Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 26, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | BK Technologies, Inc. | |
Entity Central Index Key | 2,186 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 13,358,813 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 11,349 | $ 7,147 |
Available-for-sale-securities | 0 | 9,184 |
Trade accounts receivable, net | 7,407 | 5,524 |
Inventories, net | 10,688 | 14,358 |
Prepaid expenses and other current assets | 1,641 | 772 |
Total current assets | 31,085 | 36,985 |
Property, plant and equipment, net | 2,619 | 2,201 |
Investment in securities | 3,198 | 0 |
Deferred tax assets, net | 3,122 | 3,317 |
Other assets | 215 | 298 |
Total assets | 40,239 | 42,801 |
Current liabilities: | ||
Accounts payable | 3,496 | 5,971 |
Accrued compensation and related taxes | 1,652 | 1,364 |
Accrued warranty expense | 1,434 | 1,389 |
Accrued other expenses and other current liabilities | 414 | 1,159 |
Dividends payable | 268 | 273 |
Deferred revenue | 179 | 157 |
Total current liabilities | 7,443 | 10,313 |
Deferred revenue | 1,422 | 481 |
Total liabilities | 8,865 | 10,794 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock; $1.00 par value; 1,000,000 authorized shares; none issued or outstanding | 0 | 0 |
Common stock; $.60 par value; 20,000,000 authorized shares; 13,882,937 and 13,844,584 issued and 13,389,519 and 13,652,490 outstanding shares at September 30, 2018 and December 31, 2017, respectively | 8,330 | 8,307 |
Additional paid-in capital | 25,796 | 25,642 |
Accumulated deficit | (789) | (5,450) |
Accumulated other comprehensive income | 0 | 4,318 |
Treasury stock, at cost, 493,418 and 192,094 shares at September 30, 2018 and December 31, 2017, respectively | (1,963) | (810) |
Total stockholders' equity | 31,374 | 32,007 |
Total liabilities and stockholders' equity | $ 40,239 | $ 42,801 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders equity: | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ .60 | $ .60 |
Common stock, authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 13,882,937 | 13,844,584 |
Common stock, outstanding shares | 13,389,519 | 13,652,490 |
Treasury stock, shares | 493,418 | 192,094 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales, net | $ 13,302 | $ 11,831 | $ 38,704 | $ 29,973 |
Expenses | ||||
Cost of products | 7,839 | 8,014 | 22,519 | 19,425 |
Selling, general and administrative | 4,585 | 3,660 | 13,229 | 10,624 |
Total expenses | 12,424 | 11,674 | 35,748 | 30,049 |
Operating income (loss) | 878 | 157 | 2,956 | (76) |
Other (expense) income: | ||||
Interest income | 28 | 14 | 63 | 32 |
(Loss) gain on investment in securities | (191) | 670 | (1,392) | 1,287 |
Gain (loss) on disposal of property, plant and equipment | 0 | 10 | 0 | (94) |
Other (expense) income | (48) | 1 | (274) | (146) |
Total other (expense) income | (211) | 695 | (1,603) | 1,079 |
Income before income taxes | 667 | 852 | 1,353 | 1,003 |
Income tax expense | (17) | (252) | (200) | (353) |
Net income | $ 650 | $ 600 | $ 1,153 | $ 650 |
Net earnings per share-basic | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.05 |
Net earnings per share-diluted | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.05 |
Weighted average shares outstanding-basic | 13,479,759 | 13,665,976 | 13,538,116 | 13,602,207 |
Weighted average shares outstanding-diluted | 13,501,587 | 13,688,297 | 13,563,990 | 13,704,884 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidated Statements Of Comprehensive Income | ||||
Net income | $ 650 | $ 600 | $ 1,153 | $ 650 |
Unrealized (loss) gain on available-for-sale securities, net of tax | 0 | (25) | 0 | 2,453 |
Total comprehensive income | $ 650 | $ 575 | $ 1,153 | $ 3,103 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 1,153 | $ 650 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Inventories allowances | (31) | 21 |
Deferred income taxes | 195 | 353 |
Depreciation and amortization | 702 | 727 |
Share-based and stock compensation expense | 66 | 34 |
Restricted stock unit compensation expense | 111 | 41 |
Loss (gain) on investment in securities | 1,392 | (1,287) |
Loss on disposal of property, plant and equipment | 0 | 94 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (1,883) | (3,584) |
Inventories | 3,700 | (1,257) |
Prepaid expenses and other current assets | (869) | 567 |
Other assets | 31 | (12) |
Accounts payable | (2,475) | 3,803 |
Accrued compensation and related taxes | 288 | (943) |
Accrued warranty expense | 45 | 545 |
Deferred revenue | 963 | 52 |
Accrued other expenses and other current liabilities | (745) | (49) |
Net cash provided by (used in) operating activities | 2,643 | (245) |
Investing activities | ||
Purchases of property, plant and equipment | (1,067) | (572) |
Investment in securities | (3,741) | 0 |
Proceeds from sale of available-for-sale securities | 8,335 | 1,819 |
Net cash provided by investing activities | 3,527 | 1,247 |
Financing activities | ||
Proceeds from issuance of common stock | 0 | 183 |
Cash dividends declared and paid | (815) | (2,752) |
Repurchase of common stock | (1,153) | (405) |
Net cash used in financing activities | (1,968) | (2,974) |
Net change in cash and cash equivalents | 4,202 | (1,972) |
Cash and cash equivalents, beginning of period | 7,147 | 10,910 |
Cash and cash equivalents, end of period | 11,349 | 8,938 |
Supplemental disclosure | ||
Cash paid for interest | 0 | 0 |
Income tax paid | 0 | 0 |
Non-cash financing activity | ||
Restricted stock units issued | 140 | 0 |
Cashless exercise of stock options and related conversion of net shares to stockholders' equity | $ 0 | $ 27 |
1. Condensed Consolidated Finan
1. Condensed Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 1 - Condensed Consolidated Financial Statements | Basis of Presentation The condensed consolidated balance sheet as of September 30, 2018, the condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 have been prepared by BK Technologies, Inc. (the “Company”), and are unaudited. In the opinion of management, all adjustments, which include normal recurring adjustments, necessary for a fair presentation have been made. The condensed consolidated balance sheet at December 31, 2017 has been derived from the Company’s audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for a full year. Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers and the additional related ASUs (ASC “606”), which replaces existing revenue guidance and outlines a single set of comprehensive principles for recognizing revenue under GAAP. The Company elected the modified retrospective method upon adoption with no impact to the opening retained earnings or revenue reported. These standards provide guidance on recognizing revenue, including a five-step method to determine when revenue recognition is appropriate. Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations Step 5: Recognize revenue as the Company satisfies a performance obligation ASC 606 provides that revenue is recognized when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We generally satisfy performance obligations upon shipment of the product or service to the customer. This is consistent with the time in which the customer obtains control of the product or service. For extended warranties, sales revenue associated with the warranty is deferred at the time of sale and later recognized on a straight-line basis over the extended warranty period. Some contracts include installation services, which are completed in a short period of time and the revenue is recognized when the installation is complete. Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity (“VIE”) or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently, or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out or participating rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20% to 50%), the Company’s investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. The Company has an investment in 1347 Property Insurance Holdings, Inc., made through FGI 1347 Holdings, LP, a consolidated VIE. Fair Value The Company’s financial instruments consist of cash and cash equivalents, trade accounts receivable, investment in securities, accounts payable, accrued expenses and other liabilities. As of September 30, 2018 and December 31, 2017, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments. The Company uses observable market data or assumptions (Level 1 inputs, as defined in accounting guidance) that it believes market participants would use in pricing the investment in securities. There were no transfers of investment in securities between Level 1 and Level 2 during the nine months ended September 30, 2018. Available-For-Sale Securities Investments reported on the December 31, 2017 balance sheet consisted of marketable equity securities of a publicly held company. As of December 31, 2017, the investment cost was $2,402. On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 “Financial Instruments,” which amended the guidance in U.S. GAAP regarding the classification and measurement of financial instruments. Changes to the prior guidance primarily affected the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Upon its adoption, the Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance was effective. On January 1, 2018, the Company recognized approximately $4,300 of net unrealized gain in its accumulated deficit balance. During the first quarter of 2018, the Company sold 1,317,503 shares of Iteris, Inc. (Nasdaq: ITI), which cost $2,402, for approximately $8,335 of proceeds and reported a loss on the sales of approximately $849. Other Comprehensive Income Other comprehensive income consists of net income and unrealized gain on available-for-sale securities, net of taxes. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 “Revenue from Contracts with Customers,” which provided for a single, principles-based model for revenue recognition and replaced the existing revenue recognition guidance, became effective for annual and interim periods beginning on or after December 15, 2017, and replaced most existing revenue recognition guidance under U.S. GAAP. This ASU requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgements and estimates and changes in those estimates. It permits the use of either a modified retrospective or cumulative effect transition method. The Company adopted ASU 2014-09 in the first quarter of 2018 and applied the modified retrospective approach. Because the Company’s primary source of revenues is from shipments of products, the adoption of this new guidance did not have any impact on its consolidated financial statements and related disclosures. See Note 1 for additional information. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments,” which amended the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes primarily affected the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard became effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity was required to apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. The Company adopted the new guidance, which had a material impact on its retained earnings, as the Company reclassified approximately $4,300 of unrealized gain on investment securities that was previously classified in other comprehensive income. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 “Leases,” which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and capital (finance) leases with lease terms greater than twelve months. The lease liability will be equal to the present value of lease payments. The lease asset will be based on the lease liability, subject to adjustment, such as for initial direct costs. For income statement purposes, leases will continue to be classified as operating or capital (finance), with lease expense in both cases calculated substantially the same as under the prior leasing guidance. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company expects this will result in the recognition of right-of-use assets and lease liabilities not currently recorded on the consolidated financial statements under existing accounting guidance. The Company is still evaluating all the Company’s contractual arrangements, however, based on the preliminary work completed, the Company expects that the adoption of ASU 2016-02 will not have a material impact on the Company’s consolidated financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for all filings made on or after November 5, 2018. Given the effective date and the proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of interim changes in stockholders’ equity in their Forms 10-Q until the quarter that begins after the date of adoption, November 5, 2018. We intend to present interim changes in stockholders’ equity beginning with our quarterly report on Form 10-Q for the first quarter of 2019 The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
2. Significant Events and Trans
2. Significant Events and Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 2 - Significant Events and Transactions | On September 27, 2018, the Company announced that it was selected as a supplier under the Subscriber Unit Radio and Accessory Contract (“SURAC”) issued by the U.S. Army, and received its first task orders under the contract totaling approximately $800. The task orders were for the Company’s UHF portable radios and related accessories, which are anticipated to be delivered during the fourth quarter of 2018. The SURAC contract is intended to serve as the U.S. Army’s primary contract vehicle for procuring Project 25 standard of the Association of Public-Safety Communications Officials (P-25) digital communications equipment. The Company was one of five companies selected by the U.S. Army. The maximum total value of the contract is $495,000 over a five-year period that commenced on June 18, 2018, and ends on June 18, 2023. The contract does not specify purchase dates or quantities of equipment from any particular named supplier, and there is no assurance that the Company will receive any additional orders. In July 2018, the Transportation Security Administration (“TSA”) of the U.S. Department of Homeland Security exercised its third one-year option, extending its contract with the Company for an additional year to September 27, 2019. The option provides for the purchase of up to $2,000 of the Company’s products; however, precise dates for quantities or deliveries are not specified. The original contract awarded in September 2015 totaled $26,200, with $15,500 in firm delivery orders and $10,700 in potential option exercises. Separate from the contract extension, the TSA also ordered approximately $2,000 of additional equipment and services for deployment at various domestic airports. Pursuant to the Company’s capital return program, on September 6, 2018, the Company’s Board of Directors declared a quarterly dividend of $0.02 per share of the Company’s common stock to stockholders of record as of October 1, 2018. These dividends were paid on October 15, 2018. |
3. Allowance for Doubtful Accou
3. Allowance for Doubtful Accounts | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 3 - Allowance for Doubtful Accounts | The allowance for doubtful accounts on trade receivables was approximately $50 on gross trade receivables of $7,457 and $5,574 at September 30, 2018 and December 31, 2017, respectively. This allowance is used to state trade receivables at a net realizable value or the amount that the Company estimates will be collected of the Company’s gross trade receivables. |
4. Inventories, net
4. Inventories, net | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 4 - Inventories, net | The components of inventories, net of allowances for slow-moving, excess or obsolete inventory, consist of the following: September 30, 2018 December 31, 2017 Finished goods $ 2,137 $ 2,825 Work in process 4,432 7,111 Raw materials 4,119 4,422 $ 10,688 $ 14,358 Allowances for slow-moving, excess, or obsolete inventory are used to state the Company’s inventories at the lower of cost or net realizable value. The allowances were approximately $758 at September 30, 2018, compared with approximately $789 at December 31, 2017. |
5. Income Taxes
5. Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 5 - Income Taxes | Income tax expense totaling approximately $17 and $200 has been recorded for the three and nine months ended September 30, 2018, respectively, compared with $252 and $353, respectively, for the same periods last year. The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision in any period will be affected by, among other things, permanent, as well as temporary differences in the deductibility of certain items, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period. For 2018, the Company generally expects its effective tax rate to decline compared to 2017, primarily due to the implementation of the Tax Cuts and Jobs Act enacted in December 2017, which, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%. As of September 30, 2018 and December 31, 2017, the Company’s net deferred tax assets totaled approximately $3,122 and $3,317, respectively, and were primarily composed of net operating loss carryforwards (“NOLs”) and research and development costs and tax credits. As of September 30, 2018, these NOLs totaled approximately $5,216 for federal and $12,766 for state purposes, with expirations starting in 2018 through 2030. In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years to utilize its NOLs prior to their expiration. The Company analyzes all positive and negative evidence to determine if, based on the weight of available evidence, the Company is more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available, current and anticipated customers, contracts and product introductions, as well as historical operating results and certain tax planning strategies. Based on management’s analysis of all available evidence, both positive and negative, the Company’s management has concluded that the Company does not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax asset. Management estimated that as of September 30, 2018, it is more likely than not that approximately $83 of the Company’s deferred tax asset will not be realized due to the inability to generate sufficient Florida taxable income in the necessary period to fully utilize its Florida NOLs. The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future. If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of September 30, 2018. |
6. Investment in Securities
6. Investment in Securities | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Investments [Abstract] | |
NOTE 6 - Investment in Securities | The Company has an investment in a limited partnership, FGI 1347 Holdings, LP, of which the Company is the sole limited partner. FGI 1347 Holdings, LP, was established for the purpose of investing in securities. As of September 30, 2018, the Company indirectly held approximately $221 in cash and 477,282 shares of 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH) with fair value of $3,198, through an investment in FGI 1347 Holdings, LP. These shares were purchased in March and May 2018 for approximately $3,741. For the three and nine months ended September 30, 2018, the Company recognized an unrealized loss on the investment of approximately $191 and $543, respectively. Affiliates of Fundamental Global Investors, LLC serve as the general partner and the investment manager of FGI 1347 Holdings, LP, and the Company is the sole limited partner. As of September 30, 2018, the Company and the affiliates of Fundamental Global Investors, LLC, including without limitation Ballantyne Strong, Inc., beneficially owned in the aggregate 2,714,362 shares of PIH’s common stock, representing approximately 45.4% of PIH’s outstanding shares. Fundamental Global with its affiliates is the largest stockholder of the Company. Mr. Kyle Cerminara, Chairman of the Company’s Board of Directors, is Chief Executive Officer, Co-Founder and Partner of Fundamental Global Investors, LLC and serves as Chief Executive Officer and Chairman of the Board of Directors of Ballantyne Strong. Mr. Lewis M. Johnson, Co-Chairman of the Company, is President, Co-Founder and Partner of Fundamental Global Investors, LLC and serves as a director of Ballantyne Strong. Messrs. Cerminara and Johnson also serve as Chairman and Co-Chairman, respectively, of the Board of Directors of PIH. |
7. Stockholders' Equity
7. Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 7 - Stockholders' Equity | The changes in consolidated stockholders’ equity for the nine months ended September 30, 2018 are as follows: Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Treasury Stock Total Balance at December 31, 2017 13,844,584 $ 8,307 $ 25,642 $ (5,450 ) $ 4,318 $ (810 ) $ 32,007 Restricted stock units issued 38,353 23 (23 ) — — — — Share-based compensation expense — — 66 — — — 66 Restricted stock unit compensation expense — — 111 — — — 111 Dividends declared — — — (810 ) — — (810 ) Net income — — — 1,153 — — 1,153 Effect of adoption of ASU 2016-01 — — — 4,318 (4,318 ) — — Repurchase of common stock — — — — — (1,153 ) (1,153 ) Balance at September 30, 2018 13,882,937 $ 8,330 $ 25,796 $ (789 ) $ — $ (1,963 ) $ 31,374 |
8. Income per Share
8. Income per Share | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 8 - Income per Share | The following table sets forth the computation of basic and diluted income per share: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Numerator: Net income (numerator for basic and diluted earnings per share) $ 650 $ 600 $ 1,153 $ 650 Denominator: Denominator for basic earnings per share weighted average shares 13,479,759 13,665,976 13,538,116 13,602,207 Effect of dilutive securities: Options and restricted stock units 21,828 22,321 25,874 102,677 Denominator: Denominator for diluted earnings per share weighted average shares 13,501,587 13,688,297 13,563,990 13,704,884 Basic income per share $ 0.05 $ 0.04 $ 0.09 $ 0.05 Diluted income per share $ 0.05 $ 0.04 $ 0.09 $ 0.05 Approximately 434,500 stock options for the three and nine months ended September 30, 2018, and 328,500 stock options for the three and nine months ended September 30, 2017, were excluded from the calculation because they were anti-dilutive. |
9. Non-Cash Share-Based Employe
9. Non-Cash Share-Based Employee Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 9 - Non-Cash Share-Based Employee Compensation | The Company has an employee and non-employee director share-based incentive compensation plan. Related to these programs, the Company recorded non-cash share-based employee compensation expense of $28 and $66 for the three and nine months ended September 30, 2018, respectively, compared with $19 and $34, respectively, for the same periods last year. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses. There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented. The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of a stock option grant. The non-cash share-based employee compensation expense recorded in the three and nine months ended September 30, 2018 was calculated using certain assumptions. Such assumptions are described more comprehensively in Note 10 (Share-Based Employee Compensation) of the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. A summary of activity under the Company’s stock option plans during the nine months ended September 30, 2018 is presented below: As of January 1, 2018 Stock Options Wgt. Avg. Exercise Price ($) Per Share Wgt. Avg. Remaining Contractual Life (Years) Wgt. Avg. Grant Date Fair Value ($) Per Share Aggregate Intrinsic Value ($) Outstanding 354,500 4.46 — 1.79 — Vested 113,000 3.75 — 2.23 — Nonvested 241,500 4.80 — 1.58 — Period activity Issued 130,000 3.72 — 1.62 — Exercised — — — — — Forfeited 24,000 5.10 — 1.37 — Expired — — — — — As of September 30, 2018 Outstanding 460,500 4.22 7.33 1.76 92,860 Vested 156,900 4.03 4.12 2.05 48,540 Nonvested 303,600 4.32 8.98 1.61 44,320 Restricted Stock Units On September 6, 2018, the Company granted to each non-employee director restricted stock units with a grant fair value of $20 per award (resulting in total aggregate grant-date fair value of $140), which will vest in five equal annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by shareholders, other than for good reason as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company. On June 4, 2018, the Company granted to each non-employee director restricted stock units with a grant fair value of $20 per award (resulting in total aggregate grant-date fair value of $140), which will vest on June 4, 2019, subject to continued service through such vesting date. On June 15, 2017, the Company granted to each non-employee director restricted stock units with a grant fair value of $20 per award (resulting in total aggregate grant-date fair value of $140), which vested on June 15, 2018. The Company recorded non-cash restricted stock unit compensation expense of $38 and $111 for the three and nine months ended September 30, 2018, respectively, compared with $35 and $41 for the same periods last year. |
10. Commitments and Contingenci
10. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 10 - Commitments and Contingencies | From time to time the Company may be involved in various claims and legal actions arising in the ordinary course of its business. On March 28, 2017, The Sales Group, Inc. (“TSG”) filed a lawsuit in the U.S. District Court for the Central District of California against the Company. TSG was a sales representative of the Company that the Company terminated in March 2017. TSG asserted claims against the Company for alleged breach of oral contract, violation of the California and Arizona sales representative statutes and an accounting of alleged unpaid sales commissions. TSG’s complaint sought damages in the amount of $6,090 for alleged unpaid past and future sales commissions. On April 3, 2017, counsel for TSG sent the Company a letter outlining additional alleged grounds for recovery against the Company and offering to settle the litigation in exchange for the continued payment of sales commissions to TSG for a negotiated period, a buyout of TSG’s alleged rights for a negotiated sum or reinstatement of TSG for a period of at least 2.5 years with commission rates equal to those in effect at the time of TSG’s termination. The matter was mediated on November 14, 2017, during which the parties agreed to a settlement. On December 19, 2017, the Company entered into a settlement agreement with TSG, pursuant to which TSG agreed to dismiss with prejudice its lawsuit filed against the Company. Pursuant to the settlement agreement, the Company agreed to pay an amount of $900 to TSG on or before December 31, 2017. The Company also agreed to pay to TSG commissions, at the rates in effect since February 7, 2013, on all orders for the Company’s products received and accepted by the Company from the states of Arizona, California, Nevada and Hawaii from January 1, 2018 through December 31, 2018, other than for (i) sales of the Company’s products to federal government agencies and offices, (ii) sales of the Company’s products to other end-users, excepting state and local government agencies and offices, and (iii) sales of parts or service, including warranty service. In addition, if at any time on or before December 31, 2018, the Company completes a change-in-control transaction, then the Company will pay to TSG an amount equal to $2,000, less the amount of commissions paid by the Company with respect to 2018, as described above. The settlement agreement settled all claims raised by TSG in its lawsuit against the Company. In December 2017, the Company recorded an estimated commission amount of approximately $536. For the nine months ended September 30, 2018, the Company paid $682 in commissions to TSG. In June 2018, the Company estimated and recorded an additional commission amount of approximately $290 for the remainder of 2018. No additional commission amounts were estimated for the three months ended September 30, 2018. Purchase Commitments As of September 30, 2018, the Company had purchase orders to suppliers for inventory of approximately $6,924. Significant Customers Sales to United States government agencies represented approximately $7,110 (53.5%) and $15,879 (41.0%) of the Company’s total sales for the three and nine months ended September 30, 2018, respectively, compared with approximately $5,210 (43.7%) and $11,145 (36.5%), respectively, for the same periods last year. Accounts receivable from agencies of the United States government were $3,440 as of September 30, 2018, compared with approximately $2,977 at the same date last year. |
11. Debt
11. Debt | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 11 - Debt | The Company has a secured revolving credit facility with Silicon Valley Bank with maximum borrowing availability of $1,000 (subject to a borrowing base) and a maturity date of December 26, 2018. As of September 30, 2018, the Company was in compliance with all covenants under the loan and security agreement, as amended, governing this revolving credit facility. For a description of such covenants and the other terms and conditions of the loan and security agreement, as amended, reference is made to Note 5 (Debt) of the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. As of September 30, 2018, there were no borrowings outstanding under the revolving credit facility and there was $1,000 of borrowing available under the revolving credit facility. |
1. Condensed Consolidated Fin_2
1. Condensed Consolidated Financial Statements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Consolidated Financial Statements | |
Basis of Presentation | The condensed consolidated balance sheet as of September 30, 2018, the condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 have been prepared by BK Technologies, Inc. (the “Company”), and are unaudited. In the opinion of management, all adjustments, which include normal recurring adjustments, necessary for a fair presentation have been made. The condensed consolidated balance sheet at December 31, 2017 has been derived from the Company’s audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for a full year. Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers and the additional related ASUs (ASC “606”), which replaces existing revenue guidance and outlines a single set of comprehensive principles for recognizing revenue under GAAP. The Company elected the modified retrospective method upon adoption with no impact to the opening retained earnings or revenue reported. These standards provide guidance on recognizing revenue, including a five-step method to determine when revenue recognition is appropriate. Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations Step 5: Recognize revenue as the Company satisfies a performance obligation ASC 606 provides that revenue is recognized when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We generally satisfy performance obligations upon shipment of the product or service to the customer. This is consistent with the time in which the customer obtains control of the product or service. For extended warranties, sales revenue associated with the warranty is deferred at the time of sale and later recognized on a straight-line basis over the extended warranty period. Some contracts include installation services, which are completed in a short period of time and the revenue is recognized when the installation is complete. |
Principles of Consolidation | The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity (“VIE”) or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently, or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out or participating rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20% to 50%), the Company’s investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. The Company has an investment in 1347 Property Insurance Holdings, Inc., made through FGI 1347 Holdings, LP, a consolidated VIE. |
Fair Value | The Company’s financial instruments consist of cash and cash equivalents, trade accounts receivable, investment in securities, accounts payable, accrued expenses and other liabilities. As of September 30, 2018 and December 31, 2017, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments. The Company uses observable market data or assumptions (Level 1 inputs, as defined in accounting guidance) that it believes market participants would use in pricing the investment in securities. There were no transfers of investment in securities between Level 1 and Level 2 during the nine months ended September 30, 2018. |
Available-For-Sale Securities | Investments reported on the December 31, 2017 balance sheet consisted of marketable equity securities of a publicly held company. As of December 31, 2017, the investment cost was $2,402. On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 “Financial Instruments,” which amended the guidance in U.S. GAAP regarding the classification and measurement of financial instruments. Changes to the prior guidance primarily affected the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Upon its adoption, the Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance was effective. On January 1, 2018, the Company recognized approximately $4,300 of net unrealized gain in its accumulated deficit balance. During the first quarter of 2018, the Company sold 1,317,503 shares of Iteris, Inc. (Nasdaq: ITI), which cost $2,402, for approximately $8,335 of proceeds and reported a loss on the sales of approximately $849. |
Other Comprehensive Income | Other comprehensive income consists of net income and unrealized gain on available-for-sale securities, net of taxes. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 “Revenue from Contracts with Customers,” which provided for a single, principles-based model for revenue recognition and replaced the existing revenue recognition guidance, became effective for annual and interim periods beginning on or after December 15, 2017, and replaced most existing revenue recognition guidance under U.S. GAAP. This ASU requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgements and estimates and changes in those estimates. It permits the use of either a modified retrospective or cumulative effect transition method. The Company adopted ASU 2014-09 in the first quarter of 2018 and applied the modified retrospective approach. Because the Company’s primary source of revenues is from shipments of products, the adoption of this new guidance did not have any impact on its consolidated financial statements and related disclosures. See Note 1 for additional information. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments,” which amended the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes primarily affected the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard became effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity was required to apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. The Company adopted the new guidance, which had a material impact on its retained earnings, as the Company reclassified approximately $4,300 of unrealized gain on investment securities that was previously classified in other comprehensive income. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 “Leases,” which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and capital (finance) leases with lease terms greater than twelve months. The lease liability will be equal to the present value of lease payments. The lease asset will be based on the lease liability, subject to adjustment, such as for initial direct costs. For income statement purposes, leases will continue to be classified as operating or capital (finance), with lease expense in both cases calculated substantially the same as under the prior leasing guidance. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company expects this will result in the recognition of right-of-use assets and lease liabilities not currently recorded on the consolidated financial statements under existing accounting guidance. The Company is still evaluating all the Company’s contractual arrangements, however, based on the preliminary work completed, the Company expects that the adoption of ASU 2016-02 will not have a material impact on the Company’s consolidated financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for all filings made on or after November 5, 2018. Given the effective date and the proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of interim changes in stockholders’ equity in their Forms 10-Q until the quarter that begins after the date of adoption, November 5, 2018. We intend to present interim changes in stockholders’ equity beginning with our quarterly report on Form 10-Q for the first quarter of 2019 The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
4. Inventories, net (Tables)
4. Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventories Net | |
Components of inventory | September 30, 2018 December 31, 2017 Finished goods $ 2,137 $ 2,825 Work in process 4,432 7,111 Raw materials 4,119 4,422 $ 10,688 $ 14,358 |
7. Stockholders' Equity (Tables
7. Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity | |
Changes in consolidated stockholders' equity | Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Treasury Stock Total Balance at December 31, 2017 13,844,584 $ 8,307 $ 25,642 $ (5,450 ) $ 4,318 $ (810 ) $ 32,007 Restricted stock units issued 38,353 23 (23 ) — — — — Share-based compensation expense — — 66 — — — 66 Restricted stock unit compensation expense — — 111 — — — 111 Dividends declared — — — (810 ) — — (810 ) Net income — — — 1,153 — — 1,153 Effect of adoption of ASU 2016-01 — — — 4,318 (4,318 ) — — Repurchase of common stock — — — — — (1,153 ) (1,153 ) Balance at September 30, 2018 13,882,937 $ 8,330 $ 25,796 $ (789 ) $ — $ (1,963 ) $ 31,374 |
8. Income per Share (Tables)
8. Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Per Share | |
Computation of basic and diluted income per share | Three Months Ended Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Numerator: Net income (numerator for basic and diluted earnings per share) $ 650 $ 600 $ 1,153 $ 650 Denominator: Denominator for basic earnings per share weighted average shares 13,479,759 13,665,976 13,538,116 13,602,207 Effect of dilutive securities: Options and restricted stock units 21,828 22,321 25,874 102,677 Denominator: Denominator for diluted earnings per share weighted average shares 13,501,587 13,688,297 13,563,990 13,704,884 Basic income per share $ 0.05 $ 0.04 $ 0.09 $ 0.05 Diluted income per share $ 0.05 $ 0.04 $ 0.09 $ 0.05 |
9. Non-Cash Share-Based Emplo_2
9. Non-Cash Share-Based Employee Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Non-cash Share-based Employee Compensation | |
A summary of stock option activity | As of January 1, 2018 Stock Options Wgt. Avg. Exercise Price ($) Per Share Wgt. Avg. Remaining Contractual Life (Years) Wgt. Avg. Grant Date Fair Value ($) Per Share Aggregate Intrinsic Value ($) Outstanding 354,500 4.46 — 1.79 — Vested 113,000 3.75 — 2.23 — Nonvested 241,500 4.80 — 1.58 — Period activity Issued 130,000 3.72 — 1.62 — Exercised — — — — — Forfeited 24,000 5.10 — 1.37 — Expired — — — — — As of September 30, 2018 Outstanding 460,500 4.22 7.33 1.76 92,860 Vested 156,900 4.03 4.12 2.05 48,540 Nonvested 303,600 4.32 8.98 1.61 44,320 |
3. Allowance for Doubtful Acc_2
3. Allowance for Doubtful Accounts (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance For Doubtful Accounts | ||
Allowance for doubtful accounts on trade receivables | $ 50 | $ 50 |
Accounts receivable, gross | $ 7,457 | $ 5,574 |
4. Inventories, net (Details)
4. Inventories, net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventories Net Details Abstract | ||
Finished goods | $ 2,137 | $ 2,825 |
Work in process | 4,432 | 7,111 |
Raw materials | 4,119 | 4,422 |
Total Inventory | $ 10,688 | $ 14,358 |
4. Inventories, net (Details Na
4. Inventories, net (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventories Net Details Narrative Abstract | ||
Reserves for slow-moving, excess, or obsolete inventory | $ 758 | $ 789 |
5. Income Taxes (Details Narati
5. Income Taxes (Details Narative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income tax expense | $ (17) | $ (252) | $ (200) | $ (353) | |
Net deferred tax assets | 3,122 | 3,122 | $ 3,317 | ||
Federal | |||||
Net operating loss carryforwards | 5,216 | 5,216 | |||
State | |||||
Net operating loss carryforwards | $ 12,766 | $ 12,766 |
7. Stockholders' Equity (Detail
7. Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Beginning Balance, Amount | $ 32,007 | |||
Share-based compensation expense | 66 | |||
Restricted stock unit compensation expense | 111 | $ 41 | ||
Dividends declared | (810) | |||
Net income | $ 650 | $ 600 | 1,153 | 650 |
Repurchase of common stock | (1,153) | $ (405) | ||
Ending Balance, Amount | 31,374 | 31,374 | ||
Common Stock | ||||
Beginning Balance, Amount | $ 8,307 | |||
Beginning Balance, Shares | 13,844,584 | |||
Restricted stock units issued, Amount | $ 23 | |||
Restricted stock units issued, Shares | 38,353 | |||
Ending Balance, Amount | $ 8,330 | $ 8,330 | ||
Ending Balance, Shares | 13,882,937 | 13,882,937 | ||
Additional Paid In Capital | ||||
Beginning Balance, Amount | $ 25,642 | |||
Restricted stock units issued, Amount | (23) | |||
Share-based compensation expense | 66 | |||
Restricted stock unit compensation expense | 111 | |||
Ending Balance, Amount | $ 25,796 | 25,796 | ||
Accumulated Deficit | ||||
Beginning Balance, Amount | (5,450) | |||
Dividends declared | (810) | |||
Net income | 1,153 | |||
Effect of adoption of ASU 2016-01 | 4,318 | |||
Ending Balance, Amount | (789) | (789) | ||
Accumulated Other Comprehensive Income | ||||
Beginning Balance, Amount | 4,318 | |||
Effect of adoption of ASU 2016-01 | (4,318) | |||
Ending Balance, Amount | 0 | 0 | ||
Treasury Stock | ||||
Beginning Balance, Amount | (810) | |||
Repurchase of common stock | (1,153) | |||
Ending Balance, Amount | $ (1,963) | $ (1,963) |
8. Income per Share (Details)
8. Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (numerator for basic and diluted earnings per share) | $ 650 | $ 600 | $ 1,153 | $ 650 |
Denominator: | ||||
Denominator for basic earnings per share weighted average shares | 13,479,759 | 13,665,976 | 13,538,116 | 13,602,207 |
Effect of dilutive securities: | ||||
Options and restricted stock units | 21,828 | 22,321 | 25,874 | 102,677 |
Denominator | ||||
Denominator for diluted earnings per share weighted average shares | 13,501,587 | 13,688,297 | 13,563,990 | 13,704,884 |
Basic income per share | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.05 |
Diluted income per share | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.05 |
9. Non-Cash Share-Based Emplo_3
9. Non-Cash Share-Based Employee Compensation (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Notes to Financial Statements | |
Outstanding Stock Options, beginning | shares | 354,500 |
Vested Stock Options, beginning | shares | 113,000 |
Nonvested Stock Options, beginning | shares | 241,500 |
Issued Stock Options | shares | 130,000 |
Exercised Stock Options | shares | 0 |
Forfeited Stock Options | shares | 24,000 |
Expired Stock Options | shares | 0 |
Outstanding Stock Options, ending | shares | 460,500 |
Vested Stock Options, ending | shares | 156,900 |
Nonvested Stock Options, ending | shares | 303,600 |
Outstanding Wgt. Avg. Exercise Price, beginning | $ 4.46 |
Vested Wgt. Avg. Exercise Price, beginning | 3.75 |
Nonvested Wgt. Avg. Exercise Price, beginning | 4.80 |
Issued Wgt. Avg. Exercise Price | 3.72 |
Exercised Wgt. Avg. Exercise Price | 0 |
Forfeited Wgt. Avg. Exercise Price | 5.10 |
Expired Wgt. Avg. Exercise Price | 0 |
Outstanding Wgt. Avg. Exercise Price, ending | 4.22 |
Vested Wgt. Avg. Exercise Price, ending | 4.03 |
Nonvested Wgt. Avg. Exercise Price, ending | $ 4.32 |
Outstanding Contractual Life | 7 years 3 months 29 days |
Vested Contractual Life | 4 years 1 month 13 days |
Nonvested Contractual Life | 8 years 11 months 23 days |
Outstanding Grant Date Fair Value, beginning | $ 1.79 |
Vested Grant Date Fair Value, beginning | 2.23 |
Nonvested Grant Date Fair Value, beginning | 1.58 |
Issued Grant Date Fair Value | 1.62 |
Exercised Grant Date Fair Value | 0 |
Forfeited Grant Date Fair Value | 1.37 |
Expired Grant Date Fair Value | 0 |
Outstanding Grant Date Fair Value | 1.76 |
Vested Grant Date Fair Value | 2.05 |
Nonvested Grant Date Fair Value | $ 1.61 |
Outstanding Aggregate Intrinsic Value | $ | $ 0 |
Vested Aggregate Intrinsic Value | $ | $ 0 |
Nonvested Aggregate Intrinsic Value | $ 0 |
Issued Aggregate Intrinsic Value | $ 0 |
Exercised Aggregate Intrinsic Value | $ | $ 0 |
Forfeited Aggregate Intrinsic Value | $ 0 |
Expired Aggregate Intrinsic Value | $ 0 |
Outstanding Aggregate Intrinsic Value | $ | $ 92,860 |
Vested Aggregate Intrinsic Value | $ | $ 48,540 |
Nonvested Aggregate Intrinsic Value | $ 44,320 |
11. Debt (Details Narrative)
11. Debt (Details Narrative) - SiliconValleyBankMember $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Credit facility with maximum borrowing | $ 1,000 |
Maturity date | 12-26-2018 |
Revolving credit outstanding balance | $ 0 |
Borrowing available under the revolving credit facility | $ 1,000 |