Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | WESTERN CAPITAL RESOURCES, INC. | |
Entity Central Index Key | 1,363,958 | |
Document Type | 10-Q | |
Trading Symbol | WCRS | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 9,388,677 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,542,060 | $ 21,295,819 |
Short-term investments | 20,949,295 | 32,292,902 |
Loans receivable (net of allowance for losses of $736,000 and $833,000, respectively) | 4,111,854 | 4,310,003 |
Accounts receivable (net of allowance for losses of $18,000 and $16,000, respectively) | 922,308 | 764,071 |
Inventory (net of allowance of $538,000 and $576,000, respectively) | 8,823,975 | 9,130,842 |
Prepaid income taxes | 390,614 | |
Prepaid expenses and other | 3,039,656 | 3,762,974 |
Escrow and other receivables | 3,341,203 | 3,482,770 |
TOTAL CURRENT ASSETS | 51,120,965 | 75,039,381 |
INVESTMENTS | 5,008,496 | 3,000,000 |
PROPERTY AND EQUIPMENT, net | 10,190,374 | 11,347,234 |
GOODWILL | 5,796,528 | 5,796,528 |
INTANGIBLE ASSETS, net | 4,418,145 | 4,987,769 |
ESCROW FUNDS RECEIVABLE | 3,250,000 | 3,250,000 |
OTHER | 577,102 | 823,244 |
TOTAL ASSETS | 80,361,610 | 104,244,156 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 10,693,307 | 11,897,968 |
Other current liabilities | 1,070,839 | 1,354,558 |
Income taxes payable | 18,730,647 | |
Note payable - short-term | 51,992 | |
Current portion capital lease obligations | 49,280 | 47,174 |
Deferred revenue | 796,471 | 1,073,600 |
TOTAL CURRENT LIABILITIES | 12,609,897 | 33,155,939 |
LONG-TERM LIABILITIES | ||
Notes payable, net of current portion | 789,216 | 789,216 |
Capital lease obligations, net of current portion | 13,936 | 51,172 |
Deferred income taxes | 1,045,000 | 1,456,000 |
Other | 98,259 | 98,259 |
TOTAL LONG-TERM LIABILITIES | 1,946,411 | 2,394,647 |
TOTAL LIABILITIES | 14,556,308 | 35,550,586 |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
WESTERN SHAREHOLDERS' EQUITY | ||
Common stock, $0.0001 par value, 12,500,000 shares authorized, 9,388,677 and 9,390,997 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively. | 939 | 939 |
Additional paid-in capital | 29,031,741 | 29,031,741 |
Retained earnings | 35,054,564 | 37,903,204 |
TOTAL WESTERN SHAREHOLDERS' EQUITY | 64,087,244 | 66,935,884 |
NONCONTROLLING INTERESTS | 1,718,058 | 1,757,686 |
TOTAL EQUITY | 65,805,302 | 68,693,570 |
TOTAL LIABILITIES AND EQUITY | $ 80,361,610 | $ 104,244,156 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Loans receivable, allowance for losses | $ 736,000 | $ 833,000 |
Accounts receivable, allowance for losses | 18,000 | 16,000 |
Inventory , allowance for losses | $ 538,000 | $ 576,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 12,500,000 | 12,500,000 |
Common stock, issued | 9,388,677 | 9,390,997 |
Common stock, outstanding | 9,388,677 | 9,390,997 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||
Total Revenues | $ 24,360,083 | $ 26,133,001 | $ 84,599,199 | $ 89,581,594 |
COST OF REVENUES | ||||
Cost of sales | 9,547,567 | 9,599,712 | 34,109,230 | 34,434,610 |
Provisions for loans receivable losses | 386,366 | 326,998 | 827,751 | 815,313 |
Total Cost of Revenues | 9,933,933 | 9,926,710 | 34,936,981 | 35,249,923 |
GROSS PROFIT | 14,426,150 | 16,206,291 | 49,662,218 | 54,331,671 |
OPERATING EXPENSES | ||||
Salaries, wages and benefits | 8,353,536 | 9,384,142 | 26,086,862 | 27,515,294 |
Occupancy | 3,011,213 | 3,573,785 | 9,518,301 | 9,618,698 |
Advertising, marketing and development | 1,205,013 | 998,433 | 5,673,036 | 5,117,015 |
Depreciation | 435,670 | 438,822 | 1,457,762 | 1,114,513 |
Amortization | 187,209 | 216,253 | 616,330 | 323,911 |
Other | 2,591,298 | 2,550,726 | 7,867,183 | 7,959,396 |
Total Operating Expenses | 15,783,939 | 17,162,161 | 51,219,474 | 51,648,827 |
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | (1,357,789) | (955,870) | (1,557,256) | 2,682,844 |
OTHER INCOME (EXPENSES): | ||||
Dividend and interest income | 153,739 | 346 | 465,425 | 131,985 |
Interest expense | (25,154) | (67,362) | (162,890) | (176,439) |
Total Other Income (Expenses) | 128,585 | (67,016) | 302,535 | (44,454) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (1,229,204) | (1,022,886) | (1,254,721) | 2,638,390 |
PROVISION FOR INCOME TAX EXPENSE (BENEFIT) FOR CONTINUING OPERATIONS | (245,000) | (397,000) | (386,000) | 906,000 |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | (984,204) | (625,886) | (868,721) | 1,732,390 |
LESS NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (188,523) | (99,865) | (561,572) | (99,865) |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS | (1,172,727) | (725,751) | (1,430,293) | 1,632,525 |
DISCONTINUED OPERATIONS | ||||
Income from operations of discontinued operations | 1,197,874 | 3,875,458 | ||
Less provision for income taxes for discontinued operations | (451,000) | (1,468,000) | ||
Net income from discontinued operations | 746,874 | 2,407,458 | ||
Less net income from discontinued operations attributable to noncontrolling interests | (4,925) | (17,446) | ||
Net income from discontinued operations attributable to noncontrolling interests | 741,949 | 2,390,012 | ||
NET INCOME (LOSS) ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS | $ (1,172,727) | $ 16,198 | $ (1,430,293) | $ 4,022,537 |
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS | ||||
FROM CONTINUING OPERATIONS - Basic and diluted (in dollars per share) | $ (0.12) | $ (0.08) | $ (0.15) | $ 0.17 |
FROM DISCONTINUED OPERATIONS - Basic and diluted (in dollars per share) | 0.08 | 0.26 | ||
FROM CONTINUING AND DISCONTINUED OPERATIONS - Basic and diluted (in dollars per share) | $ (0.12) | $ (0.15) | $ 0.43 | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic and diluted (in shares) | 9,390,770 | 9,390,997 | 9,390,921 | 9,418,009 |
Sales And Associated Fees [Member] | ||||
REVENUES | ||||
Total Revenues | $ 17,924,270 | $ 18,535,592 | $ 65,423,204 | $ 67,834,678 |
Financing Fees And Interest [Member] | ||||
REVENUES | ||||
Total Revenues | 2,323,000 | 2,342,285 | 6,569,660 | 6,695,439 |
Other Revenue [Member] | ||||
REVENUES | ||||
Total Revenues | $ 4,112,813 | $ 5,255,124 | $ 12,606,335 | $ 15,051,477 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net income from continuing operations | $ (868,721) | $ 1,732,390 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,457,762 | 1,114,513 |
Amortization | 616,330 | 323,911 |
Share based compensation | 27,992 | |
Deferred income taxes | (411,000) | 255,000 |
Loss on disposal of property and equipment | 751,496 | 22,030 |
Income from investments | (67,737) | |
Changes in operating assets and liabilities: | ||
Loans receivable | 198,149 | 356,619 |
Accounts receivable | (158,237) | (298,309) |
Inventory | 225,819 | (750,602) |
Prepaid expenses and other assets | 310,231 | (1,746,082) |
Accounts payable and accrued expenses | (19,935,308) | (891,043) |
Deferred revenue and other current liabilities | (560,848) | (34,563) |
Operating cash flows from discontinued operations | 1,846,005 | |
Net cash and cash equivalents provided by (used in) operating activities | (18,442,064) | 1,957,861 |
INVESTING ACTIVITIES | ||
Purchases of investments | (27,565,227) | |
Proceeds from held-to-maturity investments | 36,961,012 | |
Purchase of property and equipment | (720,067) | (1,999,408) |
Acquisition of stores, net of cash acquired | (76,707) | (188,325) |
Advances on note receivable, net | (513,744) | |
Proceeds from installment sale receivable | 185,963 | |
Proceeds from the disposal of property, plant and equipment | 10,000 | 16,959 |
Cash received from discontinued operations | 4,368,350 | |
Investing activities of discontinued operations | (30,023) | |
Net cash and cash equivalents provided by investing activities | 8,794,974 | 1,653,809 |
FINANCING ACTIVITIES | ||
Payments on notes payable - short-term, net | (51,992) | (63,303) |
Payments on line of credit, net | (998,426) | |
Payments on notes payable - long-term | (2,457,450) | |
Common stock redemption | (9,697) | (480,928) |
Payments on capital leases | (35,130) | (31,461) |
Payment of dividends to noncontrolling interests | (601,200) | |
Payment of dividends | (1,408,650) | (704,325) |
Financing activities of discontinued operations | (4,407,355) | |
Net cash and cash equivalents used in financing activities | (2,106,669) | (9,143,248) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (11,753,759) | (5,531,578) |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 21,295,819 | 14,159,975 |
End of period | 9,542,060 | 8,628,397 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Income taxes paid | 19,151,512 | 3,648,839 |
Interest paid | 103,025 | 354,601 |
Noncash investing and financing activities: | ||
Note receivable balance applied to acquisition of stores | 3,433,856 | |
Financed acquisition of stores (Note 8) | 789,216 | |
Noncontrolling interests' equity contribution in acquisition of stores | $ 1,550,724 |
Basis of Presentation, Nature o
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies | 1. Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies – Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the Condensed Consolidated Financial Statements and footnotes thereto included in our Form 10-K for the year ended December 31, 2017. The condensed consolidated balance sheet at December 31, 2017, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. Nature of Business Western Capital Resources, Inc. (WCR) is a parent company owning operating subsidiaries, with percentage owned shown parenthetically, as summarized below. ● Cellular Retail ○ PQH Wireless, Inc. (PQH) (100%) – operates 206 cellular retail stores as of September 30, 2018 (149 100% owned plus 57 through a 70% owned subsidiary), as an exclusive dealer of the Cricket brand. ● Direct to Consumer ○ J & P Park Acquisitions, Inc. (JPPA) (100%) – an online and direct marketing distribution retailer of 1) live plants, seeds, holiday gifts and garden accessories selling its products under Park Seed, Jackson & Perkins, and Wayside Gardens brand names and 2) home improvement and restoration products operating under the Van Dyke’s Restorers brand, as well as a seed wholesaler under the Park Wholesale brand. ○ J & P Real Estate, LLC (JPRE) (100%) – owns real estate utilized as JPPA’s distribution and warehouse facility and the corporate offices of JPPA. ● Consumer Finance ○ Wyoming Financial Lenders, Inc. (WFL) (100%) – owns and operates “payday” stores (41 as of September 30, 2018) in seven states (Colorado, Iowa, Kansas, Nebraska, North Dakota, Wisconsin and Wyoming) providing sub-prime short-term uncollateralized non-recourse “cash advance” or “payday” loans typically ranging from $100 to $500 with a maturity of generally two to four weeks, sub-prime short-term uncollateralized non-recourse installment loans typically ranging from $300 to $800 with a maturity of six months, check cashing and other money services to individuals. ○ Express Pawn, Inc. (EPI) (100%) – owns and operates retail pawn stores (three as of September 30, 2018) in Nebraska and Iowa providing collateralized non-recourse pawn loans and retail sales of merchandise obtained from forfeited pawn loans or purchased from customers. ● Discontinued Operations 2017 - Franchise ○ AlphaGraphics, Inc. (AGI) – franchisor of domestic and international AlphaGraphics BusinessCenters. AGI was sold on October 3, 2017. References in these financial statement notes to “Company” or “we” refer to Western Capital Resources, Inc. and its subsidiaries. References to specific companies within our enterprise, such as” “PQH,” “JPPA,” “JPRE,” “WFL,” “EPI” or “AGI” are references only to those companies. Basis of Consolidation The consolidated financial statements include the accounts of the WCR, its wholly owned subsidiaries and other entities in which the Company owns a controlling financial interest. For financial interests in which the Company owns a controlling financial interest, the Company applies the provisions of Financial Accounting Standards Board Accounting Standards Codification (ASC) 810, “Consolidation” applicable to reporting the equity and net income or loss attributable to noncontrolling interests. All significant intercompany balances and transactions of the Company have been eliminated in consolidation, with the exception of the presentation of dividends received from discontinued subsidiary operations in the Condensed Consolidated Statement of Cash Flows. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant management estimates relate to the loans and accounts receivable allowance, carrying value and impairment of long-lived goodwill and intangible assets, inventory valuation and obsolescence, estimated useful lives of property and equipment, gift certificate and merchandise credits liability and deferred taxes and tax uncertainties. Reclassifications Certain Statements of Operations and Statements of Cash Flows reclassifications have been made in the presentation of our prior financial statements and accompanying notes to conform to the presentation as of and for the three and nine months ended September 30, 2018. In accordance with ASC 205-20-45-6, interest on debt required to be paid as a result of our Franchise segment disposal transaction has been allocated to discontinued operations and, in accordance with ASC 205-20-45-9, general corporate overhead has not been allocated to discontinued operations. These re-allocations and related income tax have been made in the presentation of our prior financial statements and accompanying notes. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new revenue recognition standard that supersedes nearly all existing revenue recognition guidance under US GAAP. This standard is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted this standard as of January 1, 2018 applying it on a retrospective basis as of the date adopted and determined it had no impact on our financial condition, results of operations and consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), related to recognition of lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that annual period, with early adoption permitted and to be applied using a modified retrospective approach. The Company is currently evaluating the impact the ASU will have on our financial condition, results of operations and consolidated financial statements and expects its adoption to have a material impact on our financial condition due to a material addition of operating lease assets and liabilities in accordance with the ASU. No other new accounting pronouncements issued or effective during the fiscal year have had or are expected to have a material impact on the consolidated financial statements. |
Risks Inherent in the Operating
Risks Inherent in the Operating Environment | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Risks Inherent in the Operating Environment | 2. Risks Inherent in the Operating Environment – Regulatory The Company’s Consumer Finance segment activities are highly regulated under numerous federal, state, and local laws, regulations and rules, which are subject to change. New laws, regulations or rules could be enacted or issued, interpretations of existing laws, regulations or rules may change and enforcement action by regulatory agencies may intensify. Over the past several years, consumer advocacy groups and certain media reports have advocated governmental and regulatory action to prohibit or severely restrict sub-prime lending activities of the kind conducted by the Company. After several years of research, debate, and public hearings, in October 2017 the U.S. Consumer Financial Protection Bureau (CFPB) issued new rules for payday lending. The proposed rules, scheduled to go into effect in August 2019, would impose significant restrictions on the industry, and it is expected that a large number of lenders would be forced to close their stores. The CFPB’s studies projected a reduction in the number of lenders by 50%, while industry studies forecast a much higher attrition rate. At this time it is uncertain whether the rule will be implemented as announced, rewritten with more favorable terms for the industry, or thrown out altogether. If the rule is implemented as written, it could have a significant and negative impact on business conducted within our Consumer Finance segment. The above rule or any other adverse change in present federal, state, or local laws or regulations that govern or otherwise affect lending could result in the Consumer Finance segment’s curtailment or cessation of operations in certain or all jurisdictions or locations. Furthermore, any failure to comply with any applicable federal, state or local laws or regulations could result in fines, litigation, closure of one or more store locations or negative publicity. Any such change or failure would have a corresponding impact on the Company’s and segment’s results of operations and financial condition, primarily through a decrease in revenues resulting from the cessation or curtailment of operations, decrease in operating income through increased legal expenditures or fines, and could also negatively affect the Company’s general business prospects due to lost or decreased operating income or if negative publicity affects its ability to obtain additional financing as needed. In addition, the passage of federal, state or local laws and regulations or changes in interpretations of them could, at any point, essentially prohibit the Consumer Finance segment from conducting its lending business in its current form. Any such legal or regulatory change would have a material and adverse effect on the Company, its operating results, financial condition and prospects, and perhaps even the viability of the Consumer Finance segment. |
Cash Equivalents and Investment
Cash Equivalents and Investments | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Investments | 3. Cash Equivalents and Investments – The following table shows the Company’s cash equivalents and held-to-maturity investments, by significant investment category, recorded as cash equivalents or short- and long-term investments: September 30, 2018 December 31, 2017 Cash and cash equivalents Operating accounts $ 9,424,670 $ 10,524,923 Certificates of deposit — 750,000 Money Market Mutual Funds - U.S. Treasury obligations 117,390 10,020,896 Subtotal 9,542,060 21,295,819 Held to Maturity Investments Certificates of deposit 15,328,405 13,250,000 T-Bills and Notes 10,629,386 22,042,902 Subtotal 25,957,791 35,292,902 TOTAL $ 35,499,851 $ 56,588,721 As of September 30, 2018, held to maturity securities consisted of the following: Cost Accrued Interest Amortized Discount Amortized Cost Unrealized Estimated Certificates of Deposit $ 15,250,000 $ 78,405 $ — $ 15,328,405 $ (110,330 ) $ 15,218,075 Treasury Bills and Notes $ 10,564,159 $ 8,496 $ 56,731 $ 10,629,386 $ (21,886 ) $ 10,607,500 |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Loans Receivable | 4. Loans Receivable – The Consumer Finance segment’s outstanding loans receivable aging is as follows: September 30, 2018 Payday Installment Pawn & Title Total Current $ 3,310,116 $ 275,468 $ 306,350 $ 3,891,934 1-30 254,673 49,657 — 304,330 31-60 200,400 21,124 — 221,524 61-90 124,066 12,208 — 136,274 91-120 106,092 6,790 — 112,882 121-150 86,742 5,602 — 92,344 151-180 78,836 9,730 — 88,566 4,160,925 380,579 306,350 4,847,854 Less Allowance (677,000 ) (59,000 ) — (736,000 ) $ 3,483,925 $ 321,579 $ 306,350 $ 4,111,854 December 31, 2017 Payday Installment Pawn & Title Total Current $ 3,550,077 $ 271,926 $ 318,361 $ 4,140,364 1-30 216,376 47,356 — 263,732 31-60 187,916 27,766 — 215,682 61-90 150,278 17,976 — 168,254 91-120 110,943 11,870 — 122,813 121-150 131,171 4,748 — 135,919 151-180 93,222 3,017 — 96,239 4,439,983 384,659 318,361 5,143,003 Less Allowance (745,000 ) (88,000 ) — (833,000 ) $ 3,694,983 $ 296,659 $ 318,361 $ 4,310,003 |
Loans Receivable Allowance
Loans Receivable Allowance | 9 Months Ended |
Sep. 30, 2018 | |
Provision for Loan and Lease Losses [Abstract] | |
Loans Receivable Allowance | 5. Loans Receivable Allowance – A rollforward of the Consumer Finance segment’s loans receivable allowance is as follows: Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Loans receivable allowance, beginning of period $ 833,000 $ 1,036,000 Provision for loan losses charged to expense 827,751 1,122,144 Charge-offs, net (924,751 ) (1,325,144 ) Loans receivable allowance, end of period $ 736,000 $ 833,000 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | 6. Accounts Receivable – A breakdown of accounts receivables by segment is as follows: September 30, 2018 Cellular Direct to Consumer Total Accounts receivable $ 339,315 $ 592,106 $ 8,887 $ 940,308 Less allowance — (18,000 ) — (18,000 ) Net account receivable $ 339,315 $ 574,106 $ 8,887 $ 922,308 December 31, 2017 Cellular Direct to Consumer Total Accounts receivable $ 399,459 $ 365,476 $ 15,136 $ 780,071 Less allowance — (16,000 ) — (16,000 ) Net account receivable $ 399,459 $ 349,476 $ 15,136 $ 764,071 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | 7. Inventory – Finished goods inventory, net of allowance, by segment consists of the following: September 30, 2018 December 31, 2017 Cellular Retail $ 4,454,231 $ 5,287,932 Direct to Consumer 3,472,897 2,988,052 Consumer Finance 896,847 854,858 $ 8,823,975 $ 9,130,842 |
Notes Payable - Long Term
Notes Payable - Long Term | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable - Long Term | 8. Notes Payable – Long Term – September 30, 2018 December 31, 2017 Subsidiary subordinated note pa yab le to seller with monthly interest only payments at 6%, guaranteed by PQH , maturing August 5 22 the . 789,216 789,216 Total 789,216 789,216 Less current maturities — — $ 789,216 $ 789,216 The Company is party to a Credit Agreement with a financial institution entered into on April 22, 2016 and last amended on April 26, 2018. The Credit Agreement provides the Company with a revolving line of credit facility in an aggregate amount up to $3,000,000, having a maturity date of April 21, 2020 and an acquisition loan facility in an aggregate amount of up to $9,000,000, having a maturity date of April 21, 2020. The revolver and the acquisition loan facility bear interest at a floating per annum rate equal to one-month LIBOR plus 3.50%, adjusted on a monthly basis. Funds advanced under the acquisition loan facility mature five years from the date of advance. At September 30, 2018, the entire $12,000,000 of credit was available under the credit facilities. See Note 14 for additional terms, conditions and amendments related to the Credit Agreement. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes – The provision for income taxes for continuing operations is 30.8% and 34.3% of income (loss) before the provision for income taxes for the nine month period ended September 30, 2018 and 2017, respectively. The significant difference in rate is the result of the 2018 net income attributable to noncontrolling interests not being subjected to income tax at the corporate level. Rather the “passthrough” taxable income is taxed to the noncontrolling interests at an individual level. |
Cash Dividends
Cash Dividends | 9 Months Ended |
Sep. 30, 2018 | |
Dividends [Abstract] | |
Cash Dividends | 10. Cash Dividends – Our Board of Directors declared the following dividends payable in 2018: Date Declared Record Date Dividend Per Share Payment Date January 18, 2018 February 9, 2018 $ 0.05 February 14, 2018 May 2, 2018 May 17, 2018 $ 0.05 May 24, 2018 July 27, 2018 August 19, 2018 $ 0.05 August 26, 2018 |
Other Operating Expense
Other Operating Expense | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense | 11. Other Operating Expense – A breakout of other expense is as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Bank fees $ 355,333 $ 379,247 $ 1,391,710 $ 1,484,462 Collection costs 78,708 94,198 244,900 275,620 Insurance 187,877 260,420 591,506 757,691 Management and advisory fees 202,146 274,710 592,655 618,853 Professional and consulting fees 415,376 555,978 1,320,387 1,704,804 Supplies 165,978 341,807 553,468 1,080,324 Other 1,185,880 644,366 3,172,557 2,037,642 $ 2,591,298 $ 2,550,726 $ 7,867,183 $ 7,959,396 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 12. Discontinued Operations – As more fully disclosed in Note 19 of the Notes to Consolidated Financial Statements for the year ended December 31, 2017, on October 3, 2017 the Company closed on the sale of its franchise segment. In accordance with the provisions of ASC 205-20, the Company has not included the results of operations of the Franchise segment in the results from continuing operations. The results of operations for this business have been reflected as discontinued operations in the unaudited Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2017, and consist of the following: Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 REVENUES OF DISCONTINUED OPERATIONS $ 4,321,834 $ 12,298,655 COST OF REVENUES OF DISCONTINUED OPERATIONS 720,813 2,098,486 GROSS PROFIT OF DISCONTINUED OPERATIONS 3,601,021 10,200,169 OPERATING EXPENSES OF DISCONTINUED OPERATIONS: Salaries, wages and benefits 1,081,618 3,194,025 Occupancy 58,967 140,428 Advertising, marketing and development 251,748 436,566 Depreciation 25,437 74,263 Amortization 86,120 258,356 Other 844,972 2,027,299 2,348,862 6,130,937 OPERATING INCOME OF DISCONTINUED OPERATIONS 1,252,159 4,069,232 OTHER INCOME (EXPENSE) OF DISCONTINUED OPERATIONS Interest expense (54,285 ) (193,774 ) (54,285 ) (193,774 ) INCOME BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS 1,197,874 3,875,458 PROVISION FOR INCOME TAXES OF DISCONTINUED OPERATIONS 451,000 1,468,000 NET INCOME OF DISCONTINUED OPERATIONS 746,874 2,407,458 LESS NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (4,925 ) (17,446 ) NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS $ 741,949 $ 2,390,012 In accordance with the provisions of ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations of the Franchise segment in the Consolidated Statements of Cash Flows. The cash flow activities from discontinued operations have been reflected as discontinued operations in the Consolidated Statements of Cash Flows for the nine month period ended September 30, 2017, and consisted of the following: Nine Months Ended September 30, 2017 DISCONTINUED OPERATING ACTIVITIES Net income of discontinued operations $ 2,407,458 Adjustments to reconcile net income of discontinued operations to net cash provided by operating activities of discontinued operations: Depreciation 74,263 Amortization 258,356 Share based compensation 6,726 Deferred income taxes (138,000 ) Changes in operating assets and liabilities: Accounts receivable (286,552 ) Prepaid expenses and other assets 30,755 Accounts payable and accrued expenses (534,655 ) Deferred revenue and other current liabilities (38,190 ) Other liabilities – long-term 65,844 Net cash provided by operating activities of discontinued operations $ 1,846,005 INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS Purchase of property, plant and equipment (30,023 ) Net cash used in investing activities of discontinued operations $ (30,023 ) FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS Principal payments on capital lease obligations (7,620 ) Dividends to shareholders (4,399,735 ) Net cash used in financing activities of discontinued operations $ (4,407,355 ) |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information – Segment information related to the three and nine month periods ended September 30, 2018 and 2017 for continuing operations is presented below: Three Months Ended September 30, 2018 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 16,704 $ 4,920 $ 2,736 $ — $ 24,360 Net income (loss) $ (133 ) $ (982 ) $ 281 $ (150 ) $ (984 ) Expenditures for segmented assets $ 148 $ 15 $ 8 $ — $ 171 Three Months Ended September 30, 2017 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 18,301 $ 4,983 $ 2,849 $ — $ 26,133 Net income (loss) $ (190 ) $ (462 ) $ 326 $ (300 ) $ (626 ) Expenditures for segmented assets $ 6,408 $ 138 $ 1 $ 8 $ 6,555 Nine Months Ended September 30, 2018 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 49,415 $ 27,310 $ 7,874 $ — $ 84,599 Net income (loss) $ (989 ) $ (128 ) $ 832 $ (584 ) $ (869 ) Total segment assets $ 24,031 $ 13,098 $ 7,609 $ 35,624 $ 80,362 Expenditures for segmented assets $ 375 $ 400 $ 22 $ — $ 797 Nine Months Ended September 30, 2017 (in thousands) Cellular Direct to Consumer Corporate Discontinued Operations Total Revenue from external customers $ 52,432 $ 29,014 $ 8,136 $ — $ 89,582 Net income (loss) $ 184 $ 1,506 $ 781 $ (739 ) $ 1,732 Total segment assets $ 28,217 $ 13,112 $ 8,079 $ 2,670 $ 8,684 $ 60,762 Expenditures for segmented assets $ 7,612 $ 341 $ 1 $ 8 $ 7,962 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies – Employment Agreements Pursuant to the Company’s numerous employment agreements, bonuses for continuing operation of approximately $79,000 and $292,000 were accrued for the three and nine month periods ended September 30, 2018, respectively. Credit Facility The Company is party to a Credit Agreement with a financial institution. Certain Company subsidiaries are guarantors of the borrowings and obligations under the Credit Agreement. All borrowings under the Credit Agreement are secured by substantially all assets of WCR and the guarantor subsidiaries. The Credit Agreement requires WCR to meet certain financial tests. On April 26, 2018 the Company entered into a Fourth Loan Modification Agreement related to the Credit Agreement with a financial institution, pursuant to which, among other things, the maturity date of the Credit Agreement was extended to April 21, 2020 and the financial covenants were modified by (1) removing the consolidated leverage ratio and consolidated fixed charge coverage ratio covenants and (2) adding a minimum liquidity covenant. Subject to certain exceptions, the Credit Agreement contains covenants limiting the Company’s ability to (or to permit the guarantor subsidiaries to) merge or consolidate with, or engage in a sale of substantially all assets to, any party, but WCR or any guarantor subsidiary generally may nonetheless merge with another party if (i) WCR or guarantor subsidiary is the entity surviving such merger, and (ii) immediately after giving effect to such merger, no default shall have occurred and be continuing under the Credit Agreement. Subject to certain exceptions, the Credit Agreement also contains covenants limiting WCR’s ability to (or to permit the guarantor subsidiaries to) create liens on assets, incur additional indebtedness, make certain types of investments, and pay dividends or make certain other types of restricted payments, but WCR may nonetheless pay dividends to its shareholders if (a) there are no outstanding loans or unpaid interest under the revolving credit facility, and (b) no default shall have occurred and be continuing under the Credit Agreement. Some covenant waivers were granted by the financial institution during the nine month period ended September 30, 2018. Assigned Leases The Company’s Cellular Retail segment has transferred to other dealers the operations of 35 locations where we are a party to non-cancelable operating leases and where a release has not been obtained from the lessor. Minimum lease payments under these leases are approximately $2,328,000 as of September 30, 2018. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events – Release of Escrow Funds In October 2018, we received $3,295,414, the scheduled release of 50% of the funds held in escrow relating to the 2017 sale of our Franchise segment, together with interest earned. Dividend Declared Our Board of Directors declared the following dividend: Date declared November 9, 2018 Record date December 4, 2018 Date payable December 14, 2018 Dividend per share of common stock $ 0.05 We evaluated all events or transactions that occurred after September 30, 2018 up through the date we issued these financial statements. During this period we did not have any material subsequent events that impacted our financial statements. |
Basis of Presentation, Nature_2
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the Condensed Consolidated Financial Statements and footnotes thereto included in our Form 10-K for the year ended December 31, 2017. The condensed consolidated balance sheet at December 31, 2017, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. |
Nature of Business | Nature of Business Western Capital Resources, Inc. (WCR) is a parent company owning operating subsidiaries, with percentage owned shown parenthetically, as summarized below. ● Cellular Retail ○ PQH Wireless, Inc. (PQH) (100%) – operates 206 cellular retail stores as of September 30, 2018 (149 100% owned plus 57 through a 70% owned subsidiary), as an exclusive dealer of the Cricket brand. ● Direct to Consumer ○ J & P Park Acquisitions, Inc. (JPPA) (100%) – an online and direct marketing distribution retailer of 1) live plants, seeds, holiday gifts and garden accessories selling its products under Park Seed, Jackson & Perkins, and Wayside Gardens brand names and 2) home improvement and restoration products operating under the Van Dyke’s Restorers brand, as well as a seed wholesaler under the Park Wholesale brand. ○ J & P Real Estate, LLC (JPRE) (100%) – owns real estate utilized as JPPA’s distribution and warehouse facility and the corporate offices of JPPA. ● Consumer Finance ○ Wyoming Financial Lenders, Inc. (WFL) (100%) – owns and operates “payday” stores (41 as of September 30, 2018) in seven states (Colorado, Iowa, Kansas, Nebraska, North Dakota, Wisconsin and Wyoming) providing sub-prime short-term uncollateralized non-recourse “cash advance” or “payday” loans typically ranging from $100 to $500 with a maturity of generally two to four weeks, sub-prime short-term uncollateralized non-recourse installment loans typically ranging from $300 to $800 with a maturity of six months, check cashing and other money services to individuals. ○ Express Pawn, Inc. (EPI) (100%) – owns and operates retail pawn stores (three as of September 30, 2018) in Nebraska and Iowa providing collateralized non-recourse pawn loans and retail sales of merchandise obtained from forfeited pawn loans or purchased from customers. ● Discontinued Operations 2017 - Franchise ○ AlphaGraphics, Inc. (AGI) – franchisor of domestic and international AlphaGraphics BusinessCenters. AGI was sold on October 3, 2017. References in these financial statement notes to “Company” or “we” refer to Western Capital Resources, Inc. and its subsidiaries. References to specific companies within our enterprise, such as” “PQH,” “JPPA,” “JPRE,” “WFL,” “EPI” or “AGI” are references only to those companies. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the WCR, its wholly owned subsidiaries and other entities in which the Company owns a controlling financial interest. For financial interests in which the Company owns a controlling financial interest, the Company applies the provisions of Financial Accounting Standards Board Accounting Standards Codification (ASC) 810, “Consolidation” applicable to reporting the equity and net income or loss attributable to noncontrolling interests. All significant intercompany balances and transactions of the Company have been eliminated in consolidation, with the exception of the presentation of dividends received from discontinued subsidiary operations in the Condensed Consolidated Statement of Cash Flows. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant management estimates relate to the loans and accounts receivable allowance, carrying value and impairment of long-lived goodwill and intangible assets, inventory valuation and obsolescence, estimated useful lives of property and equipment, gift certificate and merchandise credits liability and deferred taxes and tax uncertainties. |
Reclassifications | Reclassifications Certain Statements of Operations and Statements of Cash Flows reclassifications have been made in the presentation of our prior financial statements and accompanying notes to conform to the presentation as of and for the three and nine months ended September 30, 2018. In accordance with ASC 205-20-45-6, interest on debt required to be paid as a result of our Franchise segment disposal transaction has been allocated to discontinued operations and, in accordance with ASC 205-20-45-9, general corporate overhead has not been allocated to discontinued operations. These re-allocations and related income tax have been made in the presentation of our prior financial statements and accompanying notes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new revenue recognition standard that supersedes nearly all existing revenue recognition guidance under US GAAP. This standard is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted this standard as of January 1, 2018 applying it on a retrospective basis as of the date adopted and determined it had no impact on our financial condition, results of operations and consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), related to recognition of lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that annual period, with early adoption permitted and to be applied using a modified retrospective approach. The Company is currently evaluating the impact the ASU will have on our financial condition, results of operations and consolidated financial statements and expects its adoption to have a material impact on our financial condition due to a material addition of operating lease assets and liabilities in accordance with the ASU. No other new accounting pronouncements issued or effective during the fiscal year have had or are expected to have a material impact on the consolidated financial statements. |
Cash Equivalents and Investme_2
Cash Equivalents and Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash equivalents or short- and long-term investments | The following table shows the Company’s cash equivalents and held-to-maturity investments, by significant investment category, recorded as cash equivalents or short- and long-term investments: September 30, 2018 December 31, 2017 Cash and cash equivalents Operating accounts $ 9,424,670 $ 10,524,923 Certificates of deposit — 750,000 Money Market Mutual Funds - U.S. Treasury obligations 117,390 10,020,896 Subtotal 9,542,060 21,295,819 Held to Maturity Investments Certificates of deposit 15,328,405 13,250,000 T-Bills and Notes 10,629,386 22,042,902 Subtotal 25,957,791 35,292,902 TOTAL $ 35,499,851 $ 56,588,721 |
Schedule of held to maturity securities | As of September 30, 2018, held to maturity securities consisted of the following: Cost Accrued Interest Amortized Discount Amortized Cost Unrealized Estimated Certificates of Deposit $ 15,250,000 $ 78,405 $ — $ 15,328,405 $ (110,330 ) $ 15,218,075 Treasury Bills and Notes $ 10,564,159 $ 8,496 $ 56,731 $ 10,629,386 $ (21,886 ) $ 10,607,500 |
Loans Receivable (Table)
Loans Receivable (Table) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of outstanding loans receivable aging | The Consumer Finance segment’s outstanding loans receivable aging is as follows: September 30, 2018 Payday Installment Pawn & Title Total Current $ 3,310,116 $ 275,468 $ 306,350 $ 3,891,934 1-30 254,673 49,657 — 304,330 31-60 200,400 21,124 — 221,524 61-90 124,066 12,208 — 136,274 91-120 106,092 6,790 — 112,882 121-150 86,742 5,602 — 92,344 151-180 78,836 9,730 — 88,566 4,160,925 380,579 306,350 4,847,854 Less Allowance (677,000 ) (59,000 ) — (736,000 ) $ 3,483,925 $ 321,579 $ 306,350 $ 4,111,854 December 31, 2017 Payday Installment Pawn & Title Total Current $ 3,550,077 $ 271,926 $ 318,361 $ 4,140,364 1-30 216,376 47,356 — 263,732 31-60 187,916 27,766 — 215,682 61-90 150,278 17,976 — 168,254 91-120 110,943 11,870 — 122,813 121-150 131,171 4,748 — 135,919 151-180 93,222 3,017 — 96,239 4,439,983 384,659 318,361 5,143,003 Less Allowance (745,000 ) (88,000 ) — (833,000 ) $ 3,694,983 $ 296,659 $ 318,361 $ 4,310,003 |
Loans Receivable Allowance (Tab
Loans Receivable Allowance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Provision for Loan and Lease Losses [Abstract] | |
Schedule of loans receivable allowance | A rollforward of the Consumer Finance segment’s loans receivable allowance is as follows: Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Loans receivable allowance, beginning of period $ 833,000 $ 1,036,000 Provision for loan losses charged to expense 827,751 1,122,144 Charge-offs, net (924,751 ) (1,325,144 ) Loans receivable allowance, end of period $ 736,000 $ 833,000 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivables | A breakdown of accounts receivables by segment is as follows: September 30, 2018 Cellular Direct to Consumer Total Accounts receivable $ 339,315 $ 592,106 $ 8,887 $ 940,308 Less allowance — (18,000 ) — (18,000 ) Net account receivable $ 339,315 $ 574,106 $ 8,887 $ 922,308 December 31, 2017 Cellular Direct to Consumer Total Accounts receivable $ 399,459 $ 365,476 $ 15,136 $ 780,071 Less allowance — (16,000 ) — (16,000 ) Net account receivable $ 399,459 $ 349,476 $ 15,136 $ 764,071 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Finished goods inventory, net of allowance, by segment consists of the following: September 30, 2018 December 31, 2017 Cellular Retail $ 4,454,231 $ 5,287,932 Direct to Consumer 3,472,897 2,988,052 Consumer Finance 896,847 854,858 $ 8,823,975 $ 9,130,842 |
Notes Payable - Long Term (Tabl
Notes Payable - Long Term (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | September 30, 2018 December 31, 2017 Subsidiary subordinated note pa yab le to seller with monthly interest only payments at 6%, guaranteed by PQH , maturing August 5 22 the . 789,216 789,216 Total 789,216 789,216 Less current maturities — — $ 789,216 $ 789,216 |
Cash Dividends (Tables)
Cash Dividends (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Dividends [Abstract] | |
Schedule of dividends payable | Our Board of Directors declared the following dividends payable in 2018: Date Declared Record Date Dividend Per Share Payment Date January 18, 2018 February 9, 2018 $ 0.05 February 14, 2018 May 2, 2018 May 17, 2018 $ 0.05 May 24, 2018 July 27, 2018 August 19, 2018 $ 0.05 August 26, 2018 |
Other Operating Expense (Tables
Other Operating Expense (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of other operating expense | A breakout of other expense is as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Bank fees $ 355,333 $ 379,247 $ 1,391,710 $ 1,484,462 Collection costs 78,708 94,198 244,900 275,620 Insurance 187,877 260,420 591,506 757,691 Management and advisory fees 202,146 274,710 592,655 618,853 Professional and consulting fees 415,376 555,978 1,320,387 1,704,804 Supplies 165,978 341,807 553,468 1,080,324 Other 1,185,880 644,366 3,172,557 2,037,642 $ 2,591,298 $ 2,550,726 $ 7,867,183 $ 7,959,396 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of statements | The results of operations for this business have been reflected as discontinued operations in the unaudited Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2017, and consist of the following: Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 REVENUES OF DISCONTINUED OPERATIONS $ 4,321,834 $ 12,298,655 COST OF REVENUES OF DISCONTINUED OPERATIONS 720,813 2,098,486 GROSS PROFIT OF DISCONTINUED OPERATIONS 3,601,021 10,200,169 OPERATING EXPENSES OF DISCONTINUED OPERATIONS: Salaries, wages and benefits 1,081,618 3,194,025 Occupancy 58,967 140,428 Advertising, marketing and development 251,748 436,566 Depreciation 25,437 74,263 Amortization 86,120 258,356 Other 844,972 2,027,299 2,348,862 6,130,937 OPERATING INCOME OF DISCONTINUED OPERATIONS 1,252,159 4,069,232 OTHER INCOME (EXPENSE) OF DISCONTINUED OPERATIONS Interest expense (54,285 ) (193,774 ) (54,285 ) (193,774 ) INCOME BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS 1,197,874 3,875,458 PROVISION FOR INCOME TAXES OF DISCONTINUED OPERATIONS 451,000 1,468,000 NET INCOME OF DISCONTINUED OPERATIONS 746,874 2,407,458 LESS NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (4,925 ) (17,446 ) NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS $ 741,949 $ 2,390,012 The cash flow activities from discontinued operations have been reflected as discontinued operations in the Consolidated Statements of Cash Flows for the nine month period ended September 30, 2017, and consisted of the following: Nine Months Ended September 30, 2017 DISCONTINUED OPERATING ACTIVITIES Net income of discontinued operations $ 2,407,458 Adjustments to reconcile net income of discontinued operations to net cash provided by operating activities of discontinued operations: Depreciation 74,263 Amortization 258,356 Share based compensation 6,726 Deferred income taxes (138,000 ) Changes in operating assets and liabilities: Accounts receivable (286,552 ) Prepaid expenses and other assets 30,755 Accounts payable and accrued expenses (534,655 ) Deferred revenue and other current liabilities (38,190 ) Other liabilities – long-term 65,844 Net cash provided by operating activities of discontinued operations $ 1,846,005 INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS Purchase of property, plant and equipment (30,023 ) Net cash used in investing activities of discontinued operations $ (30,023 ) FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS Principal payments on capital lease obligations (7,620 ) Dividends to shareholders (4,399,735 ) Net cash used in financing activities of discontinued operations $ (4,407,355 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Segment information related to the three and nine month periods ended September 30, 2018 and 2017 for continuing operations is presented below: Three Months Ended September 30, 2018 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 16,704 $ 4,920 $ 2,736 $ — $ 24,360 Net income (loss) $ (133 ) $ (982 ) $ 281 $ (150 ) $ (984 ) Expenditures for segmented assets $ 148 $ 15 $ 8 $ — $ 171 Three Months Ended September 30, 2017 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 18,301 $ 4,983 $ 2,849 $ — $ 26,133 Net income (loss) $ (190 ) $ (462 ) $ 326 $ (300 ) $ (626 ) Expenditures for segmented assets $ 6,408 $ 138 $ 1 $ 8 $ 6,555 Nine Months Ended September 30, 2018 (in thousands) Cellular Direct to Consumer Corporate Total Revenue from external customers $ 49,415 $ 27,310 $ 7,874 $ — $ 84,599 Net income (loss) $ (989 ) $ (128 ) $ 832 $ (584 ) $ (869 ) Total segment assets $ 24,031 $ 13,098 $ 7,609 $ 35,624 $ 80,362 Expenditures for segmented assets $ 375 $ 400 $ 22 $ — $ 797 Nine Months Ended September 30, 2017 (in thousands) Cellular Direct to Consumer Corporate Discontinued Operations Total Revenue from external customers $ 52,432 $ 29,014 $ 8,136 $ — $ 89,582 Net income (loss) $ 184 $ 1,506 $ 781 $ (739 ) $ 1,732 Total segment assets $ 28,217 $ 13,112 $ 8,079 $ 2,670 $ 8,684 $ 60,762 Expenditures for segmented assets $ 7,612 $ 341 $ 1 $ 8 $ 7,962 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Schedule of dividends payable | Our Board of Directors declared the following dividend: Date declared November 9, 2018 Record date December 4, 2018 Date payable December 14, 2018 Dividend per share of common stock $ 0.05 |
Basis of Presentation, Nature_3
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies (Details Narrative) | Sep. 30, 2018N |
PQH Wireless, Inc. [Member] | Cellular Retail [Member] | |
Number of stores | 206 |
Percentage of equity method investment | 100.00% |
PQH Wireless, Inc. [Member] | Cellular Retail [Member] | PQH South LLC. [Member] | |
Number of stores | 57 |
Percentage of equity method investment | 70.00% |
PQH Wireless, Inc. [Member] | Cellular Retail [Member] | PQH Other Subsidiary [Member] | |
Number of stores | 149 |
Percentage of equity method investment | 100.00% |
JPPA [Member] | Direct to Consumer [Member] | |
Percentage of equity method investment | 100.00% |
JPRE [Member] | Direct to Consumer [Member] | |
Percentage of equity method investment | 100.00% |
Wyoming Financial Lenders, Inc. [Member] | Consumer Finance [Member] | |
Number of stores | 41 |
Percentage of equity method investment | 100.00% |
Number of states in which entity operates | 7 |
Wyoming Financial Lenders, Inc. [Member] | Consumer Finance [Member] | Minimum [Member] | Payday [Member] | |
Number of states in which entity operates | 100 |
Wyoming Financial Lenders, Inc. [Member] | Consumer Finance [Member] | Minimum [Member] | Installment [Member] | |
Number of states in which entity operates | 300 |
Wyoming Financial Lenders, Inc. [Member] | Consumer Finance [Member] | Maximum [Member] | Payday [Member] | |
Number of states in which entity operates | 500 |
Wyoming Financial Lenders, Inc. [Member] | Consumer Finance [Member] | Maximum [Member] | Installment [Member] | |
Number of states in which entity operates | 800 |
Express Pawn, Inc. [Member] | Consumer Finance [Member] | |
Number of stores | 3 |
Percentage of equity method investment | 100.00% |
Risks Inherent in the Operati_2
Risks Inherent in the Operating Environment (Details Narrative) | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Description of attrition rate | <font style="font: 10pt Times New Roman, Times, Serif">The CFPB’s studies projected a reduction in the number of lenders by 50%, while industry studies forecast a much higher attrition rate.</font></p>" id="sjs-B4"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><font style="font: 10pt Times New Roman, Times, Serif">The CFPB’s studies projected a reduction in the number of lenders by 50%, while industry studies forecast a much higher attrition rate.</font></p> |
Cash Equivalents and Investme_3
Cash Equivalents and Investments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | ||||
Operating accounts | $ 9,424,670 | $ 10,524,923 | ||
Certificates of deposit | 750,000 | |||
Money Market Mutual Funds - U.S. Treasury obligations | 117,390 | 10,020,896 | ||
Subtotal | 9,542,060 | 21,295,819 | $ 8,628,397 | $ 14,159,975 |
Held to Maturity Investments | ||||
Certificates of deposit | 15,328,405 | 13,250,000 | ||
T-Bills and Notes | 10,629,386 | 22,042,902 | ||
Subtotal | 25,957,791 | 35,292,902 | ||
TOTAL | $ 35,499,851 | $ 56,588,721 |
Cash Equivalents and Investme_4
Cash Equivalents and Investments (Details 1) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Held to Maturity Investments | |
Certificates of deposit (Cost) | $ 15,250,000 |
Certificates of deposit (Accrued Interest) | 78,405 |
Certificates of deposit (Amortized Cost) | 15,328,405 |
Certificates of deposit (Unrealized Gain (Loss)) | (110,330) |
Certificates of deposit (Estimated Fair Value) | 15,218,075 |
Treasury Bills and Notes (Cost) | 10,564,159 |
Treasury Bills and Notes (Accrued Interest) | 8,496 |
Treasury Bills and Notes (Amortized Discount) | 56,731 |
Treasury Bills and Notes (Amortized cost) | 10,629,386 |
Treasury Bills and Notes (Unrealized Gain (Loss)) | (21,886) |
Treasury Bills and Notes (Estimated Fair Value) | $ 10,607,500 |
Loans Receivable (Details)
Loans Receivable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | $ 4,847,854 | $ 5,143,003 |
Less Allowance | (736,000) | (833,000) |
Notes, Loans and Financing Receivable, Net, current | 4,111,854 | 4,310,003 |
Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 4,160,925 | 4,439,983 |
Less Allowance | (677,000) | (745,000) |
Notes, Loans and Financing Receivable, Net, current | 3,483,925 | 3,694,983 |
Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 380,579 | 384,659 |
Less Allowance | (59,000) | (88,000) |
Notes, Loans and Financing Receivable, Net, current | 321,579 | 296,659 |
Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 306,350 | 318,361 |
Less Allowance | ||
Notes, Loans and Financing Receivable, Net, current | 306,350 | 318,361 |
Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 3,891,934 | 4,140,364 |
Current [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 3,310,116 | 3,550,077 |
Current [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 275,468 | 271,926 |
Current [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 306,350 | 318,361 |
1 To 30 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 304,330 | 263,732 |
1 To 30 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 254,673 | 216,376 |
1 To 30 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 49,657 | 47,356 |
1 To 30 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
31 to 60 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 221,524 | 215,682 |
31 to 60 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 200,400 | 187,916 |
31 to 60 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 21,124 | 27,766 |
31 to 60 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
61 To 90 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 136,274 | 168,254 |
61 To 90 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 124,066 | 150,278 |
61 To 90 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 12,208 | 17,976 |
61 To 90 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
91 To 120 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 112,882 | 122,813 |
91 To 120 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 106,092 | 110,943 |
91 To 120 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 6,790 | 11,870 |
91 To 120 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
121 To 150 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 92,344 | 135,919 |
121 To 150 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 86,742 | 131,171 |
121 To 150 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 5,602 | 4,748 |
121 To 150 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
151 To 180 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 88,566 | 96,239 |
151 To 180 Days [Member] | Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 78,836 | 93,222 |
151 To 180 Days [Member] | Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 9,730 | 3,017 |
151 To 180 Days [Member] | Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current |
Loans Receivable Allowance (Det
Loans Receivable Allowance (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Loans receivable allowance, beginning of period | $ 833,000 | $ 1,036,000 |
Provision for loan losses charged to expense | 827,751 | 1,122,144 |
Charge-offs, net | (924,751) | (1,325,144) |
Loans receivable allowance, end of period | $ 736,000 | $ 833,000 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts receivable | $ 940,308 | $ 780,071 |
Less allowance | (18,000) | (16,000) |
Net account receivable | 922,308 | 764,071 |
Cellular Retail [Member] | ||
Accounts receivable | 339,315 | 399,459 |
Less allowance | ||
Net account receivable | 339,315 | 399,459 |
Direct to Consumer [Member] | ||
Accounts receivable | 592,106 | 365,476 |
Less allowance | (18,000) | (16,000) |
Net account receivable | 574,106 | 349,476 |
Consumer Finance [Member] | ||
Accounts receivable | 8,887 | 15,136 |
Less allowance | ||
Net account receivable | $ 8,887 | $ 15,136 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Finished Goods | ||
TOTAL | $ 8,823,975 | $ 9,130,842 |
Cellular Retail [Member] | ||
Finished Goods | ||
TOTAL | 4,454,231 | 5,287,932 |
Direct to Consumer [Member] | ||
Finished Goods | ||
TOTAL | 3,472,897 | 2,988,052 |
Consumer Finance [Member] | ||
Finished Goods | ||
TOTAL | $ 896,847 | $ 854,858 |
Notes Payable - Long Term (Deta
Notes Payable - Long Term (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total | $ 789,216 | $ 789,216 |
Less current maturities | ||
Notes payable, noncurrent | 789,216 | 789,216 |
Note Payable to Seller [Member] | ||
Debt Instrument [Line Items] | ||
Total | $ 789,216 | $ 789,216 |
Notes Payable - Long Term (De_2
Notes Payable - Long Term (Details Narrative) - USD ($) | Apr. 22, 2016 | Sep. 30, 2018 |
Note Payable to Seller [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Aug. 5, 2022 | |
Stated interest rate | 6.00% | |
Credit Facilities Overview [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Apr. 21, 2020 | |
Description of variable rate | one-month LIBOR plus 3.50%</font></p>" id="sjs-B9"><p><font style="font: 10pt Times New Roman, Times, Serif">one-month LIBOR plus 3.50%</font></p> | |
Remaining maximum borrowing capacity | $ 12,000,000 | |
Credit Facilities Overview [Member] | Acquisition Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 9,000,000 | |
Description of maturity date | Mature five years from the date of advance.</font></p>" id="sjs-B14"><p><font style="font: 10pt Times New Roman, Times, Serif">Mature five years from the date of advance.</font></p> | |
Credit Facilities Overview [Member] | Revolver Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Remaining maximum borrowing capacity | $ 3,000,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes for continuing operations (in percent) | 30.80% | 34.30% |
Cash Dividends (Details)
Cash Dividends (Details) - $ / shares | Oct. 02, 2018 | Sep. 30, 2018 |
Date Declared | Nov. 9, 2018 | |
Record Date | Dec. 4, 2018 | |
Payment Date | Dec. 14, 2018 | |
Dividend Per Share | $ 0.05 | |
Dividends [Member] | ||
Date Declared | Jan. 18, 2018 | |
Record Date | Feb. 9, 2018 | |
Payment Date | Feb. 14, 2018 | |
Dividend Per Share | $ 0.05 | |
Dividends One [Member] | ||
Date Declared | May 2, 2018 | |
Record Date | May 17, 2018 | |
Payment Date | May 24, 2018 | |
Dividend Per Share | $ 0.05 | |
Dividends Two [Member] | ||
Date Declared | Jul. 27, 2018 | |
Record Date | Aug. 19, 2018 | |
Payment Date | Aug. 26, 2018 | |
Dividend Per Share | $ 0.05 |
Other Operating Expense (Detail
Other Operating Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Bank fees | $ 355,333 | $ 379,247 | $ 1,391,710 | $ 1,484,462 |
Collection costs | 78,708 | 94,198 | 244,900 | 275,620 |
Insurance | 187,877 | 260,420 | 591,506 | 757,691 |
Management and advisory fees | 202,146 | 274,710 | 592,655 | 618,853 |
Professional and consulting fees | 415,376 | 555,978 | 1,320,387 | 1,704,804 |
Supplies | 165,978 | 341,807 | 553,468 | 1,080,324 |
Other | 1,185,880 | 644,366 | 3,172,557 | 2,037,642 |
Total other operating expenses | $ 2,591,298 | $ 2,550,726 | $ 7,867,183 | $ 7,959,396 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
OTHER INCOME (EXPENSE) OF DISCONTINUED OPERATIONS | ||||
INCOME BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS | $ 1,197,874 | $ 3,875,458 | ||
PROVISION FOR INCOME TAXES OF DISCONTINUED OPERATIONS | 451,000 | 1,468,000 | ||
NET INCOME OF DISCONTINUED OPERATIONS | 746,874 | 2,407,458 | ||
LESS NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (4,925) | (17,446) | ||
Franchise Segment Discontinued Operations [Member] | ||||
REVENUES OF DISCONTINUED OPERATIONS | 4,321,834 | 12,298,655 | ||
COST OF REVENUES OF DISCONTINUED OPERATIONS | 720,813 | 2,098,486 | ||
GROSS PROFIT OF DISCONTINUED OPERATIONS | 3,601,021 | 10,200,169 | ||
OPERATING EXPENSES OF DISCONTINUED OPERATIONS: | ||||
Salaries, wages and benefits | 1,081,618 | 3,194,025 | ||
Occupancy | 58,967 | 140,428 | ||
Advertising, marketing and development | 251,748 | 436,566 | ||
Depreciation | 25,437 | 74,263 | ||
Amortization | 86,120 | 258,356 | ||
Other | 844,972 | 2,027,299 | ||
TOTAL OPERATING EXPENSES OF DISCONTINUED OPERATIONS | 2,348,862 | 6,130,937 | ||
OPERATING INCOME OF DISCONTINUED OPERATIONS | 1,252,159 | 4,069,232 | ||
OTHER INCOME (EXPENSE) OF DISCONTINUED OPERATIONS | ||||
Interest expense | (54,285) | (193,774) | ||
INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF TAX, INCLUDING PORTION ATTRIBUTABLE TO NONCONTROLLING INTERES | (54,285) | (193,774) | ||
INCOME BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS | 1,197,874 | 3,875,458 | ||
PROVISION FOR INCOME TAXES OF DISCONTINUED OPERATIONS | 451,000 | 1,468,000 | ||
NET INCOME OF DISCONTINUED OPERATIONS | 746,874 | 2,407,458 | ||
LESS NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (4,925) | (17,446) | ||
NET INCOME OF DISCONTINUED OPERATIONS ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS | $ 741,949 | $ 2,390,012 |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Adjustments to reconcile net income of discontinued operations to net cash provided by operating activities of discontinued operations: | ||||
Depreciation | $ 435,670 | $ 438,822 | $ 1,457,762 | $ 1,114,513 |
Amortization | $ 187,209 | $ 216,253 | 616,330 | 323,911 |
Share based compensation | 27,992 | |||
Deferred income taxes | (411,000) | 255,000 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (158,237) | (298,309) | ||
Prepaid expenses and other assets | 310,231 | (1,746,082) | ||
Accounts payable and accrued expenses | (19,935,308) | (891,043) | ||
Deferred revenue and other current liabilities | (560,848) | (34,563) | ||
Net cash provided by operating activities of discontinued operations | 1,846,005 | |||
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Purchase of property, plant and equipment | (720,067) | (1,999,408) | ||
Net cash used in investing activities of discontinued operations | (30,023) | |||
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Dividends to shareholders | (1,408,650) | (704,325) | ||
Net cash used in financing activities of discontinued operations | (4,407,355) | |||
Franchise Segment Discontinued Operations [Member] | ||||
DISCONTINUED OPERATING ACTIVITIES | ||||
Net income of discontinued operations | 2,407,458 | |||
Adjustments to reconcile net income of discontinued operations to net cash provided by operating activities of discontinued operations: | ||||
Depreciation | 74,263 | |||
Amortization | 258,356 | |||
Share based compensation | 6,726 | |||
Deferred income taxes | (138,000) | |||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (286,552) | |||
Prepaid expenses and other assets | 30,755 | |||
Accounts payable and accrued expenses | (534,655) | |||
Deferred revenue and other current liabilities | (38,190) | |||
Other liabilities - long-term | 65,844 | |||
Net cash provided by operating activities of discontinued operations | 1,846,005 | |||
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Purchase of property, plant and equipment | (30,023) | |||
Net cash used in investing activities of discontinued operations | (30,023) | |||
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | ||||
Principal payments on capital lease obligations | (7,620) | |||
Dividends to shareholders | (4,399,735) | |||
Net cash used in financing activities of discontinued operations | $ (4,407,355) |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 24,360,083 | $ 26,133,001 | $ 84,599,199 | $ 89,581,594 | |
Net income (loss) | (984,204) | (625,886) | (868,721) | 1,732,390 | |
Total segment assets | 80,361,610 | 60,762 | 80,361,610 | 60,762 | $ 104,244,156 |
Expenditures for segmented assets | 171,000 | 6,555,000 | 797,000 | 7,962,000 | |
Cellular Retail [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 16,704,000 | 18,301,000 | 49,415,000 | 52,432,000 | |
Net income (loss) | (133,000) | (190,000) | (989,000) | 184,000 | |
Total segment assets | 24,031,000 | 28,217,000 | 24,031,000 | 28,217,000 | |
Expenditures for segmented assets | 148,000 | 6,408,000 | 375,000 | 7,612,000 | |
Direct to Consumer [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 4,920,000 | 4,983,000 | 2,731,000 | 29,014,000 | |
Net income (loss) | (982,000) | (462,000) | (128,000) | 1,506,000 | |
Total segment assets | 13,098,000 | 13,112,000 | 13,098,000 | 13,112,000 | |
Expenditures for segmented assets | 15,000 | 138,000 | 400,000 | 341,000 | |
Consumer Finance [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 2,736,000 | 2,849,000 | 7,874,000 | 8,136,000 | |
Net income (loss) | 281,000 | 326,000 | 832,000 | 781,000 | |
Total segment assets | 7,609,000 | 8,079,000 | 7,609,000 | 8,079,000 | |
Expenditures for segmented assets | 8,000 | 1,000 | 22,000 | 1,000 | |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | |||||
Net income (loss) | (150,000) | (300,000) | 584,000 | (739,000) | |
Total segment assets | 35,624,000 | 2,670,000 | 35,624,000 | 2,670,000 | |
Expenditures for segmented assets | 8,000 | 8,000 | |||
Discontinued Operations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | |||||
Net income (loss) | |||||
Total segment assets | $ 8,684,000 | 8,684,000 | |||
Expenditures for segmented assets |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)N | |
Cellular Retail [Member] | ||
Number of locations transferred | N | 35 | |
Minimum lease payments under leases | $ 2,328,000 | $ 2,328,000 |
Other Employment Agreement [Member] | ||
Bonus arrangement current | $ 79,000 | $ 292,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 02, 2018$ / shares |
Subsequent Events [Abstract] | |
Date declared | Nov. 9, 2018 |
Record Date | Dec. 4, 2018 |
Date payable | Dec. 14, 2018 |
Dividend Per Share | $ 0.05 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Escrow Funds [Member] - Subsequent Event [Member] | 1 Months Ended |
Oct. 31, 2018USD ($) | |
Debt instrument face amount | $ 3,295,414 |
Scheduled to release funds percenatge | 50.00% |