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ESP Espey Manufacturing & Electronics

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Sep. 30, 2019Nov. 13, 2019
Document And Entity Information [Abstract]
Entity Registrant NameESPEY MFG & ELECTRONICS CORP
Entity Central Index Key0000033533
Document Type10-Q
Document Period End DateSep. 30,
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 FocusQ1
Document Fiscal Year Focus2020
Entity Common Stock, Shares Outstanding2,402,456
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity File Number1-4383
Entity Incorportion, State or Country CodeNY
Entity Shell Companyfalse

Balance Sheets

Balance Sheets - USD ($)Sep. 30, 2019Jun. 30, 2019
ASSETS:
Cash and cash equivalents $ 4,655,736 $ 1,462,761
Investment securities5,571,744 5,684,240
Trade accounts receivable, net of allowance of $3,0006,648,986 10,995,783
Income tax receivable93,981
Inventories:
Raw materials1,893,356 1,747,449
Work-in-process643,664 408,130
Costs related to contracts in process12,301,017 11,069,558
Total inventories14,838,037 13,225,137
Prepaid expenses and other current assets263,921 494,181
Total current assets32,072,405 31,862,102
Property, plant and equipment, net3,776,683 3,825,411
Total assets35,849,088 35,687,513
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable2,076,454 2,160,433
Accrued expenses:
Salaries and wages432,524 329,890
Vacation675,854 786,870
ESOP payable84,291
Other84,510 109,755
Payroll and other taxes withheld60,800 61,451
Contract liabilities666,834 6,054
Income taxes payable 30,481
Total current liabilities4,081,267 3,484,934
Deferred tax liabilities268,439 277,075
Total liabilities4,349,706 3,762,009
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 September 30, 2019 and June 30, 2019. Outstanding 2,402,880 and 2,401,213 as of September 30, 2019 and June 30, 2019, respectively (includes 10,624 and 14,166 Unearned ESOP shares, respectively)1,009,958 1,009,958
Capital in excess of par value18,812,931 18,731,975
Accumulated other comprehensive loss(1,102)(1,299)
Retained earnings19,506,648 20,022,132
Total stockholders equity before ESOP39,328,435 39,762,766
Less: Unearned ESOP shares(204,706)(204,706)
Cost of 626,994 and 628,661 shares of common stock in treasury as of September 30, 2019 and June 30, 2019, respectively(7,624,347)(7,632,556)
Total stockholders' equity31,499,382 31,925,504
Total liabilities and stockholders' equity $ 35,849,088 $ 35,687,513

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)Sep. 30, 2019Jun. 30, 2019
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 outstanding2,402,880 2,401,213
Unearned ESOP, shares10,624 14,166
Treasury stock, shares626,994 628,661

Statements of Comprehensive Inc

Statements of Comprehensive Income (Unaudited) - USD ($)3 Months Ended
Sep. 30, 2019Sep. 30, 2018
Income Statement [Abstract]
Net sales $ 5,923,819 $ 8,337,399
Cost of sales4,787,471 7,344,465
Gross profit1,136,348 992,934
Selling, general and administrative expenses1,084,212 1,009,544
Operating income (loss)52,136 (16,610)
Other income:
Interest income32,161 52,399
Other15,328 23,671
Total other income47,489 76,070
Income before provision (benefit) for income taxes99,625 59,460
Provision (benefit) for income taxes17,849 (2,211)
Net income81,776 61,671
Other comprehensive income, net of tax:
Unrealized gain on investment securities197 1,347
Total comprehensive income $ 81,973 $ 63,018
Net income per share:
Basic $ 0.03 $ 0.03
Diluted $ 0.03 $ 0.03
Weighted average number of shares outstanding:
Basic2,387,408 2,359,493
Diluted2,396,256 2,382,072
Dividends per share: $ 0.25 $ 1.25

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity (Unaudited) - 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, 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
Net income61,671 61,671
Other comprehensive income, net of tax1,347 1,347
Total comprehensive income63,018
Stock options exercised124,231 $ 75,892 200,123
Stock options exercised, shares9,199 (9,199)
Stock-based compensation37,371 37,371
Dividends paid on common stock(2,995,403)(2,995,403)
Balance, ending at Sep. 30, 2018 $ 1,009,958 18,363,293 (5,002)19,482,668 $ (7,642,943)(421,453)30,786,521
Balance, ending, common shares at Sep. 30, 20182,396,323 633,551
Balance, beginning at Jun. 30, 2019 $ 1,009,958 18,731,975 (1,299)20,022,132 $ (7,632,556)(204,706) $ 31,925,504
Balance, beginning, shares at Jun. 30, 20192,401,213 628,661 2,401,213
Net income81,776 $ 81,776
Other comprehensive income, net of tax197 197
Total comprehensive income81,973
Stock options exercised33,780 $ 16,500 $ 50,280
Stock options exercised, shares2,000 (2,000)2,000
Stock-based compensation47,176 $ 47,176
Dividends paid on common stock(597,260)(597,260)
Purchase of treasury stock $ (8,291)(8,291)
Purchase of treasury stock, shares(333)333
Balance, ending at Sep. 30, 2019 $ 1,009,958 $ 18,812,931 $ (1,102) $ 19,506,648 $ (7,624,347) $ (204,706) $ 31,499,382
Balance, ending, common shares at Sep. 30, 20192,402,880 626,994 2,402,880

Statements of Changes in Stoc_2

Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)3 Months Ended
Sep. 30, 2019Sep. 30, 2018
Statement of Stockholders' Equity [Abstract]
Other comprehensive income, tax portion $ 52 $ 358
Dividends paid per share $ 0.25 $ 1.25

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)3 Months Ended
Sep. 30, 2019Sep. 30, 2018
Cash Flows from Operating Activities:
Net income $ 81,776 $ 61,671
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation47,176 37,371
Depreciation142,798 122,872
ESOP compensation expense87,833 101,361
Deferred income tax (benefit) expense(8,688)45,763
Changes in assets and liabilities:
Decrease (increase) in trade receivable, net4,346,797 (1,417,803)
Increase in income taxes receivable(93,981)(127,222)
Increase in inventories, net(1,612,900)(2,354,298)
Decrease in prepaid expenses and other current assets230,260 1,014,850
(Decrease) increase in accounts payable(83,979)758,776
Increase in accrued salaries and wages102,634 58,419
(Decrease) increase in vacation accrual(111,016)3,385
Decrease in ESOP payable(3,542)
(Decrease) increase in other accrued expenses(25,245)54,054
(Decrease) increase in payroll and other taxes withheld(651)15,131
Increase in contract liabilities660,780
Decrease in income taxes payable(30,481)
Net cash provided by (used in) operating activities3,729,571 (1,625,670)
Cash Flows from Investing Activities:
Additions to property, plant and equipment(94,070)(611,995)
Purchase of investment securities(2,468,751)(2,577,706)
Proceeds from sale/maturity of investment securities2,581,496 6,654,073
Net cash provided by investing activities18,675 3,464,372
Cash Flows from Financing Activities:
Dividends on common stock(597,260)
Purchase of treasury stock(8,291)
Proceeds from exercise of stock options50,280 200,123
Net cash (used in) provided by financing activities(555,271)200,123
Increase in cash and cash equivalents3,192,975 2,038,825
Cash and cash equivalents, beginning of period1,462,761 4,298,796
Cash and cash equivalents, end of period4,655,736 6,337,621
Supplemental Schedule of Cash Flow Information:
Income taxes paid151,000 80,000
Supplemental Schedule of Non-cash Financing Activities
Accrual of dividends $ 2,995,403

Basis of Presentation

Basis of Presentation3 Months Ended
Sep. 30, 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. Specific to inventories, including work-in-process and contracts in process, management
evaluates, quarterly, those estimates used in determining the cost to complete for each contract on Espey Mfg. &
Electronics Corp. (the Company’s) sales backlog. The change in estimates may affect the reported amount of inventories and
gross profit in the current or a future period. 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, 2019. Certain reclassifications may have been made to the prior year financial statements to conform to the
current year presentation.

Investment Securities

Investment Securities3 Months Ended
Sep. 30, 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 September 30, 2019 and June 30, 2019 because of the immediate or short-term maturity of these financial
instruments. Investment securities at September 30,
2019 and June 30, 2019 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 September 30, 2019 and June 30, 2019 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
September 30, 2019
Certificates of deposit $ 5,081,627 $ — $ — $ 5,081,627
Municipal bonds 488,523 1,631 (37 ) 490,117
Total investment securities $ 5,570,150 $ 1,631 $ (37 ) $ 5,571,744
June 30, 2019
Certificates of deposit $ 5,046,627 $ — $ — $ 5,046,627
Municipal bonds 636,269 1,576 (232 ) 637,613
Total investment securities $ 5,682,896 $ 1,576 $ (232 ) $ 5,684,240 The portfolio is diversified and highly
liquid and primarily consists of investment grade fixed income instruments. At September 30, 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 September 30, 2019 and June 30,
2019, the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
September 30, 2019
Available-for-sale $ 5,487,993 $ 83,751 $ 5,571,744
June 30, 2019
Available-for-sale $ 5,549,460 $ 134,780 $ 5,684,240

Net Income per Share

Net Income per Share3 Months Ended
Sep. 30, 2019
Net Income per Share [Abstract]
Net Income per ShareNote 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 190,639 and 25,400 shares of our common stock for the three months ended September 30, 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 Compensation3 Months Ended
Sep. 30, 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 September 30, 2019 and 2018 was $47,176
and $37,371, respectively, before income taxes. The related total deferred tax benefits were $2,578 and $2,034 for
the same periods. As of September 30, 2019, there was
$152,793 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the
next 1.50 years. The total deferred tax benefit related to these awards is expected to be $8,426. 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 September 30, 2019. While no further
grants of options may be made under the Company’s 2007 Stock Option and Restricted Stock Plan, as of September 30, 2019,
152,550 options were outstanding under such plan of which all 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 three months ended September 30, 2018.
There were no options awarded for the three months ended September 30, 2019.
September 30, 2018
Dividend yield 3.89%
Company’s expected volatility 25.89%
Risk-free interest rate 2.75%
Expected term 5.1 yrs
Weighted average fair value per share
of options granted during the period $4.405 The Company declares regular dividends quarterly
and declared and paid a first quarter regular cash dividends of $0.25 per share for the three months ended September 30, 2019.
The company declared a regular cash dividends of $0.25 per share and a special cash dividend of $1.00 per share for the three months
ended September 30, 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 term (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 three months ended September 30, 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, 2019 259,164 $ 25.16 6.37
Granted — — —
Exercised (2,000 ) $ 25.14 —
Forfeited or expired (6,650 ) $ 24.48 —
Outstanding at September 30, 2019 250,514 $ 25.18 6.08 $ 149,376
Vested or expected to vest at September 30, 2019 235,984 $ 25.20 5.93 $ 136,856
Exercisable at September 30, 2019 152,550 $ 25.43 4.43 $ 63,280 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 September 30, 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 September 30, 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 three months ended September 30, 2019 and 2018 were $263 and $64,420, respectively. The following table summarizes changes in non-vested stock
options during the three months ended September 30, 2019:
Number Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2019 104,214 $ 4.077
Granted — —
Vested — —
Forfeited or expired (6,250 ) $ 3.918
Non-vested at September 30, 2019 97,964 $ 4.088

Commitments and Contingencies

Commitments and Contingencies3 Months Ended
Sep. 30, 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 September 30, 2019
and June 30, 2019. 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

Revenue3 Months Ended
Sep. 30, 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 $666,834
and $6,054 as of September 30, 2019 and June 30, 2019, respectively. The increase in contract liabilities is primarily due
to cash collected from a progress payment related to a specific contract. 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 months
ended September 30, 2019 based on units delivered was $5,118,314 compared to $6,852,770 for the same period in fiscal year 2019.
Total revenue recognized for the three months ended September 30, 2019 based on milestones achieved was $805,505 compared to $1,484,629
for the same periods in fiscal year 2019. 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 September 30, 2019. Our payment terms are generally 30-60 days. The company’s backlog at September 30,
2019 totaling $46.6 million is expected, based on contractual due dates, to be recognized in the following fiscal years: 63% in
2020; 23% in 2021; 12% in 2022, and 2% thereafter.

Recently Issued Accounting Stan

Recently Issued Accounting Standards3 Months Ended
Sep. 30, 2019
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting StandardsNote 7. Recently Issued Accounting Standards Recent Accounting Pronouncements 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 adoption did not have a material effect on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted 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 Plan3 Months Ended
Sep. 30, 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 balance sheets and statement of changes in
stockholders’ equity. 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 $87,833 and $101,361 for the three-month periods ended September 30, 2019 and 2018,
respectively. The ESOP shares as
of September 30, 2019 and 2018 were as follows:
September 30, 2019 September 30, 2018
Allocated shares 454,610 459,032
Committed-to-be-released shares 3,542 3,750
Unreleased shares 10,624 25,416
Total shares held by the ESOP 468,776 488,198
Fair value of unreleased shares $ 252,001 $ 759,684 The Company may at times be required
to repurchase shares at the ESOP participants’ request at the fair market value. During the three months ended September
30, 2019 the Company repurchased 333 shares previously held by the ESOP for $8,291. During the three months ended September 30,
2018 the Company did not repurchase any shares held in the ESOP. 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. There were
no share distributions from the ESOP during the three months ended September 30, 2019 and 2018.

Investment Securities (Tables)

Investment Securities (Tables)3 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale SecuritiesThe cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at September 30, 2019 and June 30, 2019 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
September 30, 2019
Certificates of deposit $ 5,081,627 $ — $ — $ 5,081,627
Municipal bonds 488,523 1,631 (37 ) 490,117
Total investment securities $ 5,570,150 $ 1,631 $ (37 ) $ 5,571,744
June 30, 2019
Certificates of deposit $ 5,046,627 $ — $ — $ 5,046,627
Municipal bonds 636,269 1,576 (232 ) 637,613
Total investment securities $ 5,682,896 $ 1,576 $ (232 ) $ 5,684,240
Schedule of Contractual MaturitiesAs of September 30, 2019 and June 30,
2019, the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
September 30, 2019
Available-for-sale $ 5,487,993 $ 83,751 $ 5,571,744
June 30, 2019
Available-for-sale $ 5,549,460 $ 134,780 $ 5,684,240

Stock Based Compensation (Table

Stock Based Compensation (Tables)3 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]
Schedule of Fair Value AssumptionsThe table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the three months ended September 30, 2018.
There were no options awarded for the three months ended September 30, 2019.
September 30, 2018
Dividend yield 3.89%
Company’s expected volatility 25.89%
Risk-free interest rate 2.75%
Expected term 5.1 yrs
Weighted average fair value per share
of options granted during the period $4.405
Schedule of Stock Option ActivityThe following table summarizes stock
option activity during the three months ended September 30, 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, 2019 259,164 $ 25.16 6.37
Granted — — —
Exercised (2,000 ) $ 25.14 —
Forfeited or expired (6,650 ) $ 24.48 —
Outstanding at September 30, 2019 250,514 $ 25.18 6.08 $ 149,376
Vested or expected to vest at September 30, 2019 235,984 $ 25.20 5.93 $ 136,856
Exercisable at September 30, 2019 152,550 $ 25.43 4.43 $ 63,280
Schedule of Changes in Non-Vested Stock OptionsThe following table summarizes changes in non-vested stock
options during the three months ended September 30, 2019:
Number Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2019 104,214 $ 4.077
Granted — —
Vested — —
Forfeited or expired (6,250 ) $ 3.918
Non-vested at September 30, 2019 97,964 $ 4.088

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)3 Months Ended
Sep. 30, 2019
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP sharesThe ESOP shares as
of September 30, 2019 and 2018 were as follows:
September 30, 2019 September 30, 2018
Allocated shares 454,610 459,032
Committed-to-be-released shares 3,542 3,750
Unreleased shares 10,624 25,416
Total shares held by the ESOP 468,776 488,198
Fair value of unreleased shares $ 252,001 $ 759,684

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)Sep. 30, 2019Jun. 30, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost $ 5,570,150 $ 5,682,896
Gross Unrealized Gains1,631 1,576
Gross Unrealized Losses(37)(232)
Fair Value5,571,744 5,684,240
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost5,081,627 5,046,627
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value5,081,627 5,046,627
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost488,523 636,269
Gross Unrealized Gains1,631 1,576
Gross Unrealized Losses(37)(232)
Fair Value $ 490,117 $ 637,613

Investment Securities (Schedu_2

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)Sep. 30, 2019Jun. 30, 2019
Contractual maturities of available-for-sale securities
Less than One Year $ 5,487,993 $ 5,549,460
One to Five Years83,751 134,780
Fair Value $ 5,571,744 $ 5,684,240

Net Income per Share (Details)

Net Income per Share (Details) - shares3 Months Ended
Sep. 30, 2019Sep. 30, 2018
Net Income per Share [Abstract]
Anti-dilutive securities190,639 25,400

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)3 Months Ended
Sep. 30, 2019Sep. 30, 2018Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense $ 47,176 $ 37,371
Deferred tax benefit related to stock based compensation2,578 $ 2,034
Unrecognized compensation costs $ 152,793
Period in which compensation cost will be recognized1 year 6 months
Deferred tax benefit related to unrecognized compensation costs $ 8,426
Granted
Outstanding250,514 259,164
Cash divided paid $ 0.25 $ 1.25
Special cash divided paid $ 1
Total intrinsic values of the options exercised $ 263 $ 64,420
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
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
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
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
Granted110,304
Stock Option Plans [Member] | 2007 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding152,550

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of weighted average assumptions for option awards) (Details)3 Months Ended
Sep. 30, 2018$ / shares
Weighted Average Assumptions
Dividend yield3.89%
Company's expected volatility25.89%
Risk-free interest rate2.75%
Expected term5 years 1 month 6 days
Weighted average fair value per share of options granted during the period $ 4.405

Stock Based Compensation (Sch_2

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)3 Months Ended12 Months Ended
Sep. 30, 2019Jun. 30, 2019
Number of Shares Subject To Options
Balance at July 1, 2019259,164
Granted
Exercised(2,000)
Forfeited or expired(6,650)
Outstanding at September 30, 2019250,514 259,164
Vested or expected to vest at September 30, 2019235,984
Exercisable at September 30, 2019152,550
Weighted Average Exercise Price
Balance at July 1, 2019 $ 25.16 $ 24.29
Granted
Exercised25.14
Forfeited or expired24.48
Outstanding at September 30, 201925.18 $ 25.16
Vested or expected to vest at September 30, 201925.20
Exercisable at September 30, 2019 $ 25.43
Weighted Average Remaining Contractual Term
Outstanding6 years 29 days6 years 4 months 13 days
Vested or expected to vest at September 30, 20195 years 11 months 4 days
Exercisable at September 30, 20194 years 5 months 5 days
Aggregate Intrinsic Value
Outstanding at September 30, 2019 $ 149,376
Vested or expected to vest at September 30, 2019136,856
Exercisable at September 30, 2019 $ 63,280

Stock Based Compensation (Sch_3

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)3 Months Ended
Sep. 30, 2019$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2019 | shares104,214
Granted | shares
Vested | shares
Forfeited or expired | shares(6,250)
Non-vested at September 30, 2019 | shares97,964
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2019 | $ / shares $ 4.077
Granted | $ / shares
Vested | $ / shares
Forfeited or expired | $ / shares3.918
Non-vested at September 30, 2019 | $ / shares $ 4.088

Commitments and Contingencies (

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

Revenue (Details)

Revenue (Details) - USD ($)3 Months Ended
Sep. 30, 2019Sep. 30, 2018Jun. 30, 2019
Item Effected [Line Items]
Revenue $ 5,923,819 $ 8,337,399
ASC 606 [Member]
Item Effected [Line Items]
Contract liabilities666,834 $ 6,054
ASC 606 [Member] | Backlog [Member]
Item Effected [Line Items]
Intangible assets $ 46,600,000
Percentage of estimated shipments63% in 2020; 23% in 2021; 12% in 2022, and 2% thereafter.
ASC 606 [Member] | Units Delivered [Member]
Item Effected [Line Items]
Revenue $ 5,118,314 6,852,770
ASC 606 [Member] | Milestones Achieved [Member]
Item Effected [Line Items]
Revenue $ 805,505 $ 1,484,629

Employee Stock Ownership Plan_2

Employee Stock Ownership Plan (Narrative) (Details)3 Months Ended
Sep. 30, 2019USD ($)hsharesSep. 30, 2018USD ($)
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP compensation expense $ 87,833 $ 101,361
Value of shares repurchased $ 8,291
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 repurchased | shares333
Value of shares repurchased $ 8,291

Employee Stock Ownership Plan_3

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)Sep. 30, 2019Sep. 30, 2018
Employee Stock Ownership Plan [Abstract]
Allocated shares454,610 459,032
Committed-to-be-released shares3,542 3,750
Unreleased shares10,624 25,416
Total shares held by the ESOP468,776 488,198
Fair value of unreleased shares $ 252,001 $ 759,684