UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act: | ||
Tile of each class | Trading Symbol | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | ||
Non-accelerated filer ☐ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes
As of April 28, 2022, the registrant had
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
1
PART 1 FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)
| September 30, |
| March 31, |
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2021 | 2022 |
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ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Accounts receivable, less allowance for doubtful accounts of $ |
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Inventories |
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Income taxes receivable |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Deferred income taxes |
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Other assets |
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Goodwill | | | |||||
Other intangible assets, net |
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Total assets | $ | | $ | | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | | $ | | |||
Accrued expenses |
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Income taxes payable |
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Accrued pension and postretirement benefits |
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Revolving credit facilities | — |
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Deferred revenue—current portion |
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Total current liabilities |
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Long-term obligations (less current portion) |
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Deferred revenue (less current portion) |
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Deferred income taxes | | | |||||
Operating lease liabilities | | | |||||
Accrued pension benefits (less current portion) |
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Accrued postretirement benefits (less current portion) | | | |||||
Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: | |||||||
Common stock, $ |
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Preferred stock, $ |
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Additional paid-in capital |
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Accumulated earnings |
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Treasury stock, |
| ( |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these financial statements.
2
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
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Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2021 |
| 2022 |
| 2021 |
| 2022 |
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Net revenues | $ | | $ | | $ | | $ | |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expense |
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Research and technical expense |
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Operating income (loss) |
| ( |
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Nonoperating retirement benefit expense (income) | | ( | | ( | |||||||||
Interest income |
| ( | ( | ( | ( | ||||||||
Interest expense |
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Income (loss) before income taxes |
| ( |
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| ( | | ||||||
Provision for (benefit from) income taxes |
| ( | | ( | | ||||||||
Net income (loss) | $ | ( | $ | | $ | ( | $ | | |||||
Net income (loss) per share: | |||||||||||||
Basic | $ | ( | $ | | $ | ( | $ | | |||||
Diluted | $ | ( | $ | | $ | ( | $ | | |||||
Weighted Average Common Shares Outstanding | |||||||||||||
Basic | | | | | |||||||||
Diluted | | | | | |||||||||
Dividends declared per common share | $ | | $ | | $ | | $ | |
The accompanying notes are an integral part of these financial statements.
3
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
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Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2021 |
| 2022 |
| 2021 |
| 2022 |
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Net income (loss) | $ | ( | $ | | $ | ( | $ | | |||||
Other comprehensive income (loss), net of tax: | |||||||||||||
Pension and postretirement |
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| ( | | ( | |||||||
Foreign currency translation adjustment |
| ( |
| ( | | ( | |||||||
Other comprehensive income (loss) | | ( | | ( | |||||||||
Comprehensive income (loss) | $ | ( | $ | | $ | ( | $ | |
The accompanying notes are an integral part of these financial statements.
4
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands, except share data)
Three Months Ended March 31, 2021 and 2022 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||
Common Stock | Paid-in | Accumulated | Treasury | Comprehensive | Stockholders’ | |||||||||||||||
| Shares |
| Par |
| Capital |
| Earnings |
| Stock |
| Income (Loss) |
| Equity | |||||||
Balance December 31, 2020 |
| | $ | | | $ | | $ | ( | $ | ( | $ | | |||||||
Net income (loss) | ( |
| ( | |||||||||||||||||
Dividends paid and accrued ($ | ( |
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Other comprehensive income (loss) | |
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Issue restricted stock (less forfeitures) |
| ( | — | |||||||||||||||||
Vesting of restricted stock | | — | ||||||||||||||||||
Stock compensation | |
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Balance March 31, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Balance December 31, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Net income (loss) | |
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Dividends paid and accrued ($ | ( |
| ( | |||||||||||||||||
Other comprehensive income (loss) | ( |
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Exercise of stock options |
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Issue restricted stock (less forfeitures) |
| ( | — | |||||||||||||||||
Vesting of restricted stock | | — | ||||||||||||||||||
Purchase of treasury stock |
| ( | ( |
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Stock compensation | |
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Balance March 31, 2022 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | |
Six Months Ended March 31, 2021 and 2022 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||
Common Stock | Paid-in | Accumulated | Treasury | Comprehensive | Stockholders’ | |||||||||||||||
| Shares |
| Par |
| Capital |
| Earnings |
| Stock |
| Income (Loss) |
| Equity | |||||||
Balance September 30, 2020 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Net income (loss) | ( |
| ( | |||||||||||||||||
Dividends paid and accrued ($ | ( |
| ( | |||||||||||||||||
Other comprehensive income (loss) | |
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Issue restricted stock (less forfeitures) |
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Vesting of restricted stock | | — | ||||||||||||||||||
Purchase of treasury stock |
| ( | ( |
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Stock compensation | |
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Balance March 31, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Balance September 30, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Net income (loss) | |
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Dividends paid and accrued ($ | ( |
| ( | |||||||||||||||||
Other comprehensive income (loss) | ( |
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Exercise of stock options |
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Issue restricted stock (less forfeitures) |
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Vesting of restricted stock | | — | ||||||||||||||||||
Purchase of treasury stock |
| ( | ( |
| ( | |||||||||||||||
Stock compensation | |
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Balance March 31, 2022 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | |
The accompanying notes are an integral part of these financial statements
5
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
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Six Months Ended March 31, | |||||||
| 2021 |
| 2022 |
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Cash flows from operating activities: | |||||||
Net income (loss) | $ | ( | $ | | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Depreciation |
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Amortization |
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Pension and post-retirement expense - U.S. and U.K. |
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Change in long-term obligations |
| ( |
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Stock compensation expense |
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Deferred revenue |
| ( |
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Deferred income taxes |
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Loss on disposition of property |
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Change in assets and liabilities: | |||||||
Accounts receivable |
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Inventories |
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Other assets |
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Accounts payable and accrued expenses |
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Income taxes |
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Accrued pension and postretirement benefits |
| ( |
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Net cash provided by (used in) operating activities |
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Cash flows from investing activities: | |||||||
Additions to property, plant and equipment |
| ( |
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Net cash used in investing activities |
| ( |
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Cash flows from financing activities: | |||||||
Revolving credit facility borrowings | — |
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Revolving credit facility repayments | — |
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Dividends paid |
| ( |
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Proceeds from exercise of stock options |
| — |
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Payment for purchase of treasury stock |
| ( |
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Payment for debt issuance cost |
| ( |
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Payments on long-term obligations | ( | ( | |||||
Net cash used in financing activities |
| ( |
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Effect of exchange rates on cash |
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Increase (decrease) in cash and cash equivalents: |
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Cash and cash equivalents: | |||||||
Beginning of period |
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End of period | $ | | $ | | |||
Supplemental disclosures of cash flow information: | |||||||
Interest (net of capitalized interest) | $ | | $ | | |||
Income taxes paid (refunded), net | $ | | $ | | |||
Capital expenditures incurred but not yet paid | $ | | $ | | |||
Dividends declared but not yet paid | $ | | $ | |
The accompanying notes are an integral part of these financial statements.
6
HAYNES INTERNATIONAL, INC. and SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data)
Note 1. Basis of Presentation
Interim Financial Statements
The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and such principles are applied on a basis consistent with information reflected in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021 filed with the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the interim financial information includes all adjustments and accruals which are necessary for a fair presentation of results for the respective interim periods. The results of operations for the three and six months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2022 or any other interim period.
Principles of Consolidation
The consolidated financial statements include the accounts of Haynes International, Inc. and directly or indirectly wholly-owned subsidiaries (collectively, the “Company”). All intercompany transactions and balances are eliminated.
Note 2. Recently Issued Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This new update provides optional expedients to ease the potential burden of accounting for the effects of reference rate reform as it pertains to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. These amendments are effective immediately and may be applied prospectively to modifications made or relationships entered into or evaluated on or before December 31, 2022. The Company is in the process of evaluating the impact of the pronouncement.
Note 3. Revenues from Contracts with Customers
Contract Balances
As of September 30, 2021 and March 31, 2022, accounts receivable with customers were $
Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the purchase order or contract. As of September 30, 2021 and March 31, 2022, no contract liabilities have been recorded except for $
7
Disaggregation of Revenue
Revenue is disaggregated by end-use markets. The following table includes a breakdown of net revenues to the markets served by the Company for the three and six months ended March 31, 2021 and 2022.
Three Months Ended | Six Months Ended | |||||||||||
March 31, | March 31, | |||||||||||
| 2021 |
| 2022 |
| 2021 |
| 2022 | |||||
Net revenues | ||||||||||||
Aerospace | $ | | $ | | $ | | $ | | ||||
Chemical processing |
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Industrial gas turbine |
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Other markets |
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Total product revenue |
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Other revenue |
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Net revenues | $ | | $ | | $ | | $ | |
Note 4. Inventories
The following is a summary of the major classes of inventories:
September 30, | March 31, |
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| 2021 |
| 2022 |
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Raw Materials | $ | | $ | | ||||
Work-in-process |
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Finished Goods |
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Other |
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$ | | $ | |
Note 5. Income Taxes
Income tax (benefit) expense for the three and six months ended March 31, 2021 and 2022 differed from the U.S. federal statutory rate of
8
Note 6. Pension and Post-retirement Benefits
Components of net periodic pension and post-retirement benefit cost for the six months ended March 31, 2021 and 2022 were as follows:
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||||
Pension Benefits | Other Benefits | Pension Benefits | Other Benefits | ||||||||||||||||||||||
| 2021 |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| 2022 |
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Service cost | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||
Interest cost |
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Expected return |
| ( |
| ( |
| — |
| — |
| ( |
| ( |
| — | — | ||||||||||
Amortizations |
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| — |
| ( |
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Net periodic benefit cost | $ | | $ | ( | $ | | $ | | $ | | $ | ( | $ | | $ | |
The Company contributed $