noncurrent assets	16,888		20,955
TOTAL ASSETS	$	284,428	$	283,977

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	79,786	$	31,547
Current maturities of long-term debt	304		310
Revolving line of credit	130,000		130,000

Other accrued liabilities	67,476		77,619
Total current liabilities	277,566		239,476

Deferred income taxes	1,258		886
Long-term debt, net of current maturities	743		781
Noncurrent contract liabilities	2,640		3,181
Other noncurrent liabilities	29,617		33,556
TOTAL LIABILITIES	$	311,824	$	277,880





STOCKHOLDERS’ (DEFICIT) EQUITY
Preferred stock – $0.001 par value. Shares authorized: 5,000. No shares issued and outstanding at all dates.	$	—	$	—
Common stock – $0.001 par value; 50,000 shares authorized; 23,117 shares issued; 22,894 and 22,892 shares outstanding June 30, 2021 and December 31, 2020, respectively	23		23
Additional paid-in capital	157,394		157,262
Accumulated deficit	(183,615)		(149,894)
Treasury stock, at cost, 223 and 225 shares at June 30, 2021 and December 31, 2020, respectively	(1,198)		(1,294)
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY	(27,396)		6,097
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	284,428	$	283,977


(in thousands, except per share amounts)	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Net sales	$	111,478	$	93,056	$	211,649	$	198,153
Cost of sales	98,284		89,279		191,385		176,662
Gross profit	13,194		3,777		20,264		21,491
Operating expenses:
Research, development and engineering expenses	6,111		5,814		12,335		12,566
Selling, general and administrative expenses	21,089		12,580		36,900		26,470

Amortization of intangible assets	633		764		1,267		1,527
Total operating expenses	27,833		19,158		50,502		40,563
Operating loss	(14,639)		(15,381)		(30,238)		(19,072)
Other expense, net:
Interest expense	1,469		1,427		3,630		2,701


Loss on debt extinguishment and modifications	—		497		—		497
Other expense (income), net	1		(44)		1		(255)
Total other expense, net	1,470		1,880		3,631		2,943
Loss before income taxes	(16,109)		(17,261)		(33,869)		(22,015)
Income tax (benefit) expense	(538)		481		(148)		(3,561)
Net loss	$	(15,571)	$	(17,742)	$	(33,721)	$	(18,454)



Weighted-average common shares outstanding:
Basic	22,893		22,858		22,893		22,858
Diluted	22,893		22,858		22,893		22,858
Loss per common share:
Basic	$	(0.68)	$	(0.78)	$	(1.47)	$	(0.81)
Diluted	$	(0.68)	$	(0.78)	$	(1.47)	$	(0.81)


(in thousands)	For the Three Months Ended
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Total Stockholders’ (Deficit) Equity
Balance at March 31, 2021	$	23	$	157,371	$	(168,044)	$	(1,295)	$	(11,945)
Net loss	—		—		(15,571)		—		(15,571)







Stock-based compensation expense	—		23		—		100		123
Common stock issued for stock-based awards, net	—		—		—		(3)		(3)







Balance at June 30, 2021	$	23	$	157,394	$	(183,615)	$	(1,198)	$	(27,396)

Balance at March 31, 2020	$	23	$	156,891	$	(127,624)	$	(1,349)	$	27,941
Net loss	—		—		(17,742)		—		(17,742)







Stock-based compensation expense	—		160		—		—		160
Common stock issued for stock-based awards, net	—		1		—		(5)		(4)







Balance at June 30, 2020	$	23	$	157,052	$	(145,366)	$	(1,354)	$	10,355


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(in thousands)	For the Six Months Ended
	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Total Stockholders’ (Deficit) Equity
Balance at December 31, 2020	$	23	$	157,262	$	(149,894)	$	(1,294)	$	6,097
Net loss	—		—		(33,721)		—		(33,721)







Stock-based compensation expense	—		132		—		100		232
Common stock issued for stock-based awards, net	—		—		—		(4)		(4)







Balance at June 30, 2021	$	23	$	157,394	$	(183,615)	$	(1,198)	$	(27,396)

Balance at December 31, 2019	$	23	$	156,727	$	(126,912)	$	(1,341)	$	28,497
Net loss	—		—		(18,454)		—		(18,454)







Stock-based compensation expense	—		317		—		—		317
Common stock issued for stock-based awards, net	—		8		—		(13)		(5)







Balance at June 30, 2020	$	23	$	157,052	$	(145,366)	$	(1,354)	$	10,355


(in thousands)	As of June 30,
	2021		2020
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheets
Cash and cash equivalents	$	5,503	$	32,533
Restricted cash	2,949		3,449
Total cash, cash equivalents, and restricted cash	$	8,452	$	35,982


	As of June 30, 2021		As of December 31, 2020
Customer A	27	%	16	%
Customer B	16	%	**
Customer D	**		22	%


(in thousands) Inventories	As of June 30, 2021		As of December 31, 2020
Raw materials *	$	103,979	$	89,684
Work in process	7,464		2,482
Finished goods	21,406		19,375
Total inventories	132,849		111,541
Inventory allowance	(3,587)		(3,328)
Inventories, net	$	129,262	$	108,213


(in thousands) Other Accrued Liabilities	As of June 30, 2021		As of December 31, 2020
Accrued product warranty	$	14,782	$	14,928
Litigation reserves *	4,288		3,128
Contract liabilities	34,751		47,960
Accrued compensation and benefits	3,247		3,124
Operating lease liabilities	3,826		3,793

Accrued interest expense	72		895

Other	6,510		3,791
Total	$	67,476	$	77,619


(in thousands)	As of June 30, 2021
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(26,316)	$	8,624
Developed technology	700		(664)		36
Trade names and trademarks	1,700		(1,308)		392
Total	$	37,340	$	(28,288)	$	9,052


(in thousands)	Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020

Operating lease cost	$	1,225	$	1,368	$	2,467	$	2,747
Finance lease cost
Amortization of right-of-use (“ROU”) asset	52		52		104		104
Interest expense	9		12		19		25
Short-term lease cost	130		108		232		217
Variable lease cost	176		374		514		797
Total lease cost	$	1,592	$	1,914	$	3,336	$	3,890


(in thousands)	June 30, 2021		December 31, 2020

Operating lease ROU assets, net 1	$	15,259	$	17,104

Operating lease liabilities, current 2	3,826		3,793
Operating lease liabilities, non-current 3	12,245		14,156
Total operating lease liabilities	$	16,071	$	17,949

Finance lease ROU assets, net 1	$	460	$	568

Finance lease liabilities, current 2	192		200
Finance lease liabilities, non-current 3	314		413
Total finance lease liabilities	$	506	$	613


(in thousands)	For the Six Months Ended June 30,
Accrued Product Warranty	2021		2020
Balance at beginning of period	$	31,542	$	25,501
Current year provision *	8,770		7,418

Changes in estimates for preexisting warranties **	780		9,925
Payments made during the period	(11,767)		(10,373)

Balance at end of period	29,325		32,471
Less: current portion	14,782		16,660
Noncurrent accrued product warranty	$	14,543	$	15,811


(in thousands)	Operating Leases		Finance Leases
Six months ending December 31, 2021	$	2,450	$	123
Year ending December 31, 2022	4,788		177
Year ending December 31, 2023	3,283		103
Year ending December 31, 2024	1,813		84
Year ending December 31, 2025	1,851		72
Thereafter	5,554		9
Total undiscounted lease payments	19,739		568
Less: imputed interest	3,668		62
Total lease liabilities	$	16,071	$	506


(in thousands)	As of June 30, 2021
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving credit facility	$	130,000	$	—	$	130,000	$	—


(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance at December 31, 2020	23,117	225	22,892
Net shares issued for Stock awards	—	(2)	2



Balance as of June 30, 2021	23,117	223	22,894


(in thousands, except per share basis)	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Numerator:
Net loss	$	(15,571)	$	(17,742)	$	(33,721)	$	(18,454)





Denominator:
Shares used in computing net loss per share:
Weighted-average common shares outstanding – basic	22,893		22,858		22,893		22,858
Effect of dilutive securities	—		—		—		—
Weighted-average common shares outstanding – diluted	22,893		22,858		22,893		22,858

Loss per common share:
Loss per share of common stock – basic	$	(0.68)	$	(0.78)	$	(1.47)	$	(0.81)
Loss per share of common stock – diluted	$	(0.68)	$	(0.78)	$	(1.47)	$	(0.81)


Non-GAAP Financial Measure			Comparable GAAP Financial Measure
Adjusted net income (loss)			Net income (loss)
Adjusted earnings (loss) per share			Earnings (loss) per common share – diluted
EBITDA			Net income (loss)
Adjusted EBITDA			Net income (loss)