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ESP Espey Manufacturing & Electronics

Document and Entity Information

Document and Entity Information - shares9 Months Ended
Mar. 31, 2019May 10, 2019
Document And Entity Information [Abstract]
Entity Registrant NameESPEY MFG & ELECTRONICS CORP
Entity Central Index Key0000033533
Document Type10-Q
Document Period End DateMar. 31,
2019
Amendment Flagfalse
Current Fiscal Year End Date--06-30
Entity Filer CategoryNon-accelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Document Fiscal Period FocusQ3
Document Fiscal Year Focus2019
Entity Common Stock, Shares Outstanding2,400,713

Balance Sheets

Balance Sheets - USD ($)Mar. 31, 2019Jun. 30, 2018
ASSETS:
Cash and cash equivalents $ 1,488,191 $ 4,298,796
Investment securities5,833,276 11,520,706
Trade accounts receivable, net of allowance of $3,0007,951,321 4,377,726
Income tax receivable126,019 161,975
Inventories:
Raw materials1,674,193 1,562,581
Work-in-process704,885 966,342
Costs related to contracts in process12,569,359 8,880,003
Total inventories14,948,437 11,408,926
Prepaid expenses and other current assets368,214 1,292,575
Total current assets30,715,458 33,060,704
Property, plant and equipment, net3,899,222 3,758,637
Total assets34,614,680 36,819,341
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable1,938,499 1,822,597
Accrued expenses:
Salaries and wages292,184 529,005
Vacation783,113 707,612
ESOP payable246,629
Other143,897 104,663
Payroll and other taxes withheld61,654 53,435
Contract liabilities20,935 102,924
Total current liabilities3,486,911 3,320,236
Deferred tax liabilities153,727 17,693
Total liabilities3,640,638 3,337,929
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 March 31, 2019 and June 30, 2018. Outstanding 2,402,523 and 2,387,124 as of March 31, 2019 and June 30, 2018, respectively (includes 17,916 and 29,166 Unearned ESOP shares, respectively)1,009,958 1,009,958
Capital in excess of par value18,505,702 18,201,691
Accumulated other comprehensive loss(2,583)(6,349)
Retained earnings19,474,211 22,416,400
Total stockholders equity before ESOP38,987,288 41,621,700
Less: Unearned ESOP shares(421,453)(421,453)
Cost of 627,351 and 642,750 shares of common stock in treasury as of March 31, 2019 and June 30, 2018, respectively(7,591,793)(7,718,835)
Total stockholders' equity30,974,042 33,481,412
Total liabilities and stockholders' equity $ 34,614,680 $ 36,819,341

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)Mar. 31, 2019Jun. 30, 2018
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance $ 3,000 $ 3,000
Common stock, par value $ 0.3333 $ 0.3333
Common stock, shares authorized10,000,000 10,000,000
Common stock, shares issued3,029,874 3,029,874
Common stock, shares outstanding2,402,523 2,387,124
Unearned ESOP, shares17,916 29,166
Treasury stock, shares627,351 642,750

Statements of Comprehensive Inc

Statements of Comprehensive Income (Unaudited) - USD ($)3 Months Ended9 Months Ended
Mar. 31, 2019Mar. 31, 2018Mar. 31, 2019Mar. 31, 2018
Income Statement [Abstract]
Net sales $ 9,218,141 $ 5,663,161 $ 24,858,649 $ 24,690,689
Cost of sales7,067,702 4,407,957 20,199,041 18,898,733
Gross profit2,150,439 1,255,204 4,659,608 5,791,956
Selling, general and administrative expenses1,069,070 895,129 3,374,301 2,756,319
Operating income1,081,369 360,075 1,285,307 3,035,637
Other income
Interest income38,623 42,684 133,398 109,561
Other6,631 13,428 41,288 31,236
Total other income45,254 56,112 174,686 140,797
Income before provision for income taxes1,126,623 416,187 1,459,993 3,176,434
Provision for income taxes204,167 98,423 258,107 801,035
Net income922,456 317,764 1,201,886 2,375,399
Other comprehensive income, net of tax:
Unrealized gain (loss) on investment securities1,512 (2,143)3,766 (2,993)
Total comprehensive income $ 923,968 $ 315,621 $ 1,205,652 $ 2,372,406
Net income per share:
Basic $ 0.39 $ 0.14 $ 0.51 $ 1.02
Diluted $ 0.39 $ 0.14 $ 0.50 $ 1.02
Weighted average number of shares outstanding:
Basic2,378,332 2,331,697 2,369,527 2,328,518
Diluted2,388,781 2,349,428 2,388,258 2,338,909
Dividends per share: $ 0.25 $ 0.25 $ 1.75 $ 0.75

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, 2017 $ 1,009,958 $ 17,650,335 $ (3,599) $ 21,670,196 $ (7,779,099) $ (650,248) $ 31,897,543
Balance, beginning, shares at Jun. 30, 20172,371,321 658,553 2,371,321
Net income2,375,399 $ 2,375,399
Other comprehensive loss, net of tax(2,993)(2,993)
Total comprehensive income2,372,406
Stock options exercised124,036 $ 77,550 201,586
Stock options exercised, shares9,400 (9,400)
Stock-based compensation86,675 86,675
Dividends paid on common stock(1,744,062)(1,744,062)
Purchase of treasury stock $ (109,694)(109,694)
Purchase of treasury stock, shares(4,798)4,798
Balance, ending at Mar. 31, 2018 $ 1,009,958 17,861,046 (6,592)22,301,533 $ (7,811,243)(650,248)32,704,454
Balance, ending, common shares at Mar. 31, 20182,375,923 653,951
Balance, beginning at Jun. 30, 2017 $ 1,009,958 17,650,335 (3,599)21,670,196 $ (7,779,099)(650,248) $ 31,897,543
Balance, beginning, shares at Jun. 30, 20172,371,321 658,553 2,371,321
Stock options exercised, shares20,601
Balance, ending at Jun. 30, 2018 $ 1,009,958 18,201,691 (6,349)22,416,400 $ (7,718,835)(421,453) $ 33,481,412
Balance, ending, common shares at Jun. 30, 20182,387,124 642,750 2,387,124
Balance, beginning at Dec. 31, 2017 $ 1,009,958 17,700,805 (4,449)22,565,450 $ (7,888,793)(650,248) $ 32,732,723
Balance, beginning, shares at Dec. 31, 20172,366,523 663,351
Net income317,764 317,764
Other comprehensive loss, net of tax(2,143)(2,143)
Total comprehensive income315,621
Stock options exercised124,036 $ 77,550 201,586
Stock options exercised, shares9,400 (9,400)
Stock-based compensation36,205 36,205
Dividends paid on common stock(581,681)(581,681)
Balance, ending at Mar. 31, 2018 $ 1,009,958 17,861,046 (6,592)22,301,533 $ (7,811,243)(650,248)32,704,454
Balance, ending, common shares at Mar. 31, 20182,375,923 653,951
Balance, beginning at Jun. 30, 2018 $ 1,009,958 18,201,691 (6,349)22,416,400 $ (7,718,835)(421,453) $ 33,481,412
Balance, beginning, shares at Jun. 30, 20182,387,124 642,750 2,387,124
Net income1,201,886 $ 1,201,886
Other comprehensive loss, net of tax3,766 3,766
Total comprehensive income1,205,652
Stock options exercised179,039 $ 127,042 $ 306,081
Stock options exercised, shares15,399 (15,399)15,399
Stock-based compensation124,972 $ 124,972
Dividends paid on common stock(4,144,075)(4,144,075)
Balance, ending at Mar. 31, 2019 $ 1,009,958 18,505,702 (2,583)19,474,211 $ (7,591,793)(421,453) $ 30,974,042
Balance, ending, common shares at Mar. 31, 20192,402,523 627,351 2,402,523
Balance, beginning at Dec. 31, 2018 $ 1,009,958 18,403,798 (4,095)19,145,095 $ (7,642,943)(421,453) $ 30,490,360
Balance, beginning, shares at Dec. 31, 20182,396,323 633,551
Net income922,456 922,456
Other comprehensive loss, net of tax1,512 1,512
Total comprehensive income923,968
Stock options exercised54,808 $ 51,150 105,958
Stock options exercised, shares6,200 (6,200)
Stock-based compensation47,096 47,096
Dividends paid on common stock(593,340)(593,340)
Balance, ending at Mar. 31, 2019 $ 1,009,958 $ 18,505,702 $ (2,583) $ 19,474,211 $ (7,591,793) $ (421,453) $ 30,974,042
Balance, ending, common shares at Mar. 31, 20192,402,523 627,351 2,402,523

Statements of Changes in Stoc_2

Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($)3 Months Ended9 Months Ended
Mar. 31, 2019Mar. 31, 2018Mar. 31, 2019Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Other comprehensive income, tax portion $ 402 $ (750) $ 1,001 $ (1,208)
Dividends paid per share $ 0.25 $ 0.25 $ 1.75 $ 0.75

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)9 Months Ended
Mar. 31, 2019Mar. 31, 2018
Cash Flows from Operating Activities:
Net income $ 1,201,886 $ 2,375,399
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Bad debt expense69,010
Stock-based compensation124,972 86,675
Depreciation397,965 318,076
ESOP compensation expense297,670 279,502
Deferred income tax expense137,035 19,707
Changes in assets and liabilities:
Increase in trade receivable, net(3,642,605)(195,828)
Decrease (increase) in income taxes receivable35,956 (27,923)
Increase in inventories, net(3,539,511)(622,344)
Decrease (increase) in prepaid expenses and other current assets924,361 (549,141)
Increase (decrease) in accounts payable115,902 (750,220)
(Decrease) increase in accrued salaries and wages(236,821)219,168
Increase in vacation accrual75,501 68,463
Decrease in ESOP payable(51,041)(33,750)
Increase (decrease) in other accrued expenses39,234 (86,865)
Increase in payroll and other taxes withheld8,219 11,490
Decrease in contract liabilities(81,989)
Net cash (used in) provided by operating activities(4,124,256)1,112,409
Cash Flows from Investing Activities:
Additions to property, plant and equipment(538,550)(632,023)
Purchase of investment securities(3,891,435)(10,101,613)
Proceeds from sale/maturity of investment securities9,581,630 8,121,986
Net cash provided by (used in) investing activities5,151,645 (2,611,650)
Cash Flows from Financing Activities:
Dividends on common stock(4,144,075)(1,744,062)
Purchase of treasury stock (109,694)
Proceeds from exercise of stock options306,081 201,586
Net cash used in financing activities(3,837,994)(1,652,170)
Decrease in cash and cash equivalents(2,810,605)(3,151,411)
Cash and cash equivalents, beginning of period4,298,796 10,058,163
Cash and cash equivalents, end of period1,488,191 6,906,752
Supplemental Schedule of Cash Flow Information:
Income taxes paid $ 80,000 $ 810,000

Basis of Presentation

Basis of Presentation9 Months Ended
Mar. 31, 2019
Basis of Presentation [Abstract]
Basis of PresentationNote 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, 2018. Certain reclassifications may have been made to the prior year financial statements to conform to the current
year presentation.

Investment Securities

Investment Securities9 Months Ended
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Investment SecuritiesNote 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 March 31, 2019 and June 30, 2018 because of the immediate or short-term maturity of these financial
instruments. Investment securities at March 31, 2019
and June 30, 2018 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 March 31, 2019 and June 30, 2018 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
March 31, 2019
Certificates of deposit $ 5,193,627 $ — $ — $ 5,193,627
Municipal bonds 639,930 668 (949 ) 639,649
Total investment securities $ 5,833,557 $ 668 $ (949 ) $ 5,833,276
June 30, 2018
Certificates of deposit $ 10,440,000 $ — $ — $ 10,440,000
Municipal bonds 1,085,754 635 (5,683 ) 1,080,706
Total investment securities $ 11,525,754 $ 635 $ (5,683 ) $ 11,520,706 The portfolio is diversified and highly
liquid and primarily consists of investment grade fixed income instruments. At March 31, 2019, 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 March 31, 2019 and June 30, 2018,
the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
March 31, 2019
Available-for-sale $ 5,698,497 $ 134,779 $ 5,833,276
June 30, 2018
Available-for-sale $ 10,967,300 $ 553,406 $ 11,520,706

Net Income per Share

Net Income per Share9 Months Ended
Mar. 31, 2019
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 196,039 and 103,600 shares of our common stock for the three and nine months ended March 31, 2019 and 2018, 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 Compensation9 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Stock Based CompensationNote 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 March 31, 2019 and 2018 was $47,096 and
$36,205, respectively, before income taxes. The related total deferred tax benefits were approximately $2,547 and $2,034 for the
same periods. Total stock-based compensation expense recognized in the statements of comprehensive income for the nine-month periods
ended March 31, 2019 and 2018, was $124,972 and $86,675, respectively, before income taxes. The related total deferred tax benefits
were approximately $6,826 and $4,805 for the same periods. As of March 31, 2019, there was approximately
$247,145 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 $13,581. The Company has one employee stock option plan
under which options or stock awards may be granted, the 2017 Stock Option and Restricted Stock Plan (the "2017 Plan").
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 110,304 have been granted as of March 31, 2019. While no further
grants of options may be made under the Company’s 2007 Stock Option and Restricted Stock Plan, as of March 31, 2019, 155,450
options were outstanding under such plan of which are all 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 nine months ended March 31, 2019 and
2018.
March 31, 2019 March 31, 2018
Dividend yield 3.68% 4.60%
Company’s expected volatility 27.63% 23.97%
Risk-free interest rate 2.70% 1.95%
Expected term 5.2 yrs 4.7 yrs
Weighted average fair value per share
of options granted during the period $ 5.13 $ 2.79 The Company declares regular dividends quarterly
and declared and paid regular cash dividends of $0.75 per share and a special cash dividend of $1.00 per share for the nine months
ended March 31, 2019. The company declared and paid regular cash dividends of $0.75 per share for the nine months ended March 31,
2018. 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 nine months ended March 31, 2019:
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, 2018 222,854 $ 24.29 6.26
Granted 55,589 $ 27.17 9.69
Exercised (15,399 ) $ 19.88 —
Forfeited or expired (3,055 ) $ 26.30 —
Outstanding at March 31, 2019 259,989 $ 25.14 6.61 $ 223,377
Vested or expected to vest at March 31, 2019 244,246 $ 25.17 6.45 $ 202,294
Exercisable at March 31, 2019 155,450 $ 25.40 4.90 $ 81,300 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 American on March 31, 2019 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 March 31, 2019. 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 nine months ended March 31, 2019 and 2018 were $64,420 and $23,437, respectively. The following table summarizes changes in non-vested stock
options during the nine months ended March 31, 2019:
Number Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2018 87,605 $ 3.649
Granted 55,589 $ 5.133
Vested (36,350 ) $ 4.640
Forfeited or expired (2,305 ) $ 4.570
Non-vested at March 31, 2019 104,539 $ 4.073

Commitments and Contingencies

Commitments and Contingencies9 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesNote 5. Commitments and Contingencies The Company from time to time, 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 March 31, 2019 and
June 30, 2018. 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. We are party to various litigation matters
and claims arising from time to time in the ordinary course of business. While the results of such matters cannot be predicted
with certainty, we believe that the final outcome of such matters will not have a material adverse effect on our business, financial
condition, results of operations or cash flows.

Revenue

Revenue9 Months Ended
Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
RevenueNote 6. Revenue Effective July 1, 2018, we adopted Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC) 606 “Revenue from Contracts
with Customers”, which requires entities to assess the products or services promised in contracts with customers at contract
inception to determine the appropriate unit at which to record revenues. Revenue is recognized when control of the promised
products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be
entitled to in exchange for those products or services. We adopted ASC 606 using the modified retrospective method, which means,
using the allowed practical expedient, we applied the new standard to open contracts at June 30, 2018. We reviewed remaining
obligations as of the effective date and determined no adjustment was required to the opening balance of retained earnings.
Under the modified retrospective method, prior period revenue is not restated for comparative periods. As a result of the
adoption, we reclassified customer advance payments from inventory to contract liabilities. Contract liabilities were $20,935
and $102,924 as of March 31, 2019 and June 30, 2018, respectively. The decrease in contract liabilities is due to the recognition
of revenue related to certain amounts previously collected and included in contract liabilities. The company used the practical
expedient to expense incremental costs incurred to obtain a contract when the contract term is less than one year. Significant judgment is required in determining
the satisfaction of performance obligations. Revenues from our performance obligations are satisfied over time using the
output method which considers the appraisal of results achieved and milestones reached or units delivered based on contractual
shipment terms, typically shipping point. Revenue is recognized when the customer takes control of the product or services.
The output method best depicts the transfer of control to the customer as the output method represents work completed. Control
is typically transferred to the customer at shipping point as the company has a present right to payment, the customer has legal
title to the asset, the customer has the significant risks and rewards of ownership of the asset, and in most instances the customer
has accepted the asset. Total revenue recognized for the three and
nine months ended March 31, 2019 based on units delivered totaled $7,527,723 and $20,400,908, respectively, compared to $4,943,378
and $22,413,426 for the same periods in 2018. Total revenue recognized for the three and nine months ended March 31, 2019
based on milestones achieved totaled $1,690,418 and $4,457,741, respectively, compared to $719,783 and $2,277,263 for the same
periods in 2018. The company offers a standard one-year product
warranty. Product warranties offered by the company are classified as assurance-type warranties, which means, the warranty only
guarantees that the good or service functions as promised. Based on this, the provided warranty is not considered to be a distinct
performance obligation. The impact of variable consideration has been considered but none identified which would be required
to be allocated to the transaction price as of March 31, 2019. Our payment terms are generally 30-60 days. The company estimates that approximately $10.7
million of the company’s backlog at March 31, 2019 will be recognized after March 31, 2020. Estimated shipments
of this backlog are expected in the following fiscal years: 24% in 2020; 56% in 2021, 17% in 2022, and 3% thereafter.

Recently Issued Accounting Stan

Recently Issued Accounting Standards9 Months Ended
Mar. 31, 2019
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting StandardsNote 7. Recently Issued Accounting Standards Recent Accounting Pronouncements Adopted None Recent Accounting Pronouncements Not Yet
Adopted In February 2018, the FASB issued ASU
No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects
from Accumulated Other Comprehensive Income”. Under current accounting guidance, the income tax effects for changes in income
tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized
in Accumulated Other Comprehensive Income that do not reflect the current tax rate of the entity (“stranded tax effects”).
The new guidance allows the Company the option to reclassify these stranded tax effects to retained earnings that relate to the
change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act (the “Tax Act”). This update
is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted.
The Company is evaluating the impact that ASU No. 2018-02 will have on the Company's financial statements. In August 2018, the FASB issued ASU No. 2018-13,
“Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This
ASU is part of the FASB’s larger disclosure framework project intended to improve the effectiveness of financial statement
footnote disclosure. ASU 2018-13 modifies required fair value disclosures related primarily to level 3 investments. This
ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The
adoption of ASU 2018-13 is not expected to have a material effect on the Company’s financial position, results of operations,
and cash flows.

Employee Stock Ownership Plan

Employee Stock Ownership Plan9 Months Ended
Mar. 31, 2019
Employee Stock Ownership Plan [Abstract]
Employee Stock Ownership PlanNote 8. 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 $93,861 and $100,464 for the three-month periods ended March 31, 2019 and 2018, respectively. ESOP
compensation expense was $297,670 and $279,502 for the nine-month periods ended March 31, 2019 and 2018, respectively. The ESOP shares as
of March 31, 2019 and 2018 were as follows:
March 31, 2019 March 31, 2018
Allocated shares 441,753 443,198
Committed-to-be-released shares 11,250 11,875
Unreleased shares 17,916 33,125
Total shares held by the ESOP 470,919 488,198
Fair value of unreleased shares $ 443,421 $ 867,875 The Company may at times be required
to repurchase shares at the ESOP participants’ request at the fair market value. During the three and nine months ended March
31, 2019 the Company did not repurchase any shares held by the ESOP. During the three and nine months ended March 31, 2018 the
Company repurchased 0 and 4,798 shares previously held in the ESOP for $0 and $109,694. The ESOP allows for eligible participants
to take whole share distributions from the plan on specific dates in accordance with the provision of the plan. Share distributions
from the ESOP during the nine months ended March 31, 2019 and 2018 totaled 17,279 and 8,103 shares, respectively.

Investment Securities (Tables)

Investment Securities (Tables)9 Months Ended
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale Securities Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
March 31, 2019
Certificates of deposit $ 5,193,627 $ — $ — $ 5,193,627
Municipal bonds 639,930 668 (949 ) 639,649
Total investment securities $ 5,833,557 $ 668 $ (949 ) $ 5,833,276
June 30, 2018
Certificates of deposit $ 10,440,000 $ — $ — $ 10,440,000
Municipal bonds 1,085,754 635 (5,683 ) 1,080,706
Total investment securities $ 11,525,754 $ 635 $ (5,683 ) $ 11,520,706
Schedule of Contractual Maturities Years to Maturity
Less than One to
One Year Five Years Total
March 31, 2019
Available-for-sale $ 5,698,497 $ 134,779 $ 5,833,276
June 30, 2018
Available-for-sale $ 10,967,300 $ 553,406 $ 11,520,706

Stock Based Compensation (Table

Stock Based Compensation (Tables)9 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Schedule of Fair Value AssumptionsMarch 31, 2019 March 31, 2018
Dividend yield 3.68% 4.60%
Company’s expected volatility 27.63% 23.97%
Risk-free interest rate 2.70% 1.95%
Expected term 5.2 yrs 4.7 yrs
Weighted average fair value per share
of options granted during the period $ 5.13 $ 2.79
Schedule of Stock Option ActivityEmployee 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, 2018 222,854 $ 24.29 6.26
Granted 55,589 $ 27.17 9.69
Exercised (15,399 ) $ 19.88 —
Forfeited or expired (3,055 ) $ 26.30 —
Outstanding at March 31, 2019 259,989 $ 25.14 6.61 $ 223,377
Vested or expected to vest at March 31, 2019 244,246 $ 25.17 6.45 $ 202,294
Exercisable at March 31, 2019 155,450 $ 25.40 4.90 $ 81,300
Schedule of Changes in Non-Vested Stock OptionsNumber Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2018 87,605 $ 3.649
Granted 55,589 $ 5.133
Vested (36,350 ) $ 4.640
Forfeited or expired (2,305 ) $ 4.570
Non-vested at March 31, 2019 104,539 $ 4.073

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)9 Months Ended
Mar. 31, 2019
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP sharesMarch 31, 2019 March 31, 2018
Allocated shares 441,753 443,198
Committed-to-be-released shares 11,250 11,875
Unreleased shares 17,916 33,125
Total shares held by the ESOP 470,919 488,198
Fair value of unreleased shares $ 443,421 $ 867,875

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)Mar. 31, 2019Jun. 30, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost $ 5,833,557 $ 11,525,754
Gross Unrealized Gains668 635
Gross Unrealized Losses(949)(5,683)
Fair Value5,833,276 11,520,706
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost5,193,627 10,440,000
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value5,193,627 10,440,000
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost639,930 1,085,754
Gross Unrealized Gains668 635
Gross Unrealized Losses(949)(5,683)
Fair Value $ 639,649 $ 1,080,706

Investment Securities (Schedu_2

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)Mar. 31, 2019Jun. 30, 2018
Contractual maturities of available-for-sale securities
Less than One Year $ 5,698,497 $ 10,967,300
One to Five Years134,779 553,406
Fair Value $ 5,833,276 $ 11,520,706

Net Income per Share (Details)

Net Income per Share (Details) - shares3 Months Ended9 Months Ended
Mar. 31, 2019Mar. 31, 2018Mar. 31, 2019Mar. 31, 2018
Net Income per Share [Abstract]
Anti-dilutive securities196,039 103,600 196,039 103,600

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)3 Months Ended9 Months Ended
Mar. 31, 2019Mar. 31, 2018Mar. 31, 2019Mar. 31, 2018Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense $ 47,096 $ 36,205 $ 124,972 $ 86,675
Deferred tax benefit related to stock based compensation2,547 $ 2,034 6,826 $ 4,805
Unrecognized compensation costs247,145 $ 247,145
Period in which compensation cost will be recognized2 years
Deferred tax benefit related to unrecognized compensation costs $ 13,581 $ 13,581
Granted55,589
Outstanding259,989 259,989 222,854
Cash divided paid $ 0.25 $ 0.25 $ 1.75 $ 0.75
Special cash divided paid $ 1
Total intrinsic values of the options exercised $ 64,420 $ 23,437
2017 Plan [Member] | Non employee directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares under plan133,000 133,000
Percentage of total number of shares subject to options or awards, single fiscal year33.33%
Number of shares subject to option or award, single fiscal year13,300 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 year15,000 15,000
Stock Option Plans [Member] | 2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period2 years
Expiration period10 years
Authorized shares under plan400,000 400,000
Granted110,304
Stock Option Plans [Member] | 2007 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding155,450 155,450

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of weighted average assumptions for option awards) (Details) - $ / shares9 Months Ended
Mar. 31, 2019Mar. 31, 2018
Weighted Average Assumptions
Dividend yield3.68%4.60%
Company's expected volatility27.63%23.97%
Risk-free interest rate2.70%1.95%
Expected term5 years 2 months 12 days4 years 8 months 12 days
Weighted average fair value per share of options granted during the period $ 5.13 $ 2.79

Stock Based Compensation (Sch_2

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)9 Months Ended12 Months Ended
Mar. 31, 2019Jun. 30, 2018
Number of Shares Subject To Options
Balance at July 1, 2018222,854
Granted55,589
Exercised(15,399)(20,601)
Forfeited or expired(3,055)
Outstanding at March 31, 2019259,989 222,854
Vested or expected to vest at March 31, 2019244,246
Exercisable at March 31, 2019155,450
Weighted Average Exercise Price
Balance at July 1, 2018 $ 24.29
Granted27.17
Exercised19.88
Forfeited or expired26.30
Outstanding at March 31, 201925.14 $ 24.29
Vested or expected to vest at March 31, 201925.17
Exercisable at March 31, 2019 $ 25.40
Weighted Average Remaining Contractual Term
Outstanding6 years 7 months 10 days6 years 3 months 4 days
Granted9 years 8 months 9 days
Vested or expected to vest at March 31, 20196 years 5 months 12 days
Exercisable at March 31, 20194 years 10 months 25 days
Aggregate Intrinsic Value
Outstanding at March 31, 2019 $ 223,377
Vested or expected to vest at March 31, 2019202,294
Exercisable at March 31, 2019 $ 81,300

Stock Based Compensation (Sch_3

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)9 Months Ended
Mar. 31, 2019$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2018 | shares87,605
Granted | shares55,589
Vested | shares(36,350)
Forfeited or expired | shares(2,305)
Non-vested at March 31, 2019 | shares104,539
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2018 | $ / shares $ 3.649
Granted | $ / shares5.133
Vested | $ / shares4.640
Forfeited or expired | $ / shares4.570
Non-vested at March 31, 2019 | $ / shares $ 4.073

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)Mar. 31, 2019Jun. 30, 2018
Standby Letters of Credit [Member]
Contingent liabilities $ 0 $ 0

Revenue (Details)

Revenue (Details) - USD ($)3 Months Ended9 Months Ended
Mar. 31, 2019Mar. 31, 2018Mar. 31, 2019Mar. 31, 2018Dec. 31, 2019Jun. 30, 2018
Item Effected [Line Items]
Revenue $ 9,218,141 $ 5,663,161 $ 24,858,649 $ 24,690,689
ASC 606 [Member]
Item Effected [Line Items]
Contract liabilities20,935 $ 20,935 $ 102,924
ASC 606 [Member] | Backlog [Member]
Item Effected [Line Items]
Percentage of estimated shipments24% in 2020; 56% in 2021, 17% in 2022, and 3% thereafter.
ASC 606 [Member] | Units Delivered [Member]
Item Effected [Line Items]
Revenue7,527,723 4,943,378 $ 20,400,908 22,413,426
ASC 606 [Member] | Milestones Achieved [Member]
Item Effected [Line Items]
Revenue $ 1,690,418 $ 719,783 $ 4,457,741 $ 2,277,263
ASC 606 [Member] | Forecast [Member] | Backlog [Member]
Item Effected [Line Items]
Intangible assets $ 10,700,000

Employee Stock Ownership Plan_2

Employee Stock Ownership Plan (Narrative) (Details)3 Months Ended9 Months Ended
Mar. 31, 2019USD ($)Mar. 31, 2018USD ($)sharesMar. 31, 2019USD ($)hsharesMar. 31, 2018USD ($)shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP compensation expense $ 93,861 $ 100,464 $ 297,670 $ 279,502
Value of shares repurchased $ 109,694
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of hours worked per year to quality for the plan | h1,000
Shares distributed | shares17,279 8,103
Shares repurchased | shares0 4,798
Value of shares repurchased $ 0 $ 109,694

Employee Stock Ownership Plan_3

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)Mar. 31, 2019Mar. 31, 2018
Employee Stock Ownership Plan [Abstract]
Allocated shares441,753 443,198
Committed-to-be-released shares11,250 11,875
Unreleased shares17,916 33,125
Total shares held by the ESOP470,919 488,198
Fair value of unreleased shares $ 443,421 $ 867,875