☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OKLAHOMA | 73‑1351610 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1221 E. Houston |
Broken Arrow, Oklahoma 74012 |
(Address of principal executive office) |
(918) 251-9121 |
(Registrant's telephone number, including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes ☒ No ☐ |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | Yes ☒ No ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act. Large accelerated filer ☐Accelerated filer ☐ Non-accelerated filer ☐ (do not check if a smaller reporting company) Smaller reporting company ☒ | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes ☐ No ☒ |
Shares outstanding of the issuer's $.01 par value common stock as of 10,134,235. |
PART I. FINANCIAL INFORMATION | ||
Page | ||
Item 1. | Financial Statements. | |
Consolidated Condensed Balance Sheets (unaudited) | ||
Consolidated Condensed Statements of Income (unaudited) | ||
Three | ||
Consolidated Condensed Statements of Cash Flows (unaudited) | ||
Notes to Unaudited Consolidated Condensed Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. | |
Item 4. | Controls and Procedures. | |
PART | ||
Item 6. | Exhibits. | |
SIGNATURES |
December 31, 2016 | September 30, 2016 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,103,337 | $ | 4,508,126 | ||||
Accounts receivable, net of allowance for doubtful accounts of $250,000 | 5,200,673 | 4,278,855 | ||||||
Income tax receivable | 361,491 | 480,837 | ||||||
Inventories, net of allowance for excess and obsolete | ||||||||
inventory of $2,737,488 and $2,570,868, respectively | 21,823,255 | 21,524,919 | ||||||
Prepaid expenses | 267,051 | 323,289 | ||||||
Total current assets | 31,755,807 | 31,116,026 | ||||||
Property and equipment, at cost: | ||||||||
Land and buildings | 7,218,678 | 7,218,678 | ||||||
Machinery and equipment | 3,921,159 | 3,833,230 | ||||||
Leasehold improvements | 202,017 | 151,957 | ||||||
Total property and equipment, at cost | 11,341,854 | 11,203,865 | ||||||
Less: Accumulated depreciation | (5,096,889 | ) | (4,993,102 | ) | ||||
Net property and equipment | 6,244,965 | 6,210,763 | ||||||
Investment in and loans to equity method investee | 1,618,124 | 2,588,624 | ||||||
Intangibles, net of accumulated amortization | 9,502,683 | 4,973,669 | ||||||
Goodwill | 6,031,511 | 3,910,089 | ||||||
Deferred income taxes | 1,337,000 | 1,333,000 | ||||||
Other assets | 136,412 | 135,988 | ||||||
Total assets | $ | 56,626,502 | $ | 50,268,159 |
June 30, 2016 | September 30, 2015 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,143,774 | $ | 6,110,986 | ||||
Accounts receivable, net of allowance for doubtful accounts of $250,000 | 5,839,088 | 4,286,377 | ||||||
Inventories, net of allowance for excess and obsolete inventory of $3,206,628 and $2,756,628, respectively | 21,667,539 | 23,600,996 | ||||||
Prepaid expenses | 241,498 | 153,454 | ||||||
Deferred income taxes | 1,824,000 | 1,776,000 | ||||||
Total current assets | 34,715,899 | 35,927,813 | ||||||
Property and equipment, at cost: | ||||||||
Land and buildings | 7,218,678 | 7,218,678 | ||||||
Machinery and equipment | 3,713,134 | 3,415,164 | ||||||
Leasehold improvements | 151,957 | 151,957 | ||||||
Total property and equipment, at cost | 11,083,769 | 10,785,799 | ||||||
Less: Accumulated depreciation | (4,883,554 | ) | (4,584,796 | ) | ||||
Net property and equipment | 6,200,215 | 6,201,003 | ||||||
Investment in and loans to equity method investee | 1,515,721 | – | ||||||
Intangibles, net of accumulated amortization | 5,180,120 | 5,799,473 | ||||||
Goodwill | 3,910,089 | 3,910,089 | ||||||
Other assets | 135,988 | 134,678 | ||||||
Total assets | $ | 51,658,032 | $ | 51,973,056 |
December 31, 2016 | September 30, 2016 | |||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,621,277 | $ | 1,857,953 | ||||
Accrued expenses | 1,218,118 | 1,324,652 | ||||||
Notes payable – current portion | 2,178,335 | 899,603 | ||||||
Other current liabilities | 1,626,220 | 963,127 | ||||||
Total current liabilities | 7,643,950 | 5,045,335 | ||||||
Notes payable, less current portion | 5,734,439 | 3,466,358 | ||||||
Other liabilities | 1,392,373 | 131,410 | ||||||
Total liabilities | 14,770,762 | 8,643,103 | ||||||
Shareholders’ equity: | ||||||||
Common stock, $.01 par value; 30,000,000 shares authorized; 10,634,893 shares issued; and 10,134,235 shares outstanding | 106,349 | 106,349 | ||||||
Paid in capital | (4,903,268 | ) | (4,916,791 | ) | ||||
Retained earnings | 47,652,673 | 47,435,512 | ||||||
Total shareholders’ equity before treasury stock | 42,855,754 | 42,625,070 | ||||||
Less: Treasury stock, 500,658 shares, at cost | (1,000,014 | ) | (1,000,014 | ) | ||||
Total shareholders’ equity | 41,855,740 | 41,625,056 | ||||||
Total liabilities and shareholders’ equity | $ | 56,626,502 | $ | 50,268,159 |
June 30, 2016 | September 30, 2015 | |||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,483,707 | $ | 1,784,482 | ||||
Accrued expenses | 1,352,554 | 1,358,681 | ||||||
Income tax payable | 52,895 | 122,492 | ||||||
Notes payable – current portion | 896,330 | 873,752 | ||||||
Other current liabilities | 952,331 | 982,094 | ||||||
Total current liabilities | 5,737,817 | 5,121,501 | ||||||
Notes payable, less current portion | 3,690,640 | 4,366,130 | ||||||
Deferred income taxes | 314,000 | 286,000 | ||||||
Other liabilities | 120,256 | 1,064,717 | ||||||
Total liabilities | 9,862,713 | 10,838,348 | ||||||
Shareholders’ equity: | ||||||||
Common stock, $.01 par value; 30,000,000 shares authorized; 10,634,893 and 10,564,221 shares issued, respectively; 10,134,235 and 10,063,563 shares outstanding, respectively | 106,349 | 105,642 | ||||||
Paid in capital | (4,938,075 | ) | (5,112,269 | ) | ||||
Retained earnings | 47,627,059 | 47,141,349 | ||||||
Total shareholders’ equity before treasury stock | 42,795,333 | 42,134,722 | ||||||
Less: Treasury stock, 500,658 shares, at cost | (1,000,014 | ) | (1,000,014 | ) | ||||
Total shareholders’ equity | 41,795,319 | 41,134,708 | ||||||
Total liabilities and shareholders’ equity | $ | 51,658,032 | $ | 51,973,056 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Sales | $ | 12,095,826 | $ | 8,249,668 | ||||
Cost of sales | 8,072,197 | 5,484,288 | ||||||
Gross profit | 4,023,629 | 2,765,380 | ||||||
Operating, selling, general and administrative expenses | 3,596,824 | 2,668,625 | ||||||
Income from operations | 426,805 | 96,755 | ||||||
Interest expense | 96,644 | 67,761 | ||||||
Income before income taxes | 330,161 | 28,994 | ||||||
Provision for income taxes | 113,000 | 5,000 | ||||||
Net income | $ | 217,161 | $ | 23,994 | ||||
Earnings per share: | ||||||||
Basic | $ | 0.02 | $ | 0.00 | ||||
Diluted | $ | 0.02 | $ | 0.00 | ||||
Shares used in per share calculation: | ||||||||
Basic | 10,134,235 | 10,069,139 | ||||||
Diluted | 10,134,559 | 10,069,139 |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Sales | $ | 10,060,242 | $ | 11,902,391 | $ | 28,897,097 | $ | 34,106,088 | ||||||||
Cost of sales | 6,594,091 | 7,757,784 | 19,080,954 | 21,886,166 | ||||||||||||
Gross profit | 3,466,151 | 4,144,607 | 9,816,143 | 12,219,922 | ||||||||||||
Operating, selling, general and administrative expenses | 3,062,288 | 3,202,402 | 8,987,316 | 10,081,016 | ||||||||||||
Income from operations | 403,863 | 942,205 | 828,827 | 2,138,906 | ||||||||||||
Other income (expense): | ||||||||||||||||
Other income | 70,517 | – | 180,071 | – | ||||||||||||
Interest income | 28,950 | – | 31,122 | – | ||||||||||||
Income (loss) from equity method investment | 63,977 | – | (77,021 | ) | – | |||||||||||
Interest expense | (54,221 | ) | (71,071 | ) | (184,289 | ) | (235,594 | ) | ||||||||
Total other income (expense), net | 109,223 | (71,071 | ) | (50,117 | ) | (235,594 | ) | |||||||||
Income before provision for income taxes | 513,086 | 871,134 | 778,710 | 1,903,312 | ||||||||||||
Provision for income taxes | 197,000 | 234,000 | 293,000 | 616,000 | ||||||||||||
Net income | $ | 316,086 | $ | 637,134 | $ | 485,710 | $ | 1,287,312 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.13 | ||||||||
Diluted | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.13 | ||||||||
Shares used in per share calculation: | ||||||||||||||||
Basic | 10,134,235 | 10,073,121 | 10,098,564 | 10,055,390 | ||||||||||||
Diluted | 10,135,607 | 10,073,121 | 10,103,054 | 10,055,390 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Operating Activities | ||||||||
Net income | $ | 217,161 | $ | 23,994 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation | 103,787 | 95,180 | ||||||
Amortization | 311,986 | 206,451 | ||||||
Provision for excess and obsolete inventories | 166,620 | 150,000 | ||||||
Deferred income tax provision (benefit) | (4,000 | ) | 2,000 | |||||
Share based compensation expense | 41,884 | 45,013 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 195,077 | 425,783 | ||||||
Income tax receivable\payable | 119,346 | (136,490 | ) | |||||
Inventories | 683,638 | 475,224 | ||||||
Prepaid expenses | 29,060 | 26,524 | ||||||
Other assets | (424 | ) | – | |||||
Accounts payable | 179,651 | 28,320 | ||||||
Accrued expenses | (252,515 | ) | (323,180 | ) | ||||
Net cash provided by operating activities | 1,791,271 | 1,018,819 | ||||||
Investing Activities | ||||||||
Acquisition of net operating assets | (6,643,540 | ) | (178,000 | ) | ||||
Repayments of loans to equity method investee | 970,500 | – | ||||||
Purchases of property and equipment | (69,833 | ) | (24,475 | ) | ||||
Net cash used in investing activities | (5,742,873 | ) | (202,475 | ) | ||||
Financing Activities | ||||||||
Proceeds from notes payable | 4,000,000 | – | ||||||
Debt issuance costs | (15,394 | ) | – | |||||
Payments on notes payable | (437,793 | ) | (215,989 | ) | ||||
Net cash provided by (used in) financing activities | 3,546,813 | (215,989 | ) | |||||
Net increase (decrease) in cash and cash equivalents | (404,789 | ) | 600,355 | |||||
Cash and cash equivalents at beginning of period | 4,508,126 | 6,110,986 | ||||||
Cash and cash equivalents at end of period | $ | 4,103,337 | $ | 6,711,341 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 63,161 | $ | 46,393 | ||||
Cash paid for income taxes | $ | – | $ | 142,200 | ||||
Supplemental noncash investing activities: | ||||||||
Deferred guaranteed payments for acquisition of business | $ | (1,897,372 | ) | $ | – |
Nine Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Operating Activities | ||||||||
Net income | $ | 485,710 | $ | 1,287,312 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation | 312,403 | 299,591 | ||||||
Amortization | 619,353 | 619,354 | ||||||
Provision for excess and obsolete inventories | 450,000 | 450,000 | ||||||
Deferred income tax benefit | (20,000 | ) | (180,000 | ) | ||||
Share based compensation expense | 142,040 | 184,751 | ||||||
Loss from equity method investment | 77,021 | – | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (1,444,754 | ) | 593,954 | |||||
Income tax receivable\payable | (69,597 | ) | 212,924 | |||||
Inventories | 1,499,557 | (2,166,895 | ) | |||||
Prepaid expenses | (55,183 | ) | 17,550 | |||||
Other assets | (1,310 | ) | – | |||||
Accounts payable | 641,268 | (125,367 | ) | |||||
Accrued expenses | 19,649 | (62,003 | ) | |||||
Net cash provided by operating activities | 2,656,157 | 1,131,171 | ||||||
Investing Activities | ||||||||
Acquisition of net operating assets | (178,000 | ) | − | |||||
Guaranteed payments for acquisition of business | (1,000,000 | ) | (1,000,000 | ) | ||||
Investment in and loans to equity method investment | (1,592,742 | ) | – | |||||
Additions to land and buildings | – | (56,074 | ) | |||||
Additions to machinery and equipment | (199,715 | ) | (90,187 | ) | ||||
Net cash used in investing activities | (2,970,457 | ) | (1,146,261 | ) | ||||
Financing Activities | ||||||||
Payments on notes payable | (652,912 | ) | (632,266 | ) | ||||
Net cash used in financing activities | (652,912 | ) | (632,266 | ) | ||||
Net decrease in cash and cash equivalents | (967,212 | ) | (647,356 | ) | ||||
Cash and cash equivalents at beginning of period | 6,110,986 | 5,286,097 | ||||||
Cash and cash equivalents at end of period | $ | 5,143,774 | $ | 4,638,741 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 153,531 | $ | 156,098 | ||||
Cash paid for income taxes | $ | 351,200 | $ | 600,000 |
Upfront cash payment | $ | 6,500,000 | ||
Deferred guaranteed payments (a) | 1,897,372 | |||
Working capital purchase adjustment | 143,540 | |||
Net purchase price | $ | 8,540,912 |
(a) | This amount represents the present value of $2.0 million in deferred payments, which will be paid in equal annual installments over the next three years. These deferred payments are recorded in other current liabilities ($0.7 million) and other long-term liabilities ($1.2 million). |
Assets acquired: | ||||
Accounts receivable | $ | 107,957 | ||
Refurbished inventory | 16,100 | |||
Fixed assets - equipment | 111,900 | |||
Liabilities assumed: | ||||
Current liabilities | (57,957 | ) | ||
Net assets acquired | $ | 178,000 |
Assets acquired: | (in thousands) | |||
Accounts receivable | $ | 1,117 | ||
Inventories | 1,149 | |||
Property and equipment, net | 68 | |||
Other non-current assets | 1 | |||
Intangible assets | 4,841 | |||
Goodwill | 2,121 | |||
Total assets acquired | 9,297 | |||
Liabilities assumed: | ||||
Accounts payable | 584 | |||
Accrued expenses | 172 | |||
Total liabilities assumed | 756 | |||
Net purchase price | $ | 8,541 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
(in thousands, except per share amounts) | ||||||||
Sales | $ | 12,534 | $ | 11,173 | ||||
Income from operations | $ | 658 | $ | 64 | ||||
Net income (loss) | $ | 351 | $ | (33 | ) | |||
Earnings (loss) per share: | ||||||||
Basic | $ | 0.03 | $ | (0.00 | ) | |||
Diluted | $ | 0.03 | $ | (0.00 | ) |
December 31, 2016 | September 30, 2016 | |||||||
New: | ||||||||
Cable TV | $ | 14,541,111 | $ | 15,087,495 | ||||
Telco | 225,177 | – | ||||||
Refurbished and used: | ||||||||
Cable TV | 3,255,801 | 3,383,079 | ||||||
Allowance for excess and obsolete inventory | (2,369,586 | ) | (2,219,586 | ) | ||||
Telco | 6,538,654 | 5,625,213 | ||||||
Allowance for excess and obsolete inventory | (367,902 | ) | (351,282 | ) | ||||
$ | 21,823,255 | $ | 21,524,919 |
June 30, 2016 | September 30, 2015 | |||||||
New: | ||||||||
Cable TV | $ | 14,916,937 | $ | 16,255,487 | ||||
Refurbished: | ||||||||
Cable TV | 3,832,035 | 3,676,132 | ||||||
Telco | 6,125,195 | 6,426,005 | ||||||
Allowance for excess and obsolete inventory | (3,206,628 | ) | (2,756,628 | ) | ||||
$ | 21,667,539 | $ | 23,600,996 |
December 31, 2016 | ||||||||||||
Gross | Accumulated Amortization | Net | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships – 10 years | $ | 8,152,000 | $ | (1,286,500 | ) | $ | 6,865,500 | |||||
Technology – 7 years | 1,303,000 | (527,402 | ) | 775,598 | ||||||||
Trade name – 10 years | 2,119,000 | (383,264 | ) | 1,735,736 | ||||||||
Non-compete agreements – 3 years | 374,000 | (248,151 | ) | 125,849 | ||||||||
Total intangible assets | $ | 11,948,000 | $ | (2,445,317 | ) | $ | 9,502,683 |
September 30, 2016 | ||||||||||||
Gross | Accumulated Amortization | Net | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships – 10 years | $ | 4,257,000 | $ | (1,099,721 | ) | $ | 3,157,279 | |||||
Technology – 7 years | 1,303,000 | (480,866 | ) | 822,134 | ||||||||
Trade name – 10 years | 1,293,000 | (334,023 | ) | 958,977 | ||||||||
Non-compete agreements – 3 years | 254,000 | (218,721 | ) | 35,279 | ||||||||
Total intangible assets | $ | 7,107,000 | $ | (2,133,331 | ) | $ | 4,973,669 | |||||
June 30, 2016 | ||||||||||||
Gross | Accumulated Amortization | Net | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships – 10 years | $ | 4,257,000 | $ | (993,296 | ) | $ | 3,263,704 | |||||
Technology – 7 years | 1,303,000 | (434,332 | ) | 868,668 | ||||||||
Trade name – 10 years | 1,293,000 | (301,699 | ) | 991,301 | ||||||||
Non-compete agreements – 3 years | 254,000 | (197,553 | ) | 56,447 | ||||||||
Total intangible assets | $ | 7,107,000 | $ | (1,926,880 | ) | $ | 5,180,120 |
September 30, 2015 | ||||||||||||
Gross | Accumulated Amortization | Net | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships – 10 years | $ | 4,257,000 | $ | (674,023 | ) | $ | 3,582,977 | |||||
Technology – 7 years | 1,303,000 | (294,725 | ) | 1,008,275 | ||||||||
Trade name – 10 years | 1,293,000 | (204,724 | ) | 1,088,276 | ||||||||
Non-compete agreements – 3 years | 254,000 | (134,055 | ) | 119,945 | ||||||||
Total intangible assets | $ | 7,107,000 | $ | (1,307,527 | ) | $ | 5,799,473 |
· | Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
· | Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. |
· | Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value. |
Three Months Ended June 30, | Nine Months Ended June 30, | Three Months Ended December 31, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Net income attributable to common shareholders | $ | 316,086 | $ | 637,134 | $ | 485,710 | $ | 1,287,312 | $ | 217,161 | $ | 23,994 | ||||||||||||
Basic weighted average shares | 10,134,235 | 10,073,121 | 10,098,564 | 10,055,390 | 10,134,235 | 10,069,139 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||
Stock options | 1,372 | − | 4,490 | − | 324 | – | ||||||||||||||||||
Diluted weighted average shares | 10,135,607 | 10,073,121 | 10,103,054 | 10,055,390 | 10,134,559 | 10,069,139 | ||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||
Basic | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.13 | $ | 0.02 | $ | 0.00 | ||||||||||||
Diluted | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.13 | $ | 0.02 | $ | 0.00 |
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Stock options excluded | 520,000 | 535,000 | ||||||
Weighted average exercise price of | ||||||||
stock options | $ | 2.83 | $ | 2.88 | ||||
Average market price of common stock | $ | 1.76 | $ | 2.19 |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Stock options excluded | 520,000 | 545,000 | 520,000 | 545,000 | ||||||||||||
Weighted average exercise price of | ||||||||||||||||
stock options | $ | 2.83 | $ | 2.91 | $ | 2.83 | $ | 2.91 | ||||||||
Average market price of common stock | $ | 1.80 | $ | 2.37 | $ | 1.92 | $ | 2.41 |
Shares | Wtd. Avg. Ex. Price | |||||||
Outstanding at September 30, 2016 | 570,000 | $ | 2.73 | |||||
Granted | – | – | ||||||
Exercised | – | – | ||||||
Expired | – | – | ||||||
Forfeited | – | – | ||||||
Outstanding at December 31, 2016 | 570,000 | $ | 2.73 | |||||
Exercisable at December 31, 2016 | 403,334 | $ | 2.81 |
Shares | Wtd. Avg. Ex. Price | |||||||
Outstanding at September 30, 2015 | 535,000 | $ | 2.88 | |||||
Granted | 50,000 | 1.75 | ||||||
Exercised | – | – | ||||||
Expired | (10,000 | ) | 5.78 | |||||
Forfeited | (5,000 | ) | 3.00 | |||||
Outstanding at June 30, 2016 | 570,000 | $ | 2.73 | |||||
Exercisable at June 30, 2016 | 403,334 | $ | 2.81 |
Nine Months Ended June 30, 2016 | ||||
Estimated fair value of options at grant date | $ | 34,350 | ||
Black-Scholes model assumptions: | ||||
Average expected life (years) | 6 | |||
Average expected volatility factor | 38 | % | ||
Average risk-free interest rate | 1.75 | % | ||
Average expected dividends yield | – |
Nine Months Ended | Three Months Ended | |||||||
June 30, 2016 | December 31, 2016 | |||||||
Fiscal year 2012 grant | $ | 13,062 | $ | 2,680 | ||||
Fiscal year 2014 grant | $ | 35,641 | $ | 6,788 | ||||
Fiscal year 2016 grant | $ | 3,498 | $ | 4,055 |
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||
Sales | ||||||||||||||||
Cable TV | $ | 5,942,856 | $ | 6,752,224 | $ | 16,966,744 | $ | 19,377,515 | ||||||||
Telco | 4,134,665 | 5,235,317 | 12,053,568 | 15,085,388 | ||||||||||||
Intercompany | (17,279 | ) | (85,150 | ) | (123,215 | ) | (356,815 | ) | ||||||||
Total sales | $ | 10,060,242 | $ | 11,902,391 | $ | 28,897,097 | $ | 34,106,088 |
Gross profit | ||||||||||||||||
Cable TV | $ | 2,126,744 | $ | 2,367,221 | $ | 5,612,691 | $ | 6,189,705 | ||||||||
Telco | 1,339,407 | 1,777,386 | 4,203,452 | 6,030,217 | ||||||||||||
Total gross profit | $ | 3,466,151 | $ | 4,144,607 | $ | 9,816,143 | $ | 12,219,922 | ||||||||
Income (loss) from operations | ||||||||||||||||
Cable TV | $ | 528,651 | $ | 846,372 | $ | 981,770 | $ | 1,813,022 | ||||||||
Telco | (124,788 | ) | 95,833 | (152,943 | ) | 325,884 | ||||||||||
Total income from operations | $ | 403,863 | $ | 942,205 | $ | 828,827 | $ | 2,138,906 |
June 30, 2016 | September 30, 2015 | |||||||
Segment assets | ||||||||
Cable TV | $ | 25,356,102 | $ | 26,494,430 | ||||
Telco | 16,916,218 | 17,094,713 | ||||||
Non-allocated | 9,385,712 | 8,383,913 | ||||||
Total assets | $ | 51,658,032 | $ | 51,973,056 |
Three Months Ended | ||||||||
December 31, 2016 | December 31, 2015 | |||||||
Sales | ||||||||
Cable TV | $ | 6,574,824 | $ | 5,004,998 | ||||
Telco | 5,539,977 | 3,317,730 | ||||||
Intersegment | (18,975 | ) | (73,060 | ) | ||||
Total sales | $ | 12,095,826 | $ | 8,249,668 | ||||
Gross profit | ||||||||
Cable TV | $ | 2,400,342 | $ | 1,579,272 | ||||
Telco | 1,623,287 | 1,186,108 | ||||||
Total gross profit | $ | 4,023,629 | $ | 2,765,380 | ||||
Operating income (loss) | ||||||||
Cable TV | $ | 908,982 | $ | 116,841 | ||||
Telco | (482,177 | ) | (20,086 | ) | ||||
Total operating income | $ | 426,805 | $ | 96,755 |
December 31, 2016 | September 30, 2016 | |||||||
Segment assets | ||||||||
Cable TV | $ | 24,645,908 | $ | 25,201,697 | ||||
Telco | 23,686,244 | 15,122,911 | ||||||
Non-allocated | 8,294,350 | 9,943,551 | ||||||
Total assets | $ | 56,626,502 | $ | 50,268,159 |
Three Months Ended June 30, 2016 | Three Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||
Cable TV | Telco | Total | Cable TV | Telco | Total | Three Months Ended December 31, 2016 | Three Months Ended December 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Cable TV | Telco | Total | Cable TV | Telco | Total | |||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | 528,651 | $ | (124,788 | ) | $ | 403,863 | $ | 846,372 | $ | 95,833 | $ | 942,205 | $ | 908,982 | $ | (482,177 | ) | $ | 426,805 | $ | 116,841 | $ | (20,086 | ) | $ | 96,755 | |||||||||||||||||||||
Depreciation | 84,152 | 24,902 | 109,054 | 72,909 | 27,795 | 100,704 | 73,245 | 30,542 | 103,787 | 72,464 | 22,716 | 95,180 | ||||||||||||||||||||||||||||||||||||
Amortization | − | 206,451 | 206,451 | − | 206,451 | 206,451 | − | 311,986 | 311,986 | − | 206,451 | 206,451 | ||||||||||||||||||||||||||||||||||||
EBITDA (a) | $ | 612,803 | $ | 106,565 | $ | 719,368 | $ | 919,281 | $ | 330,079 | $ | 1,249,360 | $ | 982,227 | $ | (139,649 | ) | $ | 842,578 | $ | 189,305 | $ | 209,081 | $ | 398,386 |
(a) | The Telco segment |
Nine Months Ended June 30, 2016 | Nine Months Ended June 30, 2015 | |||||||||||||||||||||||
Cable TV | Telco | Total | Cable TV | Telco | Total | |||||||||||||||||||
Income (loss) from operations | $ | 981,770 | $ | (152,943 | ) | $ | 828,827 | $ | 1,813,022 | $ | 325,884 | $ | 2,138,906 | |||||||||||
Depreciation | 237,418 | 74,985 | 312,403 | 214,622 | 84,969 | 299,591 | ||||||||||||||||||
Amortization | − | 619,353 | 619,353 | − | 619,354 | 619,354 | ||||||||||||||||||
EBITDA (a) | $ | 1,219,188 | $ | 541,395 | $ | 1,760,583 | $ | 2,027,644 | $ | 1,030,207 | $ | 3,057,851 |
Item 6. Exhibits. | |
Exhibit No. | Description |
31.1 | Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002. |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
101.LAB | XBRL Taxonomy Extension Label Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |
Exhibit No. | Description |
31.1 | Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002. |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
101.LAB | XBRL Taxonomy Extension Label Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |