Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 20, 2022 | Dec. 31, 2021 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Entity Central Index Key | 0000033533 | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2022 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity File Number | 1-4383 | ||
Entity Registrant Name | ESPEY MFG. & ELECTRONICS CORP. | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Tax Identification Number | 14-1387171 | ||
Entity Address, Address Line One | 233 Ballston Avenue | ||
Entity Address, City or Town | Saratoga Springs | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 12866 | ||
City Area Code | 518 | ||
Local Phone Number | 584-4100 | ||
Title of 12(b) Security | Common Stock $.33-1/3 par value | ||
Trading Symbol | ESP | ||
Name of Exchange on which Security is Registered | NYSE | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Auditor Attestation Flag | false | ||
Auditor Name | Freed Maxick CPAs, P.C. | ||
Auditor Location | Buffalo, New York | ||
Auditor Firm ID | 317 | ||
Entity Public Float | $ 26,663,026 | ||
Entity Common stock, closing sale price | $ 14.21 | ||
Entity Common Stock, Shares Outstanding | 2,702,633 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 8,104,060 | $ 6,802,712 |
Investment securities | 3,708,779 | 3,092,000 |
Trade accounts receivable, net of allowance of $3,000 | 5,733,174 | 5,353,781 |
Income tax receivable | 249,602 | |
Inventories: | ||
Raw materials | 2,037,483 | 2,111,058 |
Work-in-process | 315,547 | 326,198 |
Costs related to contracts in process | 16,207,419 | 16,354,636 |
Total inventories | 18,560,449 | 18,791,892 |
Prepaid expenses and other current assets | 992,774 | 700,297 |
Total current assets | 37,099,236 | 34,990,284 |
Property, plant and equipment, net | 2,797,993 | 2,990,519 |
Total assets | 39,897,229 | 37,980,803 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 2,079,177 | 2,718,173 |
Accrued expenses: | ||
Salaries and wages | 627,187 | 475,667 |
Vacation | 666,380 | 672,611 |
Other | 752,554 | 126,014 |
Payroll and other taxes withheld | 55,292 | 409,881 |
Contract liabilities | 3,384,474 | 3,077,605 |
Income taxes payable | 54,722 | |
Total current liabilities | 7,619,786 | 7,479,951 |
Deferred tax liabilities | 177,829 | 168,557 |
Total liabilities | 7,797,615 | 7,648,508 |
Commitments and Contingencies (See Note 14) | ||
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,129,874 shares as of June 30, 2022 and 2021. Outstanding 2,702,633 as of June 30, 2022 and 2021 (includes 256,293 and 279,429 Unearned ESOP Shares, respectively) | 1,043,291 | 1,043,291 |
Capital in excess of par value | 23,104,693 | 23,026,096 |
Accumulated other comprehensive loss | (1,932) | (2,361) |
Retained earnings | 18,679,857 | 17,414,730 |
Total stockholders equity before ESOP | 42,825,909 | 41,481,756 |
Less: Unearned ESOP shares | (4,687,604) | (5,110,770) |
Cost of 427,241 shares of common stock in treasury as of June 30, 2022 and 2021 | (6,038,691) | (6,038,691) |
Total stockholders' equity | 32,099,614 | 30,332,295 |
Total liabilities and stockholders' equity | $ 39,897,229 | $ 37,980,803 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 3,000 | $ 3,000 |
Common stock, par value | $ 0.33 | $ 0.33 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,129,874 | 3,129,874 |
Common stock, shares outstanding | 2,702,633 | 2,702,633 |
Unearned ESOP, shares | 256,293 | 279,429 |
Treasury stock, shares | 427,241 | 427,241 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 32,104,774 | $ 27,734,598 |
Cost of sales | 26,632,616 | 24,374,991 |
Gross profit | 5,472,158 | 3,359,607 |
Selling, general and administrative expenses | 3,942,991 | 3,785,746 |
Operating income (loss) | 1,529,167 | (426,139) |
Other income | ||
Interest income | 12,153 | 21,376 |
Other | 51,761 | 36,566 |
Total other income | 63,914 | 57,942 |
Income (loss) before provision (benefit) for income taxes | 1,593,081 | (368,197) |
Provision (benefit) for income taxes | 327,954 | (186,654) |
Net income (loss) | 1,265,127 | (181,543) |
Other comprehensive income (loss), net of tax: | ||
Unrealized gain on investment securities | 429 | 746 |
Total comprehensive income (loss) | $ 1,265,556 | $ (180,797) |
Net income (loss) per share: | ||
Basic | $ 0.52 | $ (0.08) |
Diluted | $ 0.52 | $ (0.08) |
Weighted average number of shares outstanding: | ||
Basic | 2,431,904 | 2,406,345 |
Diluted | 2,431,904 | 2,406,345 |
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 (Loss) Income [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Unearned ESOP Shares [Member] | Total |
Balance, beginning at Jun. 30, 2020 | $ 1,009,958 | $ 19,073,213 | $ (3,107) | $ 18,797,589 | $ (7,650,805) | $ 31,226,848 | |
Balance, beginning, shares at Jun. 30, 2020 | 2,402,633 | 627,241 | 2,402,633 | ||||
Comprehensive income (loss) | |||||||
Net income (loss) | (181,543) | $ (181,543) | |||||
Other comprehensive income loss, net of tax | 746 | 746 | |||||
Total comprehensive income (loss) | (180,797) | ||||||
Stock-based compensation | 133,663 | 133,663 | |||||
Dividends paid on common stock per share | (1,201,316) | (1,201,316) | |||||
Sale of stock to ESOP | $ 33,333 | 3,841,553 | $ 1,612,114 | (5,487,000) | |||
Sale of stock to ESOP, shares | 300,000 | (200,000) | |||||
Reduction of unearned ESOP shares | (22,333) | 376,230 | 353,897 | ||||
Balance, ending at Jun. 30, 2021 | $ 1,043,291 | 23,026,096 | (2,361) | 17,414,730 | $ (6,038,691) | (5,110,770) | $ 30,332,295 |
Balance, ending, common shares at Jun. 30, 2021 | 2,702,633 | 427,241 | 2,702,633 | ||||
Comprehensive income (loss) | |||||||
Net income (loss) | 1,265,127 | $ 1,265,127 | |||||
Other comprehensive income loss, net of tax | 429 | 429 | |||||
Total comprehensive income (loss) | $ 1,265,556 | ||||||
Stock options exercised, shares | |||||||
Stock-based compensation | 176,696 | $ 176,696 | |||||
Reduction of unearned ESOP shares | (98,099) | 423,166 | 325,067 | ||||
Balance, ending at Jun. 30, 2022 | $ 1,043,291 | $ 23,104,693 | $ (1,932) | $ 18,679,857 | $ (6,038,691) | $ (4,687,604) | $ 32,099,614 |
Balance, ending, common shares at Jun. 30, 2022 | 2,702,633 | 427,241 | 2,702,633 |
Statements of Changes in Stoc_2
Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Other comprehensive income, tax portion | $ 198 | $ 90 |
Dividends paid per share | $ 0.50 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ 1,265,127 | $ (181,543) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Stock-based compensation | 176,696 | 133,663 |
Depreciation | 494,635 | 519,813 |
ESOP compensation expense | 325,067 | 353,897 |
Gain on disposal of assets | (119) | |
Loss on inventory reduction due to contract cancellation | 710,207 | |
Deferred income tax expense (benefit) | 9,271 | (64,396) |
Changes in assets and liabilities: | ||
(Increase) decrease in trade accounts receivables | (379,393) | 3,659,624 |
Decrease (increase) in income tax receivable | 249,602 | (249,602) |
Decrease (increase) in inventories | 231,443 | (4,714,044) |
Increase in prepaid expenses and other current assets | (292,477) | (303,411) |
Decrease in accounts payable | (638,996) | (143,523) |
Increase in accrued salaries and wages | 151,520 | 6,466 |
Decrease in vacation accrual | (6,231) | (17,223) |
Increase (decrease) in other accrued expenses | 626,540 | (192,308) |
(Decrease) increase in payroll and other taxes withheld | (354,589) | 222,911 |
Increase in contract liabilities | 306,869 | 902,370 |
Increase (decrease) in income taxes payable | 54,722 | (47,905) |
Net cash provided by operating activities | 2,219,687 | 594,996 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (303,561) | (43,554) |
Proceeds from sale of fixed assets | 2,000 | |
Purchase of investment securities | (4,237,778) | (5,436,056) |
Proceeds from sale/maturity of investment securities | 3,621,000 | 7,486,520 |
Net cash provided by investing activities | (918,339) | 2,006,910 |
Cash Flows from Financing Activities: | ||
Dividends paid on common stock | (1,201,316) | |
Net cash used in financing activities | (1,201,316) | |
Increase in cash and cash equivalents | 1,301,348 | 1,400,590 |
Cash and cash equivalents, beginning of the year | 6,802,712 | 5,402,122 |
Cash and cash equivalents, end of the year | 8,104,060 | 6,802,712 |
Supplemental Schedule of Cash Flow Information: | ||
Income taxes paid net of refunds | $ 14,365 | $ 175,250 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 1. Nature of Operations Espey Mfg. & Electronics Corp. (the Company) is a manufacturer of electronic equipment used primarily in military and industrial applications. The principal markets for the Company's products are companies that provide electronic support to both military and industrial applications across the United States and at some international locations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Revenue The majority of our net sales is generated from contracts with industrial manufacturers and defense companies, the Department of Defense, other agencies of the government of the United States and foreign governments for the design, development and/or manufacture of products. We provide our products and design and development services under fixed-price contracts. Under fixed-price contracts we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit or could incur a loss. We account for a contract with a customer after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collection of substantially all of the amount to which the entity will be entitled in exchange for the good or services that will be transferred to the customer is probable. We assess each contract at its inception to determine whether it should be combined with other contracts. When making this determination, we consider factors such as whether two or more contracts were negotiated and executed at or near the same time, or were negotiated with an overall profit objective. We evaluate the products or services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. Significant judgment is required in determining performance obligations. We determine the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract. The transaction price for each performance obligation is based on the estimated standalone selling price of the product or service underlying each performance obligation. Transaction prices on our contracts subject to the Federal Acquisition Regulations (FAR) are typically based on estimated costs plus a reasonable profit margin. We recognize revenue using the output method based on the appraisal of results achieved and milestones reached or units delivered based on contractual shipment terms, typically shipping point. Inventory Raw materials are valued at the lower of cost (average cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing estimated demand, inventory on hand, sales levels, market conditions, and other information and reduce inventory balances based on this analysis. Inventory relating to contracts in process and work in process is valued at cost, including factory overhead incurred to date. Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. Work in process represents spare units and parts and other inventory items acquired or produced to service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company’s balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected to be produced. Certain contracts are expected to extend beyond twelve months. The estimation of total cost at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process. When a change in expected sales value or estimated cost is determined, the change is reflected in current period earnings. 18 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 2. Summary of Significant Accounting Policies, Continued Contract Liabilities Contract liabilities include advance payments and billings in excess of revenue recognized. Depreciation Depreciation of plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of depreciable assets are as follows: Buildings and improvements 10 – years Machinery and equipment 3 – years Furniture and fixtures 7 – years Income Taxes The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes." Under the provisions of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market funds. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Investment Securities The Company accounts for its investments in debt securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” Investments in debt securities at June 30, 2022 consists of certificates of deposit and municipal bonds, and at June 30, 2021, consisted of certificates of deposit. The Company classifies investments in debt securities as available-for-sale. Unrealized holding gains and losses, net of related tax effect, on available-for-sale debt securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. Realized gains and losses for debt securities classified as available-for-sale are included in earnings and are determined using the specific identification method. Interest income is recognized when earned. Fair values are based on quoted market prices available as of the balance sheet date, and are therefore considered a Level 1 valuation. Fair Value of Financial Instruments ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ▪ 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. 19 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 2. Summary of Significant Accounting Policies, Continued ▪ 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 investments, accounts receivable, accounts payable, accrued expenses and contract liabilities, approximated fair value as of June 30, 2022 and 2021 because of the immediate or short-term maturity of these financial instruments. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business and collateral is generally not required for trade receivables. Exposure to credit risk is controlled through the use of credit approvals, credit limits, and monitoring procedures. Accounts receivable are reported net of an allowance for doubtful accounts. The Company estimates the allowance based on its analysis of specific balances. Interest is not charged on past due balances. Based on these factors, there was an allowance for doubtful accounts of $ 3,000 Per Share Amounts ASC 260-10 “Earnings Per Share (EPS)” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share, as defined. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of outstanding options issued by the Company are reflected in diluted EPS using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income. Other comprehensive income for fiscal years ended June 30, 2022 and 2021 consists of unrealized holding gains on available-for-sale debt securities. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 amends ASC 740 to simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in the accounting standard under the FASB’s simplification initiative. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Upon adoption, the amendments in ASU 2019-12 should be applied on a prospective basis to all periods presented. The Company adopted the new guidance under ASU 2019-12 in the first quarter of fiscal year 2022 and removed the exception for intraperiod allocations from its interim period tax provision calculation, accordingly. The removal of the exception for intraperiod allocations did not have a material impact on the Company. 20 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 2. Summary of Significant Accounting Policies, Continued Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently. For trade receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Upon adoption, the amendments in ASU 2016-13 should be applied on a prospective basis to all periods presented relating to available-for-sale debt securities. For all other financial instruments the Company upon adoption will apply the amendments on a modified-retrospective approach. The Company is expected to adopt the new guidance under ASU 2016-13 in the first quarter of fiscal year 2024 and is currently evaluating the impact of the adoption on its financial statements. Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairments of long-lived assets in fiscal years 2022 and 2021. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable. Concentrations of Risk The market for our defense electronics products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors to which we provide components. Any decline in expenditures by the United States or foreign governments may have an adverse effect on our financial performance. Generally, U.S. Government contracts are subject to procurement laws and regulations. Some of the Company’s contracts are governed by the Federal Acquisition Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition regulations that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal Acquisition Regulation (DFAR). The FAR also contains guidelines and regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government’s convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated for default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related costs and fees. |
Revenue
Revenue | 12 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3. Revenue The Company follows ASC 606 “Revenue from Contracts with Customers” to determine the recognition of revenue. This standard 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. 21 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 3. Revenue, Continued 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, or as, 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 the 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 twelve months ended June 30, 2022 based on units delivered totaled $ 26,931,949 22,973,507 5,172,825 4,761,091 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 result in the adjustment of the transaction price as of June 30, 2022. Our payment terms are generally 30-60 days. Contract liabilities were $ 3,384,474 3,077,605 1,160,000 The Company’s backlog at June 30, 2022 totaling $ 76.8 46 43 11 |
Investment Securities
Investment Securities | 12 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 4. Investment Securities Investment securities at June 30, 2022 consist of certificates of deposit and municipal bonds, and at June 30, 2021, consist of certificates of deposit, which are classified as available-for-sale debt 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 debt securities by major security type at June 30, 2022 and June 30, 2021 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2022 Certificates of deposit $ 3,639,000 $ — $ — $ 3,639,000 Municipal bonds 72,225 — ( 2,446 ) 69,779 2022 Total investment securities $ 3,711,225 $ — $ ( 2,446 ) $ 3,708,779 2021 Certificates of deposit $ 3,092,000 $ — $ — $ 3,092,000 Municipal bonds — — — — 2021 Total investment securities $ 3,092,000 $ — $ — $ 3,092,000 22 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 4. Investment Securities, Continued The portfolio is diversified and highly liquid and primarily consists of investment grade fixed income instruments. At June 30, 2022, the Company did not have any investments in individual securities that have been in a continuous loss position considered to be other than temporary. As of June 30, 2022 and 2021, the remaining contractual maturities of available-for-sale debt securities were as follows: Years to Maturity Less than One to One Year Five Years Total 2022 Available-for-sale $ 3,639,000 $ 69,779 $ 3,708,779 2021 Available-for-sale $ 3,092,000 $ — $ 3,092,000 |
Contracts in Process
Contracts in Process | 12 Months Ended |
Jun. 30, 2022 | |
Contractors [Abstract] | |
Contracts in Process | Note 5. Contracts in Process Contracts in process at June 30, 2022 and 2021 are as follows: 2022 2021 Unrecognized gross contract value $ 76,782,028 $ 65,647,715 Costs related to contracts in process $ 16,207,419 $ 16,354,636 Included in costs relating to contracts in process at June 30, 2022 and 2021 are costs relative to contracts that may not be completed within the ensuing year as contracts vary in size, scope and duration. Under the units-of-delivery method, the related sale and cost of sales will not be reflected in the statements of comprehensive income until the units under contract are shipped. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 6. Property, Plant and Equipment Property, plant and equipment at June 30, 2022 and 2021 is as follows: 2022 2021 Land $ 45,000 $ 45,000 Building and improvements 4,450,399 4,387,113 Machinery and equipment 11,287,648 11,121,960 Furniture and fixtures 164,200 164,200 15,947,247 15,718,273 Accumulated depreciation ( 13,149,254 ) ( 12,727,754 ) Property, plant and equipment, net $ 2,797,993 $ 2,990,519 Depreciation expense was $ 494,635 519,813 |
Pension Expense
Pension Expense | 12 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pension Expense | Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 7. Pension Expense Under terms of a negotiated union contract which expired on June 30, 2022, the Company was obligated to make contributions to a union-sponsored International Brotherhood of Electrical Workers Local 1799 defined benefit pension plan (Plan identifying number is 14-6065199) covering eligible employees. Such contributions and expenses are based upon hours worked at a specified rate and amounted to $ 110,378 112,997 0.04 In addition, a Memorandum of Understanding (MOU) between the Company and Union which was effective July 1, 2021, the Company agreed and became obligated to make contributions to the National Electrical Benefit Fund (NEBF) (Plan identifying number is 53-0181657). The Plan is a defined pension benefit plan covering eligible union employees. Such contributions and expenses amounted to $ 73,771 The Company sponsors a 401(k) plan for non-union workers with employee and employer matching contributions. The employer match is 10 53,836 49,218 |
Provision (Benefit) for Income
Provision (Benefit) for Income Taxes | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision (Benefit) for Income Taxes | Note 8. Provision (Benefit) for Income Taxes A summary of the components of the provision (benefit) for income taxes for the years ended June 30, 2022 and 2021 is as follows: 2022 2021 Current tax expense (benefit) - federal $ 313,705 $ ( 122,221 ) Current tax expense (benefit) - state 4,978 ( 37 ) Deferred tax expense (benefit) 9,271 ( 64,396 ) Provision (benefit) for income taxes $ 327,954 $ ( 186,654 ) Deferred income taxes reflect the impact of "temporary differences" between the amount of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. These "temporary differences" are determined in accordance with ASC 740-10. The combined U.S. federal and state effective income tax rates of 20.6 50.7 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % Increase (reduction) in rate resulting from: State franchise tax, net of federal income tax benefit 0.3 0.1 ESOP cost versus Fair Market Value ( 1.3 ) 1.3 Dividend on allocated ESOP shares ( 3.1 ) 25.9 Stock-based compensation 4.0 ( 6.7 ) Foreign Derived Intangible Income Deduction — — Rate Differential on Net Operating Loss Carryback ( 0.1 ) 10.5 Other ( 0.2 ) ( 1.4 ) Effective tax rate 20.6 % 50.7 % 24 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 8. Provision (Benefit) for Income Taxes, Continued For the years ended June 30, 2022 and 2021 deferred income tax expense (benefit) of $ 9,271 64,396 2022 2021 Deferred tax assets: Accrued expenses $ 204,774 $ 186,339 ESOP 14,237 2,190 Stock-based compensation 33,719 59,659 Inventory - effect of uniform capitalization — 46,197 Total deferred tax assets $ 252,730 $ 294,385 Deferred tax liability: Property, plant and equipment - principally due to differences in depreciation methods $ 374,566 $ 422,771 Inventory - effect of uniform capitalization 19,276 — Prepaid expenses 36,716 40,171 Total deferred tax liability $ 430,558 $ 462,942 Net deferred tax liability $ ( 177,828 ) $ ( 168,557 ) In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projection for future taxable income over the period in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these temporary differences without consideration of a valuation allowance. As the result of the implementation of the FASB interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109, the Company recognized no material adjustments to unrecognized tax benefits. As of June 30, 2022 and 2021, the Company has no unrecognized tax benefits. The Company recognizes interest and penalties in general and administrative expense. As of June 30, 2022 and 2021, the Company has not recorded any provision for accrued interest and penalties. The Company is subject to taxation in the United States and various state jurisdictions. The federal tax returns are subject to audit for three years from date of filing unless the return was audited within that period. In general the majority of state statutes follow similar guidelines. As such, the Company’s tax returns for tax years ending June 30, 2022, 2021, and 2020 remain open to examination by the respective taxing authorities. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the economic uncertainty resulting from the COVID19 pandemic. The CARES Act includes many measures to assist companies, including temporary changes to income and non-income based laws, some of which were enacted as part of the Tax Cuts and Jobs Act of 2017 (“TCJA”). Some of the key changes include eliminating the 80 120,000 125,635 |
Significant Customers
Significant Customers | 12 Months Ended |
Jun. 30, 2022 | |
Significant Customers [Abstract] | |
Significant Customers | Note 9. Significant Customers A significant portion of the Company’s business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain industrial customers. Sales to four domestic customers accounted for 57 59 74 76 Export sales in fiscal years 2022 and 2021 were approximately $ 1,644,000 2,019,000 |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 12 Months Ended |
Jun. 30, 2022 | |
Employee Stock Ownership Plan [Abstract] | |
Employee Stock Ownership Plan | Note 10. Employee Stock Ownership Plan The Company ESOP covers all nonunion employees who work 1,000 469,119 300,000 0.33 1/3 15 18.29 5,487,000 15 annual 3.00 The Board of Directors of the Company had approved a purchase price per share equal to the lesser of the trading value on the day of closing or the lowest price listed in the valuation established by the independent valuation firm plus $ 0.25 18.04 19.43 In making the sale, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, because the shares sold were offered only to the ESOP. After giving effect to the transaction, the ESOP owned 769,119 2,702,633 The Company makes annual contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated shares received by the ESOP. Any dividends on unallocated shares received by the ESOP are used to pay debt service. Any 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 the statements 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 $ 325,067 353,897 The ESOP shares as of June 30, 2022 and 2021 were as follows: 2022 2021 Allocated shares 496,091 487,220 Unreleased shares 256,293 279,429 Total shares held by the ESOP 752,384 766,649 Fair value of unreleased shares $ 3,649,612 $ 4,141,138 26 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 10. Employee Stock Ownership Plan, Continued The Company may at times be required to repurchase shares at the ESOP participants’ request at the fair market value. During the twelve months ended June 30, 2022 and 2021, the Company did not repurchase shares previously held by 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. Share distributions from the ESOP during the twelve months ended June 30, 2022 and 2021 totaled 14,265 2,470 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Note 11. Stock-based Compensation The Company follows ASC 718 in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. Included as a reduction to the cost recognized for share-based payments is an estimate for option forfeitures. It is the Company’s policy to estimate expected option forfeitures based on historical experience. Actual forfeitures are adjusted prior to the vesting date if the impact is material. Total stock-based compensation expense recognized in the statements of comprehensive income (loss) for the fiscal years ended June 30, 2022 and 2021, was $ 176,696 133,663 29,287 32,863 6,150 6,901 As of June 30, 2022, there was approximately $ 130,093 2 103,355 26,738 5,615 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"), 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 13,300 33 1/3 15,000 two years ten-year 400,000 307,904 195,523 112,381 204,477 50,750 ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model, which incorporates various assumptions including those for volatility, expected life, and interest rates. 27 Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 11. Stock-based Compensation, Continued The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the year ended June 30, 2022 and 2021. 2022 2021 Dividend yield - 5.54 % Expected stock price volatility 25.60 % 23.41 % Risk-free interest rate 0.99 % 0.36 % Expected option life (in years) 5.4 yrs 5.4 yrs Weighted average fair value per share of options granted during the period $ 3.74 $ 1.59 Effective March 9, 2021, the Company suspended the payment of regular quarterly dividends. The Company paid no cash dividends for the fiscal year ended June 30, 2022 and paid regular cash dividends on common stock of $ 0.50 The following table summarizes stock option activity during the twelve months ended June 30, 2022: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2021 304,662 $ 23.37 6.06 Granted 81,550 $ 14.75 9.08 Exercised — — — Forfeited or expired ( 139,939 ) $ 22.70 — Outstanding at June 30, 2022 246,273 $ 20.89 6.73 $ 2,392 Vested or expected to vest at June 30, 2022 228,074 $ 21.28 6.56 $ 2,294 Exercisable at June 30, 2022 142,098 $ 24.48 5.20 $ 0 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 June 30, 2022 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders had exercised their options on June 30, 2022. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised during the twelve months ended June 30, 2022 and 2021 was $ 0 The following table summarizes changes in non-vested stock options during the twelve months ended June 30, 2022: Weighted Number of Average Shares Grant Date Subject Fair Value to Option (per Option) Non-Vested at July 1, 2021 103,450 $ 2.22 Granted 81,550 3.74 Vested ( 43,025 ) 3.03 Forfeited or expired ( 37,800 ) 2.65 Non-Vested at June 30, 2022 104,175 $ 2.92 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 12. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains cash and cash equivalents with various financial institutions. At times such investments may be in excess of FDIC insurance limits. As disclosed in Note 9, a significant portion of the Company's business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain industrial customers. The related accounts receivable balance, as a percentage of the Company's total trade accounts receivable balance, was 74 four 76.3 four Although the Company's exposure to credit risk associated with nonpayment of these concentrated balances is affected by the conditions or occurrences within the U.S. and foreign governments, the Company believes that its trade accounts receivable credit risk exposure is limited. The Company performs ongoing credit evaluations of its customer's financial conditions and requires collateral, such as progress payments, in certain circumstances. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. |
Related Parties
Related Parties | 12 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 13. Related Parties The administration of the shares of common stock held by the ESOP Trust is subject to the Amended and Restated Plan and a Trust Agreement, each effective as of July 1, 2016. The Trustees’ rights with respect to the disposition of shares are governed by the terms of the Plan and the Trust Agreement. As to shares that have been allocated to the accounts of participants in the ESOP Trust, the Plan provides that the Trustees are required to vote such shares in accordance with instructions received from the participants. As to unallocated shares and allocated shares for which voting instructions have not been received from participants, the Plan provides that the Trustees are required to vote such shares in accordance with the direction of the Board of Directors of the Company under the terms of the Plan and Trust Agreement. See Note 10 for additional information regarding the ESOP. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Espey Mfg. & Electronics Corp. Notes to Financial Statements Note 14. Commitments and Contingencies The Company at certain times enters into standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero 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. Currently, there are no matters pending. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 15. Stockholders' Equity Reservation of Shares The Company has reserved common shares for future issuance as follows as of June 30, 2022: Stock options outstanding 246,273 Stock options available for issuance 204,477 Number of common shares reserved 450,750 The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the years ended June 30: 2022 2021 Numerator: Net income (loss) $ 1,265,127 $ ( 181,543 ) Denominator: Basic EPS: Common shares outstanding, beginning of period 2,702,633 2,402,633 Common shares issued to ESOP during the period — 300,000 Unearned ESOP shares ( 279,429 ) ( 300,000 ) Weighted average common shares issued during the period — — Weighted average common shares purchased during the period — — Weighted average ESOP shares earned during the period 8,700 3,712 Denominator for basic earnings per common shares –Weighted average common shares 2,431,904 2,406,345 Diluted EPS: Common shares outstanding, beginning of period 2,702,633 2,402,633 Common shares issued to ESOP during the period — 300,000 Unearned ESOP shares ( 279,429 ) ( 300,000 ) Weighted average common shares issued during the period — — Weighted average common shares purchased during the period — — Weighted average ESOP shares earned during the period 8,700 3,712 Weighted average dilutive effect of stock options — — Denominator for diluted earnings per common shares –Weighted average common shares 2,431,904 2,406,345 Not included in this computation of earnings per share for the year ended June 30, 2022 and 2021 were options to purchase 246,273 304,662 Effective March 9, 2021, the Company suspended the payment of quarterly dividends. The Company paid no cash dividends for the fiscal year ended June 30, 2022 and paid cash dividends on common stock of $ 0.50 |
Line of Credit
Line of Credit | 12 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 16. Line of Credit At June 30, 2022, the Company has an uncommitted and unused Line of Credit with a financial institution. The agreement provides that the Company may borrow up to $ 3,000,000 2 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Note 17. Quarterly Financial Information (Unaudited) First Second Third Fourth 2022 Quarter Quarter Quarter Quarter Net sales $ 7,545,432 $ 7,458,050 $ 8,620,049 $ 8,481,243 Gross profit 1,353,098 1,206,817 1,734,880 1,177,363 Net income 306,061 21,201 661,359 276,506 Net income per share - Basic 0.13 0.01 0.27 0.11 Diluted 0.13 0.01 0.27 0.11 2021 Net sales $ 7,265,515 $ 6,962,065 $ 4,205,068 $ 9,301,950 Gross profit (loss) 1,127,374 713,461 ( 187,154 ) 1,705,926 Net income (loss) 189,824 ( 181,006 ) ( 1,070,114 ) 879,753 Net income (loss) per share - Basic 0.08 ( 0.08 ) ( 0.44 ) 0.36 Diluted 0.08 ( 0.08 ) ( 0.44 ) 0.36 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Revenue | Revenue The majority of our net sales is generated from contracts with industrial manufacturers and defense companies, the Department of Defense, other agencies of the government of the United States and foreign governments for the design, development and/or manufacture of products. We provide our products and design and development services under fixed-price contracts. Under fixed-price contracts we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit or could incur a loss. We account for a contract with a customer after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collection of substantially all of the amount to which the entity will be entitled in exchange for the good or services that will be transferred to the customer is probable. We assess each contract at its inception to determine whether it should be combined with other contracts. When making this determination, we consider factors such as whether two or more contracts were negotiated and executed at or near the same time, or were negotiated with an overall profit objective. We evaluate the products or services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. Significant judgment is required in determining performance obligations. We determine the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract. The transaction price for each performance obligation is based on the estimated standalone selling price of the product or service underlying each performance obligation. Transaction prices on our contracts subject to the Federal Acquisition Regulations (FAR) are typically based on estimated costs plus a reasonable profit margin. We recognize revenue using the output method based on the appraisal of results achieved and milestones reached or units delivered based on contractual shipment terms, typically shipping point. |
Inventory | Inventory Raw materials are valued at the lower of cost (average cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing estimated demand, inventory on hand, sales levels, market conditions, and other information and reduce inventory balances based on this analysis. Inventory relating to contracts in process and work in process is valued at cost, including factory overhead incurred to date. Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. Work in process represents spare units and parts and other inventory items acquired or produced to service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company’s balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected to be produced. Certain contracts are expected to extend beyond twelve months. The estimation of total cost at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process. When a change in expected sales value or estimated cost is determined, the change is reflected in current period earnings. |
Contract Liabilities | Contract Liabilities Contract liabilities include advance payments and billings in excess of revenue recognized. |
Depreciation | Depreciation Depreciation of plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of depreciable assets are as follows: Buildings and improvements 10 – years Machinery and equipment 3 – years Furniture and fixtures 7 – years |
Income Taxes | Income Taxes The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes." Under the provisions of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market funds. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. |
Investment Securities | Investment Securities The Company accounts for its investments in debt securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” Investments in debt securities at June 30, 2022 consists of certificates of deposit and municipal bonds, and at June 30, 2021, consisted of certificates of deposit. The Company classifies investments in debt securities as available-for-sale. Unrealized holding gains and losses, net of related tax effect, on available-for-sale debt securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. Realized gains and losses for debt securities classified as available-for-sale are included in earnings and are determined using the specific identification method. Interest income is recognized when earned. Fair values are based on quoted market prices available as of the balance sheet date, and are therefore considered a Level 1 valuation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ▪ 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 investments, accounts receivable, accounts payable, accrued expenses and contract liabilities, approximated fair value as of June 30, 2022 and 2021 because of the immediate or short-term maturity of these financial instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business and collateral is generally not required for trade receivables. Exposure to credit risk is controlled through the use of credit approvals, credit limits, and monitoring procedures. Accounts receivable are reported net of an allowance for doubtful accounts. The Company estimates the allowance based on its analysis of specific balances. Interest is not charged on past due balances. Based on these factors, there was an allowance for doubtful accounts of $ 3,000 |
Per Share Amounts | Per Share Amounts ASC 260-10 “Earnings Per Share (EPS)” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share, as defined. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of outstanding options issued by the Company are reflected in diluted EPS using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income. Other comprehensive income for fiscal years ended June 30, 2022 and 2021 consists of unrealized holding gains on available-for-sale debt securities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 amends ASC 740 to simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in the accounting standard under the FASB’s simplification initiative. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Upon adoption, the amendments in ASU 2019-12 should be applied on a prospective basis to all periods presented. The Company adopted the new guidance under ASU 2019-12 in the first quarter of fiscal year 2022 and removed the exception for intraperiod allocations from its interim period tax provision calculation, accordingly. The removal of the exception for intraperiod allocations did not have a material impact on the Company. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently. For trade receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Upon adoption, the amendments in ASU 2016-13 should be applied on a prospective basis to all periods presented relating to available-for-sale debt securities. For all other financial instruments the Company upon adoption will apply the amendments on a modified-retrospective approach. The Company is expected to adopt the new guidance under ASU 2016-13 in the first quarter of fiscal year 2024 and is currently evaluating the impact of the adoption on its financial statements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairments of long-lived assets in fiscal years 2022 and 2021. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable. |
Concentrations of Risk | Concentrations of Risk The market for our defense electronics products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors to which we provide components. Any decline in expenditures by the United States or foreign governments may have an adverse effect on our financial performance. Generally, U.S. Government contracts are subject to procurement laws and regulations. Some of the Company’s contracts are governed by the Federal Acquisition Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition regulations that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal Acquisition Regulation (DFAR). The FAR also contains guidelines and regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government’s convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated for default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related costs and fees. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Estimated useful lives of depreciable assets | Estimated useful lives of depreciable assets are as follows: Buildings and improvements 10 – years Machinery and equipment 3 – years Furniture and fixtures 7 – years |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities | Investment securities at June 30, 2022 consist of certificates of deposit and municipal bonds, and at June 30, 2021, consist of certificates of deposit, which are classified as available-for-sale debt 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 debt securities by major security type at June 30, 2022 and June 30, 2021 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2022 Certificates of deposit $ 3,639,000 $ — $ — $ 3,639,000 Municipal bonds 72,225 — ( 2,446 ) 69,779 2022 Total investment securities $ 3,711,225 $ — $ ( 2,446 ) $ 3,708,779 2021 Certificates of deposit $ 3,092,000 $ — $ — $ 3,092,000 Municipal bonds — — — — 2021 Total investment securities $ 3,092,000 $ — $ — $ 3,092,000 |
Schedule of contractual maturities of available-for-sale securities | As of June 30, 2022 and 2021, the remaining contractual maturities of available-for-sale debt securities were as follows: Years to Maturity Less than One to One Year Five Years Total 2022 Available-for-sale $ 3,639,000 $ 69,779 $ 3,708,779 2021 Available-for-sale $ 3,092,000 $ — $ 3,092,000 |
Contracts in Process (Tables)
Contracts in Process (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Contractors [Abstract] | |
Schedule of contracts in process | Contracts in process at June 30, 2022 and 2021 are as follows: 2022 2021 Unrecognized gross contract value $ 76,782,028 $ 65,647,715 Costs related to contracts in process $ 16,207,419 $ 16,354,636 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of the original cost of property, plant and equipment | Property, plant and equipment at June 30, 2022 and 2021 is as follows: 2022 2021 Land $ 45,000 $ 45,000 Building and improvements 4,450,399 4,387,113 Machinery and equipment 11,287,648 11,121,960 Furniture and fixtures 164,200 164,200 15,947,247 15,718,273 Accumulated depreciation ( 13,149,254 ) ( 12,727,754 ) Property, plant and equipment, net $ 2,797,993 $ 2,990,519 |
Provision (Benefit) for Incom_2
Provision (Benefit) for Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | A summary of the components of the provision (benefit) for income taxes for the years ended June 30, 2022 and 2021 is as follows: 2022 2021 Current tax expense (benefit) - federal $ 313,705 $ ( 122,221 ) Current tax expense (benefit) - state 4,978 ( 37 ) Deferred tax expense (benefit) 9,271 ( 64,396 ) Provision (benefit) for income taxes $ 327,954 $ ( 186,654 ) |
Schedule of effective income tax rates | The combined U.S. federal and state effective income tax rates of 20.6 50.7 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % Increase (reduction) in rate resulting from: State franchise tax, net of federal income tax benefit 0.3 0.1 ESOP cost versus Fair Market Value ( 1.3 ) 1.3 Dividend on allocated ESOP shares ( 3.1 ) 25.9 Stock-based compensation 4.0 ( 6.7 ) Foreign Derived Intangible Income Deduction — — Rate Differential on Net Operating Loss Carryback ( 0.1 ) 10.5 Other ( 0.2 ) ( 1.4 ) Effective tax rate 20.6 % 50.7 % |
Schedule of deferred tax assets and liabilities | For the years ended June 30, 2022 and 2021 deferred income tax expense (benefit) of $ 9,271 64,396 2022 2021 Deferred tax assets: Accrued expenses $ 204,774 $ 186,339 ESOP 14,237 2,190 Stock-based compensation 33,719 59,659 Inventory - effect of uniform capitalization — 46,197 Total deferred tax assets $ 252,730 $ 294,385 Deferred tax liability: Property, plant and equipment - principally due to differences in depreciation methods $ 374,566 $ 422,771 Inventory - effect of uniform capitalization 19,276 — Prepaid expenses 36,716 40,171 Total deferred tax liability $ 430,558 $ 462,942 Net deferred tax liability $ ( 177,828 ) $ ( 168,557 ) |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Employee Stock Ownership Plan [Abstract] | |
Schedule of ESOP shares | The ESOP shares as of June 30, 2022 and 2021 were as follows: 2022 2021 Allocated shares 496,091 487,220 Unreleased shares 256,293 279,429 Total shares held by the ESOP 752,384 766,649 Fair value of unreleased shares $ 3,649,612 $ 4,141,138 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of weighted average assumptions for option awards | The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the year ended June 30, 2022 and 2021. 2022 2021 Dividend yield - 5.54 % Expected stock price volatility 25.60 % 23.41 % Risk-free interest rate 0.99 % 0.36 % Expected option life (in years) 5.4 yrs 5.4 yrs Weighted average fair value per share of options granted during the period $ 3.74 $ 1.59 |
Schedule of stock option activity | The following table summarizes stock option activity during the twelve months ended June 30, 2022: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2021 304,662 $ 23.37 6.06 Granted 81,550 $ 14.75 9.08 Exercised — — — Forfeited or expired ( 139,939 ) $ 22.70 — Outstanding at June 30, 2022 246,273 $ 20.89 6.73 $ 2,392 Vested or expected to vest at June 30, 2022 228,074 $ 21.28 6.56 $ 2,294 Exercisable at June 30, 2022 142,098 $ 24.48 5.20 $ 0 |
Schedule of changes in non-vested stock options | The following table summarizes changes in non-vested stock options during the twelve months ended June 30, 2022: Weighted Number of Average Shares Grant Date Subject Fair Value to Option (per Option) Non-Vested at July 1, 2021 103,450 $ 2.22 Granted 81,550 3.74 Vested ( 43,025 ) 3.03 Forfeited or expired ( 37,800 ) 2.65 Non-Vested at June 30, 2022 104,175 $ 2.92 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Schedule of reserved common shares for future issuance | The Company has reserved common shares for future issuance as follows as of June 30, 2022: Stock options outstanding 246,273 Stock options available for issuance 204,477 Number of common shares reserved 450,750 |
Schedule of reconciliation of the numerators and denominators of basic and diluted per share computations | The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the years ended June 30: 2022 2021 Numerator: Net income (loss) $ 1,265,127 $ ( 181,543 ) Denominator: Basic EPS: Common shares outstanding, beginning of period 2,702,633 2,402,633 Common shares issued to ESOP during the period — 300,000 Unearned ESOP shares ( 279,429 ) ( 300,000 ) Weighted average common shares issued during the period — — Weighted average common shares purchased during the period — — Weighted average ESOP shares earned during the period 8,700 3,712 Denominator for basic earnings per common shares –Weighted average common shares 2,431,904 2,406,345 Diluted EPS: Common shares outstanding, beginning of period 2,702,633 2,402,633 Common shares issued to ESOP during the period — 300,000 Unearned ESOP shares ( 279,429 ) ( 300,000 ) Weighted average common shares issued during the period — — Weighted average common shares purchased during the period — — Weighted average ESOP shares earned during the period 8,700 3,712 Weighted average dilutive effect of stock options — — Denominator for diluted earnings per common shares –Weighted average common shares 2,431,904 2,406,345 |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | First Second Third Fourth 2022 Quarter Quarter Quarter Quarter Net sales $ 7,545,432 $ 7,458,050 $ 8,620,049 $ 8,481,243 Gross profit 1,353,098 1,206,817 1,734,880 1,177,363 Net income 306,061 21,201 661,359 276,506 Net income per share - Basic 0.13 0.01 0.27 0.11 Diluted 0.13 0.01 0.27 0.11 2021 Net sales $ 7,265,515 $ 6,962,065 $ 4,205,068 $ 9,301,950 Gross profit (loss) 1,127,374 713,461 ( 187,154 ) 1,705,926 Net income (loss) 189,824 ( 181,006 ) ( 1,070,114 ) 879,753 Net income (loss) per share - Basic 0.08 ( 0.08 ) ( 0.44 ) 0.36 Diluted 0.08 ( 0.08 ) ( 0.44 ) 0.36 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Jun. 30, 2022 | |
Building and improvements [Member] | Lower Range [Member] | |
Estimated useful lives of depreciated assets | 10 years |
Building and improvements [Member] | Upper Range [Member] | |
Estimated useful lives of depreciated assets | 50 years |
Machinery and equipment [Member] | Lower Range [Member] | |
Estimated useful lives of depreciated assets | 3 years |
Machinery and equipment [Member] | Upper Range [Member] | |
Estimated useful lives of depreciated assets | 20 years |
Furniture and fixtures [Member] | Lower Range [Member] | |
Estimated useful lives of depreciated assets | 7 years |
Furniture and fixtures [Member] | Upper Range [Member] | |
Estimated useful lives of depreciated assets | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) (Narrative) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Summary Of Significant Accounting Policies Details | ||
Allowance for doubtful accounts | $ 3,000 | $ 3,000 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Contract liabilities | $ 1,160,000 | $ 1,160,000 | ||||||||
Revenue | 8,481,243 | $ 8,620,049 | $ 7,458,050 | $ 7,545,432 | $ 9,301,950 | $ 4,205,068 | $ 6,962,065 | $ 7,265,515 | 32,104,774 | $ 27,734,598 |
ASC 606 [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Contract liabilities | 3,384,474 | $ 3,077,605 | 3,384,474 | 3,077,605 | ||||||
ASC 606 [Member] | Backlog [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Intangible assets | $ 76,800,000 | 76,800,000 | ||||||||
ASC 606 [Member] | Units Delivered [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Revenue | 26,931,949 | 22,973,507 | ||||||||
ASC 606 [Member] | Milestones Achieved [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Revenue | $ 5,172,825 | $ 4,761,091 | ||||||||
ASC 606 [Member] | Forecast [Member] | Backlog [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Backlog amount to be recognized, 2023 | 46% | 46% | ||||||||
Backlog amount to be recognized, 2024 | 43% | 43% | ||||||||
Backlog amount to be recognized, 2025 | 11% | 11% |
Investment Securities (Schedule
Investment Securities (Schedule of Investment Securities) (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Amortized Cost | $ 3,711,225 | $ 3,092,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (2,446) | |
Fair Value | 3,708,779 | 3,092,000 |
Certificates of deposit [Member] | ||
Amortized Cost | 3,639,000 | 3,092,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 3,639,000 | 3,092,000 |
Municipal bonds [Member] | ||
Amortized Cost | 72,225 | |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (2,446) | |
Fair Value | $ 69,779 |
Investment Securities (Schedu_2
Investment Securities (Schedule of Contractual Maturities of Available-For-Sale Securities) (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Years to maturity of Available-for-sale securities: | ||
Less than One Year | $ 3,639,000 | $ 3,092,000 |
One to Five Years | 69,779 | |
Total | $ 3,708,779 | $ 3,092,000 |
Contracts in Process (Schedule
Contracts in Process (Schedule of Contracts in Process) (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Contractors [Abstract] | ||
Unrecognized gross contract value | $ 76,782,028 | $ 65,647,715 |
Costs related to contracts in process | $ 16,207,419 | $ 16,354,636 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Narrative) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 494,635 | $ 519,813 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Summary of Original Cost of Property, Plant and Equipment) (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Property, plant and equipment, gross | $ 15,947,247 | $ 15,718,273 |
Accumulated depreciation | (13,149,254) | (12,727,754) |
Property, plant and equipment, net | 2,797,993 | 2,990,519 |
Land [Member] | ||
Property, plant and equipment, gross | 45,000 | 45,000 |
Building and improvements [Member] | ||
Property, plant and equipment, gross | 4,450,399 | 4,387,113 |
Machinery and equipment [Member] | ||
Property, plant and equipment, gross | 11,287,648 | 11,121,960 |
Furniture and fixtures [Member] | ||
Property, plant and equipment, gross | $ 164,200 | $ 164,200 |
Pension Expense (Details)
Pension Expense (Details) | 1 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Retirement Benefits [Abstract] | |||
Defined benefit contributions and expenses | $ 110,378 | $ 112,997 | |
Increase in contribution, hourly rate | 0.04 | ||
Employer matching contibutions of 401(k) plan (percentage) | 10% | 10% | |
Employer matching contributions to 401(k) plan | $ 53,836 | $ 49,218 | |
Pension benefit plan contributions and expenses | $ 73,771 |
Provision (benefit) for Incom_3
Provision (benefit) for Income Taxes (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 27, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Corporate income tax rate | 80% | ||
Combined U.S. federal and state effective income tax rates | 20.60% | 50.70% | |
Deferred tax expense | $ 9,271 | $ (64,396) | |
Tax benefit relating to NOL carryback provisions provided for in CARES Act | $ 120,000 | ||
Actual benefit received amounts | $ 125,635 |
Provision (benefit) for Incom_4
Provision (benefit) for Income Taxes (Schedule of Components of Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Components of the provision for income taxes | ||
Current tax (benefit) expense - federal | $ 313,705 | $ (122,221) |
Current tax benefit - state | 4,978 | (37) |
Deferred tax benefit | 9,271 | (64,396) |
Provision (benefit) for income taxes | $ 327,954 | $ (186,654) |
Provision (benefit) for Incom_5
Provision (benefit) for Income Taxes (Schedule of Effective Income Tax Rates) (Details) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income tax rate reconciliation | ||
U.S. federal statutory income tax rate | 21% | 21% |
Increase (reduction) in rate resulting from: | ||
State franchise tax, net of federal income tax benefit | 0.30% | 0.10% |
ESOP cost versus Fair Market Value | (1.30%) | 1.30% |
Dividend on allocated ESOP shares | (3.10%) | 25.90% |
Stock-based compensation | 4% | (6.70%) |
Foreign Derived Intangible Income Deduction | ||
Rate Differential on Net Operating Loss Carryback | (0.10%) | 10.50% |
Other | (0.20%) | (1.40%) |
Effective tax rate | 20.60% | 50.70% |
Provision (benefit) for Incom_6
Provision (benefit) for Income Taxes (Schedule of Deferred Tax Assets And Liabilities) (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 204,774 | $ 186,339 |
ESOP | 14,237 | 2,190 |
Stock-based compensation | 33,719 | 59,659 |
Inventory - effect of uniform capitalization | 46,197 | |
Total deferred tax assets | 252,730 | 294,385 |
Deferred tax liability: | ||
Property, plant and equipment - principally due to differences in depreciation methods | 374,566 | 422,771 |
Inventory - effect of uniform capitalization | 19,276 | |
Prepaid expenses | 36,716 | 40,171 |
Total deferred tax liability | 430,558 | 462,942 |
Net deferred tax liability | $ (177,828) | $ (168,557) |
Significant Customers (Details)
Significant Customers (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Sales | $ 8,481,243 | $ 8,620,049 | $ 7,458,050 | $ 7,545,432 | $ 9,301,950 | $ 4,205,068 | $ 6,962,065 | $ 7,265,515 | $ 32,104,774 | $ 27,734,598 |
Sales Revenue [Member] | Domestic U.S. Customers [Member] | ||||||||||
Concentration Risk percentage | 57% | 59% | ||||||||
Sales Revenue [Member] | Foreign Customers [Member] | ||||||||||
Sales | $ 1,644,000 | $ 2,019,000 | ||||||||
Accounts Receivable [Member] | Domestic U.S. Customers [Member] | ||||||||||
Concentration Risk percentage | 74% | 76% |
Employee Stock Ownership Plan_2
Employee Stock Ownership Plan (Narrative) (Details) | 12 Months Ended | ||||
Dec. 01, 2020 shares | Jun. 30, 2022 USD ($) h $ / shares shares | Jun. 30, 2021 USD ($) shares | Dec. 01, 2021 $ / shares | Jun. 30, 2020 shares | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Price per share | $ / shares | $ 0.25 | ||||
Common stock, shares outstanding | 2,702,633 | 2,702,633 | 2,402,633 | ||
ESOP compensation expense | $ | $ 325,067 | $ 353,897 | |||
Shares distributed | 300,000 | ||||
Common Stock [Member] | |||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Common stock, shares outstanding | 2,702,633 | 2,702,633 | 2,402,633 | ||
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 | ||||
Number of shares allocated to employees | 469,119 | 496,091 | 487,220 | ||
Period of services rendered | 15 years | ||||
Price per share | $ / shares | $ 18.29 | ||||
Aggregate purchase price | $ | $ 5,487,000 | ||||
Loan, frequency of periodic payment | annual | ||||
Number of loan repayment annual installments | 15 | ||||
Interest rate on loan | 3% | ||||
Purchase price per share, lower range limit | $ / shares | $ 18.04 | ||||
Purchase price per share, upper range limit | $ / shares | $ 19.43 | ||||
Number of shares owned | 769,119 | 752,384 | 766,649 | ||
Common stock, shares outstanding | 2,702,633 | ||||
ESOP compensation expense | $ | $ 325,067 | $ 353,897 | |||
Shares distributed | 14,265 | 2,470 | |||
Employee Stock Ownership Plan [Member] | Common Stock [Member] | |||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Number of shares sold | 300,000 | ||||
Sale of stock, price per share | $ / shares | $ 0.3333 |
Employee Stock Ownership Plan_3
Employee Stock Ownership Plan (Schedule of ESOP Shares) (Details) - Employee Stock Ownership Plan [Member] - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 01, 2020 |
ESOP share allocation | |||
Allocated shares | 496,091 | 487,220 | 469,119 |
Unreleased shares | 256,293 | 279,429 | |
Total shares held by the ESOP | 752,384 | 766,649 | 769,119 |
Fair value of unreleased shares | $ 3,649,612 | $ 4,141,138 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock based compensation expense | $ 176,696 | $ 133,663 |
Deferred tax benefit related to stock based compensation | 6,150 | $ 6,901 |
Unrecognized compensation costs | $ 130,093 | |
Period in which compensation cost will be recognized | 2 years | |
Deferred tax benefit related to unrecognized compensation costs | $ 5,615 | |
Shares cancelled | 139,939 | |
Outstanding | 246,273 | 304,662 |
Dividends paid per share | $ 0.50 | |
Aggregate intrinsic value of options exercised | $ 0 | |
Remaining available grant | 204,477 | |
2017 Plan [Member] | Non-employee Director [Member] | Upper Range [Member] | ||
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 | |
Number of shares authorized | 133,000 | |
2017 Plan [Member] | Individual Employee [Member] | Upper Range [Member] | ||
Number of shares subject to option or award, single fiscal year | 15,000 | |
Non-qualified stock options [Member] | ||
Stock based compensation expense | $ 29,287 | $ 32,863 |
Unrecognized compensation costs | 103,355 | |
Incentive Stock Options [Member] | ||
Unrecognized compensation costs | $ 26,738 | |
Stock Options [Member] | 2017 Plan [Member] | ||
Vesting period | 2 years | |
Expiration period | 10 years | |
Shares cancelled | 112,381 | |
Number of shares authorized | 400,000 | |
Granted | 307,904 | |
Stock Options [Member] | 2007 Plan [Member] | ||
Outstanding | 195,523 | |
Remaining available grant | 204,477 | |
Restricted Stock Plan [Member] | 2007 Plan [Member] | ||
Outstanding | 50,750 |
Stock-based Compensation (Sched
Stock-based Compensation (Schedule of Weighted Average Assumptions for Option Awards) (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Weighted average assumptions to calculation option fair value | ||
Dividend yield | 5.54% | |
Expected stock price volatility | 25.60% | 23.41% |
Risk-free interest rate | 0.99% | 0.36% |
Expected option life (in years) | 5 years 4 months 24 days | 5 years 4 months 24 days |
Weighted average fair value per share of options granted during the period | $ 3.74 | $ 1.59 |
Stock-based Compensation (Sch_2
Stock-based Compensation (Schedule of Stock Option Activity) (Details) | 12 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Balance, beginning | shares | 304,662 |
Granted | shares | 81,550 |
Exercised | shares | |
Forfeited or expired | shares | (139,939) |
Outstanding, ending | shares | 246,273 |
Vested or expected to vest, end of period | shares | 228,074 |
Exercisable, end of period | shares | 142,098 |
Balance, beginning | $ / shares | $ 23.37 |
Granted | $ / shares | 14.75 |
Exercised | $ / shares | |
Forfeited or expired | $ / shares | 22.70 |
Outstanding, ending | $ / shares | 20.89 |
Vested or expected to vest, end of period | $ / shares | 21.28 |
Exercisable, end of period | $ / shares | $ 24.48 |
Balance, beginning | 6 years 21 days |
Granted | 9 years 29 days |
Outstanding, ending | 6 years 8 months 23 days |
Vested or expected to vest, end of period | 6 years 6 months 21 days |
Exercisable, end of period | 5 years 2 months 12 days |
Outstanding end of period | $ | $ 2,392 |
Vested or expected to vest, end of period | $ | 2,294 |
Exercisable, end of period | $ | $ 0 |
Stock-based Compensation (Sch_3
Stock-based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details) | 12 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Non-vested, beginning balance | shares | 103,450 |
Granted | shares | 81,550 |
Vested | shares | (43,025) |
Forfeited or expired | shares | (37,800) |
Non-vested, ending balance | shares | 104,175 |
Weighted Average Grant Date Fair Value (per Option) | |
Balance, beginning | $ / shares | $ 2.22 |
Granted | $ / shares | 3.74 |
Vested | $ / shares | 3.03 |
Forfeited or expired | $ / shares | 2.65 |
Outstanding, ending | $ / shares | $ 2.92 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) - Sales Revenue [Member] - Trade Accounts Receivable [Member] - Customers | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Concentration Risk percentage | 74% | 76.30% |
Number of customers | 4 | 2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Contingent liability on outstanding letters of credit | $ 0 | $ 0 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Equity [Abstract] | ||
Cash dividends on common stock (in dollars per share) | $ 0.50 | |
Anti-dilutive options excluded from calculation of EPS | 246,273 | 304,662 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Reserved Common Shares for Future Issuance) (Details) (USD $) - shares | Jun. 30, 2022 | Jun. 30, 2021 |
Shares reserved for future issuance | ||
Stock options outstanding | 246,273 | 304,662 |
Stock options available for issuance | 204,477 | |
Number of common shares reserved | 450,750 |
Stockholders' Equity (Schedul_2
Stockholders' Equity (Schedule of Reconciliation of Numerators and Denominators of Basic and Diluted Per Share Computations) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | |||||||||||
Net income (loss) | $ 276,506 | $ 661,359 | $ 21,201 | $ 306,061 | $ 879,753 | $ (1,070,114) | $ (181,006) | $ 189,824 | $ 1,265,127 | $ (181,543) | |
Basic EPS: | |||||||||||
Common shares outstanding, beginning of period | 2,702,633 | 2,702,633 | 2,702,633 | 2,702,633 | 2,402,633 | ||||||
Common shares issued to ESOP during the period | 300,000 | ||||||||||
Unearned ESOP shares | (279,429) | (300,000) | |||||||||
Weighted average common shares issued during the period | |||||||||||
Weighted average common shares purchased during the period | |||||||||||
Weighted average ESOP shares earned during the period | 8,700 | 3,712 | |||||||||
Denominator for basic earnings per common shares –Weighted average common shares | 2,431,904 | 2,406,345 | |||||||||
Diluted EPS: | |||||||||||
Common shares outstanding, beginning of period | 2,702,633 | 2,702,633 | 2,702,633 | 2,702,633 | 2,402,633 | ||||||
Common shares issued to ESOP during the period | 300,000 | ||||||||||
Unearned ESOP shares | 279,429 | 300,000 | |||||||||
Weighted average common shares issued during the period | |||||||||||
Weighted average common shares purchased during the period | |||||||||||
Weighted average ESOP shares earned during the period | 8,700 | 3,712 | |||||||||
Weighted average dilutive effect of stock options | |||||||||||
Denominator for diluted earnings per common shares –Weighted average common shares | 2,431,904 | 2,406,345 |
Line of Credit (Details)
Line of Credit (Details) | 12 Months Ended |
Jun. 30, 2022 USD ($) | |
Maximum amount of Line of Credit | $ 3,000,000 |
BSBY [Member] | |
Spread on variable interest rate | 2% |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Schedule of Quarterly Financial Information) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Net sales | $ 8,481,243 | $ 8,620,049 | $ 7,458,050 | $ 7,545,432 | $ 9,301,950 | $ 4,205,068 | $ 6,962,065 | $ 7,265,515 | $ 32,104,774 | $ 27,734,598 |
Gross profit (loss) | 1,177,363 | 1,734,880 | 1,206,817 | 1,353,098 | 1,705,926 | (187,154) | 713,461 | 1,127,374 | 5,472,158 | 3,359,607 |
Net income (loss) | $ 276,506 | $ 661,359 | $ 21,201 | $ 306,061 | $ 879,753 | $ (1,070,114) | $ (181,006) | $ 189,824 | $ 1,265,127 | $ (181,543) |
Net income (loss) per share - | ||||||||||
Basic | $ 0.11 | $ 0.27 | $ 0.01 | $ 0.13 | $ 0.36 | $ (0.44) | $ (0.08) | $ 0.08 | $ 0.52 | $ (0.08) |
Diluted | $ 0.11 | $ 0.27 | $ 0.01 | $ 0.13 | $ 0.36 | $ (0.44) | $ (0.08) | $ 0.08 | $ 0.52 | $ (0.08) |