0001137091-23-000004 | 10-K | XBRL Viewer | Power Solutions International INC

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Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2022	Apr. 10, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	001-35944
Entity Registrant Name	POWER SOLUTIONS INTERNATIONAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	33-0963637
Entity Address, Address Line One	201 Mittel Drive
Entity Address, City or Town	Wood Dale
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60191
City Area Code	630
Local Phone Number	350-9400
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	false
Entity Public Float			$ 9.5
Entity Common Stock, Shares Outstanding		22,951,478
Documents Incorporated by Reference	Part III incorporates information by reference to the registrant’s definitive proxy statement (the “2023 proxy statement”), to be filed with the United States Securities and Exchange Commission (the “SEC”) within 120 days after the fiscal year ended December 31, 2022.
Entity Central Index Key	0001137091
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Audit Information [Abstract]
Auditor Name	BDO USA, LLP
Auditor Location	Chicago, IL
Auditor Firm ID	243

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 24,296	$ 6,255
Restricted cash	3,604	3,477
Accounts receivable, net of allowances of $4,308 and $3,420 as of December 31, 2022 and December 31, 2021, respectively; (from related parties $2,325 and $168 as of December 31, 2022 and December 31, 2021, respectively)	89,894	65,110
Income tax receivable	555	4,276
Inventories, net	120,560	142,192
Prepaid expenses and other current assets	16,364	8,918
Total current assets	255,273	230,228
Property, plant and equipment, net	13,844	17,344
Right-of-use assets, net	13,282	13,545
Intangible assets, net	5,660	7,784
Goodwill	29,835	29,835
Other noncurrent assets	2,019	1,802
TOTAL ASSETS	319,913	300,538
Current liabilities:
Accounts payable (to related parties $23,358 and $12,548 as of December 31, 2022 and December 31, 2021, respectively)	76,430	93,256
Current maturities of long-term debt	130	107
Revolving line of credit	130,000	130,000
Finance lease liability, current	90	147
Operating lease liability, current	2,894	3,978
Other short-term financing (from related parties $75,020 and $25,000 as of December 31, 2022 and December 31, 2021, respectively)	75,614	25,000
Other accrued liabilities (from related parties $5,232 and $385 as of December 31, 2022 and December 31, 2021, respectively)	34,109	30,823
Total current liabilities	319,267	283,311
Deferred income taxes	1,278	1,016
Long-term debt, net of current maturities (from related parties $4,800 and $25,000 as of December 31, 2022 and December 31, 2021, respectively)	5,029	25,376
Finance lease liability, long-term	170	260
Operating lease liability, long-term	10,971	10,304
Noncurrent contract liabilities	3,199	3,330
Other noncurrent liabilities	10,371	18,964
TOTAL LIABILITIES	350,285	342,561
STOCKHOLDERS’ DEFICIT
Preferred stock – $0.001 par value. Shares authorized: 5,000. No shares issued and outstanding at all dates.	0	0
Common stock – $0.001 par value; 50,000 shares authorized; 23,117 and 23,117 shares issued; 22,951 and 22,926 shares outstanding at December 31, 2022 and December 31, 2021, respectively	23	23
Additional paid-in capital	157,673	157,436
Accumulated deficit	(187,096)	(198,366)
Treasury stock, at cost, 166 and 191 shares at December 31, 2022 and December 31, 2021, respectively	(972)	(1,116)
TOTAL STOCKHOLDERS’ DEFICIT	(30,372)	(42,023)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$ 319,913	$ 300,538

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Accounts receivable allowance	$ 4,308	$ 3,420
Accounts receivable allowance related party	2,325	168
Current liabilities:
Accounts payable, related party	23,358	12,548
Other short term financing related parties	75,020	25,000
Other accrued liabilities related parties	5,232	385
Long-term debt, net of current maturities, related parties	$ 4,800	$ 25,000
STOCKHOLDERS’ DEFICIT
Preferred stock, par or stated value (in dollar per share)	$ 0.001	$ 0.001
Preferred stock authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par or stated value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares, issued (in shares)	23,117,000	23,117,000
Common stock, shares, outstanding (in shares)	22,951,000	22,926,000
Treasury stock (in shares)	166,000	191,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Total	$ 481,333	$ 456,255
Cost of sales (from related parties $2,262 and $346 for the year ended December 31, 2022 and December 31, 2021, respectively)	392,770	414,984
Gross profit	88,563	41,271
Operating expenses:
Research, development and engineering expenses	18,896	22,435
Selling, general and administrative expenses	42,941	57,871
Amortization of intangible assets	2,124	2,535
Total operating expenses	63,961	82,841
Operating income (loss)	24,602	(41,570)
Other expense, net:
Interest expense	13,028	7,307
Other expense, net	0	1
Total other expense, net	13,028	7,308
Income (Loss) before income taxes	11,574	(48,878)
Income tax expense (benefit)	304	(406)
Net income (loss)	$ 11,270	$ (48,472)
Weighted-average common shares outstanding:
Basic (in shares)	22,938	22,908
Diluted (in shares)	22,948	22,908
Earnings (Loss) per common share:
Basic (in dollars per share)	$ 0.49	$ (2.12)
Diluted (in dollars per share)	$ 0.49	$ (2.12)

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Net sales from related party	$ 2,749	$ 493
Related parties amount in cost of sales	$ 2,262	$ 346

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning balance at Dec. 31, 2020	$ 6,097	$ 23	$ 157,262	$ (149,894)	$ (1,294)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(48,472)			(48,472)
Stock-based compensation expense	394		174		220
Common stock issued for stock-based awards, net	(42)				(42)
Ending balance at Dec. 31, 2021	(42,023)	23	157,436	(198,366)	(1,116)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	11,270			11,270
Stock-based compensation expense	385		237		148
Common stock issued for stock-based awards, net	(4)				(4)
Ending balance at Dec. 31, 2022	$ (30,372)	$ 23	$ 157,673	$ (187,096)	$ (972)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash used in operating activities
Net income (loss)	$ 11,270	$ (48,472)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization of intangible assets	2,124	2,535
Depreciation	4,566	4,871
Stock-based compensation expense	385	394
Amortization of financing fees	2,178	2,819
Deferred income taxes	189	29
Other adjustments, net	1,746	941
Changes in operating assets and liabilities:
Accounts receivable	(24,796)	(4,952)
Inventory	20,426	(34,840)
Prepaid expenses, right-of-use assets and other assets	(4,251)	(103)
Accounts payable	(17,004)	62,105
Income taxes receivable	3,721	0
Accrued expenses	2,107	(42,759)
Other noncurrent liabilities	(11,506)	(4,046)
Net cash used in operating activities	(8,845)	(61,478)
Cash (used in) provided by investing activities
Capital expenditures	(1,354)	(1,968)
Return of investment in joint venture	0	2,263
Other investing activities, net	0	103
Net cash (used in) provided by investing activities	(1,354)	398
Cash provided by financing activities
Repayments of long-term debt and lease liabilities	(256)	(380)
Proceeds from debt financings	31,582	51,309
Repayment of short-term financings	(1,168)	(1,180)
Payments of deferred financing costs	(1,787)	(3,162)
Other financing activities, net	(4)	(42)
Net cash provided by financing activities	28,367	46,545
Net increase (decrease) in cash, cash equivalents, and restricted cash	18,168	(14,535)
Cash, cash equivalents, and restricted cash at beginning of the year	9,732	24,267
Cash, cash equivalents, and restricted cash at end of the year	27,900	9,732
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheets
Cash and cash equivalents	24,296	6,255
Restricted cash	3,604	3,477
Total cash, cash equivalents, and restricted cash	$ 27,900	$ 9,732

Summary of Significant Accounting Policies and Other Information

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies and Other Information

Nature of Business Operations

Power Solutions International, Inc. (“Power Solutions,” “PSI” or the “Company”), a Delaware corporation, is a global producer and distributor of a broad range of high-performance, certified, low-emission power systems, including alternative-fueled power systems for original equipment manufacturers (“OEMs”) of off-highway industrial equipment and certain on-road vehicles and large custom-engineered integrated electrical power generation systems.

The Company’s customers include large, industry-leading and multinational organizations. The Company’s products and services are sold predominantly to customers throughout North America as well as to customers located throughout the Pacific Rim and Europe. The Company’s power systems are highly engineered, comprehensive systems which, through the Company’s technologically sophisticated development and manufacturing processes, including its in-house design, prototyping, testing and engineering capabilities and its analysis and determination of the specific components to be integrated into a given power system (driven in large part by emission standards and cost considerations), allow the Company to provide its customers with power systems customized to meet specific OEM application requirements, other technical customers’ specifications and requirements imposed by environmental regulatory bodies.

The Company’s power system configurations range from a basic engine integrated with appropriate fuel system components to completely packaged power systems that include any combination of cooling systems, electronic systems, air intake systems, fuel systems, housings, power takeoff systems, exhaust systems, hydraulic systems, enclosures, brackets, hoses, tubes and other assembled componentry. The Company also designs and manufactures large, custom-engineered integrated electrical power generation systems for both standby and prime power applications. The Company purchases engines from third-party suppliers and produces internally designed engines, all of which are then integrated into its power systems.

Of the other components that the Company integrates into its power systems, a substantial portion consist of internally designed components and components for which it coordinates significant design efforts with third-party suppliers, with the remainder consisting largely of parts that are sourced off-the-shelf from third-party suppliers. Some of the key components (including purchased engines) embody proprietary intellectual property of the Company’s suppliers. As a result of its design and manufacturing capabilities, the Company is able to provide its customers with a power system that can be incorporated into a customer’s specified application. In addition to the certified products described above, the Company sells diesel, gasoline and non-certified power systems and aftermarket components.

Stock Ownership and Control

In April 2019, Weichai America Corp., a wholly-owned subsidiary of Weichai Power Co., Ltd. (HK2338, SZ000338) (herein collectively referred to as “Weichai”), exercised the stock purchase warrant (the “Weichai Warrant”) and owns a majority of the outstanding shares of the Company’s Common Stock. As a result, Weichai is able to exercise control over matters requiring stockholders’ approval, including the election of the directors, amendment of the Company’s Charter and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of the Company or changes in management and will make the approval of certain transactions impractical without the support of Weichai.

Weichai also entered into an Investor Rights Agreement (the “Rights Agreement”) with the Company upon execution of the SPA. The Rights Agreement provides Weichai with representation on the Company’s Board and management representation rights. Weichai currently has four representatives on the Board, which constitutes the majority of the directors serving on the Board. According to the Rights Agreement, during any period when the Company is a “controlled company” within the meaning of the NASDAQ Stock Market (“NASDAQ”) Listing Rules, it will take such measures as to avail itself of the “controlled company” exemptions available under Rule 5615 of the NASDAQ Listing Rules of Rules 5605(b), (d) and (e).

Going Concern Considerations

Significant uncertainties exist about the Company’s ability to refinance, extend, or repay its outstanding indebtedness, maintain sufficient liquidity to fund its business activities, and maintain compliance with the covenants and other requirements under the Company’s debt arrangements. As of December 31, 2022, the Company’s total outstanding debt obligations under the Third Amended and Restated Credit Agreement, the second Amended Shareholder’s Loan Agreement, the third Amended Shareholder's Loan Agreement, the fourth Amended Shareholder's Loan Agreement and for finance leases and other debt were $211.0 million in the aggregate, and its cash and cash equivalents were $24.3 million. See Note 6. Debt, for further information regarding the terms and conditions of the Company’s debt agreements.

Without additional financing, the Company anticipates that it will not have sufficient cash and cash equivalents to repay amounts owing under its existing debt arrangements as they become due. In order to provide the Company with a more

permanent source of liquidity, management plans to seek an extension and amendment and/or replacement of its existing debt agreements or seek additional liquidity from its current or other lenders before the maturity dates in 2023 and 2024. There can be no assurance that the Company’s management will be able to successfully complete an extension and amendment of its existing debt agreements or obtain new financing on acceptable terms, when required or if at all. These consolidated financial statements do not include any adjustments that might result from the outcome of the Company’s efforts to address these issues.

Furthermore, if the Company cannot raise capital on acceptable terms, it may not, among other things, be able to do the following:

•continue to expand the Company’s research and product investments and sales and marketing organization;

•continue to fund and expand operations both organically and through acquisitions; and

•respond to competitive pressures or unanticipated working capital requirements.

Macroeconomic volatility and uncertainties further increase the potential for continued supply chain disruptions, economic uncertainty, and unfavorable oil and gas market dynamics which may continue to have a material adverse impact on the results of operations, financial position and liquidity of the Company.

Lastly, in addition to incurring higher total debt levels during 2022, the Company’s debt is tied to LIBOR and SOFR, both of which have seen significant increases during the year. As a result of these factors, the Company’s interest expense has increased and is subject to further increases. Accordingly, the above challenges may continue to have a material adverse impact on the Company’s future results of operations, financial position, and liquidity.

The Company’s management has concluded that, due to uncertainties surrounding the Company’s future ability to refinance, extend and amend, or repay its outstanding indebtedness under its existing debt arrangements, maintain sufficient liquidity to fund its business activities, and maintain compliance with the covenants and other requirements under the Third Amended and Restated Credit Agreement and other outstanding debt, in the future, substantial doubt exists as to its ability to continue as a going concern within one year after the date that these financial statements are issued. The Company’s plans to alleviate the substantial doubt about its ability to continue as a going concern may not be successful, and it may be forced to limit its business activities or be unable to continue as a going concern, which would have a material adverse effect on its results of operations and financial condition.

The consolidated financial statements included herein have been prepared assuming that the Company will continue as a going concern and contemplating the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company’s ability to continue as a going concern is dependent on generating profitable operating results, having sufficient liquidity, maintaining compliance with the covenants and other requirements under the Third Amended and Restated Credit Agreement and other outstanding debt, in the future, and extending and amending, refinancing or repaying the indebtedness outstanding under the Company’s existing debt arrangements.

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Power Solutions International, Inc. and its wholly-owned subsidiaries. The Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the assets, liabilities, sales and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries in which the Company exercises control. All intercompany balances and transactions have been eliminated in consolidation.

The Company operates as one business and geographic operating segment. Operating segments are defined as components of a business that can earn revenues and incur expenses for which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker (“CODM”). The Company’s CODM is its principal executive officer, who decides how to allocate resources and assess performance. A single management team reports to the CODM, who manages the entire business. The Company’s CODM reviews consolidated statements of operations to make decisions, allocate resources and assess performance, and the CODM does not evaluate the profit or loss from any separate geography or product line.

Concentrations

The following table presents customers individually accounting for more than 10% of the Company’s net sales:


	For the Year Ended December 31,
	2022		2021
Customer A	19	%	17	%
Customer B	**		21	%

The following table presents customers individually accounting for more than 10% of the Company’s trade accounts receivable:


	As of December 31,
	2022		2021
Customer A	30	%	24	%

The following table presents suppliers individually accounting for more than 10% of the Company’s purchases:


	For the Year Ended December 31,
	2022		2021

Supplier B	**		12	%
Supplier C	10	%	**

** Less than 10% of the total

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions include the valuation of allowances for uncollectible receivables, inventory reserves, warranty reserves, stock-based compensation, evaluation of goodwill, other intangibles, property, plant and equipment for impairment, and determination of useful lives of long-lived assets. Actual results could materially differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments that have original maturities of three months or less from the date of purchase. Such investments are stated at cost, which approximates fair value.

Restricted Cash

Restricted cash consists of funds that are contractually restricted as to usage or withdrawal due to required minimum levels of cash collateral for letters of credits and contractual agreements with customers. As of December 31, 2022 and 2021, the Company had restricted cash of $3.6 million and $3.5 million, respectively, which includes $1.1 million restricted cash held in escrow which could be required to be refunded to the customer if conditions occur as defined in the agreement with the customer. The Company has not recognized revenue associated with the restricted cash. The liability is included within Noncurrent Contract Liabilities on the Consolidated Balance Sheet.

Research and Development

R&D expenses are expensed when incurred. R&D expenses consist primarily of wages, materials, testing and consulting related to the development of new engines, parts and applications. These costs were $18.9 million and $21.4 million for 2022 and 2021, respectively. From time to time, the Company enters into agreements with its customers to fund a portion of the research, development and engineering costs of a particular project. These reimbursements are accounted for as a reduction of the related research, development and engineering expenditure.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be settled or realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent that it believes these assets will more likely than not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations.

The Company records uncertain tax positions in accordance with accounting guidance, on the basis of a two-step process whereby (i) it determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. Tax benefits related to uncertain tax positions taken or expected to be taken on a tax return are recorded when such

benefits meet a more-likely-than-not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the appropriate taxing authority has completed its examination even though the statute of limitations remains open, or the statute of limitation has expired. Interest and penalties related to uncertain tax positions are recognized as part of income tax expense and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized.

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable represent amounts billed to customers and not yet collected. Trade accounts receivable are recorded at the invoiced amount, which approximates net recoverable value, and generally do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable and is established through a charge to selling, general and administrative expenses. The allowance is primarily determined based on historical collection experience and reviews of customer creditworthiness. Trade accounts receivable and the allowance for doubtful accounts are reviewed on a regular basis. When necessary, an allowance for the full amount of specific accounts deemed uncollectible is recorded. Accounts receivable losses are deducted from the allowance and the account balance is written off when the customer receivable is deemed uncollectible. Recoveries of previously written off balances are recognized when received. An allowance associated with anticipated future sales returns is also included in the allowance for doubtful accounts.

Inventories

The Company’s inventories consist primarily of engines and parts. Engines are valued at the lower of cost plus estimated freight-in or net realizable value. Parts are valued at the lower of cost or net realizable value. Net realizable value approximates replacement cost. Cost is principally determined using the first-in, first-out method and includes material, labor and manufacturing overhead. It is the Company’s policy to review inventories on a continuing basis for obsolete, excess and slow-moving items and to record valuation adjustments for such items in order to eliminate non-recoverable costs from inventory. Valuation adjustments are recorded in an inventory reserve account and reduce the cost basis of the inventory in the period in which the reduced valuation is determined. Inventory reserves are established based on quantities on hand, usage and sales history, customer orders, projected demand and utilization within a current or future power system. Specific analysis of individual items or groups of items is performed based on these same criteria, as well as on changes in market conditions or any other identified conditions.

Inventories consist of the following:


(in thousands)	As of December 31,
Inventories	2022		2021
Raw materials	$	101,566	$	120,130
Work in process	3,073		8,923
Finished goods	19,825		16,509
Total inventories	124,464		145,562
Inventory allowance	(3,904)		(3,370)
Inventories, net	$	120,560	$	142,192

Activity in the Company’s inventory allowance was as follows:


(in thousands)	For the Year Ended December 31,
Inventory Allowance	2022		2021
Balance at beginning of period	$	3,370	$	3,328
Charged to expense	1,159		1,035
Write-offs	(625)		(993)
Balance at end of period	$	3,904	$	3,370

Property, Plant and Equipment

Property, plant and equipment is carried at cost and presented net of accumulated depreciation and impairments. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Property, plant and equipment is evaluated periodically to determine if an adjustment to depreciable lives is warranted. Such evaluation is based principally on the expected utilization of the long-lived assets.

Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.

Estimated useful lives by each type of asset category are as follows:


						Years
Buildings						Up to 39
Leasehold improvements						Lesser of (i) expected useful life of improvement or (ii) life of lease (including likely extension thereof)
Machinery and equipment						1 to 10

Intangible Assets

The Company’s intangible assets include customer relationships, developed technology, trade names and trademarks. Intangible assets are amortized on an accelerated basis over a period of time that approximates the pattern over which the Company expects to gain the estimated economic benefits, and such period generally ranges between three years and 15 years.

Impairment of Long-Lived Assets

The Company assesses potential impairments to its long-lived assets or asset groups, excluding goodwill which is separately tested for impairment, whenever events indicate that the carrying amount of such assets may not be recoverable. Long-lived assets are evaluated for impairment by comparing the carrying value of the asset or asset group with the estimated future net undiscounted cash flows expected to result from the use of the asset or asset group, including cash flows from disposition. If the future net undiscounted cash flows are less than the carrying value, an impairment loss is calculated. An impairment loss is determined by the amount that the asset’s or asset group’s carrying value exceeds its estimated fair value. Estimated fair value is generally measured by discounting estimated future cash flows. If an impairment loss is recognized, the adjusted balance becomes the new cost basis and is depreciated (amortized) over the remaining useful life. The Company also periodically reassesses the useful lives of its long-lived assets due to advances and changes in technologies.

Goodwill

Goodwill represents the excess of the cost of an acquired business over the amounts assigned to the net acquired assets. Goodwill is not amortized but is tested for impairment at the reporting unit level, on an annual basis or more frequently, if events occur or circumstances change indicating potential impairment. The Company annually tests goodwill for impairment on October 1.

In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not (i.e., there is a likelihood of more than 50%) that the Company’s fair value is less than its carrying amount. Qualitative factors that the Company considers include, but are not limited to, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs a quantitative goodwill impairment test to identify potential goodwill impairment and measures the amount of goodwill impairment it will recognize, if any.

In the quantitative goodwill impairment test, the Company compares the estimated fair value of the reporting unit with its related carrying value. If the estimated fair value exceeds the carrying amount, no further analysis is needed. If, however, the reporting unit’s estimated fair value is less than its carrying amount, the Company records an impairment for the difference between the estimated fair value and the carrying value.

The Company calculates its estimated fair value using the income and market approaches when feasible, or an asset approach when neither the income nor the market approach has sufficient data. For the income approach, a discounted cash flow method, the Company uses internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses and related cash flows based on assumed long-term growth rates and demand trends, expected future investments to grow new units, and estimated discount rates. The Company based these assumptions on its historical data and experience, industry projections, and micro and macro general economic condition projections and expectations. The market approach, also called the Guideline Public Company Approach, compares the value of an entity to similar publicly traded companies. The asset approach estimates the selling price the unit could achieve under assumed market conditions.

During the years ended December 31, 2022 and 2021, the Company performed a quantitative assessment and determined that the estimated fair value of the reporting unit exceeded the carrying value; as such, no impairment charges were recognized.

Other Accrued Liabilities

Other accrued liabilities consisted of the following:


(in thousands)	As of December 31,
Other Accrued Liabilities	2022		2021
Accrued product warranty	$	13,037	$	15,830
Litigation reserves *	2,102		894
Contract liabilities	2,256		1,819
Accrued compensation and benefits	7,299		4,397


Accrued interest expense	5,257		625

Other	4,158		7,258
Total	$	34,109	$	30,823

*As of December 31, 2021 and 2022, litigation reserves related to various ongoing legal matters including associated legal fees.

Warranty Costs

The Company offers a standard limited warranty on the workmanship of its products that in most cases covers defects for a defined period. Warranties for certified emission products are mandated by the U.S. Environmental Protection Agency (the “EPA”) and / or the California Air Resources Board (the “CARB”) and are longer than the Company’s standard warranty on certain emission-related products. The Company’s products also carry limited warranties from suppliers. The Company’s warranties generally apply to engines fully manufactured by the Company and to the modifications the Company makes to supplier base products. Costs related to supplier warranty claims are generally borne by the supplier and passed through to the end customer.

Warranty estimates are based on historical experience and represent the projected cost associated with the product. A liability and related expense are recognized at the time products are sold. The Company adjusts estimates when it is determined that actual costs may differ from initial or previous estimates. The Company’s warranty liability is generally affected by failure rates, repair costs and the timing of failures. Future events and circumstances related to these factors could materially change the estimates and require adjustments to the warranty liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.

The Company records adjustments to preexisting warranties for changes in its estimate of warranty costs for products sold in prior fiscal years in the period in which new information is received and the information indicates that actual costs may differ from the Company’s initial or previous estimates. Such adjustments typically occur when claims experience deviates from historic and expected trends.

When the Company identifies cost effective opportunities to address issues in products sold or corrective actions for safety issues, it initiates product recalls or field campaigns. As a result of the uncertainty surrounding the nature and frequency of product recalls and field campaigns, the liability for such actions is generally recorded when the Company commits to a product recall or field campaign. In each subsequent quarter after a recall or field campaign is initiated, the recorded warranty liability balance is analyzed, reviewed and adjusted, if necessary, to reflect any changes in the anticipated average cost of repair or number of repairs to be completed prospectively.

When collection is reasonably assured, the Company also estimates the amount of warranty claim recoveries to be received from its suppliers. Warranty costs and recoveries are included in Cost of sales in the Consolidated Statements of Operations. As of December 31, 2022, included in accounts receivable is approximately $1.0 million of reimbursements of warranty costs due from a significant supplier.

Accrued product warranty activities are presented below:


(in thousands)	For the Year Ended December 31,
Accrued Product Warranty	2022		2021
Balance at beginning of year	$	32,948	$	31,542
Current year provision *	6,258		18,242

Changes in estimates for preexisting warranties **	4,576		9,397
Payments made during the period	(22,232)		(26,233)

Balance at end of year	21,550		32,948
Less: Current portion	13,037		15,830
Noncurrent accrued product warranty	$	8,513	$	17,118

*Warranty costs, net of supplier recoveries, and other adjustments, were $6.4 million and $22.8 million for the year ended December 31, 2022 and 2021, respectively. Supplier recoveries were $4.1 million and $4.8 million for the year ended December 31, 2022 and 2021, respectively.

**Changes in estimates for preexisting warranties reflect changes in the Company’s estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historical and expected trends. As of December 31, 2022, the Company recorded a cost for changes in estimates of preexisting warranties of $4.6 million, or $0.20 per diluted share, for the year ended December 31, 2022, which includes a favorable experience for preexisting warranties attributable to a contract revision during the quarter ended March 31, 2022, and costs of $9.4 million, or $0.41 per diluted share, for the year ended December 31, 2021.

Revenue Recognition

See Note 2. Revenue for additional information the Company’s policy related to revenue recognition.

Recently Issued Accounting Pronouncements – Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, which provided optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendment allows entities to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. The guidance was effective upon issuance and expires after December 31, 2024. There was no impact on the Company’s Consolidated Balance Sheets, Statements of Operations, Statements of Cash Flows or Statement of Stockholders’ Equity (Deficit) since the third Shareholder's Loan Agreement that referenced LIBOR was amended in November 2022 and refers to an alternative reference rate other than LIBOR.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The standard replaces the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The new standard is effective for non-public companies, and public business entities that meet the definition of a smaller reporting company as defined by the SEC, for interim and annual periods beginning after December 15, 2022. The Company will adopt this guidance effective January 1, 2023. The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statements.

Revenue

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue Recognition

The Company determines the amount of revenue to be recognized through the following steps:

•identification of the contract, or contracts with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue when, or as, the Company satisfies the performance obligations.

Revenue for the Company is generated from contracts that may include a single performance obligation (generally, a single type of engine) or multiple performance obligations (which may include an engine with aftermarket parts, different types of engines,

etc.). A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. Revenue is measured at the transaction price which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods or services to the customer. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company is required to estimate the total consideration expected to be received from contracts with customers. The consideration expected to be received may be variable based on the specific terms of the contract and the Company’s past practices.

For contracts with multiple performance obligations, the Company allocates the total transaction price to distinct performance obligations based on directly observable data, if available, or the Company’s best estimate of the stand-alone selling price of each distinct performance obligation. The primary method used to estimate stand-alone selling price is the cost plus a margin approach.

The Company applies significant judgment in order to identify and determine the number of performance obligations, determine the total transaction price, allocate the transaction price to each performance obligation, and determine the appropriate timing of revenue recognition.

Taxes collected from customers and remitted to governmental authorities are presented on a net basis; that is, such taxes are excluded from revenues.

The Company’s payment terms are generally 60 days or less and its sales arrangements do not contain any significant financing components.

Timing of revenue recognition. The Company recognizes revenue related to performance obligations in its contracts with customers when control passes to the customer. Control passes to the customer when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the asset. For the majority of the Company’s products, revenue is recognized at a point in time when the products are shipped or delivered to the customer based on the shipping terms as that is the point in time when control passes to the customer. For the years ended December 31, 2022 and 2021, the Company recognized revenue of $434.0 million and $415.7 million, respectively, related to products shipped or delivered at a point in time.

The Company also recognizes revenue over time primarily when the Company’s performance obligations include enhancing a customer-controlled asset (generally when an engine is provided by the customer), constructing an asset with no alternative future use and the Company has an enforceable right to payment throughout the period as the services are performed, or providing services over time such as an extended warranty beyond the Company’s standard warranty. The Company recognizes revenue throughout the manufacturing process when constructing an asset based on labor hours incurred because the customer receives the benefit of the asset as the product is constructed. The Company believes labor hours incurred relative to total estimated labor hours at completion faithfully depicts the transfer of control to the customer. The Company recognizes revenue related to extended warranty programs based on the passage of time over the extended warranty period. For both years ended December 31, 2022 and 2021, the Company recognized revenue of $47.3 million and $40.6 million, respectively, for products manufactured and services provided over time.

Shipping and handling costs. The Company accounts for shipping and handling costs as fulfillment costs which are recorded in Cost of sales in the Consolidated Statements of Operations. This includes shipping and handling costs incurred after control of the asset has transferred to the customer as the Company has elected the practical expedient in ASC 606.

Principal vs. agent considerations. For transactions that involve more than one party when providing goods or services to a customer, the Company determines whether it is the principal or agent in these transactions by evaluating the nature of its promise to the customer. The analysis of whether the Company is a principal or an agent in a transaction is performed for each good or services provided to the customer. The Company determines whether it controls the good or service before it is transferred to the customer by considering the following factors:

a.Whether the Company is primarily responsible for fulfilling the promise to provide the specified good or service.

b.Whether the Company has inventory risk before the specified good or service has been transferred to the customer or after transfer of control to the customer.

c.Whether the Company has discretion in establishing the price for the specified good or service.

If the Company determines that it is the principal in the transaction, it recognizes revenues at the gross transaction price for the good or service. If the Company determines that is an agent in the transaction, it recognizes revenue at the net amount of the transaction price.

The Company had two significant supply agreements with multiple performance obligations related to the sale of 6.0L engines in 2021. As a result of the Weichai ownership change in April 2019 (see additional discussion in Note 3. Weichai Transactions), the Company was required to be compliant with Phase 1 GHG standards beginning January 1, 2020 for its 6.0L

and 8.8L engines. In order to address the impact of the transition of its emission regulation requirements in 2021, the Company licensed its technology to a third-party small manufacturer to produce and certify the 6.0L gasoline engine and utilized averaging, banking, and trading compliance provisions for the sale of its 8.8L gasoline engine. As a result of outsourcing the production of the 6.0L gasoline engine, the Company considered whether it was the principal or agent in the transactions with its customers related to the 6.0L gasoline engine. With the exception of certain parts sold directly to customers, the Company concluded that it remained the principal in the transactions. The Company ended the program to outsource and sell the certified 6.0L engines effective December 31, 2021 and recognized revenue related to contracts with customers for 6.0L engines of $103.7 million in 2021.

Variable consideration. Variable consideration primarily includes rebates and discounts. The Company estimates the projected amount of rebates and discounts based on current assumptions, customer-specific information and historical experience. Variable consideration is recorded as a reduction of revenue to the extent that it is probable that there will not be significant changes to the Company’s estimate of variable consideration when any uncertainties are settled.

Costs to obtain and fulfill a contract. The Company has elected the practical expedient to recognize incremental costs to obtain a contract (primarily commissions) as expense when incurred since the amortization period of the asset that the Company otherwise would have recognized is one year or less.

Disaggregation of Revenue

The following table summarizes net sales by end market:


(in thousands)	For the Year Ended December 31,
End Market	2022		2021
Power Systems	$	179,491	$	123,132
Industrial	224,669		153,289
Transportation	77,173		179,834
Total	$	481,333	$	456,255

The following table summarizes net sales by geographic area:


(in thousands)	For the Year Ended December 31,
Geographic Area	2022		2021
United States	$	349,488	$	406,077
North America (outside of United States)	16,437		8,616
Pacific Rim	80,681		25,457
Europe	18,452		7,457
Other	16,275		8,648
Total	$	481,333	$	456,255

Contract Balances

Most of the Company’s contracts are for a period of less than one year; however, certain long-term manufacturing and extended warranty contracts extend beyond one year. The timing of revenue recognition may differ from the time of invoicing to customers and these timing differences result in contract assets, or contract liabilities on the Company’s Consolidated Balance Sheet. Contract assets include amounts related to the contractual right to consideration for completed performance when the right to consideration is conditional. The Company records contract liabilities when cash payments are received or due in advance of performance. Contract assets and contract liabilities are recognized at the contract level.


(in thousands)	As of December 31,
	2022		2021
Short-term contract assets (included in Prepaid expenses and other current assets)	$	3,620	$	2,707

Short-term contract liabilities (included in Other accrued liabilities)	(2,256)		(1,819)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(3,199)		(3,330)
Net contract liabilities	$	(1,835)	$	(2,442)

During the year ended December 31, 2022 and 2021, the Company recognized $1.6 million and $47.2 million of revenue upon satisfaction of performance obligations related to amounts that were included in the net contract liabilities balance as of

December 31, 2021 and 2020, respectively. The decrease in the net contract liabilities from December 31, 2021 to December 31, 2022 is primarily related to the prepayment for 6.0L gasoline engine by a customer under a long-term supply agreement. At both December 31, 2022 and 2021 the Company had no contract liability related to prepayments of 6.0L gasoline engines.

Remaining Performance Obligations

The Company has elected the practical expedient to not disclose remaining performance obligations that have expected original durations of one year or less. For performance obligations that extend beyond one year, the Company had $4.6 million of remaining performance obligations as of December 31, 2022 primarily related to a long-term manufacturing contract with a customer and extended warranties. The Company expects to recognize revenue related to these remaining performance obligations of approximately $1.4 million in 2023, $1.0 million in 2024, $0.5 million in 2025, $0.2 million in 2026, $1.0 million in 2027 and $0.5 million in 2028 and beyond.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Weichai Transactions

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Weichai Transactions

Weichai Shareholder’s Loan Agreements

The Company is party to four shareholder’s loan agreements with Weichai, including the $130.0 million first Amended Shareholder's Loan Agreement, the $25.0 million second Amended Shareholder’s Loan Agreement, the $50.0 million third Amended Shareholder's Loan Agreement, and the $30.0 million fourth Amended Shareholder's Loan Agreement. See additional discussion of these debt agreements in Note 6. Debt.

Weichai Collaboration Arrangement and Other Related Party Transactions

The Company and Weichai executed a strategic collaboration agreement (the “Collaboration Agreement”) on March 20, 2017, in order to achieve their respective strategic objectives and enhance the strategic cooperation alliance to share experiences, expertise and resources. The Collaboration Agreement was extended for three years in March 2020 and was set to expire in March 2023. On March 22, 2023, the Collaboration Agreement was extended for an additional term of three years.

The Company evaluates whether an arrangement is a collaborative arrangement at its inception based on the facts and circumstances specific to the arrangement. The Company also reevaluates whether an arrangement qualifies or continues to qualify as a collaborative arrangement whenever there is a change in either the roles of the participants or the participants’ exposure to significant risks and rewards dependent on the ultimate commercial success of the endeavor. For those collaborative arrangements where it is determined that the Company is the principal participant, costs incurred and revenue generated from third parties are recorded on a gross basis in the financial statements. The Company’s sales to Weichai were $0.6 million and $0.5 million during 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company had outstanding receivables from Weichai of $0.4 million and $0.2 million, respectively. The Company purchased $13.3 million and $12.4 million of inventory from Weichai during 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company had outstanding payables to Weichai of $23.4 million and $12.5 million, respectively.

In January 2022, PSI and Baudouin, a subsidiary of Weichai, entered into an international distribution and sales agreement which enables Baudouin to bring PSI’s power systems line of products into the European, Middle Eastern, and African markets. In addition to sales, Baudouin will manage service, support, warranty claims, and technical requests. The Company’s sales to Baudouin were $2.2 million for the year ended December 31, 2022. As of December 31, 2022 and 2021, the Company had $1.9 million and no receivables from Baudouin, respectively.Stockholders’ Equity (Deficit)

Common and Treasury Stock

The changes in shares of Common and Treasury Stock are as follows:


(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance as of December 31, 2020	23,117	225	22,892
Net shares issued for stock awards	—	(34)	34



Balance as of December 31, 2021	23,117	191	22,926
Net shares issued for stock awards	—	(25)	25



Balance as of December 31, 2022	23,117	166	22,951

Preferred Stock

The Company is authorized to issue 5,000,000 shares of Preferred stock, par value $0.001 per share. The Preferred stock may be designated into one or more series as determined by the Board. As of December 31, 2022, the Board had authorized two series of Preferred stock. At December 31, 2022 and 2021, there were no shares of Preferred stock outstanding.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment by type were as follows:


(in thousands)	As of December 31,
Property, Plant and Equipment	2022		2021


Leasehold improvements	$	7,107	$	7,107
Machinery and equipment	45,747		44,358
Construction in progress	467		1,125
Total property, plant and equipment, at cost	53,321		52,590
Accumulated depreciation	(39,477)		(35,246)
Property, plant and equipment, net	$	13,844	$	17,344

Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill

The carrying amount of goodwill at both December 31, 2022 and 2021 was $29.8 million.

Other Intangible Assets

Components of intangible assets are as follows:


(in thousands)	As of December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(29,527)	$	5,413
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,453)		247
Total	$	37,340	$	(31,680)	$	5,660


(in thousands)	As of December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(27,514)	$	7,426
Developed technology	700		(680)		20
Trade names and trademarks	1,700		(1,362)		338
Total	$	37,340	$	(29,556)	$	7,784

Estimated future amortization expense for intangible assets as of December 31, 2022 is as follows:


(in thousands)
Year Ending December 31,	Estimated Amortization
2023	$	1,746
2024	1,459
2025	1,219
2026	997
2027	230
2028 and beyond	9
Total	$	5,660

Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

The Company’s outstanding debt consisted of the following:


(in thousands)	As of December 31,
	2022		2021
Short-term financing:
Revolving credit facility	$	130,000	$	130,000
Other short-term financing	75,614		25,000
Total Short-Term Debt	$	205,614	$	155,000

Long-term debt:
Long-term financing	$	4,800	$	25,000
Finance leases and other debt	$	619	$	890

Total long-term debt and finance leases	5,419		25,890
Less: Current maturities of long-term debt and finance leases	220		254
Long-term debt	$	5,199	$	25,636

* Unamortized financing costs and deferred fees on the Revolving Credit Facility are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheets. Unamortized debt issuance costs, were $0.4 million and $0.8 million at December 31, 2022 and 2021, respectively.

The Company paid $6.1 million and $3.7 million in cash for interest in 2022 and 2021, respectively.

Credit Agreement and Shareholders’ Loan Agreements

On March 25, 2022, the Company amended and restated its $130.0 million uncommitted senior secured revolving credit agreement with Standard Chartered by entering into the Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement extends the maturity date of loans outstanding under its previous credit facility to the earlier of March 24, 2023 or the demand of Standard Chartered. The Second Amended and Restated Credit Agreement is subject to customary events of default and covenants, as well as financial covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants, as further defined in the Second Amended and Restated Credit Agreement, required only for the second and third quarters of 2022. The Company was in compliance with these financial covenants for the second and third quarter of 2022. Borrowings under the Second Amended and Restated Credit Agreement will incur interest at either the alternate base rate or the SOFR plus 2.95% per annum. The Second Amended and Restated Credit Agreement continues to be secured by substantially all of the Company’s assets and provides Standard Chartered the right to demand payment of any and all of the outstanding borrowings and other amounts owed under the Second Amended and Restated Credit Agreement at any point in time prior to the maturity date at Standard Chartered’s discretion. Furthermore, the Second Amended and Restated Credit Agreement grants Standard Chartered a power of attorney to submit a borrowing request to Weichai under the first Amended Shareholder's Loan Agreement (see discussion below) if the Company did not submit a borrowing request to Weichai within five business days of receiving a request from Standard Chartered to submit said borrowing request. As of December 31, 2022, the Company had $130.0 million outstanding under the Amended and Restated Credit Agreement.

In connection with the Second Amended and Restated Credit Agreement, on March 25, 2022, the Company also amended two of its shareholder’s loan agreements with Weichai, to among other things, extend the maturities thereof. The first Amended Shareholder's Loan Agreement continues to provide the Company with a $130.0 million subordinated loan under which Weichai is obligated to advance funds solely for purposes of repaying outstanding borrowings under the Second Amended and Restated Credit Agreement if the Company is unable to pay such borrowings. The second Amended Shareholder’s Loan Agreement continues to provide the Company with a $25.0 million subordinated loan at the discretion of Weichai. The maturity of the first Amended Shareholder's Loan Agreement was extended to April 24, 2023 and the maturity of the second Amended Shareholder’s Loan Agreement was extended to May 20, 2023. The Company has covenanted to secure any amounts borrowed under either of the agreements upon payment in full of all amounts outstanding under the Second Amended and Restated Credit Agreement. As of December 31, 2022, there were no borrowings under the first Amended Shareholder's Loan Agreement and $25.0 million under the second Amended Shareholder’s Loan Agreement.

The Company is also party to the third Shareholder's Loan Agreement with Weichai, which was entered into on December 10, 2021. The third Shareholder's Loan Agreement provides the Company with a $50.0 million uncommitted facility that is subordinated to the Third Amended and Restated Credit Agreement and any borrowing requests made under the third Shareholder's Loan Agreement are subject to Weichai’s discretionary approval. Borrowings under the third Shareholder's Loan Agreement will incur interest at the applicable SOFR, plus 4.65% per annum and can be used for general corporate purposes, except for certain legal expenditures which require additional approval from Weichai. Further, if the applicable term SOFR is negative, the interest rate per annum shall be deemed as 4.65% per annum. If the interest rate for any loan is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus 1%. The third

Shareholder's Loan Agreement was amended on November 29, 2022 and expires on November 30, 2023 with any outstanding principal and accrued interest due upon maturity. As of December 31, 2022, the Company had $50.0 million outstanding under the third Shareholder's Loan Agreement.

On April 20, 2022, the Company entered into the fourth Shareholder's Loan Agreement (the "fourth Shareholder's Loan Agreement") with Weichai. The fourth Shareholder's Loan Agreement which matures on March 31, 2023, provides the Company with access to up to $30.0 million of credit at the discretion of Weichai to supplement the Company’s working capital. The fourth Shareholder's Loan Agreement is subordinated in all respects to the Third Amended and Restated Credit Agreement. Borrowings under the first Amended Shareholder's Loan Agreement, the second Amended Shareholder’s Loan Agreement and the fourth Shareholder's Loan Agreement will incur interest at the applicable SOFR, plus 4.65% per annum. Further, if the applicable term SOFR is negative, the interest rate per annum shall be deemed as 4.65% per annum. If the interest rate for any loan is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus 1%. As of December 31, 2022, the Company had $4.8 million outstanding under the fourth Shareholder's Loan Agreement.

As of December 31, 2022, the Company’s total outstanding debt obligations under the Third Amended and Restated Credit Agreement, the second Amended Shareholder’s Loan Agreement, the third Amended Shareholder's Loan Agreement, the fourth Amended Shareholder's Loan Agreement and for finance leases and other debt were $211.0 million in the aggregate, and its cash and cash equivalents were $24.3 million. The Company's total accrued interest for all shareholder loans was $5.3 million and $0.6 million as of December 31, 2022 and December 31, 2021, respectively. Accrued interest is included within Other Accrued Liabilities on the Consolidated Balance Sheet.

On March 24, 2023, the Company amended and restated its $130.0 million Second Amended and Restated Uncommitted Revolving Credit Agreement with Standard Chartered. The Third Amended and Restated Credit Agreement extends the maturity date of loans outstanding under its previous credit facility to the earlier of March 22, 2024 or the demand of Standard Chartered. The Third Amended and Restated Uncommitted Revolving Credit Agreement is subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the second and third quarters of 2023. Borrowings under the Third Amended and Restated Credit Agreement will incur interest at either the alternate base rate or the SOFR plus 3.35% per annum. In addition, the Company paid fees of $1.0 million related to the Third Amended and Restated Uncommitted Revolving Credit Agreement, which will be deferred and amortized over the term of the Third Amended and Restated Uncommitted Revolving Credit Agreement. The Third Amended and Restated Credit Agreement continues to be secured by substantially all of the Company’s assets and contains the same provisions as described above with respect to Standard Chartered’s demand rights and its power of attorney (POA). As of April 12, 2023, the Company had $130.0 million outstanding under the Third Amended and Restated Credit Agreement.

In connection with this Third Amended and Restated Uncommitted Revolving Credit Agreement, on March 24, 2023, the Company also amended two of the four shareholder’s loan agreements with Weichai, to among other things, extend the maturities thereof. The first Amended Shareholder's Loan Agreement continues to provide the Company with a $130.0 million subordinated loan under which Weichai is obligated to advance funds solely for purposes of repaying outstanding borrowings under the $130.0 million Third Amended and Restated Uncommitted Revolving Credit Agreement if the Company is unable to pay such borrowings. The fourth Amended Shareholder's Loan Agreement continues to provide the Company with access to up to $30 million of credit at the discretion of Weichai. The maturity of the first Amended Shareholder's Loan Agreement was extended to April 24, 2024 and the maturity of the fourth Amended Shareholder's Loan Agreement was extended to March 31, 2024. Borrowings under the first Amended Shareholder's Loan Agreement and the fourth Amended Shareholder's Loan Agreement will bear interest at an annual rate equal to SOFR plus 4.05% per annum. Further, if the applicable term SOFR is negative, the interest rate per annum shall be deemed as 4.05% per annum. If the interest rate for any loan is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus 1%. All of the amended shareholder loan agreements with Weichai are subject to customary events of default and covenants. The Company has covenanted to secure any amounts borrowed under either of the agreements upon payment in full of all amounts outstanding under the $130.0 million Third Amended and Restated Uncommitted Revolving Credit Agreement.

The following table summarizes the Company’s total outstanding debt obligations under all Credit Agreements and Shareholders’ Loan Agreements:


(in thousands)	As of December 31,
	2022
Third Amended and Restated Credit Agreement	$	130,000
second Amended Shareholder’s Loan Agreement	50,000
third Amended Shareholder's Loan Agreement	25,000
fourth Amended Shareholder's Loan Agreement	4,820
Other debt	1,213
Total	$	211,033

See Item 8., Note 1. Summary of Significant Accounting Policies and Other Information for further discussion of the Company’s going concern considerations.

The below schedule of remaining maturities of long-term debt excludes finance leases (refer to Item 8., Note 7. Leases).


(in thousands)
Year Ending December 31,	Maturities of Long-Term Debt

2024	4,953
2025	67
2026	9

Total	$	5,029

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Lease Policies

The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term while lease liabilities represent the obligation to make lease payments arising from the lease. All leases with an expected term greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of the lease payments unless the implicit rate in the lease is readily determinable. The incremental borrowing rate is determined considering factors such as the lease term, the Company’s credit standing and the economic environment of the location of the lease.

The lease term includes all non-cancellable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that the Company will exercise the option. Leases that have a term of 12 months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of a ROU asset or lease liability.

The Company classifies leases as finance leases when (i) there is a transfer of ownership of the underlying asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, (iii) the lease term is for the majority of the remaining economic life of the asset, or (iv) the present value of the lease payments and any residual value guarantee equals or substantially exceeds the fair value of the asset.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for finance leases is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis, but interest expense on the lease liability is recognized using the interest method which results in more expense during the early years of the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities for all classes of leased assets.

Leases

The Company has obligations under lease arrangements primarily for facilities, equipment and vehicles. These leases have original lease periods expiring between April 2023 and July 2034. The following table summarizes the lease expense by category in the Consolidated Statement of Operations:


(in thousands)	For the Year Ended December 31,
	2022		2021
Cost of sales	$	6,300	$	6,079
Research, development and engineering expenses	267		326
Selling, general and administrative expenses	169		174
Interest expense	21		44
Total	$	6,757	$	6,623

The following table summarizes the components of lease expense:


(in thousands)	For the Year Ended December 31,
	2022		2021
Operating lease cost	$	4,706	$	4,855
Finance lease cost:
Amortization of ROU asset	148		192
Interest expense	21		33
Short-term lease cost	100		267
Variable lease cost	1,782		1,276
Sublease income	(1,062)		—
Total lease cost	$	5,695	$	6,623

The following table presents supplemental cash flow information related to leases:


(in thousands)	For the Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,859	$	4,959
Operating cash flows paid for interest portion of finance leases	21		33
Financing cash flows paid for principal portion of finance leases	157		194
Right-of-use assets obtained in exchange for lease obligations
Operating leases	3,540		137
Finance leases	—		—

As of December 31, 2022 and 2021, the weighted-average remaining lease term for both periods was 5.8 years for operating leases and 3.0 years and 3.4 years for finance leases, respectively. As of December 31, 2022 and 2021, the weighted-average discount rate for both periods was 7.1% for operating leases, and 6.6% and 6.5% for finance leases, respectively.

The following table presents supplemental balance sheet information related to leases:


(in thousands)	As of December 31,
	2022		2021
Operating lease ROU assets, net 1	$	13,282	$	13,545

Operating lease liabilities, current	2,894		3,978
Operating lease liabilities, non-current	10,971		10,304
Total operating lease liabilities	$	13,865	$	14,282

Finance lease ROU assets, net 1	$	225	$	364

Finance lease liabilities, current	90		147
Finance lease liabilities, non-current	170		260
Total finance lease liabilities	$	260	$	407

1. Included in Other noncurrent assets for operating leases and Property, plant and equipment, net for finance leases on the Consolidated Balance Sheets.

The following table presents maturity analysis of lease liabilities as of December 31, 2022:


(in thousands)
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	3,767	$	103
2024	2,668		85
2025	2,731		82
2026	2,421		17
2027	2,413		—
Thereafter	3,015		—
Total undiscounted lease payments	17,015		286
Less: imputed interest	3,150		26
Total lease liabilities	$	13,865	$	260

Leases

Lease Policies

Leases


(in thousands)	For the Year Ended December 31,
	2022		2021
Cost of sales	$	6,300	$	6,079
Research, development and engineering expenses	267		326
Selling, general and administrative expenses	169		174
Interest expense	21		44
Total	$	6,757	$	6,623

The following table summarizes the components of lease expense:


(in thousands)	For the Year Ended December 31,
	2022		2021
Operating lease cost	$	4,706	$	4,855
Finance lease cost:
Amortization of ROU asset	148		192
Interest expense	21		33
Short-term lease cost	100		267
Variable lease cost	1,782		1,276
Sublease income	(1,062)		—
Total lease cost	$	5,695	$	6,623

The following table presents supplemental cash flow information related to leases:


(in thousands)	For the Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,859	$	4,959
Operating cash flows paid for interest portion of finance leases	21		33
Financing cash flows paid for principal portion of finance leases	157		194
Right-of-use assets obtained in exchange for lease obligations
Operating leases	3,540		137
Finance leases	—		—

The following table presents supplemental balance sheet information related to leases:


(in thousands)	As of December 31,
	2022		2021
Operating lease ROU assets, net 1	$	13,282	$	13,545

Operating lease liabilities, current	2,894		3,978
Operating lease liabilities, non-current	10,971		10,304
Total operating lease liabilities	$	13,865	$	14,282

Finance lease ROU assets, net 1	$	225	$	364

Finance lease liabilities, current	90		147
Finance lease liabilities, non-current	170		260
Total finance lease liabilities	$	260	$	407

1. Included in Other noncurrent assets for operating leases and Property, plant and equipment, net for finance leases on the Consolidated Balance Sheets.

The following table presents maturity analysis of lease liabilities as of December 31, 2022:


(in thousands)
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	3,767	$	103
2024	2,668		85
2025	2,731		82
2026	2,421		17
2027	2,413		—
Thereafter	3,015		—
Total undiscounted lease payments	17,015		286
Less: imputed interest	3,150		26
Total lease liabilities	$	13,865	$	260

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair-value measurement as follows:

•Level 1 – based on quoted prices in active markets for identical assets or liabilities;

•Level 2 – based on other significant observable inputs for the assets or liabilities through corroborations with market data at the measurement date; and

•Level 3 – based on significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

Financial Instruments Measured at Carrying Value

Current Assets

Cash and cash equivalents are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments.

Debt

The Company measures the Revolving Credit Facility and Other financing at original carrying value including accrued interest, net of unamortized deferred financing costs and fees. The fair value of the revolving credit facility and other financing approximates carrying value, as it consists of short-term variable rate loans.


(in thousands)	As of December 31, 2022
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving credit facility	$	130,000	$	—	$	130,000	$	—
Other financing	75,614		—		75,614


(in thousands)	As of December 31, 2021
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving credit facility	$	130,000	$	—	$	130,000	$	—
Unsecured Senior Notes	50,000		—		50,000

Other Financial Assets and Liabilities

In addition to the methods and assumptions used for the financial instruments discussed above, accounts receivable, net, income tax receivable, and accounts payable and certain accrued expenses are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Defined Contribution Plans	12 Months Ended
Defined Contribution Plans	Dec. 31, 2022
Retirement Benefits [Abstract]
Defined Contribution Plans	Defined Contribution Plans For the years ending December 31, 2022 and 2021, the Company incurred plan costs of $0.8 million.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Contingencies The legal matters discussed below and others could result in losses, including damages, fines, civil penalties and criminal charges, which could be substantial. The Company records accruals for these contingencies to the extent the Company concludes that a loss is both probable and reasonably estimable. Regarding the matters disclosed below, unless otherwise disclosed, the Company has determined that liabilities associated with these legal matters are reasonably possible; however, unless otherwise stated, the possible loss or range of possible loss cannot be reasonably estimated. Given the nature of the litigation and investigations and the complexities involved, the Company is unable to reasonably estimate a possible loss for all such matters until the Company knows, among other factors the following: •what claims, if any, will survive dispositive motion practice; •the extent of the claims, particularly when damages are not specified or are indeterminate; •how the discovery process will affect the litigation; •the settlement posture of the other parties to the litigation; and •any other factors that may have a material effect on the litigation or investigation. However, the Company could incur judgments, enter into settlements or revise its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on the Company’s results of operations in the period in which the amounts are accrued and/or liquidity in the period in which the amounts are paid. Securities and Exchange Commission and United States Attorney’s Office for the Northern District of Illinois Investigations In September 2020, the Company entered into agreements with the SEC and the USAO to resolve the investigations into the Company’s past revenue recognition practices. Under the settled administrative order with the SEC, the Company committed to remediate the deficiencies in its internal control over financial reporting that constituted material weaknesses identified in its 2017 Form 10-K filed in May 2019 by April 30, 2021 unless an extension was provided by the SEC. On April 12, 2021, the SEC granted the Company’s request for an extension of time until March 31, 2022 in which to comply with the requirements of the administrative order to remediate the remaining outstanding material weaknesses. In April 2022, the SEC granted a further extension of time until March 31, 2023 for the Company to remediate any outstanding material weaknesses in accordance with the administrative order. Subsequent to the filing of this Form 10-K, the Company will submit documentation to the SEC for its review to assess the Company’s compliance with the administrative order. Jerome Treadwell v. the Company In October 2018, a putative class-action complaint was filed against the Company and NOVAtime Technology, Inc. (“NOVAtime”) in the Circuit Court of Cook County, Illinois. In December 2018, NOVAtime removed the case to the U.S. District Court for the Northern District of Illinois, Eastern Division under the Class Action Fairness Act. Plaintiff has since voluntarily dismissed NOVAtime from the lawsuit without prejudice and filed an amended complaint in April 2019. The operative, amended complaint asserts violations of the Illinois Biometric Information Privacy Act (“BIPA”) in connection with employees’ use of the time clock to clock in and clock out using a finger scan and seeks statutory damages, attorneys’ fees, and injunctive and equitable relief. An aggrieved party under BIPA may recover (i) $1,000 per violation if the Company is found to have negligently violated BIPA or (ii) $5,000 per violation if the Company is found to have intentionally or recklessly violated BIPA plus reasonable attorneys’ fees. In May 2019, the Company filed its motion to dismiss the plaintiff’s amended complaint. In December 2019, the court denied the Company’s motion to dismiss. In January 2020, the Company moved for reconsideration of the court’s order denying the motion to dismiss, or in the alternative, to stay the case pending the Illinois Appellate Court’s ruling in McDonald v. Symphony Healthcare on a legal question that would be potentially dispositive in this matter. In February 2020, the court denied the Company’s motion for reconsideration, but required the parties to submit additional briefing on the Company’s motion to stay. In April 2020, the court granted the Company’s motion to stay and stayed the case pending the Illinois Appellate Court’s ruling in McDonald v. Symphony Healthcare. In October 2020, after the McDonald ruling, the court granted the parties’ joint request to continue the stay of the case for 60 days. The court also ordered the parties to schedule a settlement conference with the Magistrate Judge in May 2021 which went forward without a settlement being reached. The stay remains in place pending further guidance from the Court. As of December 31, 2022 and December 31, 2021, the Company had recorded an estimated liability of $2.0 million and $0.3 million, respectively, recorded within Other accrued liabilities on the Consolidated Balance Sheet related to the settlement of this matter. Mast Powertrain v. the Company In February 2020, the Company received a demand for arbitration from Mast Powertrain, LLC (“Mast”) pursuant to a development agreement entered into in November 2011 (the “Development Agreement”). Mast claimed that it is owed more than $9.0 million in past royalties and other damages for products sold by the Company pursuant to the Development Agreement. The Company disputed Mast’s damages, denied that any royalties are owed to Mast, denied any liability, and counterclaimed for overpayment on invoices paid to Mast. Mast subsequently clarified its claim for past royalties owed to be approximately $4.5 million. In July 2021, the Company reached a settlement with Mast to resolve past claims for royalties owed for $1.5 million which the Company had previously recorded within Selling, general and administrative expenses in the Statement of Operations for the year-ended December 31, 2020. The Company fully paid the settlement and had no recognized liability as of December 31, 2022 and $0.5 million was outstanding as of December 31, 2021. In addition, the Company entered into an agreement with Mast under which Mast will provide various technical services. Gary Winemaster Litigation v. The Company In August 2021, the Company’s former Chairman of the Board and former Chief Executive Officer and President, Gary Winemaster (“Winemaster”) filed suit in the Court of Chancery of the State of Delaware against the Company and Travelers Casualty and Surety Company of America (“Travelers”) alleging the Company’s breach of its advancement obligations under Winemaster’s indemnification agreement and Travelers’ breach of the side A policy between Traveler’s and the Company of which Winemaster is a beneficiary. In his complaint, Winemaster is seeking reimbursement under his indemnification agreement in excess of $7.2 million of attorney’s fees plus interest incurred by Winemaster in his defense of the Department of Justice (“DOJ”) case, U.S. v. Winemaster et al.. Since the filing of the complaint, Travelers has paid approximately $8.8 million to Winemaster’s attorneys, Latham and Watkins, under the Company’s side A policy to settle existing outstanding attorney’s fees. Travelers is seeking reimbursement from the Company for those advances pursuant to the terms of the side A policy. In October 2021, the Company and Winemaster entered into a Stipulation and Advancement Order to handle all future attorney’s fees relating to his DOJ and SEC cases, to the extent not reimbursed by Travelers under the side A policy. As of December 31, 2022, the Company has approximately $8.8 million accrued for the reimbursement to Travelers recorded within Accounts payable on the Consolidated Balance Sheet. Jeffrey Ehlers and Rick Lulloff Litigation In September 2021 Jeffrey Ehlers and Rick Lulloff (“Lulloff”), former employees of the Company, made demands against the Company for approximately $2.4 million and $1.2 million, respectively, for alleged wages due and owing under each employee’s employment contract related to “Incentive Bonuses” for revenues generated in the Company’s transportation end market. In November 2021, Lulloff and Ehlers separately filed complaints against the Company in the Circuit Court of Cook County, Illinois, alleging breach of contract and violations of the Illinois Wage and Payment Collection Act incorporating their claims in the above referenced demand letter. The Company filed a notice of removal from the Circuit Court of Cook County, Illinois and has also moved to consolidate the cases which has been granted by the Court. In December 2022, the Company reached a settlement with both Jeffrey Ehlers and Rick Lulloff, for $0.8 million and $0.5 million, respectively. As of December 31, 2022, the Company has recorded the aforementioned settlement liabilities within Other accrued liabilities on the Consolidated Balance Sheet and will pay the settlement amounts in installments. No estimated liability was recorded for the year ended December 31, 2021. Indemnification Agreements Under the Company’s bylaws and certain indemnification agreements, the Company has obligations to indemnify current and former officers and directors and certain current and former employees. As a result of cumulative legal fees and settlements previously paid, the Company fully exhausted its primary directors’ and officers’ insurance coverage of $30.0 million during the first quarter of 2020. Additional expenses currently expected to be incurred and that will occur in the future and/or liabilities that may be imposed in connection with actions against certain of the Company’s past directors and officers and certain former employees who are entitled to indemnification will be funded by the Company with its existing cash resources. The Company accrues for such costs as incurred within Selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. For the year ended December 31, 2022, the Company incurred $0.1 million of costs related to these indemnification obligations and $15.7 million for the year ended December 31, 2021. In June 2020, the Company entered into a new directors’ and officers’ liability insurance policy, which was renewed in June 2021, and again in June 2022. The insurance policy includes standard exclusions including for any ongoing or pending litigation such as the previously disclosed investigations by the SEC and USAO. Other Commitments At December 31, 2022, the Company had five outstanding letters of credit totaling $2.1 million. The letters of credit primarily serve as collateral for the Company for certain facility leases and insurance policies. As discussed in Note 1. Summary of Significant Accounting Policies and Other Information, the Company had restricted cash of $3.6 million at December 31, 2022 related to these letters of credit and cash held in escrow due to a customer agreement. The Company had arrangements with Doosan that required the Company to purchase minimum volumes or be subject to monetary penalties. On July 7, 2022, the Company entered into a revised supply agreement with Doosan, which among other things, removed the Company’s exclusivity to purchase and distribute specified engines within the territory of the United States, Canada and Mexico, and removed the minimum product purchase commitments and related performance penalties imposed on the Company. The liability was fully settled in 2022. The Company was also party to a supply agreement with SAME through December 31, 2022 for the exclusive purchase and distribution of engines around the world, with the exception of China (including Hong Kong, Macao and Taiwan), within the forklift and marine markets. The agreement included minimum purchase commitments which has no financial impact or monetary penalties for not meeting minimum purchases.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense (benefit) was as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Current tax expense (benefit)
Federal	$	204	$	(418)
State	(89)		(17)

Total current tax expense (benefit)	$	115	$	(435)

Deferred tax expense
Federal	$	(71)	$	(106)
State	260		135
Total deferred tax expense	189		29
Total tax expense (benefit)	$	304	$	(406)

The Company received net cash refunds for income taxes of $3.0 million in 2022 and $0.1 million in 2021.

A reconciliation between the Company’s effective tax rate on income (loss) before income taxes and the statutory tax rate is as follows:


(in thousands)	For the Year Ended December 31,
	2022				2021
	Amount		Percent		Amount		Percent
Income tax expense (benefit) at federal statutory rate	$	2,430	21.0	%	$	(10,264)	21.0	%
State income tax, net of federal benefit	140		1.2	%	(2,185)		4.5	%


Other permanent differences	1		—	%	1		—	%
Research and development tax credits	(393)		(3.4)	%	(551)		1.1	%
Other tax credits	(612)		(5.3)	%	291		(0.6)	%
Tax reserve reassessment	79		0.7	%	157		(0.3)	%

Change in valuation allowance	(497)		(4.3)	%	12,361		(25.3)	%
Return adjustment	(1,147)		(9.9)	%	(278)		0.6	%
Stock-based compensation	87		0.7	%	74		(0.2)	%
Other, net	216		1.9	%	(12)		—	%
Income tax expense (benefit)	$	304	2.6	%	$	(406)	0.8	%

For the year ended December 31, 2022, the Company recognized pretax income of $11.6 million. For the year ended December 31, 2021, the Company recognized a pretax loss of $48.9 million.

The Company generates R&D tax credits as a result of its R&D activities, which reduce the Company’s effective income tax rate. In general, these credits are general business credits and may be carried forward up to 20 years to be offset against future taxable income. The income tax expense for 2022 is primarily related to the R&D, state credit and valuation allowance against the deferred tax assets.

Significant components of deferred income tax assets and liabilities consisted of the following:


(in thousands)	As of December 31,
	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	25,541	$	30,967
Capital loss carryforwards	194		—
Research and development credits	5,565		5,168
Other state credits	3,671		3,090
Inventory	2,407		2,511
Allowances and bad debts	1,195		1,146
Accrued warranty	6,048		9,492
Accrued wages and benefits	1,294		107
Other accrued expenses	5,749		4,533
Stock-based compensation	188		182
Capitalized research and development costs	4,658		160
163(j) disallowed interest	1,343		1,634
Intangible amortization	—		668
Contract liabilities	1,057		1,005
Operating lease liability	2,820		3,862
Other	1,685		752
Total deferred tax assets	63,415		65,277
Valuation allowance	(59,680)		(60,177)
Total deferred tax assets, net of valuation allowance	$	3,735	$	5,100

Deferred tax liabilities:
ROU operating lease asset	$	(2,612)	$	(3,537)
Intangible amortization	(110)		—
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,291)		(2,579)
Total deferred tax liabilities	$	(5,013)	$	(6,116)

Net deferred tax liability	$	(1,278)	$	(1,016)

The Company’s net deferred tax liability is presented as a separate line item in the Consolidated Balance Sheets.

A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The guidance on accounting for income taxes provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset.

The Company evaluated the need to maintain a valuation allowance for deferred tax assets based on an assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. As a result of this evaluation, the Company concluded that the negative evidence outweighed the positive evidence and that a full valuation allowance should be maintained against its net deferred tax assets as of December 31, 2022 and 2021. The Company’s net deferred tax liability of $1.3 million and $1.0 million as of December 31, 2022 and 2021, respectively, represents the deferred tax liability related to indefinite-lived assets which cannot serve as a source of income for the realization of deferred tax assets that are not indefinite-lived.

As of December 31, 2022, the Company has, on a tax-effected basis, $9.2 million in R&D and state tax credit carryforwards which begin to expire in 2023. The Company has $17.5 million and $8.1 million of federal and state (tax effected, net of federal tax benefit) net operating loss carryforwards that are available to offset taxable income in the future. The federal and state net operating loss carryforwards begin to expire in 2037 and 2026, respectively.

The change in unrecognized tax benefits excluding interest and penalties were as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Balance at beginning of year	$	1,588	$	1,431
Additions based on tax positions related to the current year	74		102
Additions for tax positions of prior years	5		56
Reduction for tax positions of prior years	(7)		$	(1)
Balance at end of year	$	1,660	$	1,588

The Company recognizes interest and penalties related to unrecognized tax benefits in Income tax expense. As of December 31, 2022 and 2021, the amount accrued for interest and penalties was not material. The Company reflects the liability for unrecognized tax benefits as Other noncurrent liabilities in its Consolidated Balance Sheets. The amounts included in “reductions for tax positions of prior years” represent decreases in the unrecognized tax benefits relating to expiration of the statutes during each year shown.

As of December 31, 2022, the Company believes the liability for unrecognized tax benefits, excluding interest and penalties, could decrease by an immaterial amount in 2023 due to lapses in the statute of limitations. Due to the various jurisdictions in which the Company files tax returns, it is possible that there could be other changes in the amount of unrecognized tax benefits in 2023, but the amount cannot be estimated. Unrecognized tax benefits that, if recognized, would affect the effective tax rate are not expected to be material.

With few exceptions, the major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:


Jurisdiction	Open Tax Years
U.S. Federal	2014	to	2022
U.S. States	2013	to	2022
Canada	2019	to	2020

The Company is currently under federal income tax audit for tax years 2014, 2015 and 2016. The Company is currently under Illinois income tax audit for tax years 2013, 2014, 2015 and 2016.

Inflation Reduction Act

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA contains several revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, the Company will continue to evaluate its impact as further information becomes available.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity (Deficit)

Weichai Transactions

Weichai Shareholder’s Loan Agreements

Weichai Collaboration Arrangement and Other Related Party Transactions

Common and Treasury Stock

The changes in shares of Common and Treasury Stock are as follows:


(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance as of December 31, 2020	23,117	225	22,892
Net shares issued for stock awards	—	(34)	34



Balance as of December 31, 2021	23,117	191	22,926
Net shares issued for stock awards	—	(25)	25



Balance as of December 31, 2022	23,117	166	22,951

Preferred Stock

- Definition

+ References

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

The Company has an incentive compensation plan (the “2012 Plan”), which authorizes the granting of a variety of different types of awards including, but not limited to, non-qualified stock options, incentive stock options, Stock Appreciation Rights (“SARs”), Restricted Stock Awards (“RSAs”), deferred stock and performance units to its executive officers, employees, consultants and Directors. The 2012 Plan is administered by the Compensation Committee of the Board.

Under the 2012 Plan, 830,925 shares were initially made available for awards, with 700,000 additional shares added to the 2012 Plan in 2013. Forfeited shares are added back to the pool of shares available for future awards.

As of December 31, 2022, the Company had 399,432 shares available for issuance of future awards. To date, the Company’s granted awards have generally been either RSAs or SARs.

SAR awards entitle the recipients to receive, upon exercise, a number of shares of Common Stock equal to (i) the number of shares for which the SAR is being exercised multiplied by the value of one share of Common Stock on the date of exercise (determined as provided in the SAR award agreement), less (ii) the number of shares for which the SAR is being exercised multiplied by the applicable exercise price, divided by (iii) the value of one share of Common Stock on the date of exercise (determined as provided in the SAR award agreement). The exercised SAR is to be settled only in whole shares of Common Stock, and the value of any fractional share of Common Stock is forfeited.

RSA grants represent Common Stock issued subject to forfeiture or other restrictions that will lapse upon satisfaction of specified conditions.

Both SAR awards and RSA grants are time-based awards that generally vest over a 2 to 3-year vesting schedule (except grants to members of the Board which have a 1-year vesting schedule). SAR awards generally have a term of 10 years. Compensation expense for recipients of these time-based awards is recognized on a straight-line basis over the vesting period from the date of grant. The Company accounts for forfeitures as they occur rather than apply an estimated forfeiture rate. Stock-based compensation expense is primarily recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.

RSAs are valued based on the fair value of the common stock at grant date.

For all SAR award assumptions, the Company used rates on the grant date of zero-coupon government bonds with maturities over periods covering the term of the awards. The Company considered the historical volatility of its stock price over a term similar to the expected life of the awards in determining expected volatility. The expected term is the period that the awards granted are expected to remain outstanding. The Company has never declared or paid a cash dividend on its Common Stock.

The following table represents stock-based compensation expense and the related income tax benefits:


(in thousands)	For the Year Ended December 31,
	2022		2021
Stock-based compensation expense	$	385	$	394
Income tax benefit	$	87	$	74

SAR Awards

The Company granted 159,217 SAR awards in 2022, and did not grant SAR awards in 2021. The assumptions used for determining the fair value of the SARs included the following:


	For the Year Ended December 31,
	2022			2021
Market closing price of the Common Stock	$	3.00		$	—
Exercise price	$	3.00		$	—
Range of risk-free interest rates	2.1% - 3.3%			—		%
Weighted-average volatility	88.4		%	—		%
Range of volatilities	84.6% - 89.0%			—		%
Expected term	5.00 years			0.00 years
Dividend yield	—		%	—		%
Weighted-average grant date fair value	$	1.40		$	—

SAR activity consisted of the following:


Number of Shares under SARs	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	175,570	$	8.06	7.04	$	—
Granted	—	4.83			—
Exercised	—	—			—
Forfeited	—	—			—
Expired	(45,050)	8.60			—
Outstanding at December 31, 2021	130,520	7.87		6.18	—
Granted	159,217	4.83			—
Exercised	—	—			—
Forfeited	(78,074)	5.74			—
Expired	(83,551)	6.58			—
Outstanding at December 31, 2022	128,112	6.22		7.07	$	52

Exercisable at December 31, 2021	111,853	$	8.32	5.91	—
Exercisable at December 31, 2022	58,217	$	9.78	4.49	—

The total fair value of SARs that vested during 2022 and 2021 was $0.2 million and $0.1 million, respectively. Unrecognized compensation expense related to SARs as of December 31, 2022 and 2021 was $0.1 million and $0.1 million, respectively. As of December 31, 2022, the weighted-average period over which the unrecognized compensation cost is expected to be recognized was approximately 2.03 years.

Restricted Stock Awards

Restricted stock activity consisted of the following:


	Shares	Weighted-Average Grant Date Fair Value
December 31, 2020	37,372	$	18.58
Granted	38,263	3.45
Forfeited	(1,503)	36.00
Vested	(40,886)	9.70
Balance as of December 31, 2021	33,246	$	12.96
Granted	20,000	1.80
Forfeited	—	$	—
Vested	(26,623)	8.83
Balance as of December 31, 2022	26,623	$	8.70

The total grant date fair value of restricted stock that vested during 2022 and 2021 was $0.2 million and $0.4 million, respectively. Unrecognized compensation expense related to RSAs as of December 31, 2022 and 2021 was $0.1 million and $0.3 million, respectively. As of December 31, 2022, the weighted-average period over which the unrecognized compensation cost is expected to be recognized was approximately 0.69 years.

Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share The Company computes basic earnings (loss) per share by dividing net income (loss) by the weighted-average common shares outstanding during the year. Diluted earnings (loss) per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the year. Weighted-average diluted common shares outstanding primarily reflect the additional shares that would be issued upon the assumed exercise of stock options and the assumed vesting of unvested share awards. The treasury stock method has been used to compute diluted earnings (loss) per share for 2022 and 2021.

The computations of basic and diluted earnings (loss) per share are as follows:


(in thousands, except per share basis)	For the Year Ended December 31,
	2022		2021
Numerator:


Net income (loss) – basic and diluted	$	11,270	$	(48,472)



Denominator:
Shares used in computing net income (loss) per share
Weighted-average common shares outstanding - basic	22,938		22,908
Effect of dilutive securities	10		—
Weighted-average common shares outstanding – diluted	22,948		22,908

Earnings (Loss) per common share
Earnings (Loss) per share of common stock – basic	$	0.49	$	(2.12)
Earnings (Loss) per share of common stock – diluted	$	0.49	$	(2.12)

The aggregate number of shares excluded from the diluted earnings (loss) per share calculations because they would have been anti-dilutive were 0.1 million and 0.2 million shares in 2022 and 2021, respectively. For the twelve months ended December 31, 2022 and 2021, SARs and RSAs were not included in the diluted earnings (loss) per share calculations as they would have been anti-dilutive (1) due to the losses reported in the Consolidated Statements of Operations or (2) the Company’s average stock price was less than the exercise price of the SARs or the grant price of the RSAs.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Weichai Transactions See Note 3. Weichai Transactions for information regarding the Weichai SPA, Shareholder’s Loan Agreements and Collaboration Agreement. Transactions with Joint Ventures MAT-PSI Holdings, LLC In December 2012, the Company and MAT Holdings, Inc. (“MAT”) entered into an agreement to create MAT-PSI Holdings, LLC (“MAT-PSI”), which was intended to be a holding company of its 100% Chinese wholly-owned foreign entity, referred to as Green Power. The Company invested $0.9 million for its 50% share of MAT-PSI, which was formed to manufacture, assemble and supply natural gas, gas and alternative-fueled power systems to Chinese and Asian forklift customers. The venture established a production facility in Dalian and also sourced base engines from a local Chinese factory. As MAT-PSI was not profitable, the venture was closed in 2017; however, the Company had previously been in dispute with Green Power related to the wind up of the joint venture and outstanding receivables. On March 29, 2021, the Company executed a settlement agreement with MAT and Green Power which resolved the dispute. The final settlement agreement did not have a material impact on the Company’s consolidated financial statements. Doosan-PSI, LLC In 2015, the Company and Doosan entered into an agreement to form Doosan-PSI, LLC. The Company invested $1.0 million to acquire 50% of the venture, which was formed to operate in the field of developing, designing, testing, manufacturing, assembling, branding, marketing, selling, distributing and providing support for industrial gas engines and all components and materials required for assembly of the gas engines to the global power generation market outside of North America and South Korea. In the fourth quarter of 2019, Doosan and the Company agreed to wind down and dissolve the joint venture. In the second quarter of 2021, the Company received a cash distribution from the joint venture of $2.2 million as a result of the final wind down and dissolution of the joint venture. Joint Venture Operating Results The Company’s investments in joint ventures are accounted for under the equity method of accounting. The Company had no income or expense from the investment for the twelve months December 31, 2022 as a result of the liquidation of the Joint venture in 2021 and an expense of less than $0.1 million for the twelve months ended December 31, 2021. The joint venture operating results are presented in Other income, net in the Company’s Consolidated Statements of Operations. Other Related Party Transactions See Note 10. Commitments and Contingencies for information regarding the Company’s indemnification obligations related to certain former directors and officers of the Company.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events In March 2023, the Company amended its uncommitted senior secured revolving credit agreement with Standard Chartered and two Shareholder’s Loan agreements with Weichai which extends maturity dates to 2024. An amendment also changed approximately $4.8 million short-term classification to long-term classification which has been reflected in the consolidated balance sheet for the year ended December 31, 2022. In addition, the Company amended the Weichai Collaboration Arrangement which extends the maturity date to March 2026.

Summary of Significant Accounting Policies and Other Information (Policies)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Consolidation

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments that have original maturities of three months or less from the date of purchase. Such investments are stated at cost, which approximates fair value.

Restricted Cash

Restricted CashRestricted cash consists of funds that are contractually restricted as to usage or withdrawal due to required minimum levels of cash collateral for letters of credits and contractual agreements with customers.

Research and Development

Research and DevelopmentR&D expenses are expensed when incurred. R&D expenses consist primarily of wages, materials, testing and consulting related to the development of new engines, parts and applications. These costs were $18.9 million and $21.4 million for 2022 and 2021, respectively.

Income Taxes

Accounts Receivable and Allowance for Doubtful Accounts

Inventories

Property, Plant and Equipment

Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.

Estimated useful lives by each type of asset category are as follows:


						Years
Buildings						Up to 39
Leasehold improvements						Lesser of (i) expected useful life of improvement or (ii) life of lease (including likely extension thereof)
Machinery and equipment						1 to 10

Intangible Assets

Impairment of Long-Lived assets

Impairment of Long-Lived Assets

Goodwill

Warranty Costs

Recently Issued Accounting Pronouncements – Adopted/Not Yet Adopted

Recently Issued Accounting Pronouncements – Adopted

Revenue

The Company determines the amount of revenue to be recognized through the following steps:

•identification of the contract, or contracts with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue when, or as, the Company satisfies the performance obligations.

Taxes collected from customers and remitted to governmental authorities are presented on a net basis; that is, such taxes are excluded from revenues.

The Company’s payment terms are generally 60 days or less and its sales arrangements do not contain any significant financing components.

a.Whether the Company is primarily responsible for fulfilling the promise to provide the specified good or service.

b.Whether the Company has inventory risk before the specified good or service has been transferred to the customer or after transfer of control to the customer.

c.Whether the Company has discretion in establishing the price for the specified good or service.

Leases

Fair Value of Financial Instruments

Current Assets

Cash and cash equivalents are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments.

Debt

Other Financial Assets and Liabilities

Summary of Significant Accounting Policies and Other Information (Tables)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedules of Concentration of Risk, by Risk Factor

The following table presents customers individually accounting for more than 10% of the Company’s net sales:


	For the Year Ended December 31,
	2022		2021
Customer A	19	%	17	%
Customer B	**		21	%

The following table presents customers individually accounting for more than 10% of the Company’s trade accounts receivable:


	As of December 31,
	2022		2021
Customer A	30	%	24	%

The following table presents suppliers individually accounting for more than 10% of the Company’s purchases:


	For the Year Ended December 31,
	2022		2021

Supplier B	**		12	%
Supplier C	10	%	**

** Less than 10% of the total

Schedule of Inventory, Current

Inventories consist of the following:


(in thousands)	As of December 31,
Inventories	2022		2021
Raw materials	$	101,566	$	120,130
Work in process	3,073		8,923
Finished goods	19,825		16,509
Total inventories	124,464		145,562
Inventory allowance	(3,904)		(3,370)
Inventories, net	$	120,560	$	142,192

Activity in the Company’s inventory allowance was as follows:


(in thousands)	For the Year Ended December 31,
Inventory Allowance	2022		2021
Balance at beginning of period	$	3,370	$	3,328
Charged to expense	1,159		1,035
Write-offs	(625)		(993)
Balance at end of period	$	3,904	$	3,370

Summary of Property, Plant and Equipment

Estimated useful lives by each type of asset category are as follows:


						Years
Buildings						Up to 39
Leasehold improvements						Lesser of (i) expected useful life of improvement or (ii) life of lease (including likely extension thereof)
Machinery and equipment						1 to 10

Property, plant and equipment by type were as follows:


(in thousands)	As of December 31,
Property, Plant and Equipment	2022		2021


Leasehold improvements	$	7,107	$	7,107
Machinery and equipment	45,747		44,358
Construction in progress	467		1,125
Total property, plant and equipment, at cost	53,321		52,590
Accumulated depreciation	(39,477)		(35,246)
Property, plant and equipment, net	$	13,844	$	17,344

Schedule of Other Accrued Liabilities

Other accrued liabilities consisted of the following:


(in thousands)	As of December 31,
Other Accrued Liabilities	2022		2021
Accrued product warranty	$	13,037	$	15,830
Litigation reserves *	2,102		894
Contract liabilities	2,256		1,819
Accrued compensation and benefits	7,299		4,397


Accrued interest expense	5,257		625

Other	4,158		7,258
Total	$	34,109	$	30,823

*As of December 31, 2021 and 2022, litigation reserves related to various ongoing legal matters including associated legal fees.

Schedule of Product Warranty Liability

Accrued product warranty activities are presented below:


(in thousands)	For the Year Ended December 31,
Accrued Product Warranty	2022		2021
Balance at beginning of year	$	32,948	$	31,542
Current year provision *	6,258		18,242

Changes in estimates for preexisting warranties **	4,576		9,397
Payments made during the period	(22,232)		(26,233)

Balance at end of year	21,550		32,948
Less: Current portion	13,037		15,830
Noncurrent accrued product warranty	$	8,513	$	17,118

Revenue (Tables)

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes net sales by end market:


(in thousands)	For the Year Ended December 31,
End Market	2022		2021
Power Systems	$	179,491	$	123,132
Industrial	224,669		153,289
Transportation	77,173		179,834
Total	$	481,333	$	456,255

Summary of Revenue from External Customers by Geographic Areas

The following table summarizes net sales by geographic area:


(in thousands)	For the Year Ended December 31,
Geographic Area	2022		2021
United States	$	349,488	$	406,077
North America (outside of United States)	16,437		8,616
Pacific Rim	80,681		25,457
Europe	18,452		7,457
Other	16,275		8,648
Total	$	481,333	$	456,255

Schedule of Contract Balances


(in thousands)	As of December 31,
	2022		2021
Short-term contract assets (included in Prepaid expenses and other current assets)	$	3,620	$	2,707

Short-term contract liabilities (included in Other accrued liabilities)	(2,256)		(1,819)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(3,199)		(3,330)
Net contract liabilities	$	(1,835)	$	(2,442)

Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Estimated useful lives by each type of asset category are as follows:


						Years
Buildings						Up to 39
Leasehold improvements						Lesser of (i) expected useful life of improvement or (ii) life of lease (including likely extension thereof)
Machinery and equipment						1 to 10

Property, plant and equipment by type were as follows:


(in thousands)	As of December 31,
Property, Plant and Equipment	2022		2021


Leasehold improvements	$	7,107	$	7,107
Machinery and equipment	45,747		44,358
Construction in progress	467		1,125
Total property, plant and equipment, at cost	53,321		52,590
Accumulated depreciation	(39,477)		(35,246)
Property, plant and equipment, net	$	13,844	$	17,344

Goodwill and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Components of intangible assets are as follows:


(in thousands)	As of December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(29,527)	$	5,413
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,453)		247
Total	$	37,340	$	(31,680)	$	5,660


(in thousands)	As of December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(27,514)	$	7,426
Developed technology	700		(680)		20
Trade names and trademarks	1,700		(1,362)		338
Total	$	37,340	$	(29,556)	$	7,784

Schedule of Future Amortization Expense

Estimated future amortization expense for intangible assets as of December 31, 2022 is as follows:


(in thousands)
Year Ending December 31,	Estimated Amortization
2023	$	1,746
2024	1,459
2025	1,219
2026	997
2027	230
2028 and beyond	9
Total	$	5,660

Debt (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s outstanding debt consisted of the following:


(in thousands)	As of December 31,
	2022		2021
Short-term financing:
Revolving credit facility	$	130,000	$	130,000
Other short-term financing	75,614		25,000
Total Short-Term Debt	$	205,614	$	155,000

Long-term debt:
Long-term financing	$	4,800	$	25,000
Finance leases and other debt	$	619	$	890

Total long-term debt and finance leases	5,419		25,890
Less: Current maturities of long-term debt and finance leases	220		254
Long-term debt	$	5,199	$	25,636

Schedule of Debt Obligations

The following table summarizes the Company’s total outstanding debt obligations under all Credit Agreements and Shareholders’ Loan Agreements:


(in thousands)	As of December 31,
	2022
Third Amended and Restated Credit Agreement	$	130,000
second Amended Shareholder’s Loan Agreement	50,000
third Amended Shareholder's Loan Agreement	25,000
fourth Amended Shareholder's Loan Agreement	4,820
Other debt	1,213
Total	$	211,033

Schedule of Maturities of Long-term Debt

The below schedule of remaining maturities of long-term debt excludes finance leases (refer to Item 8., Note 7. Leases).


(in thousands)
Year Ending December 31,	Maturities of Long-Term Debt

2024	4,953
2025	67
2026	9

Total	$	5,029

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Components of Lease Expense and Cash Flow Information

The following table summarizes the lease expense by category in the Consolidated Statement of Operations:


(in thousands)	For the Year Ended December 31,
	2022		2021
Cost of sales	$	6,300	$	6,079
Research, development and engineering expenses	267		326
Selling, general and administrative expenses	169		174
Interest expense	21		44
Total	$	6,757	$	6,623

The following table summarizes the components of lease expense:


(in thousands)	For the Year Ended December 31,
	2022		2021
Operating lease cost	$	4,706	$	4,855
Finance lease cost:
Amortization of ROU asset	148		192
Interest expense	21		33
Short-term lease cost	100		267
Variable lease cost	1,782		1,276
Sublease income	(1,062)		—
Total lease cost	$	5,695	$	6,623

The following table presents supplemental cash flow information related to leases:


(in thousands)	For the Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,859	$	4,959
Operating cash flows paid for interest portion of finance leases	21		33
Financing cash flows paid for principal portion of finance leases	157		194
Right-of-use assets obtained in exchange for lease obligations
Operating leases	3,540		137
Finance leases	—		—

Supplemental Balance Sheet Information

The following table presents supplemental balance sheet information related to leases:


(in thousands)	As of December 31,
	2022		2021
Operating lease ROU assets, net 1	$	13,282	$	13,545

Operating lease liabilities, current	2,894		3,978
Operating lease liabilities, non-current	10,971		10,304
Total operating lease liabilities	$	13,865	$	14,282

Finance lease ROU assets, net 1	$	225	$	364

Finance lease liabilities, current	90		147
Finance lease liabilities, non-current	170		260
Total finance lease liabilities	$	260	$	407

1. Included in Other noncurrent assets for operating leases and Property, plant and equipment, net for finance leases on the Consolidated Balance Sheets.

Maturity Analysis of Operating Lease Liabilities

The following table presents maturity analysis of lease liabilities as of December 31, 2022:


(in thousands)
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	3,767	$	103
2024	2,668		85
2025	2,731		82
2026	2,421		17
2027	2,413		—
Thereafter	3,015		—
Total undiscounted lease payments	17,015		286
Less: imputed interest	3,150		26
Total lease liabilities	$	13,865	$	260

Maturity Analysis of Financing Lease Liabilities

The following table presents maturity analysis of lease liabilities as of December 31, 2022:


(in thousands)
Year Ending December 31,	Operating Leases		Finance Leases
2023	$	3,767	$	103
2024	2,668		85
2025	2,731		82
2026	2,421		17
2027	2,413		—
Thereafter	3,015		—
Total undiscounted lease payments	17,015		286
Less: imputed interest	3,150		26
Total lease liabilities	$	13,865	$	260

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements at Reporting Date


(in thousands)	As of December 31, 2022
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving credit facility	$	130,000	$	—	$	130,000	$	—
Other financing	75,614		—		75,614


(in thousands)	As of December 31, 2021
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving credit facility	$	130,000	$	—	$	130,000	$	—
Unsecured Senior Notes	50,000		—		50,000

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense (benefit) was as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Current tax expense (benefit)
Federal	$	204	$	(418)
State	(89)		(17)

Total current tax expense (benefit)	$	115	$	(435)

Deferred tax expense
Federal	$	(71)	$	(106)
State	260		135
Total deferred tax expense	189		29
Total tax expense (benefit)	$	304	$	(406)

The following table represents stock-based compensation expense and the related income tax benefits:


(in thousands)	For the Year Ended December 31,
	2022		2021
Stock-based compensation expense	$	385	$	394
Income tax benefit	$	87	$	74

Reconciliation of Effective Tax Rate to the Statutory Rate

A reconciliation between the Company’s effective tax rate on income (loss) before income taxes and the statutory tax rate is as follows:


(in thousands)	For the Year Ended December 31,
	2022				2021
	Amount		Percent		Amount		Percent
Income tax expense (benefit) at federal statutory rate	$	2,430	21.0	%	$	(10,264)	21.0	%
State income tax, net of federal benefit	140		1.2	%	(2,185)		4.5	%


Other permanent differences	1		—	%	1		—	%
Research and development tax credits	(393)		(3.4)	%	(551)		1.1	%
Other tax credits	(612)		(5.3)	%	291		(0.6)	%
Tax reserve reassessment	79		0.7	%	157		(0.3)	%

Change in valuation allowance	(497)		(4.3)	%	12,361		(25.3)	%
Return adjustment	(1,147)		(9.9)	%	(278)		0.6	%
Stock-based compensation	87		0.7	%	74		(0.2)	%
Other, net	216		1.9	%	(12)		—	%
Income tax expense (benefit)	$	304	2.6	%	$	(406)	0.8	%

Schedule of Significant Components of the Deferred Income Tax Assets and Liabilities

Significant components of deferred income tax assets and liabilities consisted of the following:


(in thousands)	As of December 31,
	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	25,541	$	30,967
Capital loss carryforwards	194		—
Research and development credits	5,565		5,168
Other state credits	3,671		3,090
Inventory	2,407		2,511
Allowances and bad debts	1,195		1,146
Accrued warranty	6,048		9,492
Accrued wages and benefits	1,294		107
Other accrued expenses	5,749		4,533
Stock-based compensation	188		182
Capitalized research and development costs	4,658		160
163(j) disallowed interest	1,343		1,634
Intangible amortization	—		668
Contract liabilities	1,057		1,005
Operating lease liability	2,820		3,862
Other	1,685		752
Total deferred tax assets	63,415		65,277
Valuation allowance	(59,680)		(60,177)
Total deferred tax assets, net of valuation allowance	$	3,735	$	5,100

Deferred tax liabilities:
ROU operating lease asset	$	(2,612)	$	(3,537)
Intangible amortization	(110)		—
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,291)		(2,579)
Total deferred tax liabilities	$	(5,013)	$	(6,116)

Net deferred tax liability	$	(1,278)	$	(1,016)

Schedule of the Change in Unrecognized Tax Benefits

The change in unrecognized tax benefits excluding interest and penalties were as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Balance at beginning of year	$	1,588	$	1,431
Additions based on tax positions related to the current year	74		102
Additions for tax positions of prior years	5		56
Reduction for tax positions of prior years	(7)		$	(1)
Balance at end of year	$	1,660	$	1,588

Summary of Income Tax Examinations

With few exceptions, the major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:


Jurisdiction	Open Tax Years
U.S. Federal	2014	to	2022
U.S. States	2013	to	2022
Canada	2019	to	2020

Stockholders' Equity (Deficit) (Tables)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Schedule of Common Stock Outstanding Roll Forward

The changes in shares of Common and Treasury Stock are as follows:


(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance as of December 31, 2020	23,117	225	22,892
Net shares issued for stock awards	—	(34)	34



Balance as of December 31, 2021	23,117	191	22,926
Net shares issued for stock awards	—	(25)	25



Balance as of December 31, 2022	23,117	166	22,951

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Income tax expense (benefit) was as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Current tax expense (benefit)
Federal	$	204	$	(418)
State	(89)		(17)

Total current tax expense (benefit)	$	115	$	(435)

Deferred tax expense
Federal	$	(71)	$	(106)
State	260		135
Total deferred tax expense	189		29
Total tax expense (benefit)	$	304	$	(406)

The following table represents stock-based compensation expense and the related income tax benefits:


(in thousands)	For the Year Ended December 31,
	2022		2021
Stock-based compensation expense	$	385	$	394
Income tax benefit	$	87	$	74

Schedule of Fair Value Assumptions

The assumptions used for determining the fair value of the SARs included the following:


	For the Year Ended December 31,
	2022			2021
Market closing price of the Common Stock	$	3.00		$	—
Exercise price	$	3.00		$	—
Range of risk-free interest rates	2.1% - 3.3%			—		%
Weighted-average volatility	88.4		%	—		%
Range of volatilities	84.6% - 89.0%			—		%
Expected term	5.00 years			0.00 years
Dividend yield	—		%	—		%
Weighted-average grant date fair value	$	1.40		$	—

Schedule of SAR Activity

SAR activity consisted of the following:


Number of Shares under SARs	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	175,570	$	8.06	7.04	$	—
Granted	—	4.83			—
Exercised	—	—			—
Forfeited	—	—			—
Expired	(45,050)	8.60			—
Outstanding at December 31, 2021	130,520	7.87		6.18	—
Granted	159,217	4.83			—
Exercised	—	—			—
Forfeited	(78,074)	5.74			—
Expired	(83,551)	6.58			—
Outstanding at December 31, 2022	128,112	6.22		7.07	$	52

Exercisable at December 31, 2021	111,853	$	8.32	5.91	—
Exercisable at December 31, 2022	58,217	$	9.78	4.49	—

Schedule of Restricted Stock Activity

Restricted stock activity consisted of the following:


	Shares	Weighted-Average Grant Date Fair Value
December 31, 2020	37,372	$	18.58
Granted	38,263	3.45
Forfeited	(1,503)	36.00
Vested	(40,886)	9.70
Balance as of December 31, 2021	33,246	$	12.96
Granted	20,000	1.80
Forfeited	—	$	—
Vested	(26,623)	8.83
Balance as of December 31, 2022	26,623	$	8.70

Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings (Loss) Per Share

The computations of basic and diluted earnings (loss) per share are as follows:


(in thousands, except per share basis)	For the Year Ended December 31,
	2022		2021
Numerator:


Net income (loss) – basic and diluted	$	11,270	$	(48,472)



Denominator:
Shares used in computing net income (loss) per share
Weighted-average common shares outstanding - basic	22,938		22,908
Effect of dilutive securities	10		—
Weighted-average common shares outstanding – diluted	22,948		22,908

Earnings (Loss) per common share
Earnings (Loss) per share of common stock – basic	$	0.49	$	(2.12)
Earnings (Loss) per share of common stock – diluted	$	0.49	$	(2.12)

Summary of Significant Accounting Policies and Other Information - Narrative (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) boardMember segment	Dec. 31, 2021 USD ($)
Concentration Risk [Line Items]
Number of board members \| boardMember	4
Debt, long-term and short-term, combined amount	$ 211,000,000
Cash and cash equivalents	$ 24,296,000	$ 6,255,000
Number of operating segments \| segment	1
Restricted cash	$ 3,604,000	3,477,000
Research and development, excluding engineering expenses	18,900,000	21,400,000
Impairment losses	0	$ 0
Product warranty reimbursements	$ 1,000,000.0
Minimum
Concentration Risk [Line Items]
Amortization period	3 years
Maximum
Concentration Risk [Line Items]
Amortization period	15 years
Contract With Customer
Concentration Risk [Line Items]
Restricted cash	$ 1,100,000

Summary of Significant Accounting Policies and Other Information - Schedules of Concentration of Risk, by Risk Factor (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Purchases \| Supplier Concentration Risk \| Supplier B
Concentration Risk [Line Items]
Concentration risk (as a percent)		12.00%
Purchases \| Supplier Concentration Risk \| Supplier C
Concentration Risk [Line Items]
Concentration risk (as a percent)	10.00%
Customer A \| Net Sales \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk (as a percent)	19.00%	17.00%
Customer A \| Accounts Receivable \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk (as a percent)	30.00%	24.00%
Customer B \| Net Sales \| Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk (as a percent)		21.00%

Summary of Significant Accounting Policies and Other Information - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Inventories
Raw materials	$ 101,566	$ 120,130
Work in process	3,073	8,923
Finished goods	19,825	16,509
Total inventories	124,464	145,562
Inventory allowance	(3,904)	(3,370)
Inventories, net	120,560	142,192
Inventory Allowance
Balance at beginning of period	3,370	3,328
Charged to expense	1,159	1,035
Write-offs	(625)	(993)
Balance at end of period	$ 3,904	$ 3,370

Summary of Significant Accounting Policies and Other Information - Property, Plant and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Buildings \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	39 years
Machinery and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	10 years
Machinery and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	1 year

Summary of Significant Accounting Policies and Other Information - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued product warranty	$ 13,037	$ 15,830
Litigation reserves	2,102	894
Contract liabilities	2,256	1,819
Accrued compensation and benefits	7,299	4,397
Accrued interest expense	5,257	625
Other	4,158	7,258
Total	$ 34,109	$ 30,823

Summary of Significant Accounting Policies and Other Information - Schedule of Accrued Product Warranty (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Accrued Product Warranty
Balance at beginning of year	$ 32,948	$ 31,542
Current year provision	6,258	18,242
Changes in estimates for preexisting warranties	4,576	9,397
Payments made during the period	(22,232)	(26,233)
Balance at end of year	21,550	32,948
Accrued Product Warranty	21,550	32,948
Less: Current portion	13,037	15,830
Noncurrent accrued product warranty	8,513	17,118
Product warranty expense	6,400	22,800
Supplier recoveries	4,100	4,800
Changes in estimates for preexisting warranties	$ 4,576	$ 9,397
Diluted share (in dollars per share)	$ 0.20	$ 0.41

Revenue - Narrative (Details)	12 Months Ended
Revenue - Narrative (Details)	Dec. 31, 2022 USD ($) supplyAgreement	Dec. 31, 2021 USD ($)
Disaggregation of Revenue [Line Items]
Revenue	$ 481,333,000	$ 456,255,000
Number of supply agreements \| supplyAgreement	2
Revenue recognized upon satisfaction of performance obligations	$ 1,600,000	47,200,000
Contract liabilities	2,256,000	1,819,000
Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Revenue	434,000,000	415,700,000
Transferred over Time
Disaggregation of Revenue [Line Items]
Revenue	47,300,000	40,600,000
6.0 Liter Engines
Disaggregation of Revenue [Line Items]
Revenue		103,700,000
Contract liabilities	$ 0	$ 0

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue - Disaggregation of Revenue and Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Total	$ 481,333	$ 456,255
United States
Disaggregation of Revenue [Line Items]
Total	349,488	406,077
North America (outside of United States)
Disaggregation of Revenue [Line Items]
Total	16,437	8,616
Pacific Rim
Disaggregation of Revenue [Line Items]
Total	80,681	25,457
Europe
Disaggregation of Revenue [Line Items]
Total	18,452	7,457
Other
Disaggregation of Revenue [Line Items]
Total	16,275	8,648
Power Systems
Disaggregation of Revenue [Line Items]
Total	179,491	123,132
Industrial
Disaggregation of Revenue [Line Items]
Total	224,669	153,289
Transportation
Disaggregation of Revenue [Line Items]
Total	$ 77,173	$ 179,834

Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Short-term contract assets (included in Prepaid expenses and other current assets)	$ 3,620	$ 2,707
Short-term contract liabilities (included in Other accrued liabilities)	(2,256)	(1,819)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(3,199)	(3,330)
Net contract liabilities	$ (1,835)	$ (2,442)

Revenue - Remaining Performance Obligations (Details) $ in Millions	Dec. 31, 2022 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 4.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 1.4
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 1.0
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0.5
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0.2
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 1.0
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0.5
Revenue, remaining performance obligation, period	1 year

Weichai Transactions (Details)		12 Months Ended
Weichai Transactions (Details)	Mar. 20, 2017	Dec. 31, 2022 USD ($) agreement	Dec. 31, 2021 USD ($)	Mar. 25, 2022 USD ($)
Subsidiary, Sale of Stock [Line Items]
Debt instrument, number of loan agreements \| agreement		4
Term of collaborative arrangement	3 years
Company sales		$ 600,000	$ 500,000
Outstanding receivables		400,000	200,000
Purchased inventory		13,300,000	12,400,000
Outstanding payables		23,400,000	12,500,000
Net sales from related party		2,749,000	493,000
Société Internationale Des Moteurs Baudouin \| International Distribution and Sales Agreement
Subsidiary, Sale of Stock [Line Items]
Net sales from related party		2,200,000
Collaborative arrangement, receivable		1,900,000	$ 0
Revolving credit facility \| First Shareholder's Loan Agreement, Weichai
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity				$ 130,000,000
Revolving credit facility \| Amended Second Shareholder's Loan Agreement
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity		25,000,000
Revolving credit facility \| Second Shareholder's Loan Agreement, Weichai
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity		50,000,000		$ 25,000,000
Revolving credit facility \| Fourth Shareholder's Loan Agreement, Weichai
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity		$ 30,000,000

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 53,321	$ 52,590
Accumulated depreciation	(39,477)	(35,246)
Property, plant and equipment, net	13,844	17,344
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	7,107	7,107
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	45,747	44,358
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 467	$ 1,125

Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 29,835	$ 29,835

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Goodwill and Other Intangibles - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 37,340	$ 37,340
Accumulated Amortization	(31,680)	(29,556)
Net Book Value	5,660	7,784
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	34,940	34,940
Accumulated Amortization	(29,527)	(27,514)
Net Book Value	5,413	7,426
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	700	700
Accumulated Amortization	(700)	(680)
Net Book Value	0	20
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,700	1,700
Accumulated Amortization	(1,453)	(1,362)
Net Book Value	$ 247	$ 338

Goodwill and Other Intangibles - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Year Ending December 31,
2023	$ 1,746
2024	1,459
2025	1,219
2026	997
2027	230
2028 and beyond	9
Net Book Value	$ 5,660	$ 7,784

Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Short-term financing:
Short-term financing	$ 205,614	$ 155,000
Other short-term financing (from related parties $75,020 and $25,000 as of December 31, 2022 and December 31, 2021, respectively)	75,614	25,000
Long-term debt:
Long-term financing	4,800	25,000
Finance leases and other debt	619	890
Total long-term debt and finance leases	5,419	25,890
Less: Current maturities of long-term debt and finance leases	220	254
Long-term debt	5,199	25,636
Debt issuance costs	$ 400	800
Revolving credit facility
Short-term financing:
Short-term financing		$ 130,000

Debt - Narrative (Details)					12 Months Ended
Debt - Narrative (Details)	Mar. 24, 2023 USD ($)	Apr. 20, 2022	Mar. 25, 2022 USD ($) agreement day	Dec. 10, 2021	Dec. 31, 2022 USD ($) agreement	Dec. 31, 2021 USD ($)	Apr. 12, 2023 USD ($)	Mar. 24, 2022 USD ($)
Debt Instrument [Line Items]
Interest paid					$ 6,100,000	$ 3,700,000
Short-term financing					205,614,000	155,000,000
Debt instrument, number of loan agreements amended \| agreement			2
Debt, long-term and short-term, combined amount					211,000,000
Cash and cash equivalents					24,296,000	6,255,000
Accrued unpaid interest					$ 5,300,000	600,000
Number of amended agreements \| agreement					2
Number of agreements \| agreement					4
Revolving credit facility
Debt Instrument [Line Items]
Short-term financing						$ 130,000,000
First Shareholder's Loan Agreement, Weichai \| Revolving credit facility
Debt Instrument [Line Items]
Short-term financing					$ 0
First Shareholder's Loan Agreement, Weichai \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate		4.65%			4.05%
Second Amended and Restated Credit Agreement, Standard Chartered \| Revolving credit facility
Debt Instrument [Line Items]
Short-term financing								$ 130,000,000.0
Second Shareholder's Loan Agreement, Weichai \| Revolving credit facility
Debt Instrument [Line Items]
Short-term financing					$ 25,000,000
Third Shareholder's Loan Agreement, Weichai \| Revolving credit facility
Debt Instrument [Line Items]
Short-term financing					50,000,000
First, Second, And Fourth Shareholder's Loan Agreement, Weichai
Debt Instrument [Line Items]
Debt instrument, incremental borrowing cost		1.00%
Fourth Shareholder's Loan Agreement, Weichai \| Revolving credit facility
Debt Instrument [Line Items]
Short-term financing					4,800,000			$ 30,000,000
Revolving credit facility
Debt Instrument [Line Items]
Short-term financing					211,033,000
Revolving credit facility \| First Shareholder's Loan Agreement, Weichai
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 130,000,000
Revolving credit facility \| First Shareholder's Loan Agreement, Weichai \| Subsequent Event
Debt Instrument [Line Items]
Maximum borrowing capacity							$ 130,000,000
Revolving credit facility \| Second Amended and Restated Credit Agreement, Standard Chartered
Debt Instrument [Line Items]
Number of days to submit borrowing request \| day			5
Short-term financing					130,000,000.0
Revolving credit facility \| Second Amended and Restated Credit Agreement, Standard Chartered \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate			2.95%
Revolving credit facility \| Second Shareholder's Loan Agreement, Weichai
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 25,000,000		50,000,000
Revolving credit facility \| Third Shareholder's Loan Agreement, Weichai
Debt Instrument [Line Items]
Short-term financing					25,000,000
Revolving credit facility \| Third Shareholder's Loan Agreement, Weichai \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate				4.65%
Revolving credit facility \| Fourth Shareholder's Loan Agreement, Weichai
Debt Instrument [Line Items]
Maximum borrowing capacity					30,000,000
Short-term financing					$ 4,820,000
Revolving credit facility \| Amended and Restated Credit Agreement, Standard Chartered \| Subsequent Event
Debt Instrument [Line Items]
Credit agreement fees	$ 1,000,000.0
Revolving credit facility \| Amended and Restated Credit Agreement, Standard Chartered \| SOFR \| Subsequent Event
Debt Instrument [Line Items]
Basis spread on variable rate	3.35%

Debt - Schedule of Debt Obligations (Details) - USD ($)	Dec. 31, 2022	Mar. 25, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total	$ 205,614,000		$ 155,000,000
Revolving credit facility
Debt Instrument [Line Items]
Total	211,033,000
Revolving credit facility \| Third Amended and Restated Credit Agreement
Debt Instrument [Line Items]
Total	130,000,000
Revolving credit facility \| second Amended Shareholder’s Loan Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity	50,000,000	$ 25,000,000
Revolving credit facility \| third Amended Shareholder's Loan Agreement
Debt Instrument [Line Items]
Total	25,000,000
Revolving credit facility \| fourth Amended Shareholder's Loan Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity	30,000,000
Total	4,820,000
Revolving credit facility \| Other debt
Debt Instrument [Line Items]
Total	$ 1,213,000

Debt - Schedule of Maturities of Long-Term Debt (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Debt Disclosure [Abstract]
2024	$ 4,953
2025	67
2026	9
Total	$ 5,029

Leases - Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Lease Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	$ 6,757	$ 6,623
Cost of sales
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	6,300	6,079
Research, development and engineering expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	267	326
Selling, general and administrative expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	169	174
Interest expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	$ 21	$ 44

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease cost	$ 4,706	$ 4,855
Finance lease cost:
Amortization of ROU asset	148	192
Interest expense	21	33
Short-term lease cost	100	267
Variable lease cost	1,782	1,276
Sublease income	(1,062)	0
Total lease cost	$ 5,695	$ 6,623

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$ 4,859	$ 4,959
Operating cash flows paid for interest portion of finance leases	21	33
Financing cash flows paid for principal portion of finance leases	157	194
Right-of-use assets obtained in exchange for lease obligations
Operating leases	3,540	137
Finance leases	$ 0	$ 0

Leases - Narrative (Details)	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Weighted-average remaining lease term, operating lease	5 years 9 months 18 days
Weighted-average remaining lease term, financing leases	3 years	3 years 4 months 24 days
Weighted-average discount rate for operating leases	7.10%	7.10%
Weighted-average discount rate for financing leases	6.60%	6.50%

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating Lease, Assets And Liabilities, Lessee [Abstract]
Operating lease ROU assets, net	$ 13,282	$ 13,545
Operating lease liability, current	2,894	3,978
Operating lease liabilities, non-current	10,971	10,304
Total operating lease liabilities	13,865	14,282
Finance Lease, Assets And Liabilities, Lessee [Abstract]
Finance lease ROU assets, net	225	364
Finance lease liabilities, current	90	147
Finance lease liabilities, non-current	170	260
Total finance lease liabilities	$ 260	$ 407
Finance ROU assets, net, statement of financial position, extensible list	Property, plant and equipment, net	Property, plant and equipment, net

Leases - Maturity Analysis of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating Leases
2023	$ 3,767
2024	2,668
2025	2,731
2026	2,421
2027	2,413
Thereafter	3,015
Total undiscounted lease payments	17,015
Less: imputed interest	3,150
Total lease liabilities	13,865	$ 14,282
Finance Leases
2023	103
2024	85
2025	82
2026	17
2027	0
Thereafter	0
Total undiscounted lease payments	286
Less: imputed interest	26
Total lease liabilities	$ 260	$ 407

Fair Value of Financial Instruments - Schedule of Debt Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value	$ 205,614	$ 155,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other financing	75,614
Fair Value, Measurements, Recurring \| Long-term financing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unsecured Senior Notes		50,000
Fair Value, Measurements, Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other financing	0
Fair Value, Measurements, Recurring \| Level 1 \| Long-term financing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unsecured Senior Notes		0
Fair Value, Measurements, Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other financing	75,614
Fair Value, Measurements, Recurring \| Level 2 \| Long-term financing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unsecured Senior Notes		50,000
Fair Value, Measurements, Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other financing
Fair Value, Measurements, Recurring \| Level 3 \| Long-term financing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unsecured Senior Notes
Revolving credit facility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value		130,000
Revolving credit facility \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value	130,000	130,000
Revolving credit facility \| Fair Value, Measurements, Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revolving credit facility	0	0
Revolving credit facility \| Fair Value, Measurements, Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revolving credit facility	130,000	130,000
Revolving credit facility \| Fair Value, Measurements, Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revolving credit facility	$ 0	$ 0

Defined Contribution Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Retirement Benefits [Abstract]
Employer contributions	$ 0.8	$ 0.8

Commitments and Contingencies (Details)		1 Months Ended							3 Months Ended	12 Months Ended
Commitments and Contingencies (Details)	Mar. 31, 2020 USD ($)	Dec. 31, 2022 USD ($) letterOfCredit	Sep. 30, 2021 USD ($)	Aug. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)	Oct. 31, 2020	Feb. 29, 2020 USD ($)	Oct. 31, 2018 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2022 USD ($) letterOfCredit	Dec. 31, 2021 USD ($)
Loss Contingencies [Line Items]
Litigation reserves		$ 2,102,000								$ 2,102,000	$ 894,000
Insurance coverage									$ 30,000,000.0
Number of outstanding letters of credit \| letterOfCredit		5								5
Outstanding letters of credit amount		$ 2,100,000								$ 2,100,000
Restricted cash		3,604,000								3,604,000	3,477,000
Indemnification Agreement
Loss Contingencies [Line Items]
Related costs										100,000	15,700,000
Jerome Treadwell v. The Company
Loss Contingencies [Line Items]
Recovery per negligent violation								$ 1,000
Recovery per intentional or reckless violation								$ 5,000
Stay case term						60 days
Costs incurred		2,000,000								2,000,000	300,000
Mast Powertrain v. The Company
Loss Contingencies [Line Items]
Damages sought	$ 4,500,000						$ 9,000,000
Litigation settlement payment					$ 1,500,000
Litigation reserves		0								$ 0	500,000
Gary Winemaster Versus The Company
Loss Contingencies [Line Items]
Damages sought				$ 7,200,000
Legal settlement				$ 8,800,000
Jeffrey Ehlers Versus The Company
Loss Contingencies [Line Items]
Costs incurred											$ 0
Damages sought			$ 2,400,000
Litigation settlement payment		800,000
Rick Lulloff Versus The Company
Loss Contingencies [Line Items]
Damages sought			$ 1,200,000
Litigation settlement payment		$ 500,000

Income Taxes - Schedule of Expense (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Current tax expense (benefit)
Federal	$ 204	$ (418)
State	(89)	(17)
Total current tax expense (benefit)	115	(435)
Deferred tax expense
Federal	(71)	(106)
State	260	135
Total deferred tax expense	189	29
Income tax expense (benefit)	$ 304	$ (406)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income tax refunds	$ 3,000	$ 100
Pretax income (loss) including permanently excludable loss	$ 11,600	(48,900)
Period to carry forward general business credits	20 years
Net deferred tax liability	$ 1,278	$ 1,016
Tax credit carryforwards	9,200
Federal net operating loss carryforwards	17,500
State net operating loss carryforwards	$ 8,100

Income Taxes - Reconciliation of Effective Tax Rate to the Statutory Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Amount
Income tax expense (benefit) at federal statutory rate	$ 2,430	$ (10,264)
State income tax, net of federal benefit	140	(2,185)
Other permanent differences	1	1
Research and development tax credits	(393)	(551)
Other tax credits	(612)	291
Tax reserve reassessment	79	157
Change in valuation allowance	(497)	12,361
Return adjustment	(1,147)	(278)
Stock-based compensation	87	74
Other, net	216	(12)
Income tax expense (benefit)	$ 304	$ (406)
Percent
Income tax expense (benefit) at federal statutory rate	21.00%	21.00%
State income tax, net of federal benefit	1.20%	4.50%
Other permanent differences	0.00%	0.00%
Research and development tax credits	(3.40%)	1.10%
Other tax credits	(5.30%)	(0.60%)
Tax reserve reassessment	0.70%	(0.30%)
Change in valuation allowance	(4.30%)	(25.30%)
Return adjustment	(9.90%)	0.60%
Stock-based compensation	0.70%	(0.20%)
Other, net	1.90%	0.00%
Income tax expense (benefit)	2.60%	0.80%

Income Taxes - Schedule of Significant Components of the Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Net operating loss carryforwards	$ 25,541	$ 30,967
Capital loss carryforwards	194	0
Research and development credits	5,565	5,168
Other state credits	3,671	3,090
Inventory	2,407	2,511
Allowances and bad debts	1,195	1,146
Accrued warranty	6,048	9,492
Accrued wages and benefits	1,294	107
Other accrued expenses	5,749	4,533
Stock-based compensation	188	182
Capitalized research and development costs	4,658	160
163(j) disallowed interest	1,343	1,634
Intangible amortization	0	668
Contract liabilities	1,057	1,005
Operating lease liability	2,820	3,862
Other	1,685	752
Total deferred tax assets	63,415	65,277
Valuation allowance	(59,680)	(60,177)
Total deferred tax assets, net of valuation allowance	3,735	5,100
Deferred tax liabilities:
ROU operating lease asset	(2,612)	(3,537)
Intangible amortization	(110)	0
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,291)	(2,579)
Total deferred tax liabilities	(5,013)	(6,116)
Net deferred tax liability	$ (1,278)	$ (1,016)

Income Taxes - Schedule of the Change in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns
Balance at beginning of year	$ 1,588	$ 1,431
Additions based on tax positions related to the current year	74	102
Additions for tax positions of prior years	5	56
Reduction for tax positions of prior years	(7)	(1)
Balance at end of year	$ 1,660	$ 1,588

Stockholders' Equity (Deficit) (Details)	12 Months Ended
Stockholders' Equity (Deficit) (Details)	Dec. 31, 2022 stockSeries $ / shares shares	Dec. 31, 2021 $ / shares shares
Common Shares Issued
Beginning balance (in shares)	23,117,000
Ending balance (in shares)	23,117,000	23,117,000
Common Shares Outstanding
Balance at beginning of period (in shares)	22,926,000
Balance at end of period (in shares)	22,951,000	22,926,000
Series B convertible preferred stock, authorized (in shares)	5,000,000	5,000,000
Series B convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001
Preferred stock, shares outstanding (in shares)	0	0
Series B Convertible Preferred Stock
Common Shares Outstanding
Series B convertible preferred stock, authorized (in shares)	5,000,000
Series B convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001
Number of authorized series of preferred stock \| stockSeries	2
Common Stock
Common Shares Issued
Beginning balance (in shares)	23,117,000	23,117,000
Ending balance (in shares)	23,117,000	23,117,000
Treasury Stock Shares
Net shares issued for Stock Awards (in shares)	(25,000)	(34,000)
Common Shares Outstanding
Balance at beginning of period (in shares)	22,926,000	22,892,000
Net shares issued for Stock Awards (in shares)	25,000	34,000
Balance at end of period (in shares)	22,951,000	22,926,000
Treasury Stock Shares
Treasury Stock Shares
Balance at beginning of period (in shares)	191,000	225,000
Net shares issued for Stock Awards (in shares)	(25,000)	(34,000)
Balance at end of period (in shares)	166,000	191,000
Common Shares Outstanding
Net shares issued for Stock Awards (in shares)	25,000	34,000

Stock-Based Compensation - Narrative (Details) - shares	12 Months Ended
Stock-Based Compensation - Narrative (Details) - shares	Dec. 31, 2022	Dec. 31, 2013	Dec. 31, 2012
Members of the Board
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
SARs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share initially made available for awards (in shares)			830,925
Additional shares added to the plan (in shares)		700,000
Share available for issuance of future awards (in shares)	399,432
Share of common stock	1
Expiration period	10 years

Stock-Based Compensation - Stock-Based Compensation Expense and Related Income Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 385	$ 394
Income tax benefit	$ 87	$ 74

Stock-Based Compensation - SAR Awards Narrative (Details) - SARs - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award (in shares)	159,217	0
Fair value of restricted stock vested	$ 0.2	$ 0.1
Unrecognized compensation expense	$ 0.1	$ 0.1
Weighted-average period the unrecognized compensation cost is expected to be recognized	2 years 10 days

Stock-Based Compensation - Schedule of Fair Value Assumptions (Details) - SARs - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market closing price of the Common Stock (in dollars per share)	$ 3.00	$ 0
Exercise price (in dollars per share)	$ 3.00	$ 0
Range of risk-free interest rate (as a percent)	2.10%
Range of risk-free interest rate (as a percent)	3.30%
Range of risk-free interest rates		0.00%
Weighted-average volatility	88.40%	0.00%
Range of volatilities		0.00%
Expected term	5 years	0 years
Dividend yield	0.00%	0.00%
Weighted average grant date fair value (in dollars per share)	$ 1.40	$ 0
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of volatilities	84.60%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of volatilities	89.00%

Stock-Based Compensation - Schedule of SAR Activity (Details) - SARs - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Shares
Outstanding, beginning balance (in shares)	130,520	175,570
Granted (in shares)	159,217	0
Exercised (in shares)	0	0
Forfeited (in shares)	(78,074)	0
Expired (in shares)	(83,551)	(45,050)
Outstanding, ending balance (in shares)	128,112	130,520	175,570
Exercisable (in shares)	58,217	111,853
Weighted-Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 7.87	$ 8.06
Granted (in dollars per share)	4.83	4.83
Exercised (in dollars per share)	0	0
Forfeited (in dollars per share)	5.74	0
Expired (in dollars per share)	6.58	8.60
Outstanding, ending balance (in dollars per share)	6.22	7.87	$ 8.06
Exercisable (in dollars per share)	$ 9.78	$ 8.32
Weighted-Average Remaining Contractual Term (years)
Outstanding (in years)	7 years 25 days	6 years 2 months 4 days	7 years 14 days
Exercisable (in years)	4 years 5 months 26 days	5 years 10 months 28 days
Aggregate Intrinsic Value (in thousands)
Outstanding	$ 52	$ 0	$ 0
Exercisable	$ 0	$ 0

Stock-Based Compensation - Schedule of Restricted Stock Activity (Details) - Restricted Stock Awards - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Shares
Outstanding, beginning balance (in shares)	33,246	37,372
Granted (in shares)	20,000	38,263
Forfeited (in shares)	0	(1,503)
Vested (in shares)	(26,623)	(40,886)
Outstanding, ending balance (in shares)	26,623	33,246
Weighted-Average Grant Date Fair Value
Outstanding, beginning balance (in dollars per share)	$ 12.96	$ 18.58
Granted (in dollars per share)	1.80	3.45
Forfeited (in dollars per share)	0	36.00
Vested (in dollars per share)	8.83	9.70
Outstanding, ending balance (in dollars per share)	$ 8.70	$ 12.96

Stock-Based Compensation - Restricted Stock Awards - Narrative (Details) - Restricted Stock Awards - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock vested	$ 0.2	$ 0.4
Unrecognized compensation expense	$ 0.1	$ 0.3
Weighted-average period the unrecognized compensation cost is expected to be recognized	8 months 8 days

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net income (loss) – basic and diluted	$ 11,270	$ (48,472)
Shares used in computing net income (loss) per share
Weighted-average common shares outstanding - basic (in shares)	22,938	22,908
Effect of dilutive securities (in shares)	10	0
Weighted-average common shares outstanding - diluted (in shares)	22,948	22,908
Earnings (Loss) per common share
Earnings (Loss) per share of common stock – basic (in dollars per share)	$ 0.49	$ (2.12)
Earnings (Loss) per share of common stock – diluted (in dollars per share)	$ 0.49	$ (2.12)
Antidilutive shares (in shares)	100	200

Related Party Transactions (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2015
Related Party Transaction [Line Items]
Return of investment in joint venture			$ 0	$ 2,263
Other expense, net			0	(1)
Corporate Joint Venture
Related Party Transaction [Line Items]
Other expense, net			$ 0	$ 100
Corporate Joint Venture \| Green Power
Related Party Transaction [Line Items]
Investment amount with related party	$ 900
Percent of noncontrolling interest	50.00%
Corporate Joint Venture \| Green Power \| MAT-PSI Holdings, LLC
Related Party Transaction [Line Items]
Ownership percentage	100.00%
Corporate Joint Venture \| Doosan-PSI, LLC
Related Party Transaction [Line Items]
Investment amount with related party					$ 1,000
Percent of noncontrolling interest					50.00%
Return of investment in joint venture		$ 2,200

Subsequent Events (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Subsequent Events [Abstract]
Long-term debt, net of current maturities, related parties	$ 4,800	$ 25,000