Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2017 | Feb. 13, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ESPEY MFG & ELECTRONICS CORP | |
Entity Central Index Key | 33,533 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 | |
Entity Common Stock, Shares Outstanding | 2,366,523 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
ASSETS: | ||
Cash and cash equivalents | $ 7,202,247 | $ 10,058,163 |
Investment securities | 11,422,070 | 9,426,968 |
Trade accounts receivable, net of allowance of $3,000 | 5,558,500 | 3,399,613 |
Income tax receivable | 120,179 | |
Inventories: | ||
Raw materials | 1,331,867 | 1,303,259 |
Work-in-process | 759,554 | 512,014 |
Costs related to contracts in process, net of advance payments of $173,061 and $1,366,504 at December 31, 2017 and June 30, 2017, respectively | 6,850,469 | 7,863,538 |
Total inventories | 8,941,890 | 9,678,811 |
Deferred tax assets | 317,559 | |
Prepaid expenses and other current assets | 252,777 | 227,306 |
Total current assets | 33,377,484 | 33,228,599 |
Property, plant and equipment, net | 2,239,093 | 2,265,096 |
Deferred tax assets | 89,965 | |
Total assets | 35,706,542 | 35,493,695 |
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||
Accounts payable | 1,296,934 | 2,250,115 |
Accrued expenses: | ||
Salaries and wages | 404,382 | 172,045 |
Vacation | 629,908 | 656,199 |
ESOP payable | 156,538 | |
Other | 120,410 | 250,283 |
Payroll and other taxes withheld | 50,696 | 46,939 |
Income taxes payable | 314,951 | |
Total current liabilities | 2,973,819 | 3,375,581 |
Deferred tax liabilities | 220,571 | |
Total liabilities | 2,973,819 | 3,596,152 |
Commitments and contingencies (see Note 5) | ||
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,029,874 shares as of December 31, 2017 and June 30, 2017. Outstanding 2,366,523 and 2,371,321 as of December 31, 2017 and June 30, 2017, respectively (includes 37,083 and 45,000 Unearned ESOP shares, respectively) | 1,009,958 | 1,009,958 |
Capital in excess of par value | 17,700,805 | 17,650,335 |
Accumulated other comprehensive loss | (4,449) | (3,599) |
Retained earnings | 22,565,450 | 21,670,196 |
Total stockholders equity before ESOP | 41,271,764 | 40,326,890 |
Less: Unearned ESOP shares | (650,248) | (650,248) |
Cost of 663,351 and 658,553 shares of common stock in treasury as of December 31, 2017 and June 30, 2017, respectively | (7,888,793) | (7,779,099) |
Total stockholders' equity | 32,732,723 | 31,897,543 |
Total liabilities and stockholders' equity | $ 35,706,542 | $ 35,493,695 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 3,000 | $ 3,000 |
Advance payments of costs related to contracts in process | $ 173,061 | $ 1,366,504 |
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 | 2,366,523 | 2,371,321 |
Unearned ESOP, shares | 37,083 | 45,000 |
Treasury stock, shares | 663,351 | 658,553 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 11,531,105 | $ 5,667,624 | $ 19,027,528 | $ 11,736,308 |
Cost of sales | 8,455,507 | 4,587,479 | 14,490,776 | 9,312,416 |
Gross profit | 3,075,598 | 1,080,145 | 4,536,752 | 2,423,892 |
Selling, general and administrative expenses | 982,370 | 750,381 | 1,861,190 | 1,523,047 |
Operating income | 2,093,228 | 329,764 | 2,675,562 | 900,845 |
Other income | ||||
Interest income | 35,653 | 11,454 | 66,877 | 23,475 |
Other | 7,636 | 7,201 | 17,808 | 14,203 |
Total other income | 43,289 | 18,655 | 84,685 | 37,678 |
Income before provision for income taxes | 2,136,517 | 348,419 | 2,760,247 | 938,523 |
Provision for income taxes | 521,646 | 104,340 | 702,612 | 273,619 |
Net income | 1,614,871 | 244,079 | 2,057,635 | 664,904 |
Other comprehensive income, net of tax: | ||||
Unrealized loss on investment securities | (569) | (570) | (850) | (1,256) |
Total comprehensive income | $ 1,614,302 | $ 243,509 | $ 2,056,785 | $ 663,648 |
Net income per share: | ||||
Basic | $ 0.69 | $ 0.11 | $ 0.88 | $ 0.29 |
Diluted | $ 0.69 | $ 0.11 | $ 0.88 | $ 0.29 |
Weighted average number of shares outstanding: | ||||
Basic | 2,327,562 | 2,308,588 | 2,326,963 | 2,305,825 |
Diluted | 2,335,293 | 2,323,604 | 2,333,764 | 2,321,295 |
Dividends per share: | $ 0.25 | $ 0.25 | $ 0.50 | $ 0.50 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 2,057,635 | $ 664,904 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Excess tax benefits from share-based compensation | (8,066) | |
Stock-based compensation | 50,470 | 53,048 |
Depreciation | 211,193 | 216,628 |
ESOP compensation expense | 179,038 | 216,876 |
Deferred income tax expense | 6,565 | 34,481 |
Changes in assets and liabilities: | ||
(Increase) decrease in trade receivable, net | (2,158,887) | 1,204,622 |
Decrease in inventories, net | 736,921 | 1,391,132 |
(Increase) decrease in prepaid expenses and other current assets | (25,471) | 132,175 |
Decrease in accounts payable | (953,181) | (116,652) |
Increase (decrease) in accrued salaries and wages | 232,337 | (177,939) |
Decrease in vacation accrual | (26,291) | (21,210) |
Decrease in ESOP payable | (22,500) | (30,833) |
Decrease in other accrued expenses | (129,873) | (94,452) |
Increase in payroll and other taxes withheld | 3,757 | 3,512 |
Increase in income tax payable | 435,131 | 21,136 |
Net cash provided by operating activities | 596,844 | 3,489,362 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (185,190) | (223,211) |
Purchase of investment securities | (4,696,925) | (6,232,932) |
Proceeds from sale/maturity of investment securities | 2,701,431 | 2,845,017 |
Net cash used in investing activities | (2,180,684) | (3,611,126) |
Cash Flows from Financing Activities: | ||
Dividends on common stock | (1,162,382) | (1,152,618) |
Purchase of treasury stock | (109,694) | (44,335) |
Proceeds from exercise of stock options | 136,285 | |
Excess tax benefits from share-based compensation | 8,066 | |
Net cash used in financing activities | (1,272,076) | (1,052,602) |
Decrease in cash and cash equivalents | (2,855,916) | (1,174,366) |
Cash and cash equivalents, beginning of period | 10,058,163 | 10,031,644 |
Cash and cash equivalents, end of period | 7,202,247 | 8,857,278 |
Supplemental Schedule of Cash Flow Information: | ||
Income taxes paid | $ 260,000 | $ 218,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation In the opinion of management the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the results for such periods. The results for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventories, income taxes, and stock-based compensation. Management bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. These financial statements should be read in conjunction with the Company's most recent audited financial statements included in its report on Form 10-K for the year ended June 30, 2017. Certain reclassifications may have been made to the prior year financial statements to conform to the current year presentation. |
Investment Securities
Investment Securities | 6 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 2. Investment Securities 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: § Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. § Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. § Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The carrying amounts of financial instruments, including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses, approximated fair value as of December 31, 2017 and June 30, 2017 because of the immediate or short-term maturity of these financial instruments. Investment securities at December 31, 2017 and June 30, 2017 consist of certificates of deposit and government 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 December 31, 2017 and June 30, 2017 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2017 Certificates of deposit $ 10,431,000 $ — $ — $ 10,431,000 Municipal bonds 994,282 568 (3,780 ) 991,070 Total investment securities $ 11,425,282 $ 568 $ (3,780 ) $ 11,422,070 June 30, 2017 Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000 Municipal bonds 871,872 258 (2,162 ) 869,968 Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968 The portfolio is diversified and highly liquid and primarily consists of investment grade fixed income instruments. At December 31, 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 December 31, 2017 and June 30, 2017, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total December 31, 2017 Available-for-sale $ 10,985,778 $ 436,292 $ 11,422,070 June 30, 2017 Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968 |
Net Income per Share
Net Income per Share | 6 Months Ended |
Dec. 31, 2017 | |
Net Income per Share [Abstract] | |
Net Income per Share | Note 3. Net Income per Share Basic net income per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The computation of weighted-average common shares outstanding, assuming dilution, excluded options to purchase 150,550 and 107,700 shares of our common stock for the three and six months ended December 31, 2017 and 2016, respectively, as the effect of including them would be anti-dilutive. As Unearned ESOP shares are released or committed-to-be-released the shares become outstanding for earnings-per-share computations. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Note 4. 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 three-month periods ended December 31, 2017 and 2016 was $29,048 and $29,715, respectively, before income taxes. The related total deferred tax benefits were approximately $1,602 and $2,359 for the same periods. Total stock-based compensation expense recognized in the statements of comprehensive income for the six-month periods ended December 31, 2017 and 2016, was $50,470 and $53,048, respectively, before income taxes. The related total deferred tax benefit was approximately $2,771 and $4,124 for the same periods. 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 December 31, 2017, there was approximately $189,343 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the next 2.00 years. The total deferred tax benefit related to these awards is expected to be approximately $10,772. The Company has one employee stock option plan under which options or stock awards may be granted, the 2017 Stock Options and Restricted Stock Plan (the "2017 Plan"), approved by the Company's shareholders at the Company's Annual Meeting on December 1, 2017. The Board of Directors may grant options to acquire shares of common stock to employees and non-employee directors of the Company at the fair market value of the common stock on the date of grant. The maximum aggregate number of shares of Common Stock subject to options or awards to non-employee directors is 133,000 and the maximum aggregate number of shares of Common Stock subject to options or awards granted to non-employee directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or awards granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee may not exceed 15,000 in a fiscal year. 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. Options covering 400,000 shares are authorized for issuance under the 2017 plan, of which 51,515 have been granted as of December 31, 2017. While no further grants of options may be made under the Company’s 2007 Stock Options and Restricted Stock Plan which expired on August 16, 2017, as of December 31, 2017, 196,550 options were outstanding under such plan of which 154,650 are vested and exercisable. 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 dividend yield, 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 six months ended December 31, 2017 and 2016. December 31, 2017 December 31, 2016 Dividend yield 4.60% 3.85% Company’s expected volatility 23.97% 29.70% Risk-free interest rate 1.95% 1.84% Expected term 4.7 yrs 4.6 yrs Weighted average fair value per share of options granted during the period $ 2.790 $ 4.640 The Company declares dividends quarterly and paid cash dividends totaling $0.50 per share for the six months ended December 31, 2017 and 2016. 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. 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 six months ended December 31, 2017: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic To Options Price Term Value Balance at July 1, 2017 197,800 $ 24.57 5.86 Granted 51,515 $ 21.75 9.81 Exercised — — — Forfeited or expired (1,250 ) $ 26.00 — Outstanding at December 31, 2017 248,065 $ 23.98 6.28 $ 309,072 Vested or expected to vest at December 31, 2017 233,886 $ 23.99 6.09 $ 291,851 Exercisable at December 31, 2017 154,650 $ 24.13 4.40 $ 195,224 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 December 31, 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 December 31, 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 six months ended December 31, 2017 and 2016 were $0 and $15,189, respectively. The following table summarizes changes in non-vested stock options during the six months ended December 31, 2017: Number Weighted Average of Shares Grant Date Fair Subject to Option Value (per Option) Non-vested at July 1, 2017 42,900 $ 4.586 Granted 51,515 $ 2.790 Vested (500 ) $ 4.431 Forfeited or expired (500 ) $ 4.640 Non-vested at December 31, 2017 93,415 $ 3.596 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5. 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 December 31, 2017 and June 30, 2017. 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. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Dec. 31, 2017 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | Note 6. Recently Issued Accounting Standards 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 continuing to evaluate the impact of our pending adoption of ASU No. 2014-09, which we do not expect to have a material impact on the Company’s financial statements upon adoption. The company expects to use the modified retrospective method when adopting the standard beginning July 1, 2018. 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. We adopted ASU 2015-17 during the first quarter of fiscal year 2018 on a prospective basis. Prior periods were not retrospectively adjusted. Accordingly, for the six-month period ended December 31, 2017 we decreased current deferred tax assets by $301,447 and decreased noncurrent deferred tax liabilities by $211,482; the net reclassification of which increased noncurrent deferred tax assets by $89,965. Adoption of ASU No. 2015-17 for the prior period presented would have the following impact on the Company’s financial statements for 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. We adopted ASU 2016-09 during the first quarter of fiscal year 2018 on a prospective basis. We have elected to follow an accounting policy to estimate the number of awards that are expected to vest (consistent with ASU and prior GAAP). Adoption of ASU No. 2016-09 did not and is not expected to 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. |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 6 Months Ended |
Dec. 31, 2017 | |
Employee Stock Ownership Plan [Abstract] | |
Employee Stock Ownership Plan | Note 7. Employee Stock Ownership Plan The Company sponsors a leveraged employee stock ownership plan (the "ESOP") that covers all non-union 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 $89,578 and $108,167 for the three-month periods ended December 31, 2017 and 2016, respectively. ESOP compensation expense was $179,038 and $216,876 for the six-month periods ended December 31, 2017 and 2016, respectively. The ESOP shares as of December 31, 2017 and 2016 were as follows: December 31, 2017 December 31, 2016 Allocated shares 443,198 439,432 Committed-to-be-released shares 7,917 8,333 Unreleased shares 37,083 53,334 Total shares held by the ESOP 488,198 501,099 Fair value of unreleased shares $ 888,509 $ 1,389,884 During the three and six months ended December 31, 2017 the Company repurchased 4,798 shares previously held in the ESOP for $109,694. During the three and six months ended December 31, 2016 the Company repurchased 1,663 shares previously held in the ESOP for $44,335. |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale Securities | Investment securities at December 31, 2017 and June 30, 2017 consist of certificates of deposit and government 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 December 31, 2017 and June 30, 2017 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2017 Certificates of deposit $ 10,431,000 $ — $ — $ 10,431,000 Municipal bonds 994,282 568 (3,780 ) 991,070 Total investment securities $ 11,425,282 $ 568 $ (3,780 ) $ 11,422,070 June 30, 2017 Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000 Municipal bonds 871,872 258 (2,162 ) 869,968 Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968 |
Schedule of Contractual Maturities | As of December 31, 2017 and June 30, 2017, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total December 31, 2017 Available-for-sale $ 10,985,778 $ 436,292 $ 11,422,070 June 30, 2017 Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value Assumptions | The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the six months ended December 31, 2017 and 2016. December 31, 2017 December 31, 2016 Dividend yield 4.60% 3.85% Company’s expected volatility 23.97% 29.70% Risk-free interest rate 1.95% 1.84% Expected term 4.7 yrs 4.6 yrs Weighted average fair value per share of options granted during the period $ 2.790 $ 4.640 |
Schedule of Stock Option Activity | The following table summarizes stock option activity during the six months ended December 31, 2017: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic To Options Price Term Value Balance at July 1, 2017 197,800 $ 24.57 5.86 Granted 51,515 $ 21.75 9.81 Exercised — — — Forfeited or expired (1,250 ) $ 26.00 — Outstanding at December 31, 2017 248,065 $ 23.98 6.28 $ 309,072 Vested or expected to vest at December 31, 2017 233,886 $ 23.99 6.09 $ 291,851 Exercisable at December 31, 2017 154,650 $ 24.13 4.40 $ 195,224 |
Schedule of Changes in Non-Vested Stock Options | The following table summarizes changes in non-vested stock options during the six months ended December 31, 2017: Number Weighted Average of Shares Grant Date Fair Subject to Option Value (per Option) Non-vested at July 1, 2017 42,900 $ 4.586 Granted 51,515 $ 2.790 Vested (500 ) $ 4.431 Forfeited or expired (500 ) $ 4.640 Non-vested at December 31, 2017 93,415 $ 3.596 |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Employee Stock Ownership Plan [Abstract] | |
Schedule of ESOP shares | The ESOP shares as of December 31, 2017 and 2016 were as follows: December 31, 2017 December 31, 2016 Allocated shares 443,198 439,432 Committed-to-be-released shares 7,917 8,333 Unreleased shares 37,083 53,334 Total shares held by the ESOP 488,198 501,099 Fair value of unreleased shares $ 888,509 $ 1,389,884 |
Investment Securities (Schedule
Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 11,425,282 | $ 9,428,872 |
Gross Unrealized Gains | 568 | 258 |
Gross Unrealized Losses | (3,780) | (2,162) |
Fair Value | 11,422,070 | 9,426,968 |
Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,431,000 | 8,557,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 10,431,000 | 8,557,000 |
Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 994,282 | 871,872 |
Gross Unrealized Gains | 568 | 258 |
Gross Unrealized Losses | (3,780) | (2,162) |
Fair Value | $ 991,070 | $ 869,968 |
Investment Securities (Schedu17
Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Contractual maturities of available-for-sale securities | ||
Less than One Year | $ 10,985,778 | $ 8,829,542 |
One to Five Years | 436,292 | 597,426 |
Fair Value | $ 11,422,070 | $ 9,426,968 |
Net Income per Share (Details)
Net Income per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Income per Share [Abstract] | ||||
Anti-dilutive securities | 150,550 | 150,550 | 107,700 | 107,700 |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation expense | $ 29,048 | $ 29,715 | $ 50,470 | $ 53,048 | |
Deferred tax benefit related to stock based compensation | 1,602 | $ 2,359 | 2,771 | $ 4,124 | |
Unrecognized compensation costs | 189,343 | $ 189,343 | |||
Period in which compensation cost will be recognized | 2 years | ||||
Deferred tax benefit related to unrecognized compensation costs | $ 10,772 | $ 10,772 | |||
Granted | 51,515 | ||||
Outstanding | 248,065 | 248,065 | 197,800 | ||
Cash divided paid | $ 0.50 | $ 0.50 | |||
Total intrinsic values of the options exercised | $ 0 | $ 15,189 | |||
2017 Plan [Member] | Stock Option Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years | ||||
Expiration period | 10 years | ||||
Authorized shares under plan | 400,000 | 400,000 | |||
Granted | 51,515 | ||||
2017 Plan [Member] | Non employee directors [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized shares under plan | 133,000 | 133,000 | |||
Percentage of total number of shares subject to options or awards, single fiscal year | 33.33% | ||||
Number of shares subject to option or award, single fiscal year | 13,300 | 13,300 | |||
2017 Plan [Member] | Individual Employee [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares subject to option or award, single fiscal year | 15,000 | 15,000 | |||
2007 Plan [Member] | Stock Option Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding | 196,550 | 196,550 | |||
Vested and exercisable shares | 154,650 | 154,650 |
Stock Based Compensation (Sched
Stock Based Compensation (Schedule of weighted average assumptions for option awards) (Details) - $ / shares | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted Average Assumptions | ||
Dividend yield | 4.60% | 3.85% |
Company's expected volatility | 23.97% | 29.70% |
Risk-free interest rate | 1.95% | 1.84% |
Expected term | 4 years 8 months 12 days | 4 years 7 months 6 days |
Weighted average fair value per share of options granted during the period | $ 2.790 | $ 4.640 |
Stock Based Compensation (Sch21
Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Jun. 30, 2017 | |
Number of Shares Subject To Options | ||
Balance at July 1, 2017 | 197,800 | |
Granted | 51,515 | |
Exercised | ||
Forfeited or expired | (1,250) | |
Outstanding at December 31, 2017 | 248,065 | 197,800 |
Vested or expected to vest at December 31, 2017 | 233,886 | |
Exercisable at December 31, 2017 | 154,650 | |
Weighted Average Exercise Price | ||
Balance at July 1, 2017 | $ 24.57 | |
Granted | 21.75 | |
Exercised | ||
Forfeited or expired | 26 | |
Outstanding at December 31, 2017 | 23.98 | $ 24.57 |
Vested or expected to vest at December 31, 2017 | 23.99 | |
Exercisable at December 31, 2017 | $ 24.13 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 6 years 3 months 11 days | 5 years 10 months 10 days |
Granted | 9 years 9 months 22 days | |
Vested or expected to vest at December 31, 2017 | 6 years 1 month 2 days | |
Exercisable at December 31, 2017 | 4 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding at December 31, 2017 | $ 309,072 | |
Vested or expected to vest at December 31, 2017 | 291,851 | |
Exercisable at December 31, 2017 | $ 195,224 |
Stock Based Compensation (Sch22
Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details) | 6 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Shares Subject to Option | |
Non-vested at July 1, 2017 | shares | 42,900 |
Granted | shares | 51,515 |
Vested | shares | (500) |
Forfeited or expired | shares | (500) |
Non-vested at December 31, 2017 | shares | 93,415 |
Weighted Average Grant Date Fair Value (per Option) | |
Non-vested at July 1, 2017 | $ / shares | $ 4.586 |
Granted | $ / shares | 2.790 |
Vested | $ / shares | 4.431 |
Forfeited or expired | $ / shares | 4.640 |
Non-vested at December 31, 2017 | $ / shares | $ 3.596 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Standby Letters of Credit [Member] | ||
Contingent liabilities | $ 0 | $ 0 |
Recently Issued Accounting St24
Recently Issued Accounting Standards (Details) - Adjustments for New Accounting Pronouncement [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Jun. 30, 2017 | |
Item Effected [Line Items] | ||
Change in current assets | $ 301,447 | $ 317,559 |
Change in noncurrent liabilities | 211,482 | 220,571 |
Change in noncurrent assets | $ 89,965 | $ 96,988 |
Employee Stock Ownership Plan25
Employee Stock Ownership Plan (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2017USD ($)hshares | Dec. 31, 2016USD ($)shares | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
ESOP compensation expense | $ 89,578 | $ 108,167 | $ 179,038 | $ 216,876 |
Employee Stock Ownership Plan [Member] | ||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Number of hours worked per year to quality for the plan | h | 1,000 | |||
Shares repurchased | shares | 4,798 | 1,663 | 4,798 | 1,663 |
Value of shares repurchased | $ 109,694 | $ 44,335 | $ 109,694 | $ 44,335 |
Employee Stock Ownership Plan26
Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Stock Ownership Plan [Abstract] | ||
Allocated shares | 443,198 | 439,432 |
Committed-to-be-released shares | 7,917 | 8,333 |
Unreleased shares | 37,083 | 53,334 |
Total shares held by the ESOP | 488,198 | 501,099 |
Fair value of unreleased shares | $ 888,509 | $ 1,389,884 |