thr-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2021

☐ 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: 001-35159

THERMON GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware			27-2228185
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

7171 Southwest Parkway, Building 300, Suite 200, Austin, Texas 78735

(Address of principal executive offices) (zip code)

(512) 690-0600

(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, $0.001 par value per share

THR

New York Stock Exchange

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 the definitions 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 August 4, 2021, the registrant had 33,331,372 shares of common stock, par value $0.001 per share, outstanding.

THERMON GROUP HOLDINGS, INC.

QUARTERLY REPORT

FOR THE QUARTER ENDED June 30, 2021

TABLE OF CONTENTS


			Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of June 3 0 , 202 1 and March 31, 2021			2
Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended June 30 , 202 1 and 2020			3
Condensed Consolidated Statements of Equity for the three months ended June 30 , 202 1 and 2 020			4
Condensed Consolidated Statements of Cash Flows for the three months ended June 30 , 202 1 and 20 20			5
Notes to Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			27
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			28
Item 1A. Risk Factors			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 3. Defaults Upon Senior Securities			28
Item 4. Mine Safety Disclosures			28
Item 5. Other Information			28
Item 6. Exhibits			28
EXHIBIT INDEX			29
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2
SIGNATURE			30

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Thermon Group Holdings, Inc.

Condensed Consolidated Balance Sheets

(Dollars in Thousands, except share and per share data)


	June 30, 2021		March 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	41,052	$	40,124

Accounts receivable, net of allowances of $1,941 and $2,074 as of June 30, 2021 and March 31, 2021, respectively	74,133		74,501
Inventories, net	64,395		63,790
Contract assets	16,089		11,379
Prepaid expenses and other current assets	9,322		8,784
Income tax receivable	9,533		8,231

Total current assets	$	214,524	$	206,809
Property, plant and equipment, net of depreciation and amortization of $58,787 and $55,555 as of June 30, 2021 and March 31, 2021, respectively	70,951		72,630
Goodwill	215,072		213,038
Intangible assets, net	102,672		103,784
Operating lease right-of-use assets	12,265		12,619
Deferred income taxes	2,615		2,586
Other long-term assets	6,726		6,412
Total assets	$	624,825	$	617,878
Liabilities
Current liabilities:
Accounts payable	$	22,483	$	19,722
Accrued liabilities	20,046		23,517
Current portion of long-term debt	2,500		2,500

Contract liabilities	4,059		2,959
Lease liabilities	3,658		3,511
Income taxes payable	678		219

Total current liabilities	$	53,424	$	52,428
Long-term debt, net	142,601		143,017
Deferred income taxes	21,880		21,088
Non-current lease liabilities	11,770		12,373
Other non-current liabilities	10,264		9,811
Total liabilities	$	239,939	$	238,717


Commitments and contingencies (Note 9)
Equity
Common stock: $0.001 par value; 150,000,000 authorized; 33,307,460 and 33,225,808 shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively	$	33	$	33
Preferred stock: $0.001 par value; 10,000,000 authorized; no shares issued and outstanding	—		—
Additional paid in capital	232,049		231,322
Accumulated other comprehensive loss	(31,787)		(35,919)
Retained earnings	184,591		183,725


Total equity	$	384,886	$	379,161
Total liabilities and equity	$	624,825	$	617,878

The accompanying notes are an integral part of these condensed consolidated financial statements

Thermon Group Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(Dollars in Thousands, except share and per share data)


	Three Months Ended June 30, 2021		Three Months Ended June 30, 2020
Sales	$	71,155	$	56,848
Cost of sales	42,986		32,729
Gross profit	28,169		24,119
Operating expenses:
Selling, general and administrative expenses	21,401		24,390
Deferred compensation plan expense	332		530
Amortization of intangible assets	2,236		3,033
Restructuring and other charges/(income)	(414)		2,921
Income/(loss) from operations	4,614		(6,755)
Other income/(expenses):
Interest expense, net	(2,165)		(2,555)

Other income/(expense)	66		732
Income/(loss) before provision for income taxes	2,515		(8,578)
Income tax expense/(benefit)	1,648		(2,493)
Net income/(loss)	$	867	$	(6,085)


Comprehensive income/(loss):
Net income/(loss)	$	867	$	(6,085)
Foreign currency translation adjustment	4,195		9,475
Other miscellaneous income/(loss)	(64)		(380)
Comprehensive income/(loss)	$	4,998	$	3,010
Net income/(loss) per common share:
Basic	$	0.03	$	(0.18)
Diluted	0.03		(0.18)
Weighted-average shares used in computing net income per common share:
Basic	33,259,804		32,986,451
Diluted	33,461,635		32,986,451

The accompanying notes are an integral part of these condensed consolidated financial statements.

Thermon Group Holdings, Inc.

Condensed Consolidated Statements of Equity (Unaudited)

(Dollars in Thousands)


	Common Stock Outstanding	Common Stock		Additional Paid-in Capital		Retained Earnings/ (Loss)		Accumulated Other Comprehensive Income/(Loss)		Total
Balances at March 31, 2021	33,225,808	$	33	$	231,322	$	183,725	$	(35,919)	$	379,161
Issuance of common stock in exercise of stock options	8,100	—		97		—		—		97
Issuance of common stock as deferred compensation to employees	23,858	—		—		—		—		—
Issuance of common stock as deferred compensation to executive officers	42,326	—		—		—		—		—
Issuance of common stock as deferred compensation to directors	7,368	—		—		—		—		—
Stock compensation expense	—	—		1,178		—		—		1,178
Repurchase of employee stock units on vesting	—	—		(548)		—		—		(548)

Net income/(loss)	—	—		—		867		—		867
Foreign currency translation adjustment	—	—		—		—		4,195		4,195
Other	—	—		—		(1)		(63)		(64)

Balances at June 30, 2021	33,307,460	$	33	$	232,049	$	184,591	$	(31,787)	$	384,886

SEC Form 10-Q filed by Thermon Group Holdings, Inc.