0001137091-24-000027 | 10-Q | XBRL Viewer | Power Solutions International INC

Leases

9 Months Ended

Sep. 30, 2024

The Company has obligations under lease arrangements primarily for facilities, equipment and vehicles. These leases have original lease periods expiring between September 2025 and July 2034. The following table summarizes the lease expense by category in the Consolidated Statement of Income:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of sales	$	1,935	$	2,243	$	5,719	$	6,214
Research and development expenses	82		64		247		190
Selling, general and administrative expenses	45		19		187		56
Interest expense	2		39		7		80
Total	$	2,064	$	2,365	$	6,160	$	6,540

The following table summarizes the components of lease expense:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023

Operating lease cost	$	1,531	$	1,561	$	4,595	$	4,353
Finance lease cost
Amortization of right-of-use (“ROU”) asset	16		20		50		61
Interest expense	2		3		7		11
Short-term lease cost	265		408		838		809
Variable lease cost	250		373		670		1,305
Sublease income	—		(87)		—		(619)
Total lease cost, net	$	2,064	$	2,278	$	6,160	$	5,920

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


(in thousands)	For the Nine Months Ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,525	$	3,315
Operating cash flows paid for interest portion of finance leases	7		11
Financing cash flows paid for principal portion of finance leases	57		67
ROU assets obtained in exchange for lease obligations
Operating leases	1,139		17,838

As of September 30, 2024 and December 31, 2023, the weighted-average remaining lease term was 5.5 years and 6.2 years for operating leases, respectively, and 1.5 years and 2.2 years for finance leases, respectively. As of September 30, 2024 and December 31, 2023, the weighted-average discount rate was 7.5% and 7.6% for operating leases, respectively, and for both periods 6.5% for finance leases.

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


(in thousands)	September 30, 2024		December 31, 2023

Operating lease ROU assets, net	$	24,319	$	27,145

Operating lease liabilities, current	4,373		3,912
Operating lease liabilities, non-current	21,845		25,070
Total operating lease liabilities	$	26,218	$	28,982

Finance lease ROU assets, net 1	$	94	$	144

Finance lease liabilities, current	78		76
Finance lease liabilities, non-current	35		94
Total finance lease liabilities	$	113	$	170

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

The following table presents maturity analysis of lease liabilities as of September 30, 2024:


(in thousands)	Operating Leases		Finance Leases
Three months ending December 31, 2024	$	1,538	$	21
Year ending December 31, 2025	6,250		81
Year ending December 31, 2026	5,946		16
Year ending December 31, 2027	5,950		—
Year ending December 31, 2028	4,972		—
Year ending December 31, 2029	4,000		—
Thereafter	3,534		—
Total undiscounted lease payments	32,190		118
Less: imputed interest	5,972		5
Total lease liabilities	$	26,218	$	113

Leases


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of sales	$	1,935	$	2,243	$	5,719	$	6,214
Research and development expenses	82		64		247		190
Selling, general and administrative expenses	45		19		187		56
Interest expense	2		39		7		80
Total	$	2,064	$	2,365	$	6,160	$	6,540

The following table summarizes the components of lease expense:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023

Operating lease cost	$	1,531	$	1,561	$	4,595	$	4,353
Finance lease cost
Amortization of right-of-use (“ROU”) asset	16		20		50		61
Interest expense	2		3		7		11
Short-term lease cost	265		408		838		809
Variable lease cost	250		373		670		1,305
Sublease income	—		(87)		—		(619)
Total lease cost, net	$	2,064	$	2,278	$	6,160	$	5,920

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


(in thousands)	For the Nine Months Ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,525	$	3,315
Operating cash flows paid for interest portion of finance leases	7		11
Financing cash flows paid for principal portion of finance leases	57		67
ROU assets obtained in exchange for lease obligations
Operating leases	1,139		17,838

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


(in thousands)	September 30, 2024		December 31, 2023

Operating lease ROU assets, net	$	24,319	$	27,145

Operating lease liabilities, current	4,373		3,912
Operating lease liabilities, non-current	21,845		25,070
Total operating lease liabilities	$	26,218	$	28,982

Finance lease ROU assets, net 1	$	94	$	144

Finance lease liabilities, current	78		76
Finance lease liabilities, non-current	35		94
Total finance lease liabilities	$	113	$	170

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

The following table presents maturity analysis of lease liabilities as of September 30, 2024:


(in thousands)	Operating Leases		Finance Leases
Three months ending December 31, 2024	$	1,538	$	21
Year ending December 31, 2025	6,250		81
Year ending December 31, 2026	5,946		16
Year ending December 31, 2027	5,950		—
Year ending December 31, 2028	4,972		—
Year ending December 31, 2029	4,000		—
Thereafter	3,534		—
Total undiscounted lease payments	32,190		118
Less: imputed interest	5,972		5
Total lease liabilities	$	26,218	$	113

Summary of Significant Accounting Policies and Other Information (Tables)

9 Months Ended

Sep. 30, 2024

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 Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Customer A	**		15	%	10	%	15	%
Customer B	**		**		12	%	**
Customer C	13	%	**		**		**

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


	As of September 30, 2024		As of December 31, 2023
Customer A	11	%	12	%
Customer C	**		13	%
Customer D	12	%	**

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Supplier A	13	%	14	%	15	%	**

**Less than 10% of the total

Schedule of Inventory and Inventory Allowance

Inventories consisted of the following:


(in thousands) Inventories	As of September 30, 2024		As of December 31, 2023
Raw materials	$	91,061	$	68,273
Work in process	1,408		1,166
Finished goods	20,648		21,238
Total inventories	113,117		90,677
Inventory allowance	(8,228)		(5,730)
Inventories, net	$	104,889	$	84,947

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


(in thousands)	For the Nine Months Ended September 30,
Inventory Allowance	2024		2023
Balance at beginning of period	$	5,730	$	3,904
Charged to expense	2,910		2,560
Write-offs	(412)		(682)
Balance at end of period	$	8,228	$	5,782

Schedule of Other Accrued Liabilities

Other accrued liabilities consisted of the following:


(in thousands) Other Accrued Liabilities	As of September 30, 2024		As of December 31, 2023
Accrued product warranty	$	10,455	$	11,290
Accrued litigation 1	3,787		3,929
Contract liabilities	11,588		2,741
Accrued compensation and benefits	9,111		8,469


Accrued interest expense	2,389		1,913

Stock appreciation rights liability 2	1,080		41
Non-interest bearing note payable	681		—
Other	3,989		3,616
Total	$	43,080	$	31,999

1 As of September 30, 2024 and December 31, 2023 accrued litigation includes accruals related to various ongoing legal matters including associated legal fees. See Note 10. Commitments and Contingencies for further information regarding the various ongoing legal matters.

2 The Company has an incentive compensation 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 SAR awards granted for the year ended September 30, 2024 and December 31, 2023 were all liability classified awards and remained outstanding. See Note 13. Stock-Based Compensation in the Company’s 2023 Annual Report for additional information on the SARs and RSAs.

Schedule of Accrued Product Warranty Activities

Accrued product warranty activities are presented below:


(in thousands)	For the Nine Months Ended September 30,
Accrued Product Warranty	2024		2023
Balance at beginning of period	$	19,263	$	21,550
Current period provision *	4,398		6,588

Changes in estimates for preexisting warranties **	2,115		6,274
Payments made during the period	(10,413)		(13,418)

Balance at end of period	15,363		20,994
Less: current portion	10,455		11,564
Noncurrent accrued product warranty (included with Other Noncurrent liabilities)	$	4,908	$	9,430

*Warranty costs, net of supplier recoveries, and other adjustments, were $5.8 million and $12.0 million for the nine months ended September 30, 2024 and 2023, respectively. Supplier recoveries were $0.7 million for both the nine months ended September 30, 2024 and 2023.

**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. During the nine months ended September 30, 2024, the Company recorded a cost for changes in estimates of preexisting warranties of $2.1 million, or $0.09 per diluted share. During the nine months ended September 30, 2023, the Company recorded a cost of $6.3 million, or $0.27 per diluted share.

Leases - Narrative (Details)	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Weighted-average remaining lease term, operating leases (in years)	5 years 6 months	6 years 2 months 12 days
Weighted-average remaining lease term, financing leases (in years)	1 year 6 months	2 years 2 months 12 days
Weighted-average discount rate for operating leases (as percent)	7.50%	7.60%
Weighted-average discount rate for financing leases (as percent)	6.50%	6.50%

Stockholders' Equity (Details) shares in Thousands	9 Months Ended
Stockholders' Equity (Details) shares in Thousands	Sep. 30, 2024 shares
Common Shares Issued
Beginning balance (in shares)	23,117
Ending balance (in shares)	23,117
Treasury Stock Shares
Balance at beginning of period (in shares)	149
Balance at end of period (in shares)	127
Common Shares Outstanding
Balance at beginning of period (in shares)	22,968
Balance at end of period (in shares)	22,990
Common Stock
Common Shares Issued
Beginning balance (in shares)	23,117
Ending balance (in shares)	23,117
Treasury Stock Shares
Net shares issued for Stock awards (in shares)	22
Common Shares Outstanding
Balance at beginning of period (in shares)	22,968
Net shares issued for Stock awards (in shares)	22
Balance at end of period (in shares)	22,990
Treasury Stock Shares
Treasury Stock Shares
Balance at beginning of period (in shares)	149
Net shares issued for Stock awards (in shares)	(22)
Balance at end of period (in shares)	127
Common Shares Outstanding
Net shares issued for Stock awards (in shares)	(22)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning balance at Dec. 31, 2022	$ (30,372)	$ 23	$ 157,673	$ (187,096)	$ (972)
Increase (Decrease) in Stockholders' Equity
Net income	17,936			17,936
Stock-based compensation expense	132		184		(52)
Ending balance at Sep. 30, 2023	(12,304)	23	157,857	(169,160)	(1,024)
Beginning balance at Jun. 30, 2023	(20,125)	23	157,831	(176,955)	(1,024)
Increase (Decrease) in Stockholders' Equity
Net income	7,795			7,795
Stock-based compensation expense	26		26
Ending balance at Sep. 30, 2023	(12,304)	23	157,857	(169,160)	(1,024)
Beginning balance at Dec. 31, 2023	(3,917)	23	157,770	(160,790)	(920)
Increase (Decrease) in Stockholders' Equity
Net income	45,992			45,992
Stock Appreciation Rights (“SAR”) awards	0		(81)		81
Stock-based compensation expense	52		52
Tax benefit from exercise of stock based compensation	(21)				(21)
Ending balance at Sep. 30, 2024	42,106	23	157,741	(114,798)	(860)
Beginning balance at Jun. 30, 2024	24,765	23	157,737	(132,135)	(860)
Increase (Decrease) in Stockholders' Equity
Net income	17,337			17,337
Stock Appreciation Rights (“SAR”) awards	0		(81)		81
Stock-based compensation expense	4		64		(60)
Tax benefit from exercise of stock based compensation	0		21		(21)
Ending balance at Sep. 30, 2024	$ 42,106	$ 23	$ 157,741	$ (114,798)	$ (860)

- Definition

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

+ References

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-URI https://asc.fasb.org/1943274/2147482790/220-10-45-1B

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-URI https://asc.fasb.org/1943274/2147478524/942-220-S99-1

+ Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

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-Section 50
-Paragraph 3
-Subparagraph (c)
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-Name Accounting Standards Codification
-Section 50
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-Paragraph 2
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-Publisher FASB
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+ Details

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Weichai Transactions See Note 3. Weichai Transactions for information regarding the Weichai Shareholder’s Loan Agreement and Collaboration Agreement. 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.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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+ Details

Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Operating Leases
Operating lease ROU assets, net	$ 24,319	$ 27,145
Operating lease liabilities, current	4,373	3,912
Operating lease liabilities, non-current	21,845	25,070
Total operating lease liabilities	26,218	28,982
Finance Leases
Finance lease ROU assets, net	94	144
Finance lease liabilities, current	78	76
Finance lease liabilities, non-current	35	94
Total finance lease liabilities	$ 113	$ 170
Finance ROU assets, net, statement of financial position, extensible list	Property, plant and equipment, net	Property, plant and equipment, net

Summary of Significant Accounting Policies and Other Information - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) boardMember	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) boardMember segment	Sep. 30, 2023 USD ($)	Aug. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Concentration Risk [Line Items]
Number of board members \| boardMember	4		4
Net income	$ 17,337,000	$ 7,795,000	$ 45,992,000	$ 17,936,000
Cash flow from operating activities			29,739,000	62,117,000
Cash and cash equivalents	40,456,000	31,793,000	40,456,000	31,793,000		$ 22,758,000
Short-term financing	135,000,000		$ 135,000,000			144,820,000
Number of operating segments \| segment			1
Restricted cash	3,217,000	$ 3,807,000	$ 3,217,000	$ 3,807,000		3,836,000
Inventory raw materials provided by customers	3,300,000		3,300,000
Subordinated Debt \| Shareholder’s Loan Agreement
Concentration Risk [Line Items]
Debt instrument, face amount					$ 105,000,000.0
Short-term financing	35,000,000		35,000,000			0
Line of Credit \| Revolving Credit Facility \| Revolving Credit Agreement
Concentration Risk [Line Items]
Maximum borrowing capacity					$ 120,000,000.0
Short-term financing	100,000,000		100,000,000			0
Contract With Customer
Concentration Risk [Line Items]
Restricted cash	$ 1,400,000		$ 1,400,000			$ 1,400,000

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes On a quarterly basis, the Company computes an estimated annual effective tax rate considering ordinary income and related income tax expense. Ordinary income refers to income before income tax expense excluding significant, unusual or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs. The Company has assessed 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. In assessing the realizability of the Company’s deferred tax assets, the Company considered whether it is more likely than not that some or all of the deferred tax assets will be realized through the generation of future taxable income. In making this determination, the Company assessed all of the evidence available at the time, including recent earnings, forecasted income projections, historical performance, and that substantial doubt exists about the Company’s ability to continue as a going concern. The Company determined that the negative evidence outweighed the objectively verifiable positive evidence and continues to maintain a valuation allowance against deferred tax assets. The Company’s valuation allowance is $46.3 million and $54.3 million as of September 30, 2024 and December 31, 2023, respectively. The effective tax rate for the three and nine months ended September 30, 2024 was 1.6% and 2.9%, respectively, compared to an effective tax rate for the three and nine months ended September 30, 2023 of 1.9% and 2.9%. The effective tax rates for all periods were significantly different than the applicable U.S. statutory tax rate. For both the three and nine months ended September 30, 2024, the difference between the effective and statutory tax rates was primarily due to the Company’s full valuation allowance.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Revenue - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Revenue - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue recognized	$ 0.7	$ 0.3	$ 1.4	$ 1.2
Revenue, remaining performance obligation, amount	3.5		3.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0.8		$ 0.8
Revenue, remaining performance obligation, period	3 months		3 months
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	$ 0.8		$ 0.8
Revenue, remaining performance obligation, period	1 year		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		$ 0.2
Revenue, remaining performance obligation, period	1 year		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	$ 1.5		$ 1.5
Revenue, remaining performance obligation, period	1 year		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	$ 0.2		$ 0.2
Revenue, remaining performance obligation, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0.1		$ 0.1
Revenue, remaining performance obligation, period

Other Non-current Liabilities

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

Other Non-current Liabilities

On June 14, 2024, the Company executed a non-interest bearing note payable of $4.5 million upon settlement of a legal matter. The note payable is due May 2028 and is discounted based on an imputed interest rate of 6.66%. The note payable includes an option for the Company to extend maturity of the note to September 2029 upon written notice before the thirty-seventh payment and the maximum payment amount of the note increases to $4.8 million.

The current portion of the note of $0.7 million is included in other accrued liabilities in the Company’s Consolidated Balance Sheets.


(in thousands)	As of September 30, 2024
Note payable	$	3,668
Unamortized discount	(532)
Total	$	3,136

The following table presents remaining maturities for the note payable as of September 30, 2024:


(in thousands)	Maturities		Discount Amortization
Three months ending December 31, 2024	$	166	$	59
Year ending December 31, 2025	693		207
Year ending December 31, 2026	740		160
Year ending December 31, 2027	1328		97
Year ending December 31, 2028	741		9
Total note payable	$	3,668	$	532

The Company recorded less than $0.1 million discount amortization as interest expense as of September 30, 2024.

Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$ 4,525	$ 3,315
Operating cash flows paid for interest portion of finance leases	7	11
Financing cash flows paid for principal portion of finance leases	57	67
ROU assets obtained in exchange for lease obligations
Operating leases	$ 1,139	$ 17,838

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of Components of Lease Expense and Cash Flow Information

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


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of sales	$	1,935	$	2,243	$	5,719	$	6,214
Research and development expenses	82		64		247		190
Selling, general and administrative expenses	45		19		187		56
Interest expense	2		39		7		80
Total	$	2,064	$	2,365	$	6,160	$	6,540

The following table summarizes the components of lease expense:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023

Operating lease cost	$	1,531	$	1,561	$	4,595	$	4,353
Finance lease cost
Amortization of right-of-use (“ROU”) asset	16		20		50		61
Interest expense	2		3		7		11
Short-term lease cost	265		408		838		809
Variable lease cost	250		373		670		1,305
Sublease income	—		(87)		—		(619)
Total lease cost, net	$	2,064	$	2,278	$	6,160	$	5,920

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


(in thousands)	For the Nine Months Ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	4,525	$	3,315
Operating cash flows paid for interest portion of finance leases	7		11
Financing cash flows paid for principal portion of finance leases	57		67
ROU assets obtained in exchange for lease obligations
Operating leases	1,139		17,838

Schedule of Supplemental Balance Sheet Information Related to Leases

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


(in thousands)	September 30, 2024		December 31, 2023

Operating lease ROU assets, net	$	24,319	$	27,145

Operating lease liabilities, current	4,373		3,912
Operating lease liabilities, non-current	21,845		25,070
Total operating lease liabilities	$	26,218	$	28,982

Finance lease ROU assets, net 1	$	94	$	144

Finance lease liabilities, current	78		76
Finance lease liabilities, non-current	35		94
Total finance lease liabilities	$	113	$	170

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

Schedule of Maturity Analysis of Operating Lease Liabilities

The following table presents maturity analysis of lease liabilities as of September 30, 2024:


(in thousands)	Operating Leases		Finance Leases
Three months ending December 31, 2024	$	1,538	$	21
Year ending December 31, 2025	6,250		81
Year ending December 31, 2026	5,946		16
Year ending December 31, 2027	5,950		—
Year ending December 31, 2028	4,972		—
Year ending December 31, 2029	4,000		—
Thereafter	3,534		—
Total undiscounted lease payments	32,190		118
Less: imputed interest	5,972		5
Total lease liabilities	$	26,218	$	113

Schedule of Maturity Analysis of Financing Lease Liabilities

The following table presents maturity analysis of lease liabilities as of September 30, 2024:


(in thousands)	Operating Leases		Finance Leases
Three months ending December 31, 2024	$	1,538	$	21
Year ending December 31, 2025	6,250		81
Year ending December 31, 2026	5,946		16
Year ending December 31, 2027	5,950		—
Year ending December 31, 2028	4,972		—
Year ending December 31, 2029	4,000		—
Thereafter	3,534		—
Total undiscounted lease payments	32,190		118
Less: imputed interest	5,972		5
Total lease liabilities	$	26,218	$	113

Goodwill and Other Intangibles (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Components of Intangible Assets

Components of intangible assets are as follows:


(in thousands)	As of September 30, 2024
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(32,240)	$	2,700
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,581)		119
Total	$	37,340	$	(34,521)	$	2,819


(in thousands)	As of December 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(31,195)	$	3,745
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,531)		169
Total	$	37,340	$	(33,426)	$	3,914

Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

The following table summarizes net sales by end market:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
End Market	2024		2023		2024		2023
Power Systems	$	84,111	$	60,405	$	219,160	$	159,491
Industrial	32,774		40,354		93,031		128,819
Transportation	8,957		15,125		19,477		65,908
Total	$	125,842	$	115,884	$	331,668	$	354,218

The following table summarizes net sales by geographic area:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Geographic Area	2024		2023		2024		2023
United States	$	113,533	$	96,899	$	294,295	$	285,761
North America (outside of United States)	5,824		4,484		16,127		16,605
Pacific Rim	5,595		9,485		17,416		36,036
Europe	890		4,273		3,781		11,238
Other	—		743		49		4,578
Total	$	125,842	$	115,884	$	331,668	$	354,218

Contract Balances

Most of the Company’s contracts are for a period of less than one year; however, 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. The fair value of noncash consideration of parts provided by customers is recorded in contract liabilities. Contract assets and contract liabilities are recognized at the contract level.


(in thousands)	As of September 30, 2024		As of December 31, 2023		As of December 31, 2022
Short-term contract assets (included in Prepaid expenses and other current assets)	$	20,006	$	15,554	$	3,620

Short-term contract liabilities (included in Other accrued liabilities)	(11,588)		(2,741)		(2,256)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(1,949)		(2,401)		(3,199)
Net contract assets (liabilities)	$	6,469	$	10,412	$	(1,835)

During the nine months ended September 30, 2024 and 2023, the Company recognized $1.4 million and $1.2 million, respectively, of revenue upon satisfaction of performance obligations related to amounts that were included in the net contract liabilities balance as of December 31, 2023 and 2022, respectively. During the three months ended September 30, 2024 and 2023, the Company recognized $0.7 million and $0.3 million, respectively, of revenue upon satisfaction of performance obligations related to amounts that were included in the net contract liabilities balance as of June 30, 2024 and 2023, respectively.

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 $3.5 million of remaining performance obligations as of September 30, 2024, primarily related to extended warranties. The Company expects to recognize revenue related to these remaining performance obligations of approximately $0.8 million in the remainder of 2024, $0.8 million in 2025, $0.2 million in 2026, $1.5 million in 2027, and $0.2 million in 2028 and less than $0.1 million in 2029 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
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
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-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 29,835	$ 29,835
Goodwill accumulated impairment loss	$ 11,600	$ 11,600

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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-Section 55
-Paragraph 49
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+ Details

Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net income – basic and diluted	$ 17,337	$ 7,795	$ 45,992	$ 17,936
Shares used in computing net income per share:
Weighted-average common shares outstanding – basic (in shares)	22,990	22,967	22,977	22,957
Effect of dilutive securities (in shares)	54	7	26	12
Weighted average common shares outstanding - diluted (in shares)	23,044	22,974	23,003	22,969
Earnings per common share:
Earnings per share of common stock – basic (in dollars per share)	$ 0.75	$ 0.34	$ 2.00	$ 0.78
Earnings per share of common stock – diluted (in dollars per share)	$ 0.75	$ 0.34	$ 2.00	$ 0.78

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

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

+ References

+ Details

Summary of Significant Accounting Policies and Other Information - Schedules of Concentration of Risk, by Risk Factor (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Supplier Concentration Risk \| Supplier A \| Purchases
Concentration Risk [Line Items]
Concentration risk (as a percent)	13.00%	14.00%	15.00%
Customer A \| Customer Concentration Risk \| Net Sales
Concentration Risk [Line Items]
Concentration risk (as a percent)		15.00%	10.00%	15.00%
Customer A \| Customer Concentration Risk \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk (as a percent)			11.00%		12.00%
Customer B \| Customer Concentration Risk \| Net Sales
Concentration Risk [Line Items]
Concentration risk (as a percent)			12.00%
Customer C \| Customer Concentration Risk \| Net Sales
Concentration Risk [Line Items]
Concentration risk (as a percent)	13.00%
Customer C \| Customer Concentration Risk \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk (as a percent)					13.00%
Customer D \| Customer Concentration Risk \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk (as a percent)			12.00%

Weichai Transactions (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
Weichai Transactions (Details) - USD ($) $ in Millions	Mar. 22, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Subsidiary, Sale of Stock [Line Items]
Term of collaborative arrangement (in years)	3 years
Related Party
Subsidiary, Sale of Stock [Line Items]
Purchased inventory		$ 13.2	$ 0.5	$ 19.9	$ 4.3

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Debt

The Company’s outstanding debt consisted of the following:


(in thousands)	As of September 30, 2024			As of December 31, 2023
	Amount		Rate (3)	Amount		Rate (3)	Maturity Date
Short-term financing:
Revolving Credit Agreement 1	$	100,000	7.20%	$	—	—%	August 30, 2025
Credit Agreement 2	—		—%	50,000		8.71%	March 21, 2025
Shareholder’s Loan Agreement	35,000		9.00%	—		—%	August 31, 2025
$25 Million Loan Agreement	—		—%	25,000		9.44%	May 20, 2025
$50 Million Loan Agreement	—		—%	50,000		9.44%	November 30, 2024
$30 Million Loan Agreement	—		—%	19,820		9.41%	March 31, 2025

Total short-term debt	$	135,000		$	144,820

Long-term debt:



Finance leases and other debt	238		**	399		**	Various

Total long-term debt and finance leases	238			399
Less: Current maturities of long-term debt and finance leases	152			215
Long-term debt	$	86		$	184


1			Unamortized financing costs and deferred fees on the new Revolving Credit Agreement are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet. Unamortized debt issuance costs, were $0.6 million as of September 30, 2024.
2			As of December 31, 2023, unamortized financing costs and deferred fees on the Credit Agreement were not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet. Unamortized debt issuance costs were $0.2 million as of December 31, 2023.
3			Includes the weighted average interest rate.
**			Finance lease obligations are a non-cash financing activity. See Note 8. Leases.

Goodwill and Other Intangibles

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill

The carrying amount of goodwill at both September 30, 2024 and December 31, 2023 was $29.8 million. Accumulated impairment losses at both September 30, 2024 and December 31, 2023 were $11.6 million.

Other Intangible Assets

Components of intangible assets are as follows:


(in thousands)	As of September 30, 2024
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(32,240)	$	2,700
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,581)		119
Total	$	37,340	$	(34,521)	$	2,819


(in thousands)	As of December 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Book Value

Customer relationships	$	34,940	$	(31,195)	$	3,745
Developed technology	700		(700)		—
Trade names and trademarks	1,700		(1,531)		169
Total	$	37,340	$	(33,426)	$	3,914

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Material Debt Obligations and Note Payable

The Company measured its material debt obligations and note payable using Level 2 inputs as follows:


(in thousands)	As of September 30, 2024
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving Credit Agreement	$	100,000	$	—	$	100,000	$	—
Note payable	3,668		—		3,668		—
Other financing	35,000		—		35,000		—


(in thousands)	As of December 31, 2023
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Credit Agreement	$	50,000	$	—	$	50,000	$	—
Other financing	94,820		—		94,820		—

Other Non-current Liabilities - Narrative (Details) - USD ($) $ in Thousands		9 Months Ended
	Jun. 14, 2024	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Short-term financing		$ 135,000	$ 144,820
Discount amortization as interest expense (less than)		$ 100
Note payable
Debt Instrument [Line Items]
Short-term financing	$ 700
Note payable
Debt Instrument [Line Items]
Note payable	$ 4,500
Imputed interest rate (as percent)	6.66%
Maximum payment amount	$ 4,800

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Valuation allowance	$ 46.3		$ 46.3		$ 54.3
Effective income tax rate (as percent)	1.60%	1.90%	2.90%	2.90%

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events In October 2024, the Company reached a settlement with a customer in the amount of $5.8 million for the collection of past due accounts receivable and various pricing adjustments. As a result of the settlement, the Company reversed $1.6 million of credit losses in its Consolidated Statements of Income as of September 30, 2024. As part of the settlement agreement, the Company agreed to pay $7.7 million for its accepted warranty obligations to the customer. These obligations were previously recorded as outstanding credit memos and have been reclassified to Accounts Payable within its Consolidated Balance Sheet as of September 30, 2024 due to the settlement agreement requirement to settle these obligations in cash. Both parties agreed to continue normal and customary relationships under existing supply agreements and amended pricing and payment terms and conditions.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Accounts receivable allowance	$ 3,890	$ 5,975
Accounts receivable, net of allowances	77,493	66,979
Current liabilities:
Accounts payable to related parties	76,615	67,355
Other short-term financing	35,000	94,820
Other accrued liabilities	$ 43,080	$ 31,999
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares 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 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)	22,990,000	22,968,000
Treasury stock (in shares)	127,000	149,000
Related Party
Current assets:
Accounts receivable, net of allowances	$ 550	$ 777
Current liabilities:
Accounts payable to related parties	24,192	24,496
Other short-term financing	35,000	94,820
Other accrued liabilities	$ 1,829	$ 1,833

Leases - Schedule of Lease Expense by Category in Consolidated Statement of Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	$ 2,064	$ 2,365	$ 6,160	$ 6,540
Cost of sales
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	1,935	2,243	5,719	6,214
Research and development expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	82	64	247	190
Selling, general and administrative expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	45	19	187	56
Interest expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total	$ 2	$ 39	$ 7	$ 80

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net sales (from related parties $50 and $340 for the three months ended September 30, 2024 and September 30, 2023, respectively, $500 and $2,400 for the nine months ended September 30, 2024 and September 30, 2023, respectively)	$ 125,842	$ 115,884	$ 331,668	$ 354,218
Cost of sales (from related parties $40 and $245 for the three months ended September 30, 2024 and September 30, 2023, respectively, and $370 and $1,755 for the nine months ended September 30, 2024 and September 30, 2023, respectively)	89,418	87,979	234,300	275,890
Gross profit	36,424	27,905	97,368	78,328
Operating expenses:
Research and development expenses	4,651	4,762	14,807	14,028
Selling, general and administrative expenses	10,957	10,595	25,009	31,050
Amortization of intangible assets	365	436	1,095	1,309
Total operating expenses	15,973	15,793	40,911	46,387
Operating income	20,451	12,112	56,457	31,941
Interest expense (from related parties $1,800 and $2,000 for the three months ended September 30, 2024 and 2023, respectively, and $6,300 and $5,800 for the nine months ended September 30, 2024 and September 30, 2023, respectively)	2,837	4,164	9,092	13,474
Income before income taxes	17,614	7,948	47,365	18,467
Income tax expense	277	153	1,373	531
Net income	$ 17,337	$ 7,795	$ 45,992	$ 17,936
Weighted-average common shares outstanding:
Basic (in shares)	22,990	22,967	22,977	22,957
Diluted (in shares)	23,044	22,974	23,003	22,969
Earnings per common share:
Basic (in dollars per share)	$ 0.75	$ 0.34	$ 2.00	$ 0.78
Diluted (in dollars per share)	$ 0.75	$ 0.34	$ 2.00	$ 0.78

Debt - Narrative (Details)					3 Months Ended	9 Months Ended
Debt - Narrative (Details)	Aug. 30, 2024 USD ($)	May 20, 2024 USD ($)	Mar. 22, 2024 USD ($) instrument	Dec. 10, 2021 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Debt Instrument [Line Items]
Proceeds from short-term financings						$ 100,000,000	$ 0
Repayment of short-term financings						109,820,000	50,593,000
Short-term financing					$ 135,000,000	135,000,000		$ 144,820,000
Debt, long-term and short-term, combined amount					135,200,000	135,200,000
Cash and cash equivalents					40,456,000	40,456,000	$ 31,793,000	22,758,000
Accrued unpaid interest					2,400,000	2,400,000		1,900,000
Shareholder’s Loan Agreement \| Subordinated Debt
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	4.05%
Debt instrument, face amount	$ 105,000,000.0
Short-term financing					35,000,000	$ 35,000,000		0
Debt instrument, incremental borrowing cost (as percent)						1.00%
Debt instrument, amount not subject to subordination	10,000,000
$30 Million, $25 Million, and $50 Million Loan Agreements \| Subordinated Debt
Debt Instrument [Line Items]
Payment for debt extinguishment or debt prepayment cost	60,000,000
Debt instrument, incremental borrowing cost (as percent)						1.00%
$30 Million Loan Agreement \| Subordinated Debt
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 30,000,000
Basis spread on variable rate (as percent)			4.05%
Short-term financing					0	$ 0		19,820,000
Number of debt instruments amended \| instrument			1
$25 Million Loan Agreement \| Subordinated Debt
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)		4.05%
Debt instrument, face amount		$ 25,000,000
Short-term financing					0	0		25,000,000
$50 Million Loan Agreement \| Subordinated Debt
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)				4.65%
Debt instrument, face amount				$ 50,000,000
Short-term financing					0	0		50,000,000
First Shareholder's Loan Agreement, Weichai \| Subordinated Debt
Debt Instrument [Line Items]
Debt instrument, face amount			$ 130,000,000
Revolving Credit Facility \| Revolving Credit Agreement \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 120,000,000.0
Basis spread on variable rate (as percent)	2.00%
Debt issuance costs	$ 600,000
Proceeds from short-term financings	100,000,000.0
Short-term financing					100,000,000	100,000,000		0
Gain or loss on extinguishment of debt	0
Revolving Credit Facility \| Credit Agreement \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 50,000,000
Basis spread on variable rate (as percent)			3.45%
Debt issuance costs			$ 100,000
Repayment of short-term financings	$ 40,000,000				40,000,000.0
Short-term financing					$ 0	$ 0		$ 50,000,000
Revolving Credit Facility \| Third Amended And Restated Credit Agreement \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 130,000,000

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Changes in Shares of 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, 2023	23,117	149	22,968
Net shares issued for Stock awards	—	(22)	22



Balance as of September 30, 2024	23,117	127	22,990

Subsequent Events (Details) - USD ($) $ in Thousands		9 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Oct. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Settlement of past due accounts receivable	$ 77,493	$ 77,493			$ 66,979
Reversal of credit losses		2,085	$ (2,998)
Accepted warranty obligations	15,363	$ 15,363	$ 20,994		$ 19,263	$ 21,550
Customer With Past Due Receivable
Subsequent Event [Line Items]
Reversal of credit losses	$ 1,600
Subsequent Event \| Customer With Past Due Receivable
Subsequent Event [Line Items]
Settlement of past due accounts receivable				$ 5,800
Accepted warranty obligations				$ 7,700

Summary of Significant Accounting Policies and Other Information - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued product warranty	$ 10,455	$ 11,290	$ 11,564
Accrued litigation	3,787	3,929
Contract liabilities	11,588	2,741		$ 2,256
Accrued compensation and benefits	9,111	8,469
Accrued interest expense	2,389	1,913
Stock appreciation rights liability	1,080	41
Non-interest bearing note payable	681	0
Other	3,989	3,616
Total	$ 43,080	$ 31,999

Other Non-current Liabilities - Schedule of Remaining Maturities of Long-Term Debt (Details) - Note payable $ in Thousands	Sep. 30, 2024 USD ($)
Maturities
Three months ending December 31, 2024	$ 166
Year ending December 31, 2025	693
Year ending December 31, 2026	740
Year ending December 31, 2027	1,328
Year ending December 31, 2028	741
Total note payable	3,668
Discount Amortization
Three months ending December 31, 2024	59
Year ending December 31, 2025	207
Year ending December 31, 2026	160
Year ending December 31, 2027	97
Year ending December 31, 2028	9
Total note payable	$ 532

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2024	Oct. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
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
Title of 12(g) Security	Common Stock, par value $0.001 per share
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
Entity Common Stock, Shares Outstanding		22,999,616
Entity Central Index Key	0001137091
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

Earnings Per Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

The Company computes basic earnings per share by dividing net income by the weighted-average common shares outstanding during the year. Diluted earnings 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 per share for the three and nine months ended September 30, 2024 and 2023.

The Company issued SARs and RSAs, all of which have been evaluated for their potentially dilutive effect under the treasury stock method. See Note 13. Stock-Based Compensation in the Company’s 2023 Annual Report for additional information on the SARs and the RSAs.

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


(in thousands, except per share basis)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net income – basic and diluted	$	17,337	$	7,795	$	45,992	$	17,936





Denominator:
Shares used in computing net income per share:
Weighted-average common shares outstanding – basic	22,990		22,967		22,977		22,957
Effect of dilutive securities	54		7		26		12
Weighted-average common shares outstanding – diluted	23,044		22,974		23,003		22,969

Earnings per common share:
Earnings per share of common stock – basic	$	0.75	$	0.34	$	2.00	$	0.78
Earnings per share of common stock – diluted	$	0.75	$	0.34	$	2.00	$	0.78

The aggregate number of shares excluded from the diluted earnings per share calculations, because they would have been anti-dilutive, were 105 for the three months ended September 30, 2023, and 59 and 107 for the nine months ended September 30, 2024 and 2023, respectively. For the three and nine months ended September 30, 2024 and 2023, SARs and RSAs were not included in the diluted earnings per share calculations as they would have been anti-dilutive because the Company’s average stock price was less than or equal to the exercise price of the SARs or the grant price of the RSAs.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2024

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 (Level 1) are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments.

Debt

The Company measured its material debt obligations and note payable at original carrying value. The fair value of the Revolving Credit Agreement and other short-term financing approximated carrying value, as it consisted primarily of short-term variable rate loans. The Company measured its non-interest bearing note payable using a rate which the Company could obtain financing of similar nature from other sources at the date of the transaction. The unamortized discount is reported in the Consolidated Balance Sheet as a deduction from the face amount of the note payable. The Company measured its material debt obligations and note payable using Level 2 inputs as follows:


(in thousands)	As of September 30, 2024
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Revolving Credit Agreement	$	100,000	$	—	$	100,000	$	—
Note payable	3,668		—		3,668		—
Other financing	35,000		—		35,000		—


(in thousands)	As of December 31, 2023
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3
Credit Agreement	$	50,000	$	—	$	50,000	$	—
Other financing	94,820		—		94,820		—

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, accounts payable, and certain accrued expenses are measured at carrying value, which approximates fair value (Level 1) 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

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Summary of Significant Accounting Policies and Other Information (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidation	The condensed consolidated financial statements include the accounts of Power Solutions International, Inc. and its wholly-owned subsidiaries and majority-owned subsidiaries in which the Company exercises control. The condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and rules and regulations of the SEC for interim financial reporting. All intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation	Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and include all of the information and disclosures required by U.S GAAP for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2023, included in the 2023 Annual Report on Form 10-K, filed with the SEC on March 14, 2024 (the “2023 Annual Report”). The Company’s significant accounting policies are described in the aforementioned 2023 Annual Report. The accompanying interim financial information is unaudited; however, the Company believes the financial information reflects all adjustments (consisting of items of a normal recurring nature) necessary for a fair presentation of its financial position, results of operations and cash flows in conformity with U.S. GAAP. Operating results for interim periods are not necessarily indicative of annual operating results.
Segments	Segments 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 income 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.
Use of Estimates	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 credit losses, inventory reserves, warranty reserves, stock-based compensation, evaluation of goodwill, other intangibles, property, plant and equipment for impairment, income tax valuation allowances and determination of useful lives of long-lived assets. Actual results could materially differ from those estimates.
Restricted Cash	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.
Inventories	Inventories The Company’s inventories consist primarily of engines and parts. Engines are valued at the lower of cost, including estimated freight-in, or net realizable value. Parts are valued at the lower of cost or net realizable value, except for integral parts provided by customers for installation on custom ordered engines. Such parts are accounted for as noncash consideration which is valued at fair 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.
Warranty Costs	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.
Recently Issued Accounting Pronouncements - Adopted and Recently Issued Accounting Pronouncements – Not Yet Adopted	Recently Issued Accounting Pronouncements – Adopted 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 was 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 adopted this guidance effective January 1, 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements – Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures – Segment Reporting (Topic 280). The amendments to this standard require public entities to disclose more detailed information about their reportable segments’ significant expenses on an interim and annual basis. The amendments to this standard do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments to this standard apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance in its annual reporting for the year ending December 31, 2024 and subsequent interim periods. The Company is continuing to assess the impact of the amendment to this standard on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures - Income Taxes (Topic 740). The amendments to this standard enhance the transparency and decision usefulness of income tax disclosures, primarily related to rate reconciliation and income taxes paid information as well as effectiveness of overall income tax disclosures. 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, 2024, although early adoption is permitted. The Company currently plans to adopt this guidance effective January 1, 2025. The Company is continuing to assess the impact of the amendment to this standard on its consolidated financial statements.
Fair Value of Financial Instruments	Current Assets Cash and cash equivalents (Level 1) are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments. Debt The Company measured its material debt obligations and note payable at original carrying value. The fair value of the Revolving Credit Agreement and other short-term financing approximated carrying value, as it consisted primarily of short-term variable rate loans.

Leases - Schedule of Maturity Analysis of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Operating Leases
Three months ending December 31, 2024	$ 1,538
Year ending December 31, 2025	6,250
Year ending December 31, 2026	5,946
Year ending December 31, 2027	5,950
Year ending December 31, 2028	4,972
Year ending December 31, 2029	4,000
Thereafter	3,534
Total undiscounted lease payments	32,190
Less: imputed interest	5,972
Total lease liabilities	26,218	$ 28,982
Finance Leases
Three months ending December 31, 2024	21
Year ending December 31, 2025	81
Year ending December 31, 2026	16
Year ending December 31, 2027	0
Year ending December 31, 2028	0
Year ending December 31, 2029	0
Thereafter	0
Total undiscounted lease payments	118
Less: imputed interest	5
Total lease liabilities	$ 113	$ 170

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash provided by operating activities
Net income	$ 45,992	$ 17,936
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	1,095	1,309
Depreciation	2,836	2,925
Amortization of right-of-use assets	3,967	3,494
Stock-based compensation expense	52	132
Amortization of financing fees	348	938
Deferred income taxes	162	131
(Credit) provision for losses in accounts receivable	(2,085)	2,998
Increase in allowance for inventory obsolescence	2,498	2,560
Other adjustments, net	45	3
Changes in operating assets and liabilities:
Accounts receivable	(8,428)	15,476
Inventories	(19,133)	23,611
Prepaid expenses	(7,268)	4,097
Contract assets	(4,452)	(12,048)
Other assets	149	(1,184)
Accounts payable	9,164	(1,268)
Income taxes receivable	(116)	0
Accrued expenses	7,694	2,638
Other noncurrent liabilities	(2,781)	(1,631)
Net cash provided by operating activities	29,739	62,117
Cash used in investing activities
Capital expenditures	(1,957)	(2,678)
Net cash used in investing activities	(1,957)	(2,678)
Cash used in financing activities
Repayment of long-term debt and lease liabilities	(153)	(161)
Proceeds from short-term financings	100,000	0
Repayment of short-term financings	(109,820)	(50,593)
Payments of deferred financing costs	(709)	(983)
Tax benefit from exercise of stock based compensation	(21)	0
Other financing activities, net	0	(2)
Net cash used in financing activities	(10,703)	(51,739)
Net increase in cash, cash equivalents, and restricted cash	17,079	7,700
Cash, cash equivalents, and restricted cash at beginning of the period	26,594	27,900
Cash, cash equivalents, and restricted cash at end of the period	43,673	35,600
Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheets
Cash and cash equivalents	40,456	31,793
Restricted cash	3,217	3,807
Total cash, cash equivalents, and restricted cash	$ 43,673	$ 35,600

Other Non-current Liabilities - Schedule of Note Payable (Details) - Note payable $ in Thousands	Sep. 30, 2024 USD ($)
Debt Instrument [Line Items]
Note payable	$ 3,668
Unamortized discount	(532)
Total	$ 3,136

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value	$ 135,000	$ 144,820
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value	3,668
Other financing	35,000	94,820
Fair Value, Measurements, Recurring \| Revolving Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value	100,000
Fair Value, Measurements, Recurring \| Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Value		50,000
Fair Value, Measurements, Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note payable	0
Other financing	0	0
Fair Value, Measurements, Recurring \| Level 1 \| Revolving Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement	0
Fair Value, Measurements, Recurring \| Level 1 \| Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement		0
Fair Value, Measurements, Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note payable	3,668
Other financing	35,000	94,820
Fair Value, Measurements, Recurring \| Level 2 \| Revolving Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement	100,000
Fair Value, Measurements, Recurring \| Level 2 \| Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement		50,000
Fair Value, Measurements, Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note payable	0
Other financing	0	0
Fair Value, Measurements, Recurring \| Level 3 \| Revolving Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement	$ 0
Fair Value, Measurements, Recurring \| Level 3 \| Credit Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit Agreement		$ 0

Goodwill and Other Intangibles - Schedule of Components of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 37,340	$ 37,340
Accumulated Amortization	(34,521)	(33,426)
Net Book Value	2,819	3,914
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	34,940	34,940
Accumulated Amortization	(32,240)	(31,195)
Net Book Value	2,700	3,745
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	700	700
Accumulated Amortization	(700)	(700)
Net Book Value	0	0
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,700	1,700
Accumulated Amortization	(1,581)	(1,531)
Net Book Value	$ 119	$ 169

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Summary of Significant Accounting Policies and Other Information - Schedule of Inventory and Inventory Allowance (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Inventories
Raw materials	$ 91,061		$ 68,273
Work in process	1,408		1,166
Finished goods	20,648		21,238
Total inventories	113,117		90,677
Inventory allowance	(8,228)	$ (5,782)	(5,730)
Inventories, net	104,889		$ 84,947
Inventory Allowance
Balance at beginning of period	5,730	3,904
Charged to expense	2,910	2,560
Write-offs	(412)	(682)
Balance at end of period	$ 8,228	$ 5,782

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

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


(in thousands, except per share basis)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net income – basic and diluted	$	17,337	$	7,795	$	45,992	$	17,936





Denominator:
Shares used in computing net income per share:
Weighted-average common shares outstanding – basic	22,990		22,967		22,977		22,957
Effect of dilutive securities	54		7		26		12
Weighted-average common shares outstanding – diluted	23,044		22,974		23,003		22,969

Earnings per common share:
Earnings per share of common stock – basic	$	0.75	$	0.34	$	2.00	$	0.78
Earnings per share of common stock – diluted	$	0.75	$	0.34	$	2.00	$	0.78

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 40,456	$ 22,758
Restricted cash	3,217	3,836
Accounts receivable, net of allowances of $3,890 and $5,975 as of September 30, 2024 and December 31, 2023, respectively; (from related parties $550 and $777 as of September 30, 2024 and December 31, 2023, respectively)	77,493	66,979
Income tax receivable	666	550
Inventories, net	104,889	84,947
Prepaid expenses	15,786	8,518
Contract assets	20,006	15,554
Other current assets	2,655	2,240
Total current assets	265,168	205,382
Property, plant and equipment, net	14,100	14,928
Right-of-use assets, net	24,319	27,145
Intangible assets, net	2,819	3,914
Goodwill	29,835	29,835
Other noncurrent assets	2,894	3,099
TOTAL ASSETS	339,135	284,303
Current liabilities:
Accounts payable (to related parties $24,192 and $24,496 as of September 30, 2024 and December 31, 2023, respectively)	76,615	67,355
Current maturities of long-term debt	74	139
Revolving line of credit	100,000	50,000
Finance lease liability, current	78	76
Operating lease liability, current	4,373	3,912
Other short-term financing (from related parties $35,000 and $94,820 as of September 30, 2024 and December 31, 2023, respectively)	35,000	94,820
Other accrued liabilities (to related parties $1,829 and $1,833 as of September 30, 2024 and December 31, 2023, respectively)	43,080	31,999
Total current liabilities	259,220	248,301
Deferred income taxes	1,640	1,478
Long-term debt, net of current maturities	51	90
Finance lease liability, long-term	35	94
Operating lease liability, long-term	21,845	25,070
Noncurrent contract liabilities	1,949	2,401
Other noncurrent liabilities	12,289	10,786
TOTAL LIABILITIES	297,029	288,220
Commitments and Contingencies (Note 10)
STOCKHOLDERS’ EQUITY (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 shares issued; 22,990 and 22,968 shares outstanding at September 30, 2024 and December 31, 2023, respectively	23	23
Additional paid-in capital	157,741	157,770
Accumulated deficit	(114,798)	(160,790)
Treasury stock, at cost, 127 and 149 shares at September 30, 2024 and December 31, 2023, respectively	(860)	(920)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	42,106	(3,917)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 339,135	$ 284,303

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 57,335	$ 55,605
Accumulated depreciation	(43,235)	(40,677)
Property, plant and equipment, net	14,100	14,928
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	8,298	6,987
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	48,234	46,964
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 803	$ 1,654

Summary of Significant Accounting Policies and Other Information - Schedule of Accrued Product Warranty Activities (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accrued Product Warranty
Balance at beginning of period	$ 19,263	$ 21,550
Current period provision	4,398	6,588
Changes in estimates for preexisting warranties	2,115	6,274
Payments made during the period	(10,413)	(13,418)
Balance at end of period	15,363	20,994
Accrued Product Warranty	15,363	20,994	$ 19,263
Less: current portion	10,455	11,564	$ 11,290
Noncurrent accrued product warranty (included with Other Noncurrent liabilities)	4,908	9,430
Warranty costs, net of supplier recoveries	5,800	12,000
Supplier recoveries	700	700
Changes in estimates for preexisting warranties	$ 2,115	$ 6,274
Diluted share (in dollars per share)	$ 0.09	$ 0.27

Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Short-term financing:
Short-term financing	$ 135,000	$ 144,820
Long-term debt:
Finance leases and other debt	238	399
Total long-term debt and finance leases	238	399
Less: Current maturities of long-term debt and finance leases	152	215
Long-term debt	86	184
Shareholder’s Loan Agreement \| Subordinated Debt
Short-term financing:
Short-term financing	$ 35,000	$ 0
Weighted average interest rate (as percent)	9.00%	0.00%
$25 Million Loan Agreement \| Subordinated Debt
Short-term financing:
Short-term financing	$ 0	$ 25,000
Weighted average interest rate (as percent)	0.00%	9.44%
$50 Million Loan Agreement \| Subordinated Debt
Short-term financing:
Short-term financing	$ 0	$ 50,000
Weighted average interest rate (as percent)	0.00%	9.44%
$30 Million Loan Agreement \| Subordinated Debt
Short-term financing:
Short-term financing	$ 0	$ 19,820
Weighted average interest rate (as percent)	0.00%	9.41%
Revolving Credit Facility \| Revolving Credit Agreement \| Line of Credit
Short-term financing:
Short-term financing	$ 100,000	$ 0
Weighted average interest rate (as percent)	7.20%	0.00%
Long-term debt:
Unamortized debt issuance costs	$ 600
Revolving Credit Facility \| Credit Agreement \| Line of Credit
Short-term financing:
Short-term financing	$ 0	$ 50,000
Weighted average interest rate (as percent)	0.00%	8.71%
Long-term debt:
Unamortized debt issuance costs		$ 200

Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

The Company’s outstanding debt consisted of the following:


(in thousands)	As of September 30, 2024			As of December 31, 2023
	Amount		Rate (3)	Amount		Rate (3)	Maturity Date
Short-term financing:
Revolving Credit Agreement 1	$	100,000	7.20%	$	—	—%	August 30, 2025
Credit Agreement 2	—		—%	50,000		8.71%	March 21, 2025
Shareholder’s Loan Agreement	35,000		9.00%	—		—%	August 31, 2025
$25 Million Loan Agreement	—		—%	25,000		9.44%	May 20, 2025
$50 Million Loan Agreement	—		—%	50,000		9.44%	November 30, 2024
$30 Million Loan Agreement	—		—%	19,820		9.41%	March 31, 2025

Total short-term debt	$	135,000		$	144,820

Long-term debt:



Finance leases and other debt	238		**	399		**	Various

Total long-term debt and finance leases	238			399
Less: Current maturities of long-term debt and finance leases	152			215
Long-term debt	$	86		$	184


1			Unamortized financing costs and deferred fees on the new Revolving Credit Agreement are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet. Unamortized debt issuance costs, were $0.6 million as of September 30, 2024.
2			As of December 31, 2023, unamortized financing costs and deferred fees on the Credit Agreement were not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet. Unamortized debt issuance costs were $0.2 million as of December 31, 2023.
3			Includes the weighted average interest rate.
**			Finance lease obligations are a non-cash financing activity. See Note 8. Leases.

Credit Agreement and Shareholder’s Loan Agreement

On August 30, 2024, the Company closed on its new Uncommitted Revolving Credit Agreement (the “Revolving Credit Agreement”), with Standard Chartered Bank (“Standard Chartered”) and two other lenders. The Revolving Credit Agreement allows the Company to borrow up to $120.0 million and has a maturity date of August 30, 2025. The Revolving Credit Agreement is subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the third and fourth quarters of 2024 and the first and second quarters of 2025. Borrowings under the Revolving Credit Agreement will incur interest at the applicable Secured Overnight Financing Rate (“SOFR”) plus 2.00% per annum. The obligations under the Revolving Credit Agreement are unconditionally guaranteed, on a joint and several basis, by certain wholly-owned, existing and subsequently acquired or formed direct and indirect domestic subsidiaries of the Company, subject to customary exceptions. The obligations under the Revolving Credit Agreement are secured by substantially all assets of the Company and the Company’s wholly-owned subsidiaries. In addition, the Company paid fees of $0.6 million related to the Revolving Credit Agreement which are deferred and amortized over the term of the Revolving Credit Agreement.

As part of the closing of the Revolving Credit Agreement, the Company made an initial draw in the amount of $100.0 million. The Company utilized the amount drawn under the Revolving Credit Agreement (i) to repay the outstanding balance of approximately $40 million under the Company’s Fourth Amended and Restated Uncommitted Revolving Credit Agreement, dated March 22, 2024, by and among the Company and Standard Chartered; and (ii) to prepay approximately $60.0 million under the following shareholder loan agreements between PSI and Weichai: the $30 Million Loan Agreement, dated as of March 22, 2024, the $25 Million Loan Agreement, dated as of May 20, 2024, and the $50 Million Loan Agreement, dated as of November 29, 2023. As of September 30, 2024, the Company had $100.0 million outstanding under the Revolving Credit Agreement. No gain or loss on extinguishment was recorded. See further discussion below.

In connection with the Revolving Credit Agreement, on August 30, 2024, the Company also entered into a new Shareholder’s Loan Agreement (the “Shareholder’s Loan Agreement”) with Weichai, which allows the Company to borrow up to $105.0 million and expires August 31, 2025. Borrowings under the Shareholder’s Loan Agreement will incur interest at the applicable

SOFR, plus 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 1.0%. The borrowing requests made under the Shareholder’s Loan Agreement are subject to Weichai’s discretionary approval. The payment of the borrowings under the Shareholder’s Loan Agreement is subordinated in all respects to the Revolving Credit Agreement with the exception that the Company is allowed to make a single payment of $10.0 million to Weichai. The $60.0 million portion of the initial advance under the Revolving Credit Agreement was applied to pay all principal, interest, and other amounts outstanding under the $30 Million Loan Agreement, the $25 Million Loan Agreement, and the $50 Million Loan Agreement, except for $35.0 million which is the outstanding principal balance under the Shareholder’s Loan Agreement as of September 30, 2024.

On March 22, 2024, the Company amended and restated its $130.0 million Third Amended and Restated Uncommitted Revolving Credit Agreement with Standard Chartered. The Fourth Amended and Restated Uncommitted Revolving Credit Agreement (the “Credit Agreement”) reduced the borrowing capacity to $50.0 million and extended the maturity date of loans outstanding under its previous credit facility to the earlier of March 21, 2025 or the demand of Standard Chartered. The Credit Agreement was 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 2024. Borrowings under the Credit Agreement incurred interest at either the alternate base rate or the SOFR plus applicable rate of 3.45% per annum. In addition, the Company paid fees of $0.1 million related to the Credit Agreement which were deferred and amortized over the term of the Credit Agreement. The Credit Agreement was secured by substantially all of the Company’s assets and provided Standard Chartered the right to demand payment of any and all of the outstanding borrowings and other amounts owed under the Credit Agreement at any point in time prior to the maturity date at Standard Chartered’s discretion. The Company repaid the outstanding balance of $40.0 million and extinguished the Fourth Amended and Restated Uncommitted Revolving Credit Agreement during the third quarter of 2024.

On March 22, 2024, the Company amended one of the four shareholder’s loan agreements with Weichai, to among other things, extend the maturities thereof. The $30 Million Loan Agreement provided the Company with a $30.0 million subordinated loan at the discretion of Weichai and was amended to extend the maturity date to March 31, 2025. Borrowings under the $30 Million Loan Agreement bear interest at an annual rate equal to SOFR plus 4.05% per annum. Further, if the applicable SOFR rate 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 1.0%. All the amended shareholder loan agreements with Weichai were subject to customary events of default and covenants. The Company and Weichai also agreed not to renew the first Amended Shareholder’s Loan Agreement, which expired on April 24, 2024 and provided the Company with a $130.0 million subordinated loan under which Weichai was obligated to advance funds solely for purposes of repaying outstanding borrowings under the $130.0 million Fourth Amended and Restated Uncommitted Revolving Credit Agreement if the Company was unable to pay such borrowings. This shareholder loan agreement was replaced by the new Shareholder’s Loan Agreement.

The Company was also party to a $50 Million Loan Agreement with Weichai, which was entered into on December 10, 2021. The $50 Million Loan Agreement provided the Company with a $50.0 million uncommitted facility that was subordinated to the Third Amended and Restated Uncommitted Revolving Credit Agreement and any borrowing requests made under the $50 Million Loan Agreement were subject to Weichai’s discretionary approval. Borrowings under the $50 Million Loan Agreement incurred interest at the applicable SOFR, plus 4.65% per annum and could have been used for general corporate purposes, except for certain legal expenditures which required additional approval from Weichai. Further, if the applicable term SOFR was negative, the interest rate per annum should have been deemed as 4.65% per annum. If the interest rate for any loan was lower than Weichai’s borrowing cost, the interest rate for such loan would have been equal to Weichai’s borrowing cost plus 1.0%. This shareholder loan agreement was replaced by the new Shareholder’s Loan Agreement.

The Company was also party to a $25 Million Loan Agreement with Weichai, which was amended and restated in May 2024. The $25 Million Loan Agreement provided the Company with a $25.0 million subordinated loan. Borrowings under the $25 Million Loan Agreement incurred interest at the applicable SOFR rate, 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 under the $25 Million Loan Agreement is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus 1.0%. This shareholder loan agreement was replaced by the new Shareholder’s Loan Agreement.

As of September 30, 2024, the Company’s total outstanding debt obligations under the Revolving Credit Agreement, the Shareholder’s Loan Agreement, and for finance leases and other debt were $135.2 million in the aggregate and its cash and cash equivalents were $40.5 million. The Company's total accrued interest for the Revolving Credit Agreement and Shareholder’s Loan Agreement was $2.4 million as of September 30, 2024. The Company’s total accrued interest for its Fourth Amended and Restated Uncommitted Revolving Credit Agreement and all shareholder loans was $1.9 million as December 31, 2023. Accrued interest is included within Other Accrued Liabilities on the Consolidated Balance Sheet

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

- 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://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
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-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
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-Paragraph 1B
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
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-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
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-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Paragraph 1B
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Operating lease cost	$ 1,531	$ 1,561	$ 4,595	$ 4,353
Finance lease cost
Amortization of right-of-use (“ROU”) asset	16	20	50	61
Interest expense	2	3	7	11
Short-term lease cost	265	408	838	809
Variable lease cost	250	373	670	1,305
Sublease income	0	(87)	0	(619)
Total lease cost, net	$ 2,064	$ 2,278	$ 6,160	$ 5,920

Commitments and Contingencies (Details)		1 Months Ended
Commitments and Contingencies (Details)	Mar. 31, 2020 USD ($)	Jun. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Aug. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)	Oct. 31, 2020	Feb. 29, 2020 USD ($)	Oct. 31, 2018 USD ($)	Sep. 30, 2024 USD ($) letterOfCredit	Dec. 31, 2023 USD ($)
Loss Contingencies [Line Items]
Number of outstanding letters of credit \| letterOfCredit											4
Outstanding letters of credit amount											$ 1,400,000
Restricted cash			$ 3,807,000								3,217,000	$ 3,836,000
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 (in days)								60 days
Estimated liability											2,400,000	2,400,000
Mast Powertrain v. The Company
Loss Contingencies [Line Items]
Estimated liability											900,000	900,000
Damages sought	$ 4,500,000		6,000,000						$ 9,000,000.0
Litigation settlement payment							$ 1,500,000
Accrued penalties			$ 0								$ 0
Gary Winemaster v. The Company
Loss Contingencies [Line Items]
Damages sought						$ 7,200,000
Litigation settlement payment		$ 4,500,000
Legal settlement						$ 8,800,000
Accrued reimbursement												$ 8,800,000
Gary Winemaster v. The Company \| Selling, general and administrative expenses
Loss Contingencies [Line Items]
Litigation settlement gain		$ 4,300,000
Jeffrey Ehlers Litigation
Loss Contingencies [Line Items]
Damages sought					$ 2,400,000
Litigation settlement payment				$ 800,000
Rick Lulloff Litigation
Loss Contingencies [Line Items]
Damages sought					$ 1,200,000
Litigation settlement payment				$ 500,000

Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment by type were as follows:


(in thousands)	As of September 30, 2024		As of December 31, 2023
Property, Plant and Equipment


Leasehold improvements	$	8,298	$	6,987
Machinery and equipment	48,234		46,964
Construction in progress	803		1,654
Total property, plant and equipment, at cost	57,335		55,605
Accumulated depreciation	(43,235)		(40,677)
Property, plant and equipment, net	$	14,100	$	14,928

Revenue - Schedule of Disaggregation of Revenue and Schedule of Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total	$ 125,842	$ 115,884	$ 331,668	$ 354,218
United States
Disaggregation of Revenue [Line Items]
Total	113,533	96,899	294,295	285,761
North America (outside of United States)
Disaggregation of Revenue [Line Items]
Total	5,824	4,484	16,127	16,605
Pacific Rim
Disaggregation of Revenue [Line Items]
Total	5,595	9,485	17,416	36,036
Europe
Disaggregation of Revenue [Line Items]
Total	890	4,273	3,781	11,238
Other
Disaggregation of Revenue [Line Items]
Total	0	743	49	4,578
Power Systems
Disaggregation of Revenue [Line Items]
Total	84,111	60,405	219,160	159,491
Industrial
Disaggregation of Revenue [Line Items]
Total	32,774	40,354	93,031	128,819
Transportation
Disaggregation of Revenue [Line Items]
Total	$ 8,957	$ 15,125	$ 19,477	$ 65,908

Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Short-term contract assets (included in Prepaid expenses and other current assets)	$ 20,006	$ 15,554	$ 3,620
Short-term contract liabilities (included in Other accrued liabilities)	(11,588)	(2,741)	(2,256)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(1,949)	(2,401)	(3,199)
Net contract assets (liabilities)	$ 6,469	$ 10,412	$ (1,835)

Summary of Significant Accounting Policies and Other Information

9 Months Ended

Sep. 30, 2024

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 customers’ technical 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

Weichai America Corp., a wholly-owned subsidiary of Weichai Power Co., Ltd. (HK2338, SZ000338) (herein collectively referred to as “Weichai”) 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 directors, amendment of the Company’s Certificate of Incorporation (the “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 has entered into an Investor Rights Agreement (the “Rights Agreement”). The Rights Agreement provides Weichai with representation on the Company’s Board of Directors (the “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 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 from Rules 5605(b), (d) and (e) to the extent applicable.

Going Concern Considerations

During the first nine months of 2024, the Company reported net income of $46.0 million and generated $29.7 million in cash flow from operating activities. In August 2024, the Company refinanced its debt through a new short-term credit facility with three banks. Additionally, the Company entered into a new Shareholder’s Loan Agreement with Weichai. The new credit facility and the Shareholder’s Loan Agreement mature on August 30, 2025 and August 31, 2025, respectively, and have borrowing capacity of $120.0 million and $105.0 million, respectively.

While the Company has achieved profitability and generated positive cash flows from operating activities in 2024, uncertainties exist about the Company’s ability to refinance, extend, or repay its outstanding indebtedness. As of September 30, 2024, the Company held $40.5 million in cash and cash equivalents and its short-term debt obligations under the credit facility and Shareholder’s Loan Agreement totaled $100.0 million and $35.0 million, respectively.

See Note 6. Debt, for further information regarding the terms and conditions of the Company’s debt arrangements.

Due to these uncertainties, the Company’s management has concluded that, 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 extending and amending, refinancing or repaying the indebtedness outstanding under the Company’s existing debt arrangements. Without additional financing, the Company anticipates that it will not have sufficient cash and cash equivalents to repay amounts owed 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 2025. 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.

Basis of Presentation and Consolidation

The Company is filing this Form 10-Q for the quarterly period ended September 30, 2024, which contains unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023.

The condensed consolidated financial statements include the accounts of Power Solutions International, Inc. and its wholly-owned subsidiaries and majority-owned subsidiaries in which the Company exercises control. The condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and rules and regulations of the SEC for interim financial reporting. All intercompany balances and transactions have been eliminated in consolidation.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and include all of the information and disclosures required by U.S GAAP for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2023, included in the 2023 Annual Report on Form 10-K, filed with the SEC on March 14, 2024 (the “2023 Annual Report”). The Company’s significant accounting policies are described in the aforementioned 2023 Annual Report. The accompanying interim financial information is unaudited; however, the Company believes the financial information reflects all adjustments (consisting of items of a normal recurring nature) necessary for a fair presentation of its financial position, results of operations and cash flows in conformity with U.S. GAAP. Operating results for interim periods are not necessarily indicative of annual operating results.

Segments

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 income 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 Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Customer A	**		15	%	10	%	15	%
Customer B	**		**		12	%	**
Customer C	13	%	**		**		**

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


	As of September 30, 2024		As of December 31, 2023
Customer A	11	%	12	%
Customer C	**		13	%
Customer D	12	%	**

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Supplier A	13	%	14	%	15	%	**

**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 credit losses, inventory reserves, warranty reserves, stock-based compensation, evaluation of goodwill, other intangibles, property, plant and equipment for impairment, income tax valuation allowances and determination of useful lives of long-lived assets. Actual results could materially differ from those estimates.

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 September 30, 2024 and December 31, 2023, the Company had restricted cash of $3.2 million and $3.8 million, respectively, which includes $1.4 million restricted cash held in escrow which could be required to be refunded to the customer if conditions occur as defined in such certain agreement with such customer. The Company has not recognized revenue associated with the restricted cash. The deferred revenue is included within Noncurrent Contract Liabilities on the Consolidated Balance Sheet.

Inventories

The Company’s inventories consist primarily of engines and parts. Engines are valued at the lower of cost, including estimated freight-in, or net realizable value. Parts are valued at the lower of cost or net realizable value, except for integral parts provided by customers for installation on custom ordered engines. Such parts are accounted for as noncash consideration which is valued at fair 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 consisted of the following:


(in thousands) Inventories	As of September 30, 2024		As of December 31, 2023
Raw materials	$	91,061	$	68,273
Work in process	1,408		1,166
Finished goods	20,648		21,238
Total inventories	113,117		90,677
Inventory allowance	(8,228)		(5,730)
Inventories, net	$	104,889	$	84,947

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


(in thousands)	For the Nine Months Ended September 30,
Inventory Allowance	2024		2023
Balance at beginning of period	$	5,730	$	3,904
Charged to expense	2,910		2,560
Write-offs	(412)		(682)
Balance at end of period	$	8,228	$	5,782

As of September 30, 2024, the Company’s inventory included $3.3 million of raw materials provided by its customers for installation in the fulfillment of its performance obligations to these customers and recorded an associated contract liability. See Note 2. Revenue for further information regarding contract assets and contract liabilities.

Other Accrued Liabilities

Other accrued liabilities consisted of the following:


(in thousands) Other Accrued Liabilities	As of September 30, 2024		As of December 31, 2023
Accrued product warranty	$	10,455	$	11,290
Accrued litigation 1	3,787		3,929
Contract liabilities	11,588		2,741
Accrued compensation and benefits	9,111		8,469


Accrued interest expense	2,389		1,913

Stock appreciation rights liability 2	1,080		41
Non-interest bearing note payable	681		—
Other	3,989		3,616
Total	$	43,080	$	31,999

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.

Accrued product warranty activities are presented below:


(in thousands)	For the Nine Months Ended September 30,
Accrued Product Warranty	2024		2023
Balance at beginning of period	$	19,263	$	21,550
Current period provision *	4,398		6,588

Changes in estimates for preexisting warranties **	2,115		6,274
Payments made during the period	(10,413)		(13,418)

Balance at end of period	15,363		20,994
Less: current portion	10,455		11,564
Noncurrent accrued product warranty (included with Other Noncurrent liabilities)	$	4,908	$	9,430

Recently Issued Accounting Pronouncements – Adopted

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 was 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 adopted this guidance effective January 1, 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures – Segment Reporting (Topic 280). The amendments to this standard require public entities to disclose more detailed information about their reportable segments’ significant expenses on an interim and annual basis. The amendments to this standard do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments to this standard apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance in its annual reporting for the year ending December 31, 2024 and subsequent interim periods. The Company is continuing to assess the impact of the amendment to this standard on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures - Income Taxes (Topic 740). The amendments to this standard enhance the transparency and decision usefulness of income tax disclosures, primarily related to rate reconciliation and income taxes paid information as well as effectiveness of overall income tax disclosures. 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, 2024, although early adoption is permitted. The Company currently plans to adopt this guidance effective January 1, 2025. The Company is continuing to assess the impact of the amendment to this standard on its consolidated financial statements.

Earnings Per Share - Narrative (Details) - shares shares in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Antidilutive shares (in shares)	105	59	107

Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Net Sales by End Market

The following table summarizes net sales by end market:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
End Market	2024		2023		2024		2023
Power Systems	$	84,111	$	60,405	$	219,160	$	159,491
Industrial	32,774		40,354		93,031		128,819
Transportation	8,957		15,125		19,477		65,908
Total	$	125,842	$	115,884	$	331,668	$	354,218

Schedule of Net Sales by Geographic Area

The following table summarizes net sales by geographic area:


(in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Geographic Area	2024		2023		2024		2023
United States	$	113,533	$	96,899	$	294,295	$	285,761
North America (outside of United States)	5,824		4,484		16,127		16,605
Pacific Rim	5,595		9,485		17,416		36,036
Europe	890		4,273		3,781		11,238
Other	—		743		49		4,578
Total	$	125,842	$	115,884	$	331,668	$	354,218

Schedule of Contract Balances


(in thousands)	As of September 30, 2024		As of December 31, 2023		As of December 31, 2022
Short-term contract assets (included in Prepaid expenses and other current assets)	$	20,006	$	15,554	$	3,620

Short-term contract liabilities (included in Other accrued liabilities)	(11,588)		(2,741)		(2,256)
Long-term contract liabilities (included in Noncurrent contract liabilities)	(1,949)		(2,401)		(3,199)
Net contract assets (liabilities)	$	6,469	$	10,412	$	(1,835)

Stockholders' Equity

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders' Equity

Weichai Transactions

Weichai Shareholder’s Loan Agreement

The Company is party to a $105.0 million shareholder’s loan agreement with Weichai. See additional discussion of this debt agreement in Note 6. Debt.

Weichai Collaboration Arrangement and Related Party Transactions

The Company and Weichai executed a strategic collaboration agreement (the “Collaboration Agreement”) in March 2017 in order to achieve their respective strategic objectives and enhance the strategic cooperation alliance to share experiences, expertise and resources. Among other things, the Collaboration Agreement established a joint steering committee, permitted Weichai to select a limited number of certain technical, marketing, sales, procurement and finance personnel to work at the Company and established several collaborations related to stationary natural-gas applications and Weichai diesel engines. The Collaboration Agreement provided for the steering committee to create various sub-committees with operating roles and otherwise governs the treatment of intellectual property of parties prior to the collaboration and the intellectual property developed during the collaboration. 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. Purchases of inventory from Weichai were $13.2 million and $19.9 million for the three and nine months ended September 30, 2024, respectively. Purchases of inventory from Weichai were $0.5 million and $4.3 million for the three and nine months ended September 30, 2023, respectively.

In January 2022, PSI and Societe Internationale des Moteurs Baudouin (“Baudouin”), a subsidiary of Weichai, entered into an international distribution and sales agreement that 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. Refer to the Consolidated Balance Sheet and Statements of Income for detailed related party information.

Stockholders’ Equity

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, 2023	23,117	149	22,968
Net shares issued for Stock awards	—	(22)	22



Balance as of September 30, 2024	23,117	127	22,990

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Other Non-current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

Schedule of Note Payable


(in thousands)	As of September 30, 2024
Note payable	$	3,668
Unamortized discount	(532)
Total	$	3,136

Schedule of Remaining Maturities for Note Payable

The following table presents remaining maturities for the note payable as of September 30, 2024:


(in thousands)	Maturities		Discount Amortization
Three months ending December 31, 2024	$	166	$	59
Year ending December 31, 2025	693		207
Year ending December 31, 2026	740		160
Year ending December 31, 2027	1328		97
Year ending December 31, 2028	741		9
Total note payable	$	3,668	$	532

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net sales from related party	$ 125,842	$ 115,884	$ 331,668	$ 354,218
Related parties amount in cost of sales	40	245	370	1,755
Interest expense	2,837	4,164	9,092	13,474
Related Party
Net sales from related party	50	340	500	2,400
Interest expense	$ 1,800	$ 2,000	$ 6,300	$ 5,800

- 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.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Weichai Transactions

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Weichai Transactions

Weichai Shareholder’s Loan Agreement

The Company is party to a $105.0 million shareholder’s loan agreement with Weichai. See additional discussion of this debt agreement in Note 6. Debt.

Weichai Collaboration Arrangement and Related Party Transactions

Stockholders’ Equity

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, 2023	23,117	149	22,968
Net shares issued for Stock awards	—	(22)	22



Balance as of September 30, 2024	23,117	127	22,990

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The entire disclosure for equity.

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Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
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 (“USAO”) 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 to fully comply with the administrative order. In May 2023, the Company submitted documentation to the SEC for its review to assess the Company’s compliance with the administrative order. In July 2023, the Company was notified by the SEC that no additional information was required with respect to the administrative order. Jerome Treadwell v. the Company In October 2018, a punitive class-action complaint was filed against the Company and NOVAtime Technology, Inc. (“NOVAtime” or “Plaintiff”) 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 (the “Court”) 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. On May 22, 2023, the Company filed the answer to the amended complaint. Plaintiff and PSI have since reached a preliminary settlement of the case, and Plaintiff filed an Unopposed Motion for Preliminary Approval of Class Action Settlement on February 23, 2024, which is currently pending with the Court. As of both September 30, 2024 and December 31, 2023, the Company had recorded an estimated liability of $2.4 million, recorded within Other accrued liabilities on the Consolidated Balance Sheet related to the potential 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 was 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 Consolidated Statement of Income for the year-ended December 31, 2020. The Company fully paid the settlement and had no recognized liability as of both September 30, 2024 and 2023. In September 2023, Mast filed a lawsuit against the Company in the Eastern District of Texas Federal Court (“Court”), alleging, among other things, damages of approximately $6.0 million for fraudulent inducement leading to the 2021 arbitration settlement agreement and breach of said settlement agreement. Upon court order, the Company participated in mediation in May 2024, and no settlement was reached. The Company has filed a motion to stay the lawsuit and compel it to arbitration, and that motion is currently pending. In the interim, the court ordered the parties to participate in a second mediation by the end of November 2024. As of both September 30, 2024 and December 31, 2023, the Company had recorded an estimated liability of $0.9 million, recorded within Other accrued liabilities on the Consolidated Balance Sheet related to the potential settlement of this matter. Gary Winemaster 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 was 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, the Company estimates that 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, 2023, the Company had approximately $8.8 million accrued for the reimbursement to Travelers recorded within Accounts payable on the Consolidated Balance Sheet. In June 2024, the Company reached a settlement with Travelers for $4.5 million, resulting in a $4.3 million gain that was recorded within Selling, General and Administrative expenses on the Consolidated Statements of Income. As of September 30, 2024, the Company recorded the aforementioned settlement liability within Other noncurrent liabilities with the current portion within Other accrued liabilities on the Consolidated Balance Sheet. Refer to Note 7. Other Non-current Liabilities for additional information related to this settlement. Jeffrey Ehlers and Rick Lulloff Litigation In September 2021, Jeffrey Ehlers (“Ehlers”) and Rick Lulloff (“Lulloff”), former employees of the Company, made demand 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, Ehlers and Lulloff 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 Ehlers and Lulloff, for $0.8 million and $0.5 million, respectively. As of December 31, 2023, the Company paid the settlement in full to both Ehlers and Lulloff. Indemnification Agreements The Company holds a directors’ and officers’ liability insurance policy, which is renewed annually and expires in July 2025. 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 and Contingencies At September 30, 2024, the Company had four outstanding letters of credit totaling $1.4 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 $3.2 million as of September 30, 2024, related to these letters of credit and cash held in escrow due to a customer agreement.

Property, Plant and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment by type were as follows:


(in thousands)	As of September 30, 2024		As of December 31, 2023
Property, Plant and Equipment


Leasehold improvements	$	8,298	$	6,987
Machinery and equipment	48,234		46,964
Construction in progress	803		1,654
Total property, plant and equipment, at cost	57,335		55,605
Accumulated depreciation	(43,235)		(40,677)
Property, plant and equipment, net	$	14,100	$	14,928