Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Sep. 12, 2017 | Dec. 31, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | ESPEY MFG & ELECTRONICS CORP | ||
Entity Central Index Key | 33,533 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Is Entity a Well-known Seasoned Issuer | No | ||
Is Entity a Voluntary Filer | No | ||
Is Entitys Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 43,624,179 | ||
Entity Common stock, closing sale price | $ 26.06 | ||
Entity Common Stock, Shares Outstanding | 2,371,321 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 10,058,163 | $ 10,031,644 |
Investment securities | 9,426,968 | 5,580,059 |
Trade accounts receivable, net of allowance of $3,000 | 3,399,613 | 4,957,464 |
Income tax receivable | 120,179 | 329,298 |
Inventories: | ||
Raw materials | 1,303,259 | 1,418,862 |
Work-in-process | 512,014 | 504,674 |
Costs related to contracts in process, net of advance payments of $1,366,504 and $18,313 as of June 30, 2017 and 2016, respectively | 7,863,538 | 8,810,145 |
Total inventories | 9,678,811 | 10,733,681 |
Deferred tax assets | 317,559 | 252,558 |
Prepaid expenses and other current assets | 227,306 | 219,688 |
Total current assets | 33,228,599 | 32,104,392 |
Property, plant and equipment, net | 2,265,096 | 2,348,525 |
Total assets | 35,493,695 | 34,452,917 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 2,250,115 | 552,787 |
Accrued expenses: | ||
Salaries and wages | 172,045 | 357,910 |
Vacation | 656,199 | 704,761 |
Other | 250,283 | 196,631 |
Payroll and other taxes withheld | 46,939 | 49,353 |
Total current liabilities | 3,375,581 | 1,861,442 |
Deferred tax liabilities | 220,571 | 203,237 |
Total liabilities | 3,596,152 | 2,064,679 |
Commitments and Contingencies (See Note 14) | ||
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,029,874 shares as of June 30, 2017 and 2016. Outstanding 2,371,321 and 2,364,684 as of June 30, 2017 and 2016, respectively (includes 45,000 and 61,667 Unearned ESOP Shares, respectively) | 1,009,958 | 1,009,958 |
Capital in excess of par value | 17,650,335 | 17,253,072 |
Accumulated other comprehensive loss | (3,599) | (1,408) |
Retained earnings | 21,670,196 | 22,820,938 |
Total stockholders equity before ESOP and treasury stock | 40,326,890 | 41,082,560 |
Less: Unearned ESOP shares | (650,248) | (891,083) |
Cost of 658,553 and 665,190 shares of common stock in treasury as of June 30, 2017 and 2016, respectively | (7,779,099) | (7,803,239) |
Total stockholders' equity | 31,897,543 | 32,388,238 |
Total liabilities and stockholders' equity | $ 35,493,695 | $ 34,452,917 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 3,000 | $ 3,000 |
Advance payments | $ 1,366,504 | $ 18,313 |
Common stock, par value | $ 0.3333 | $ 0.3333 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,029,874 | 3,029,874 |
Common stock, shares outstanding | 2,371,321 | 2,364,684 |
Unearned ESOP, shares | 45,000 | 61,667 |
Treasury stock, shares | 658,553 | 665,190 |
Statements of Comprehensive Inc
Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 22,521,012 | $ 27,471,365 |
Cost of sales | 17,806,444 | 20,099,683 |
Gross profit | 4,714,568 | 7,371,682 |
Selling, general and administrative expenses | 3,188,112 | 3,028,449 |
Operating Income | 1,526,456 | 4,343,233 |
Other income | ||
Interest income | 88,836 | 33,782 |
Other | 36,113 | 85,492 |
Total other income | 124,949 | 119,274 |
Income before provision for income taxes | 1,651,405 | 4,462,507 |
Provision for income taxes | 515,669 | 1,286,706 |
Net income | 1,135,736 | 3,175,801 |
Other comprehensive income, net of tax: | ||
Unrealized (loss) gain on investment securities | (2,191) | 2,978 |
Total comprehensive income | $ 1,133,545 | $ 3,178,779 |
Net income per share: | ||
Basic | $ 0.49 | $ 1.39 |
Diluted | $ 0.49 | $ 1.38 |
Weighted average number of shares outstanding: | ||
Basic | 2,312,870 | 2,285,686 |
Diluted | 2,324,838 | 2,302,034 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Capital in Excess of Par Value [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Unearned ESOP Shares [Member] | Total |
Balance, beginning at Jun. 30, 2015 | $ 1,009,958 | $ 16,785,604 | $ (4,386) | $ 21,865,951 | $ (7,582,296) | $ (1,143,957) | $ 30,930,874 |
Balance, beginning, shares at Jun. 30, 2015 | 2,362,687 | 667,187 | 2,362,687 | ||||
Net income | 3,175,801 | $ 3,175,801 | |||||
Other comprehensive income (loss), net of tax | 2,978 | 2,978 | |||||
Total comprehensive income | 3,178,779 | ||||||
Stock options exercised | 162,488 | $ 134,475 | $ 296,963 | ||||
Stock options exercised, shares | 16,300 | (16,300) | 16,300 | ||||
Stock option expense | 97,045 | $ 97,045 | |||||
Dividends paid on common stock | (2,256,018) | (2,256,018) | |||||
Tax effect of stock options exercised | 17,141 | 17,141 | |||||
Tax effect of dividends on unallocated ESOP shares | 35,204 | 35,204 | |||||
Purchase of treasury stock | $ (355,418) | (355,418) | |||||
Purchase of treasury stock, shares | (14,303) | 14,303 | |||||
Reduction of unearned ESOP shares | 190,794 | 252,874 | 443,668 | ||||
Balance, ending at Jun. 30, 2016 | $ 1,009,958 | 17,253,072 | (1,408) | 22,820,938 | $ (7,803,239) | (891,083) | $ 32,388,238 |
Balance, ending, common shares at Jun. 30, 2016 | 2,364,684 | 665,190 | 2,364,684 | ||||
Net income | 1,135,736 | $ 1,135,736 | |||||
Other comprehensive income (loss), net of tax | (2,191) | (2,191) | |||||
Total comprehensive income | 1,133,545 | ||||||
Stock options exercised | 82,442 | $ 68,475 | $ 150,917 | ||||
Stock options exercised, shares | 8,300 | (8,300) | 8,300 | ||||
Stock option expense | 129,167 | $ 129,167 | |||||
Dividends paid on common stock | (2,307,445) | (2,307,445) | |||||
Tax effect of stock options exercised | 9,070 | 9,070 | |||||
Tax effect of dividends on unallocated ESOP shares | 20,967 | 20,967 | |||||
Purchase of treasury stock | $ (44,335) | (44,335) | |||||
Purchase of treasury stock, shares | (1,663) | 1,663 | |||||
Reduction of unearned ESOP shares | 176,584 | 240,835 | 417,419 | ||||
Balance, ending at Jun. 30, 2017 | $ 1,009,958 | $ 17,650,335 | $ (3,599) | $ 21,670,196 | $ (7,779,099) | $ (650,248) | $ 31,897,543 |
Balance, ending, common shares at Jun. 30, 2017 | 2,371,321 | 658,553 | 2,371,321 |
Statements of Changes in Stock6
Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Other comprehensive income, tax portion | $ (1,179) | $ 2,874 |
Dividends paid per share | $ 1 | $ 1 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 1,135,736 | $ 3,175,801 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Excess tax benefits from share-based compensation | (9,070) | (17,141) |
Tax effect of dividends on unallocated ESOP shares | 20,967 | 35,204 |
Stock-based compensation | 129,167 | 97,045 |
Depreciation | 435,557 | 434,401 |
ESOP compensation expense | 417,419 | 443,668 |
Loss on disposal of assets | 4 | 147 |
Deferred income tax (benefit) expense | (46,488) | 57,735 |
Changes in assets and liabilities: | ||
Decrease in trade receivables, net | 1,557,851 | 1,736,937 |
Decrease (increase) in income tax receivable | 218,189 | (314,874) |
Decrease in inventories, net | 1,054,870 | 852,216 |
Increase in prepaid expenses and other current assets | (7,618) | (7,748) |
Increase (decrease) in accounts payable | 1,697,328 | (423,325) |
(Decrease) increase in accrued salaries and wages | (185,865) | 25,523 |
(Decrease) increase in vacation accrual | (48,562) | 13,928 |
Increase (decrease) in other accrued expenses | 53,652 | (352,186) |
(Decrease) increase in payroll and other taxes withheld | (2,414) | 2,271 |
Net cash provided by operating activities | 6,420,723 | 5,759,602 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (352,132) | (284,210) |
Purchase of investment securities | (8,922,097) | (4,930,146) |
Proceeds from sale/maturity of investment securities | 5,071,818 | 3,514,997 |
Net cash used in investing activities | (4,202,411) | (1,699,359) |
Cash Flows from Financing Activities: | ||
Dividends paid on common stock | (2,307,445) | (2,846,690) |
Purchase of treasury stock | (44,335) | (355,418) |
Proceeds from exercise of stock options | 150,917 | 296,963 |
Excess tax benefits from share-based compensation | 9,070 | 17,141 |
Net cash used in financing activities | (2,191,793) | (2,888,004) |
Increase in cash and cash equivalents | 26,519 | 1,172,239 |
Cash and cash equivalents, beginning of the year | 10,031,644 | 8,859,405 |
Cash and cash equivalents, end of the year | 10,058,163 | 10,031,644 |
Supplemental Schedule of Cash Flow Information: | ||
Income taxes paid | $ 323,000 | $ 1,511,000 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Note 1. Nature of Operations Espey Mfg. & Electronics Corp. (the Company) is a manufacturer of electronic equipment used primarily in military and industrial applications. The principal markets for the Company's products are companies that provide electronic support to both military and industrial applications across the United States and at some international locations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Inventory Valuation, Cost Estimation and Revenue Recognition Raw materials are valued at the lower of weighted average cost or market. Inventoried work relating to contracts in process and work in process is valued at actual production cost, including factory overhead incurred to date. Work in process represents spare units; parts and other inventory items acquired or produced to service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company’s balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected to be produced. Certain contracts are expected to extend beyond twelve months. Revenue is recognized on contracts in the period in which the units are delivered and billed (units-of-delivery method). A significant portion of our business is comprised of development and production contracts. Generally, revenues on long-term fixed-price contracts are recorded on a percentage of completion basis using units of delivery as the measurement basis for progress toward completion. Percentage of completion accounting requires judgment relative to expected sales, estimating costs and making assumptions related to technical issues and delivery schedules. Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. The estimation of cost at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process. When a change in expected sales value or estimated cost is determined, changes are reflected in current period earnings. Depreciation Depreciation of plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of depreciable assets are as follows: Buildings and improvements 10 – 40 years Machinery and equipment 3 – 20 years Furniture and fixtures 7 – 10 years Income Taxes The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes." Under the provisions of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. In addition, ASC 740-10 requires that the tax benefit of tax-deductible dividends on unallocated ESOP shares be recorded as a direct addition to retained earnings rather than as a reduction of income tax expense. Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market funds. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Investment Securities The Company accounts for its investment securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” Investment securities at June 30, 2017 and 2016 consist of certificates of deposit and municipal bonds. The Company classifies investment securities as available-for-sale. Unrealized holding gains and losses, net of related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. Realized gains and losses for securities classified as available-for-sale are included in earnings and are determined using the specific identification method. Interest income is recognized when earned. Fair values are based on quoted market prices available as of the balance sheet date, and are therefore considered a Level 1 valuation. Fair Value of Financial Instruments ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: § § § The carrying amounts of financial instruments, including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued expenses, approximated fair value as of June 30, 2017 and 2016 because of the immediate or short-term maturity of these financial instruments. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business and collateral is generally not required for trade receivables. Exposure to credit risk is controlled through the use of credit approvals, credit limits, and monitoring procedures. Accounts receivable are reported net of an allowance for doubtful accounts. The Company estimates the allowance based on its analysis of specific balances. An account is generally considered past due after thirty (30) days from the invoice date. Interest is not charged on past due balances. Based on these factors, there was an allowance for doubtful accounts of $3,000 at June 30, 2017 and 2016. Changes to the allowance for doubtful accounts are charged to expense and reduced by charge-offs, net of recoveries. Per Share Amounts ASC 260-10 “Earnings Per Share” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share, as defined. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of outstanding options issued by the Company are reflected in diluted EPS using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income for fiscal years ended June 30, 2017 and 2016 consists of unrealized holding gains and losses on available-for-sale securities. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investment Tax Credits Investment tax credits are accounted for as a reduction of income tax expense in the year taxes payable are reduced. Unused credits are reflected as a deferred tax asset. Reclassifications Certain reclassifications may have been made to the prior year financial statements to conform to the current year presentation. Recently Issued Accounting Standards In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” ASU No. 2015-11 requires inventory measured using any method other than last-in, first out or the retail inventory method to be subsequently measured at the lower of cost and net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose, and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. The Company’s adoption of ASU No. 2015-11 is not expected to have a material impact on the Company’s financial position or results of operations. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers, ” In subsequent periods, the FASB issued additional ASUs intended to clarify specific aspects related to the interpretation and implementation of ASU No. 2014-09. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” to provide guidance on principal versus agent considerations by an entity as discussed in ASU No. 2014-09. ASU No. 2016-08 provides criteria to be assessed by an entity when determining whether it is the principal or agent in relation to the goods or services which the company is contractually obligated to provide to the customer. Among these considerations are; identifying the unit of account at which the entity should assess whether it is a principal or an agent, identifying the nature of the good or service provided to the customer; applying the control principle to certain types of transactions; and, interaction of the control principle with the indicators provided to assist in the principle versus agent evaluation. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers – (Topic 606): Identifying Performance Obligations and Licensing” to provide implementation guidance related to the necessary judgements required in identifying performance obligations of a contract and guidance related to recognition of licensing revenues. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers – (Topic 606): Narrow-Scope Improvements and Practical Expedients” to provide guidance related to the implementation of ASU No. 2014-09 in the following areas; assessing collectability for contracts that do not meet Step 1 of revenue recognition, presentation of sales taxes, noncash consideration, contract modifications at transition, and completed contracts at transition. These standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No. 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods therein. We are currently evaluating the impact of our pending adoption of ASU No. 2014-09 on our financial statements and have not yet determined the method by which we will adopt the standard in fiscal year 2019. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The guidance requires the classification of deferred tax assets and liabilities as non-current in a classified balance sheet. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. ASU No. 2015-17 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ASU No. 2015-17 may be applied prospectively or retrospectively, and early adoption is permitted. Adoption of ASU No. 2015-17 would have the following impact on the Company’s financial statements at June 30, 2017; a decrease in current assets of $317,559, a decrease in non-current liabilities of $220,571 and an increase in non-current assets of $96,988. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in this Update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments (primarily equity securities) in order to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU No. 2016-01 will be effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is evaluating the impact that ASU No. 2016-01 will have on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Additionally, this ASU allows an entity to make an accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures as they occur. ASU No. 2016-09 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ASU No. 2016-09 may be applied prospectively or retrospectively, and early adoption is permitted. Adoption of ASU No. 2016-09 will not have a material impact on the Company’s financial statements. In March 2017, the FASB issued ASU No. 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. ASU No. 2017-08 will be effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is evaluating the impact that ASU No. 2017-08 will have on the Company's financial statements. Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairments of long-lived assets in fiscal years 2017 and 2016. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable. Concentrations of Risk The market for our defense electronics products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors to which we provide components. Any decline in expenditures by the United States or foreign governments may have an adverse effect on our financial performance. Generally, U.S. Government contracts are subject to procurement laws and regulations. Some of the Company’s contracts are governed by the Federal Acquisition Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition regulations that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal Acquisition Regulation (DFAR). The FAR also contains guidelines and regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government’s convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated for default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related costs and fees. |
Investment Securities
Investment Securities | 12 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 3. Investment Securities Investment securities at June 30, 2017 and 2016 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities and have been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities by major security type at June 30, 2017 and 2016 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2017 Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000 Municipal bonds 871,872 258 (2,162 ) 869,968 2017 Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968 2016 Certificates of deposit $ 4,871,000 $ — $ — $ 4,871,000 Municipal bonds 707,593 1,466 — 709,059 2016 Total investment securities $ 5,578,593 $ 1,466 $ — $ 5,580,059 The portfolio is diversified and highly liquid and primarily consists of investment grade fixed income instruments. At June 30, 2017, the Company did not have any investments in individual securities that have been in a continuous loss position considered to be other than temporary. As of June 30, 2017 and 2016, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total 2017 Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968 2016 Available-for-sale $ 4,811,511 $ 768,548 $ 5,580,059 |
Contracts in Process
Contracts in Process | 12 Months Ended |
Jun. 30, 2017 | |
Contractors [Abstract] | |
Contracts in Process | Note 4. Contracts in Process Contracts in process at June 30, 2017 and 2016 are as follows: 2017 2016 Gross contract value $ 43,140,921 $ 39,061,415 Costs related to contracts in process, net of progress payments of $1,366,504 and $18,313 at June 30, 2017 and 2016 $ 7,863,538 $ 8,810,145 Included in costs relating to contracts in process at June 30, 2017 and 2016 are costs of $1,635,661 3,944,035 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 5. Property, Plant and Equipment Property, plant and equipment at June 30, 2017 and 2016 is as follows: 2017 2016 Land $ 45,000 $ 45,000 Building and improvements 4,304,366 4,259,266 Machinery and equipment 9,028,835 8,735,432 Furniture and fixtures 170,120 159,951 13,548,321 13,199,649 Accumulated depreciation (11,283,225 ) (10,851,124 ) Property, plant and equipment, net $ 2,265,096 $ 2,348,525 Depreciation expense was $435,557 and $434,401 for the years ended June 30, 2017 and 2016, respectively. |
Pension Expense
Pension Expense | 12 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Pension Expense | Note 6. Pension Expense Under terms of a negotiated union contract which expires on June 30, 2018, the Company is obligated to make contributions to a union-sponsored International Brotherhood of Electrical Workers Local 1799 defined benefit pension plan (Plan identifying number is 14-6065199) covering eligible employees. Such contributions and expenses are based upon hours worked at a specified rate and amounted to $89,023 in fiscal year 2017 and $97,336 in fiscal year 2016. These contributions represent more than five percent of the total plan contributions. For the years beginning January 1, 2017 and 2016, the Plan was in the “green zone” which means it is neither endangered nor critical status. A Funding Improvement Plan, entered into by Plan Trustees in fiscal year 2013, when the Plan was in “critical status,” calls for an increase in contributions starting January 1, 2016 of $0.04 per hour for each year for five years thereafter. The increase did not and will not have a material impact on the Company’s financial statements. The Company sponsors a 401(k) plan for non-union workers with employee and employer matching contributions. The employer match is 10% of the employee contribution and was $49,247 and $47,175, for fiscal years 2017 and 2016, respectively. |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Note 7. Provision for Income Taxes A summary of the components of the provision for income taxes for the years ended June 30, 2017 and 2016 is as follows: 2017 2016 Current tax expense - federal $ 559,171 $ 1,230,367 Current tax expense (benefit) - state 2,986 (1,396 ) Deferred tax (benefit) expense (46,488 ) 57,735 Provision for income taxes $ 515,669 $ 1,286,706 Deferred income taxes reflect the impact of "temporary differences" between the amount of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. These "temporary differences" are determined in accordance with ASC 740-10. The combined U.S. federal and state effective income tax rates of 31.2% and 28.8%, for 2017 and 2016 respectively, differed from the statutory U.S. federal income tax rate for the following reasons: 2017 2016 U.S. federal statutory income tax rate 34.0 % 34.0 % Increase (reduction) in rate resulting from: State franchise tax, net of federal income tax benefit 0.1 — ESOP cost versus Fair Market Value 3.6 1.5 Dividend on allocated ESOP shares (7.2 ) (3.2 ) Qualified production activities (2.8 ) (2.7 ) Stock-based compensation 1.8 (0.2 ) Other 1.7 (0.6 ) Effective tax rate 31.2 % 28.8 % For the years ended June 30, 2017 and 2016 deferred income tax (benefit) expense of ($46,488) and $57,735, respectively, results from the changes in temporary differences for each year. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of June 30, 2017 and 2016 are presented as follows: 2017 2016 Deferred tax assets: Accrued expenses $ 195,915 $ 151,210 ESOP 73,696 90,072 Stock-based compensation 81,659 74,287 Inventory - effect of uniform capitalization 36,935 27,266 Unrealized loss (gain) on investment securities 666 (513 ) Other 2,384 308 Total deferred tax assets $ 391,255 $ 342,630 Deferred tax liability: Property, plant and equipment - principally due to differences in depreciation methods $ 294,267 $ 293,309 Total deferred tax liability 294,267 293,309 Net deferred tax asset $ 96,988 $ 49,321 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projection for future taxable income over the period in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these temporary differences without consideration of a valuation allowance. As the result of the implementation of the FASB interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109, the Company recognized no material adjustments to unrecognized tax benefits. As of June 30, 2017 and 2016, the Company has no unrecognized tax benefits. The Company recognizes interest and penalties in general and administrative expense. As of June 30, 2017 and 2016, the Company has not recorded any provision for accrued interest and penalties. By federal and state tax statue, federal and state tax returns are subject to audit for three years from date of filing, unless the return was audited within that period. As such, federal returns for tax years ending June 30, 2017, 2016, 2015, and 2014 remain open to examination by the IRS. State returns for tax years ending June 30, 2017, 2016, 2015 and 2014 remain open to examination by the State of New York. |
Significant Customers
Significant Customers | 12 Months Ended |
Jun. 30, 2017 | |
Significant Customers [Abstract] | |
Significant Customers | Note 8. Significant Customers A significant portion of the Company's business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain industrial customers. Sales to two domestic customers accounted for approximately 45% of total sales in fiscal year 2017. Sales to two domestic customers accounted for approximately 49% of total sales in fiscal year 2016. Export sales in fiscal years 2017 and 2016 were approximately $1,730,000 and $2,125,000, respectively. |
Stock Rights Plan
Stock Rights Plan | 12 Months Ended |
Jun. 30, 2017 | |
Stock Rights Plan [Abstract] | |
Stock Rights Plan | Note 9. Stock Rights Plan The Company has a Shareholder Rights Plan that expires on December 31, 2019 If a 15% or larger shareholder should engage in certain self-dealing transactions or a merger with the Company in which the Company is the surviving corporation and its shares of common stock are not changed or converted into equity securities of any other person, or if any person were to become the beneficial owner of 15% or more of the Company's common stock, then each right not owned by such shareholder or related parties of such shareholder (all of which will be void) will entitle its holder to purchase, at the right's then current exercise price, shares of the Company's common stock having a value of twice the right's exercise price. In addition, if the Company is involved in any other merger or consolidation with, or sells 50% or more of its assets or earning power to another person, each right will entitle its holder to purchase, at the right's then current exercise price, shares of common stock of such other person having a value of twice the right's exercise price. The Company generally is entitled to redeem the rights at one cent per right at any time until the 15th day (or 25th day if extended by the Company's Board of Directors) following public announcement that a 15% position has been acquired or the commencement of a tender or exchange offer which, if consummated, would result in the offeror, together with all affiliates and associates thereof, being the beneficial owner of 15% or more of the Company's common stock. |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 12 Months Ended |
Jun. 30, 2017 | |
Employee Stock Ownership Plan [Abstract] | |
Employee Stock Ownership Plan | Note 10. Employee Stock Ownership Plan The Company sponsors a leveraged employee stock ownership plan (the "ESOP") that covers all nonunion employees who work 1,000 or more hours per year and are employed on June 30. The Company makes annual contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated shares received by the ESOP. All dividends on unallocated shares received by the ESOP are used to pay debt service. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the debt is repaid, shares are released and allocated to active employees, based on the proportion of debt service paid in the year. The Company accounts for its ESOP in accordance with FASB ASC 718-40. Accordingly, the shares purchased by the ESOP are reported as Unearned ESOP Shares in the statement of financial position. As shares are released or committed-to-be-released, the Company reports compensation expense equal to the current average market price of the shares, and the shares become outstanding for earnings-per-share (EPS) computations. ESOP compensation expense was $417,419 and $443,668 for the years ended June 30, 2017 and 2016, respectively. The ESOP shares as of June 30, 2017 and 2016 were as follows: 2017 2016 Allocated shares 456,099 441,095 Unreleased shares 45,000 61,667 Total shares held by the ESOP 501,099 502,762 Fair value of unreleased shares $ 1,008,900 $ 1,603,959 During the twelve months ended June 30, 2017, the Company repurchased 1,663 shares previously held in the ESOP for $44,335. During the twelve months ended June 30, 2016 the Company repurchased 14,303 shares previously held by the ESOP for $355,418. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Note 11. Stock-based Compensation The Company follows ASC 718 in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. Total stock-based compensation expense recognized in the statements of comprehensive income for the fiscal years ended June 30, 2017 and 2016, was $129,167 and $97,045, respectively, before income taxes. The related total deferred tax benefit as of June 30, 2017 and 2016 was approximately $11,606 and $7,971, respectively. ASC 718 requires the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options to be classified and reported as both an operating cash outflow and a financing cash inflow. As of June 30, 2017, there was approximately $117,827 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the next 1.5 years. The total deferred tax benefit related to these awards is approximately $10,728. As of June 30, 2017, the Company had one employee stock option plan under which options could be granted, the 2007 Stock Option and Restricted Stock Plan (the "2007 Plan"). The Board of Directors could grant options to acquire shares of common stock to employees of the Company at the fair market value of the common stock on the date of grant. Generally, options granted have a two-year vesting period based on two years of continuous service and have a ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares issued upon the exercise of options are from those held in Treasury. The 2007 Plan was approved by the Company's shareholders at the Company's Annual Meeting on November 30, 2007. Options covering 400,000 shares are authorized for issuance under the 2007 Plan, of which 278,300 have been granted and 197,800 are outstanding as of June 30, 2017. Subsequent to June 30, 2017 the 2007 Plan expired and the Board of Directors adopted the 2017 Stock Options and Restricted Stock Plan subject to shareholder approval at the Company’s annual meeting scheduled on December 1, 2017. ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model, which incorporates various assumptions including those for volatility, expected life, and interest rates. The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the year ended June 30, 2017 and 2016. 2017 2016 Dividend yield 3.85% 3.99% Expected stock price volatility 29.70% 27.80% Risk-free interest rate 1.84% 1.20% Expected option life (in years) 4.6 yrs 4.2 yrs Weighted average fair value per share of options granted during the period $ 4.640 $ 3.866 The Company pays dividends quarterly and paid cash dividends totaling $1.00 per share for the twelve months ended June 30, 2017 and 2016. Expected stock price volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options. The expected option life (in years) represents the estimated period of time until exercise and is based on actual historical experience. The following table summarizes stock option activity during the twelve months ended June 30, 2017: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2016 170,450 $ 23.84 5.73 Granted 41,150 $ 26.25 9.43 Exercised (8,300 ) $ 18.18 — Forfeited or expired (5,500 ) $ 24.11 — Outstanding at June 30, 2017 197,800 $ 24.57 5.86 $ 124,384 Vested or expected to vest at June 30, 2017 191,230 $ 24.52 5.74 $ 124,384 Exercisable at June 30, 2017 154,900 $ 24.13 4.89 $ 124,384 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing sale price of the Company’s common stock as reported on the NYSE MKT on June 30, 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders had exercised their options on June 30, 2017. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised during the twelve months ended June 30, 2017 and 2016 was $20,769 and $40,981, respectively. The following table summarizes changes in non-vested stock options during the twelve months ended June 30, 2017: Weighted Number of Average Shares Grant Date Subject Fair Value to Option (per Option) Non-Vested at July 1, 2016 45,800 $ 4.564 Granted 41,150 4.640 Vested (41,050 ) 4.609 Forfeited or expired (3,000 ) 4.681 Non-Vested at June 30, 2017 42,900 $ 4.586 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Note 12. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains cash and cash equivalents with various financial institutions. At times such investments may be in excess of FDIC insurance limits. As disclosed in Note 8, a significant portion of the Company's business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain industrial customers. The related accounts receivable balance , as a percentage of the Company's total trade accounts receivable balance, was 41% represented by two customers at June 30, 2017 and 40% represented by two customers at June 30, 2016. Although the Company's exposure to credit risk associated with nonpayment of these concentrated balances is affected by the conditions or occurrences within the U.S. and foreign governments, the Company believes that its trade accounts receivable credit risk exposure is limited. The Company performs ongoing credit evaluations of its customer's financial conditions and requires collateral, such as progress payments, in certain circumstances. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. |
Related Parties
Related Parties | 12 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 13. Related Parties The administration of the shares of common stock held by the ESOP Trust is subject to the Amended and Restated Plan and a Trust Agreement, each effective as of July 1, 2016. The Trustees’ rights with respect to the disposition of shares are governed by the terms of the Plan and the Trust Agreement. As to shares that have been allocated to the accounts of participants in the ESOP Trust, the Plan provides that the Trustees are required to vote such shares in accordance with instructions received from the participants. As to unallocated shares and allocated shares for which voting instructions have not been received from participants, the Plan provides that the Trustees are required to vote such shares in accordance with the direction of the Board of Directors of the Company under the terms of the Plan and Trust Agreement. See Note 10 for additional information regarding the ESOP. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies The Company at certain times enters into standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at June 30, 2017 and 2016. The Company, as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government related to its negotiation and performance of government contracts and its accounting for such contracts. Failure to comply with applicable U.S. Government standards by a contractor may result in suspension from eligibility for award of any new government contract and a guilty plea or conviction may result in debarment from eligibility for awards. The government may, in certain cases, also terminate existing contracts, recover damages, and impose other sanctions and penalties. As a result of contract audits the Company will determine a range of possible outcomes and in accordance with ASC 450 “Contingencies” the Company will accrue amounts within a range that appears to be its best estimate of a possible outcome. Adjustments are made to accruals, if any, periodically based on current information. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 15. Stockholders' Equity Reservation of Shares The Company has reserved common shares for future issuance as follows as of June 30, 2017: Stock options outstanding 197,800 Stock options available for issuance 156,550 Number of common shares reserved 354,350 The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the years ended June 30: 2017 2016 Numerator: Net income $ 1,135,736 $ 3,175,801 Denominator: Basic EPS: Common shares outstanding, beginning of period 2,364,684 2,362,687 Unearned ESOP shares (61,667 ) (79,167 ) Weighted average common shares issued during the period 4,465 5,975 Weighted average common shares purchased during the period (879 ) (10,395 ) Weighted average ESOP shares earned during the period 6,267 6,586 Denominator for basic earnings per common shares – Weighted average common shares 2,312,870 2,285,686 Diluted EPS: Common shares outstanding, beginning of period 2,364,684 2,362,687 Unearned ESOP shares (61,667 ) (79,167 ) Weighted average common shares issued during the period 4,465 5,975 Weighted average common shares purchased during the period (879 ) (10,395 ) Weighted average ESOP shares earned during the period 6,267 6,586 Weighted average dilutive effect of stock options 11,968 16,348 Denominator for diluted earnings per common shares – Weighted average common shares 2,324,838 2,302,034 Not included in this computation of earnings per share for the year ended June 30, 2017 and 2016 were options to purchase 151,800 and 113,250 shares, respectively, of the Company’s common stock. These options were excluded because their inclusion would have been anti-dilutive due to the average strike price exceeding the average market price of those shares. The Company paid cash dividends on common stock of $1.00 per share for the fiscal year ended June 30, 2017 and 2016. Subsequent to June 30, 2017, the Board of Directors has authorized the payment of a fiscal year 2018 first quarter dividend of $0.25 payable September 29, 2017 to shareholders of record on September 25, 2017. Our Board of Directors assesses the Company’s dividend policy periodically. There is no assurance that the Board of Directors will maintain the amount of the regular cash dividend during any future years. |
Line of Credit
Line of Credit | 12 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 16. Line of Credit At June 30, 2017, the Company has an uncommitted and unused Line of Credit with a financial institution. The agreement provides that the Company may borrow up to $3,000,000. The line provides for interest payments equal to the LIBOR Daily Floating Rate plus 2.00%. Any borrowing under the line of credit will be collateralized by accounts receivable. The line will be reviewed annually for renewal. All outstanding balances are payable no later than the expiration date of the agreement, unless other terms are agreed to by the lender. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Note 17. Quarterly Financial Information (Unaudited) First Second Third Fourth 2017 Quarter Quarter Quarter Quarter Net sales $ 6,068,684 $ 5,667,624 $ 5,324,104 $ 5,460,600 Gross profit 1,343,748 1,080,145 1,128,505 1,162,170 Net income 420,825 244,079 279,173 191,659 Net income per share - Basic 0.18 0.11 0.12 0.08 Diluted 0.18 0.11 0.12 0.08 2016 Net sales $ 6,279,436 $ 7,242,020 $ 7,217,922 $ 6,731,987 Gross profit 1,968,320 1,588,043 2,148,223 1,667,096 Net income 878,530 614,427 972,468 710,376 Net income per share - Basic 0.38 0.27 0.43 0.31 Diluted 0.38 0.27 0.43 0.30 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Inventory Valuation, Cost Estimation and Revenue Recognition | Inventory Valuation, Cost Estimation and Revenue Recognition Raw materials are valued at the lower of weighted average cost or market. Inventoried work relating to contracts in process and work in process is valued at actual production cost, including factory overhead incurred to date. Work in process represents spare units; parts and other inventory items acquired or produced to service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company’s balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected to be produced. Certain contracts are expected to extend beyond twelve months. Revenue is recognized on contracts in the period in which the units are delivered and billed (units-of-delivery method). A significant portion of our business is comprised of development and production contracts. Generally, revenues on long-term fixed-price contracts are recorded on a percentage of completion basis using units of delivery as the measurement basis for progress toward completion. Percentage of completion accounting requires judgment relative to expected sales, estimating costs and making assumptions related to technical issues and delivery schedules. Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. The estimation of cost at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process. When a change in expected sales value or estimated cost is determined, changes are reflected in current period earnings. |
Depreciation | Depreciation Depreciation of plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of depreciable assets are as follows: Buildings and improvements 10 – 40 years Machinery and equipment 3 – 20 years Furniture and fixtures 7 – 10 years |
Income Taxes | Income Taxes The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes." Under the provisions of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. In addition, ASC 740-10 requires that the tax benefit of tax-deductible dividends on unallocated ESOP shares be recorded as a direct addition to retained earnings rather than as a reduction of income tax expense. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market funds. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. |
Investment Securities | Investment Securities The Company accounts for its investment securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” Investment securities at June 30, 2017 and 2016 consist of certificates of deposit and municipal bonds. The Company classifies investment securities as available-for-sale. Unrealized holding gains and losses, net of related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. Realized gains and losses for securities classified as available-for-sale are included in earnings and are determined using the specific identification method. Interest income is recognized when earned. Fair values are based on quoted market prices available as of the balance sheet date, and are therefore considered a Level 1 valuation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: § § § The carrying amounts of financial instruments, including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued expenses, approximated fair value as of June 30, 2017 and 2016 because of the immediate or short-term maturity of these financial instruments. |
Accounts receivable and allowance for doubtful accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business and collateral is generally not required for trade receivables. Exposure to credit risk is controlled through the use of credit approvals, credit limits, and monitoring procedures. Accounts receivable are reported net of an allowance for doubtful accounts. The Company estimates the allowance based on its analysis of specific balances. An account is generally considered past due after thirty (30) days from the invoice date. Interest is not charged on past due balances. Based on these factors, there was an allowance for doubtful accounts of $3,000 at June 30, 2017 and 2016. Changes to the allowance for doubtful accounts are charged to expense and reduced by charge-offs, net of recoveries. |
Per Share Amounts | Per Share Amounts ASC 260-10 “Earnings Per Share” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share, as defined. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of outstanding options issued by the Company are reflected in diluted EPS using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income for fiscal years ended June 30, 2017 and 2016 consists of unrealized holding gains and losses on available-for-sale securities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Investment Tax Credits | Investment Tax Credits Investment tax credits are accounted for as a reduction of income tax expense in the year taxes payable are reduced. Unused credits are reflected as a deferred tax asset. |
Reclassifications | Reclassifications Certain reclassifications may have been made to the prior year financial statements to conform to the current year presentation. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” ASU No. 2015-11 requires inventory measured using any method other than last-in, first out or the retail inventory method to be subsequently measured at the lower of cost and net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose, and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. The Company’s adoption of ASU No. 2015-11 is not expected to have a material impact on the Company’s financial position or results of operations. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers, ” In subsequent periods, the FASB issued additional ASUs intended to clarify specific aspects related to the interpretation and implementation of ASU No. 2014-09. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” to provide guidance on principal versus agent considerations by an entity as discussed in ASU No. 2014-09. ASU No. 2016-08 provides criteria to be assessed by an entity when determining whether it is the principal or agent in relation to the goods or services which the company is contractually obligated to provide to the customer. Among these considerations are; identifying the unit of account at which the entity should assess whether it is a principal or an agent, identifying the nature of the good or service provided to the customer; applying the control principle to certain types of transactions; and, interaction of the control principle with the indicators provided to assist in the principle versus agent evaluation. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers – (Topic 606): Identifying Performance Obligations and Licensing” to provide implementation guidance related to the necessary judgements required in identifying performance obligations of a contract and guidance related to recognition of licensing revenues. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers – (Topic 606): Narrow-Scope Improvements and Practical Expedients” to provide guidance related to the implementation of ASU No. 2014-09 in the following areas; assessing collectability for contracts that do not meet Step 1 of revenue recognition, presentation of sales taxes, noncash consideration, contract modifications at transition, and completed contracts at transition. These standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No. 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods therein. We are currently evaluating the impact of our pending adoption of ASU No. 2014-09 on our financial statements and have not yet determined the method by which we will adopt the standard in fiscal year 2019. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The guidance requires the classification of deferred tax assets and liabilities as non-current in a classified balance sheet. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. ASU No. 2015-17 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ASU No. 2015-17 may be applied prospectively or retrospectively, and early adoption is permitted. Adoption of ASU No. 2015-17 would have the following impact on the Company’s financial statements at June 30, 2017; a decrease in current assets of $317,559, a decrease in non-current liabilities of $220,571 and an increase in non-current assets of $96,988. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in this Update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments (primarily equity securities) in order to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU No. 2016-01 will be effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is evaluating the impact that ASU No. 2016-01 will have on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Additionally, this ASU allows an entity to make an accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures as they occur. ASU No. 2016-09 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ASU No. 2016-09 may be applied prospectively or retrospectively, and early adoption is permitted. Adoption of ASU No. 2016-09 will not have a material impact on the Company’s financial statements. In March 2017, the FASB issued ASU No. 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. ASU No. 2017-08 will be effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is evaluating the impact that ASU No. 2017-08 will have on the Company's financial statements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairments of long-lived assets in fiscal years 2017 and 2016. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable. |
Concentrations of Risk | Concentrations of Risk The market for our defense electronics products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors to which we provide components. Any decline in expenditures by the United States or foreign governments may have an adverse effect on our financial performance. Generally, U.S. Government contracts are subject to procurement laws and regulations. Some of the Company’s contracts are governed by the Federal Acquisition Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition regulations that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal Acquisition Regulation (DFAR). The FAR also contains guidelines and regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government’s convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated for default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related costs and fees. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Estimated useful lives of depreciable assets | Buildings and improvements 10 – 40 years Machinery and equipment 3 – 20 years Furniture and fixtures 7 – 10 years |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2017 Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000 Municipal bonds 871,872 258 (2,162 ) 869,968 2017 Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968 2016 Certificates of deposit $ 4,871,000 $ — $ — $ 4,871,000 Municipal bonds 707,593 1,466 — 709,059 2016 Total investment securities $ 5,578,593 $ 1,466 $ — $ 5,580,059 |
Schedule of contractual maturities of available-for-sale securities | Years to Maturity Less than One to One Year Five Years Total 2017 Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968 2016 Available-for-sale $ 4,811,511 $ 768,548 $ 5,580,059 |
Contracts in Process (Tables)
Contracts in Process (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Contractors [Abstract] | |
Schedule of contracts in process | 2017 2016 Gross contract value $ 43,140,921 $ 39,061,415 Costs related to contracts in process, net of progress payments of $1,366,504 and $18,313 at June 30, 2017 and 2016 $ 7,863,538 $ 8,810,145 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of the original cost of property, plant and equipment | 2017 2016 Land $ 45,000 $ 45,000 Building and improvements 4,304,366 4,259,266 Machinery and equipment 9,028,835 8,735,432 Furniture and fixtures 170,120 159,951 13,548,321 13,199,649 Accumulated depreciation (11,283,225 ) (10,851,124 ) Property, plant and equipment, net $ 2,265,096 $ 2,348,525 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | 2017 2016 Current tax expense - federal $ 559,171 $ 1,230,367 Current tax expense (benefit) - state 2,986 (1,396 ) Deferred tax (benefit) expense (46,488 ) 57,735 Provision for income taxes $ 515,669 $ 1,286,706 |
Schedule of effective income tax rates | 2017 2016 U.S. federal statutory income tax rate 34.0 % 34.0 % Increase (reduction) in rate resulting from: State franchise tax, net of federal income tax benefit 0.1 — ESOP cost versus Fair Market Value 3.6 1.5 Dividend on allocated ESOP shares (7.2 ) (3.2 ) Qualified production activities (2.8 ) (2.7 ) Stock-based compensation 1.8 (0.2 ) Other 1.7 (0.6 ) Effective tax rate 31.2 % 28.8 % |
Schedule of deferred tax assets and liabilities | 2017 2016 Deferred tax assets: Accrued expenses $ 195,915 $ 151,210 ESOP 73,696 90,072 Stock-based compensation 81,659 74,287 Inventory - effect of uniform capitalization 36,935 27,266 Unrealized loss (gain) on investment securities 666 (513 ) Other 2,384 308 Total deferred tax assets $ 391,255 $ 342,630 Deferred tax liability: Property, plant and equipment - principally due to differences in depreciation methods $ 294,267 $ 293,309 Total deferred tax liability 294,267 293,309 Net deferred tax asset $ 96,988 $ 49,321 |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Employee Stock Ownership Plan [Abstract] | |
Schedule of ESOP shares | 2017 2016 Allocated shares 456,099 441,095 Unreleased shares 45,000 61,667 Total shares held by the ESOP 501,099 502,762 Fair value of unreleased shares $ 1,008,900 $ 1,603,959 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average assumptions for option awards | 2017 2016 Dividend yield 3.85% 3.99% Expected stock price volatility 29.70% 27.80% Risk-free interest rate 1.84% 1.20% Expected option life (in years) 4.6 yrs 4.2 yrs Weighted average fair value per share of options granted during the period $ 4.640 $ 3.866 |
Schedule of stock option activity | Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2016 170,450 $ 23.84 5.73 Granted 41,150 $ 26.25 9.43 Exercised (8,300 ) $ 18.18 — Forfeited or expired (5,500 ) $ 24.11 — Outstanding at June 30, 2017 197,800 $ 24.57 5.86 $ 124,384 Vested or expected to vest at June 30, 2017 191,230 $ 24.52 5.74 $ 124,384 Exercisable at June 30, 2017 154,900 $ 24.13 4.89 $ 124,384 |
Schedule of changes in non-vested stock options | Weighted Number of Average Shares Grant Date Subject Fair Value to Option (per Option) Non-Vested at July 1, 2016 45,800 $ 4.564 Granted 41,150 4.640 Vested (41,050 ) 4.609 Forfeited or expired (3,000 ) 4.681 Non-Vested at June 30, 2017 42,900 $ 4.586 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of reserved common shares for future issuance | Stock options outstanding 197,800 Stock options available for issuance 156,550 Number of common shares reserved 354,350 |
Schedule of reconciliation of the numerators and denominators of basic and diluted per share computations | 2017 2016 Numerator: Net income $ 1,135,736 $ 3,175,801 Denominator: Basic EPS: Common shares outstanding, beginning of period 2,364,684 2,362,687 Unearned ESOP shares (61,667 ) (79,167 ) Weighted average common shares issued during the period 4,465 5,975 Weighted average common shares purchased during the period (879 ) (10,395 ) Weighted average ESOP shares earned during the period 6,267 6,586 Denominator for basic earnings per common shares – Weighted average common shares 2,312,870 2,285,686 Diluted EPS: Common shares outstanding, beginning of period 2,364,684 2,362,687 Unearned ESOP shares (61,667 ) (79,167 ) Weighted average common shares issued during the period 4,465 5,975 Weighted average common shares purchased during the period (879 ) (10,395 ) Weighted average ESOP shares earned during the period 6,267 6,586 Weighted average dilutive effect of stock options 11,968 16,348 Denominator for diluted earnings per common shares – Weighted average common shares 2,324,838 2,302,034 |
Quarterly Financial Informati34
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | First Second Third Fourth 2017 Quarter Quarter Quarter Quarter Net sales $ 6,068,684 $ 5,667,624 $ 5,324,104 $ 5,460,600 Gross profit 1,343,748 1,080,145 1,128,505 1,162,170 Net income 420,825 244,079 279,173 191,659 Net income per share - Basic 0.18 0.11 0.12 0.08 Diluted 0.18 0.11 0.12 0.08 2016 Net sales $ 6,279,436 $ 7,242,020 $ 7,217,922 $ 6,731,987 Gross profit 1,968,320 1,588,043 2,148,223 1,667,096 Net income 878,530 614,427 972,468 710,376 Net income per share - Basic 0.38 0.27 0.43 0.31 Diluted 0.38 0.27 0.43 0.30 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Allowance for doubtful accounts | $ 3,000 | $ 3,000 |
Adjustments for New Accounting Principle, Early Adoption [Member] | Other Current Assets [Member] | ||
Effect of early adoption of new accounting standard, amount | 317,559 | |
Adjustments for New Accounting Principle, Early Adoption [Member] | Other Noncurrent Liabilities [Member] | ||
Effect of early adoption of new accounting standard, amount | 220,571 | |
Adjustments for New Accounting Principle, Early Adoption [Member] | Other Noncurrent Assets [Member] | ||
Effect of early adoption of new accounting standard, amount | $ 96,988 | |
Buildings and improvements [Member] | Lower Range [Member] | ||
Estimated useful lives of depreciated assets | 10 years | |
Buildings and improvements [Member] | Upper Range [Member] | ||
Estimated useful lives of depreciated assets | 40 years | |
Machinery and equipment [Member] | Lower Range [Member] | ||
Estimated useful lives of depreciated assets | 3 years | |
Machinery and equipment [Member] | Upper Range [Member] | ||
Estimated useful lives of depreciated assets | 20 years | |
Furniture and fixtures [Member] | Lower Range [Member] | ||
Estimated useful lives of depreciated assets | 7 years | |
Furniture and fixtures [Member] | Upper Range [Member] | ||
Estimated useful lives of depreciated assets | 10 years |
Investment Securities (Schedule
Investment Securities (Schedule of Investment Securities) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Amortized Cost | $ 9,428,872 | $ 5,578,593 |
Gross Unrealized Gains | 258 | 1,466 |
Gross Unrealized Losses | (2,162) | |
Fair Value | 9,426,968 | 5,580,059 |
Certificates of deposit [Member] | ||
Amortized Cost | 8,557,000 | 4,871,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 8,557,000 | 4,871,000 |
Municipal bonds [Member] | ||
Amortized Cost | 871,872 | 707,593 |
Gross Unrealized Gains | 258 | 1,466 |
Gross Unrealized Losses | (2,162) | |
Fair Value | $ 869,968 | $ 709,059 |
Investment Securities (Schedu37
Investment Securities (Schedule of Contractual Maturities of Available-For-Sale Securities) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Years to maturity of Available-for-sale securities: | ||
Less than One Year | $ 8,829,542 | $ 4,811,511 |
One to Five Years | 597,426 | 768,548 |
Total | $ 9,426,968 | $ 5,580,059 |
Contracts in Process (Narrative
Contracts in Process (Narrative) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Contractors [Abstract] | ||
Progress payments | $ 1,366,504 | $ 18,313 |
Costs relating to contracts that may not be completed within the next year | $ 1,635,661 | $ 3,944,035 |
Contracts in Process (Schedule
Contracts in Process (Schedule of Contracts in Process) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Contractors [Abstract] | ||
Gross contract value | $ 43,140,921 | $ 39,061,415 |
Costs related to contracts in process, net of progress payments of $1,366,504 and $18,313 at June 30, 2017 and 2016 | $ 7,863,538 | $ 8,810,145 |
Property, Plant and Equipment40
Property, Plant and Equipment (Narrative) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 435,557 | $ 434,401 |
Property, Plant and Equipment41
Property, Plant and Equipment (Summary of Original Cost of Property, Plant and Equipment) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Property, plant and equipment, gross | $ 13,548,321 | $ 13,199,649 |
Accumulated depreciation | (11,283,225) | (10,851,124) |
Property, plant and equipment, net | 2,265,096 | 2,348,525 |
Land [Member] | ||
Property, plant and equipment, gross | 45,000 | 45,000 |
Buildings and improvements [Member] | ||
Property, plant and equipment, gross | 4,304,366 | 4,259,266 |
Machinery and equipment [Member] | ||
Property, plant and equipment, gross | 9,028,835 | 8,735,432 |
Furniture and fixtures [Member] | ||
Property, plant and equipment, gross | $ 170,120 | $ 159,951 |
Pension Expense (Details)
Pension Expense (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Retirement Benefits [Abstract] | ||
Defined benefit contributions and expenses | $ 89,023 | $ 97,336 |
Increase in contribution, hourly rate | 0.04 | |
Employer matching contibutions of 401(k) plan (percentage) | 10.00% | 10.00% |
Employer matching contributions to 401(k) plan | $ 49,247 | $ 47,175 |
Provision for Income Taxes (Sch
Provision for Income Taxes (Schedule of Components of Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Components of the provision for income taxes | ||
Current tax expense - federal | $ 559,171 | $ 1,230,367 |
Current tax (benefit) - state | 2,986 | (1,396) |
Deferred tax expense (benefit) | (46,488) | 57,735 |
Provision for income taxes | $ 515,669 | $ 1,286,706 |
Provision for Income Taxes (S44
Provision for Income Taxes (Schedule of Effective Income Tax Rates) (Details) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income tax rate reconciliation | ||
U.S. federal statutory income tax rate | 34.00% | 34.00% |
Increase (reduction) in rate resulting from: | ||
State franchise tax, net of federal income tax benefit | 0.10% | |
ESOP cost versus Fair Market Value | 3.60% | 1.50% |
Dividend on allocated ESOP shares | (7.20%) | (3.20%) |
Qualified production activities | (2.80%) | (2.70%) |
Stock-based compensation | 1.80% | (0.20%) |
Other | 1.70% | (0.60%) |
Effective tax rate | 31.20% | 28.80% |
Provision for Income Taxes (S45
Provision for Income Taxes (Schedule of Deferred Tax Assets And Liabilities) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Deferred tax assets: | ||
Accrued expenses | $ 195,915 | $ 151,210 |
ESOP | 73,696 | 90,072 |
Stock-based compensation | 81,659 | 74,287 |
Inventory - effect on uniform capitalization | 36,935 | 27,266 |
Unrealized loss (gain) on investment securities | 666 | (513) |
Other | 2,384 | 308 |
Total deferred tax assets | 391,255 | 342,630 |
Deferred tax liability: | ||
Property, plant and equipment - principally due to differences in depreciation methods | 294,267 | 293,309 |
Total deferred tax liability | 294,267 | 293,309 |
Net deferred tax asset | 96,988 | 49,321 |
Deferred tax expense (benefit) | $ (46,488) | $ 57,735 |
Significant Customers (Details)
Significant Customers (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | |
Sales | $ 5,460,600 | $ 5,324,104 | $ 5,667,624 | $ 6,068,684 | $ 6,731,987 | $ 7,217,922 | $ 7,242,020 | $ 6,279,436 | $ 22,521,012 | $ 27,471,365 |
Sales Revenue [Member] | Domestic U.S. Customers [Member] | ||||||||||
Concentration Risk percentage | 45.00% | 49.00% | ||||||||
Number of customers | 2 | 2 | ||||||||
Sales Revenue [Member] | Foreign Customers [Member] | ||||||||||
Sales | $ 1,730,000 | $ 2,125,000 |
Stock Rights Plan (Details)
Stock Rights Plan (Details) | 12 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Stock Rights Plan [Abstract] | |
Expiration date of the plan | Dec. 31, 2019 |
Number of rights distributed as a dividend, per share of common stock | 1 |
Date purchased rights distributed | Apr. 14, 1989 |
Number of shares that can be purchased by exercising each stock right | 0.50 |
Exercise price (per share) | $ / shares | $ 25 |
Beneficial ownership percentage that causes rights to be exercisable | 15.00% |
Percentage sale of assets or earning power to another person where rights become exercisable | 50.00% |
Employee Stock Ownership Plan48
Employee Stock Ownership Plan (Narrative) (Details) | 12 Months Ended | |
Jun. 30, 2017USD ($)hshares | Jun. 30, 2016USD ($)shares | |
ESOP compensation expense | $ 417,419 | $ 443,668 |
Value of shares repurchased | $ 44,335 | $ 355,418 |
Employee Stock Ownership Plan [Member] | ||
Number of hours worked per year to quality for the plan | h | 1,000 | |
Shares repurchased | shares | 1,663 | 14,303 |
Value of shares repurchased | $ 44,335 | $ 355,418 |
Employee Stock Ownership Plan49
Employee Stock Ownership Plan (Schedule of ESOP Shares) (Details) - Employee Stock Ownership Plan [Member] - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
ESOP share allocation | ||
Allocated shares | 456,099 | 441,095 |
Unreleased shares | 45,000 | 61,667 |
Total shares held by the ESOP | 501,099 | 502,762 |
Fair value of unreleased shares | $ 1,008,900 | $ 1,603,959 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2007 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock based compensation expense | $ 129,167 | $ 97,045 | |
Deferred tax benefit related to stock based compensation | 11,606 | $ 7,971 | |
Unrecognized compensation costs | $ 117,827 | ||
Period in which compensation cost will be recognized | 1 year 6 months | ||
Deferred tax benefit related to unrecognized compensation costs | $ 10,728 | ||
Options granted | 41,150 | ||
Options outstanding | 197,800 | 170,450 | |
Dividends paid per share | $ 1 | $ 1 | |
Aggregate intrinsic value of options exercised | $ 20,769 | $ 40,981 | |
2007 Plan [Member] | Stock Options [Member] | |||
Authorized shares under plan | 400,000 | ||
Vesting period | 2 years | ||
Contractual life | 10 years | ||
Options granted | 278,300 | ||
Options outstanding | 197,800 |
Stock-based Compensation (Sched
Stock-based Compensation (Schedule of Weighted Average Assumptions for Option Awards) (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Weighted average assumptions to calculation option fair value | ||
Dividend yield | 3.85% | 3.99% |
Expected stock price volatility | 29.70% | 27.80% |
Risk-free interest rate | 1.84% | 1.20% |
Expected option life (in years) | 4 years 7 months 6 days | 4 years 2 months 12 days |
Weighted average fair value per share of options granted during the period | $ 4.640 | $ 3.866 |
Stock-based Compensation (Sch52
Stock-based Compensation (Schedule of Stock Option Activity) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Shares Subject to Option | ||
Balance, beginning | 170,450 | |
Granted | 41,150 | |
Exercised | (8,300) | (16,300) |
Forfeited or expired | (5,500) | |
Outstanding, ending | 197,800 | 170,450 |
Vested or expected to vest, end of period | 191,230 | |
Exercisable, end of period | 154,900 | |
Weight Average Exercise Price | ||
Balance, beginning | $ 23.84 | |
Granted | 26.25 | |
Exercised | 18.18 | |
Forfeited or expired | 24.11 | |
Outstanding, ending | 24.57 | $ 23.84 |
Vested or expected to vest, end of period | 24.52 | |
Exercisable, end of period | $ 24.13 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 5 years 10 months 10 days | 5 years 8 months 23 days |
Granted | 9 years 5 months 5 days | |
Vested or expected to vest, end of period | 5 years 8 months 26 days | |
Exercisable, end of period | 4 years 10 months 21 days | |
Aggregate Intrinsic Value | ||
Outstanding end of period | $ 124,384 | |
Vested or expected to vest, end of period | 124,384 | |
Exercisable, end of period | $ 124,384 |
Stock-based Compensation (Sch53
Stock-based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details) | 12 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Weighted Average Number of Shares Subject to Option | |
Non-vested, beginning balance | shares | 45,800 |
Granted | shares | 41,150 |
Vested | shares | (41,050) |
Forfeited or expired | shares | (3,000) |
Non-vested, ending balance | shares | 42,900 |
Average Grant Date Fair Value | |
Balance, beginning | $ / shares | $ 4.564 |
Granted | $ / shares | 4.640 |
Vested | $ / shares | 4.609 |
Forfeited or expired | $ / shares | 4.681 |
Outstanding, ending | $ / shares | $ 4.586 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) - Accounts receivable [Member] - Customers | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Concentration Risk percentage | 41.00% | 40.00% |
Number of customers | 2 | 2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Contingent liability on outstanding letters of credit | $ 0 | $ 0 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Dividends Payable [Line Items] | |||
Cash dividends on common stock (in dollars per share) | $ 1 | $ 1 | |
Anti-dilutive options excluded from calculation of EPS | 151,800 | 113,250 | |
Forecast [Member] | |||
Dividends Payable [Line Items] | |||
Dividend payable, amount per share | $ 0.25 | ||
Dividend payable, date to be paid | 2017-09 | ||
Dividend payable, date of record | Sep. 25, 2017 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Reserved Common Shares for Future Issuance) (Details) - shares | Jun. 30, 2017 | Jun. 30, 2016 |
Shares reserved for future issuance | ||
Stock options outstanding | 197,800 | 170,450 |
Stock options available for issuance | 156,550 | |
Number of common shares reserved | 354,350 |
Stockholders' Equity (Schedul58
Stockholders' Equity (Schedule of Reconciliation of Numerators and Denominators of Basic and Diluted Per Share Computations) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||||||||
Net Income | $ 191,659 | $ 279,173 | $ 244,079 | $ 420,825 | $ 710,376 | $ 972,468 | $ 614,427 | $ 878,530 | $ 1,135,736 | $ 3,175,801 |
Basic EPS: | ||||||||||
Balance, beginning, shares | 2,364,684 | 2,362,687 | 2,364,684 | 2,362,687 | ||||||
Unearned ESOP shares | (61,667) | (79,167) | ||||||||
Weighted average common shares issued during the period | 4,465 | 5,975 | ||||||||
Weighted average common shares purchased during the period | (879) | (10,395) | ||||||||
Weighted average ESOP shares earned during the period | 6,267 | 6,586 | ||||||||
Denominator for basic earnings per common shares - Weighted average common shares | 2,312,870 | 2,285,686 | ||||||||
Diluted EPS: | ||||||||||
Weighted average dilutive effect of stock options | 11,968 | 16,348 | ||||||||
Denominator for diluted earnings per common shares - Weighted average common shares | 2,324,838 | 2,302,034 |
Line of Credit (Details)
Line of Credit (Details) | 12 Months Ended |
Jun. 30, 2017USD ($) | |
Maximum amount of Line of Credit | $ 3,000,000 |
LIBOR [Member] | |
Spread on variable interest rate | 2.00% |
Quarterly Financial Informati60
Quarterly Financial Information (Unaudited) (Schedule of Quarterly Financial Information) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Net sales | $ 5,460,600 | $ 5,324,104 | $ 5,667,624 | $ 6,068,684 | $ 6,731,987 | $ 7,217,922 | $ 7,242,020 | $ 6,279,436 | $ 22,521,012 | $ 27,471,365 |
Gross profit | 1,162,170 | 1,128,505 | 1,080,145 | 1,343,748 | 1,667,096 | 2,148,223 | 1,588,043 | 1,968,320 | 4,714,568 | 7,371,682 |
Net income | $ 191,659 | $ 279,173 | $ 244,079 | $ 420,825 | $ 710,376 | $ 972,468 | $ 614,427 | $ 878,530 | $ 1,135,736 | $ 3,175,801 |
Net income per share: | ||||||||||
Basic | $ 0.08 | $ 0.12 | $ 0.11 | $ 0.18 | $ 0.31 | $ 0.43 | $ 0.27 | $ 0.38 | $ 0.49 | $ 1.39 |
Diluted | $ 0.08 | $ 0.12 | $ 0.11 | $ 0.18 | $ 0.30 | $ 0.43 | $ 0.27 | $ 0.38 | $ 0.49 | $ 1.38 |