Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 14, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Atrion Corporation | ||
Entity Central Index Key | 0000701288 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Common Stock Shares Outstanding | 1,825,472 | ||
Entity Public Float | $ 904,980,997 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 001-32982 | ||
Entity Incorporation State Country Code | DE | ||
Entity Address Address Line 1 | One Allentown Parkway | ||
Entity Address City Or Town | Allen | ||
Entity Address State Or Province | TX | ||
Entity Tax Identification Number | 63-0821819 | ||
City Area Code | 972 | ||
Local Phone Number | 390-9800 | ||
Entity Address Postal Zip Code | 75002 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 147,591,000 | $ 155,066,000 | $ 152,448,000 |
Cost of Goods Sold | 81,428,000 | 84,378,000 | 80,670,000 |
Gross Profit | 66,163,000 | 70,688,000 | 71,778,000 |
Operating Expenses: | |||
Selling | 7,520,000 | 8,813,000 | 8,341,000 |
General and administrative | 17,330,000 | 16,308,000 | 16,217,000 |
Research and development | 5,645,000 | 5,038,000 | 5,513,000 |
Total operating expense | 30,495,000 | 30,159,000 | 30,071,000 |
Operating Income | 35,668,000 | 40,529,000 | 41,707,000 |
Interest and Dividend Income | 1,444,000 | 2,487,000 | 1,667,000 |
Other Investment Income (Loss) | 1,355,000 | 152,000 | (1,380,000) |
Other Income | 0 | 0 | 42,000 |
Income before Provision for Income Taxes | 38,467,000 | 43,168,000 | 42,036,000 |
Provision for Income Taxes | (6,352,000) | (6,407,000) | (7,781,000) |
Net Income | $ 32,115,000 | $ 36,761,000 | $ 34,255,000 |
Net Income Per Basic Share | $ 17.49 | $ 19.82 | $ 18.49 |
Weighted Average Basic Shares Outstanding | 1,836 | 1,855 | 1,853 |
Net Income Per Diluted Share | $ 17.44 | $ 19.73 | $ 18.44 |
Weighted Average Diluted Shares Outstanding | 1,841 | 1,863 | 1,858 |
Dividends Per Common Share | $ 6.60 | $ 5.80 | $ 5.10 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 22,450,000 | $ 45,048,000 |
Short-term investments | 19,258,000 | 23,766,000 |
Accounts receivable, net of allowance for doubtful accounts of $41 and $36 in 2020 and 2019, respectively | 16,445,000 | 18,886,000 |
Inventories | 50,298,000 | 42,093,000 |
Prepaid expenses and other current assets | 3,868,000 | 2,545,000 |
Total Current Assets | 112,319,000 | 132,338,000 |
Long-term investments | 46,207,000 | 31,772,000 |
Property, Plant and Equipment | 218,912,000 | 200,990,000 |
Less: accumulated depreciation | 123,977,000 | 116,384,000 |
Total Eqiupment | 94,935,000 | 84,606,000 |
Other Assets and Deferred Charges: | ||
Patents and licenses, net of accumulated amortization of $12,419 and $12,301 in 2020 and 2019, respectively | 1,421,000 | 1,539,000 |
Goodwill | 9,730,000 | 9,730,000 |
Other | 2,278,000 | 2,046,000 |
Total Non- Current Assets | 13,429,000 | 13,315,000 |
Total Assets | 266,890,000 | 262,031,000 |
Current Liabilities: | ||
Accounts payable | 6,635,000 | 5,707,000 |
Accrued liabilities | 6,565,000 | 5,148,000 |
Accrued income and other taxes | 436,000 | 419,000 |
Total Current Liabilities | 13,636,000 | 11,274,000 |
Line of credit | 0 | 0 |
Other Liabilities and Deferred Credits: | ||
Deferred income taxes | 10,768,000 | 8,496,000 |
Other | 2,044,000 | 4,391,000 |
Other Liabilities | 12,812,000 | 12,887,000 |
Total Liabilities | 26,448,000 | 24,161,000 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity: | ||
Common stock, par value $0.10 per share, authorized 10,000 shares, issued 3,420 shares | 342,000 | 342,000 |
Additional paid-in capital | 53,527,000 | 52,043,000 |
Retained earnings | 337,700,000 | 317,745,000 |
Treasury shares, 1,594 shares in 2020 and 1,565 shares in 2019, at cost | (151,127,000) | (132,260,000) |
Total Stockholders' Equity | 240,442,000 | 237,870,000 |
Total Liabilities and Stockholders' Equity | $ 266,890,000 | $ 262,031,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, net of allowance for doubtful accounts | $ 41 | $ 36 |
Patents and licenses, net of accumulated amortization | $ 12,419 | $ 12,301 |
Stockholders' equity | ||
Common stock, shares par value | $ 0.10 | $ 0.1 |
Common stock, shares authorized | 10,000 | 10,000 |
Common stock, shares issued | 3,420 | 3,420 |
Treasury stock, shares | 1,594 | 1,565 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities: | |||
Net income | $ 32,115,000 | $ 36,761,000 | $ 34,255,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 11,652,000 | 10,853,000 | 9,123,000 |
Deferred income taxes | 2,282,000 | 1,809,000 | (625,000) |
Stock-based compensation | 1,731,000 | 1,682,000 | 1,659,000 |
Net change in unrealized gains and losses on investments | (1,093,000) | (135,000) | 1,399,000 |
Net change in accrued interest, premiums, and discounts on investments | 112,000 | (281,000) | 47,000 |
Other | 21,000 | (6,000) | (18,000) |
Adjustments to reconcile net income to net cash provided by operating activities | 46,820,000 | 50,683,000 | 45,840,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,438,000 | (1,872,000) | 62,000 |
Inventories | (8,205,000) | (8,521,000) | (4,218,000) |
Prepaid expenses and other current assets | (1,323,000) | 697,000 | (43,000) |
Other non-current assets | (275,000) | (425,000) | (87,000) |
Accounts payable and accrued liabilities | 2,095,000 | 1,254,000 | 725,000 |
Accrued income and other taxes | 17,000 | (200,000) | (127,000) |
Other non-current liabilities | (2,347,000) | 849,000 | 1,084,000 |
Net cash provided by used in operating activities | 38,970,000 | 42,465,000 | 43,236,000 |
Cash Flows From Investing Activities: | |||
Property, plant and equipment additions | (21,886,000) | (20,446,000) | (17,507,000) |
Purchase of investments | (45,768,000) | (83,721,000) | (28,472,000) |
Proceeds from sale of investments | 899,000 | 0 | 0 |
Proceeds from maturities of investments | 35,923,000 | 59,331,000 | 40,898,000 |
Net cash provided by used in investing activities | (30,832,000) | (44,836,000) | (5,081,000) |
Cash Flows From Financing Activities: | |||
Shares tendered for employees' withholding taxes on stock-based compensation | (55,000) | (579,000) | (90,000) |
Purchase of treasury stock | (18,831,000) | 0 | 0 |
Dividends paid | (12,100,000) | (10,755,000) | (9,448,000) |
Net cash provided by used in financing activities | (30,986,000) | (11,334,000) | (9,538,000) |
Net change in cash and cash equivalents | (22,598,000) | (13,705,000) | 28,617,000 |
Cash and cash equivalents, beginning of year | 45,048,000 | 58,753,000 | 30,136,000 |
Cash and cash equivalents, end of year | 22,450,000 | 45,048,000 | 58,753,000 |
Cash paid for: | |||
Income taxes, net of refunds | $ 5,565,000 | $ 4,178,000 | $ 9,858,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($) shares in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated other comprehensive Income (Loss) | Retained Earnings |
Balance, shares at Dec. 31, 2017 | 1,852 | 1,568 | ||||
Balance, amount at Dec. 31, 2017 | $ 184,388,000 | $ 342,000 | $ (131,663,000) | $ 48,730,000 | $ (1,215,000) | $ 268,194,000 |
Net income | 34,255,000 | 34,255,000 | ||||
Reclass from adopting ASU 2016-01 | 0 | 1,215,000 | (1,215,000) | |||
Stock-based compensation transactions, shares | 1 | (1) | ||||
Stock-based compensation transactions, amount | 1,687,000 | $ 26,000 | 1,661,000 | |||
Shares surrendered in stock transactions | (90,000) | $ (90,000) | ||||
Dividends | (9,473,000) | (9,473,000) | ||||
Balance, shares at Dec. 31, 2018 | 1,853 | 1,567 | ||||
Balance, amount at Dec. 31, 2018 | 210,767,000 | $ 342,000 | $ (131,727,000) | 50,391,000 | 0 | 291,761,000 |
Net income | 36,761,000 | 36,761,000 | ||||
Stock-based compensation transactions, shares | 3 | (3) | ||||
Stock-based compensation transactions, amount | 1,698,000 | $ 46,000 | 1,652,000 | |||
Shares surrendered in stock transactions | (579,000) | $ (579,000) | ||||
Dividends | (10,777,000) | (10,777,000) | ||||
Shares surrendered in stock transactions, shares | (1) | 1 | ||||
Balance, shares at Dec. 31, 2019 | 1,855 | 1,565 | ||||
Balance, amount at Dec. 31, 2019 | 237,870,000 | $ 342,000 | $ (132,260,000) | 52,043,000 | 0 | 317,745,000 |
Net income | 32,115,000 | 32,115,000 | ||||
Stock-based compensation transactions, amount | 1,503,000 | 19,000 | 1,484,000 | |||
Shares surrendered in stock transactions | (55,000) | $ (55,000) | ||||
Dividends | (12,124,000) | (12,124,000) | ||||
Cumulative change in accounting principle | (36,000) | (36,000) | ||||
Adjusted Balance at January 1, 2020, shares | 1,855 | 1,565 | ||||
Adjusted Balance at January 1, 2020, amount | 237,834,000 | $ 342,000 | $ (132,260,000) | 52,043,000 | 0 | 317,709,000 |
Purchase of treasury stock, shares | (29) | 29 | ||||
Purchase of treasury stock, amount | (18,831,000) | $ (18,831,000) | ||||
Balance, shares at Dec. 31, 2020 | 1,826 | 1,594 | ||||
Balance, amount at Dec. 31, 2020 | $ 240,442,000 | $ 342,000 | $ (151,127,000) | $ 53,527,000 | $ 0 | $ 337,700,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
1- Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies Atrion Corporation and its subsidiaries (“we,” “our,” “us,” “Atrion” or the “Company”) develop and manufacture products primarily for medical applications. We market our products throughout the United States and internationally. Our customers include physicians, hospitals, distributors and other manufacturers. Atrion Corporation’s principal subsidiaries through which these operations are conducted are Atrion Medical Products, Inc., Halkey-Roberts Corporation and Quest Medical, Inc. Principles of Consolidation The consolidated financial statements include the accounts of Atrion Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior-year balances have been reclassified in order to conform to the current year presentation. Estimates The preparation of the consolidated 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 amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash and Cash Equivalents and Investments Cash and cash equivalents include cash on hand and cash deposits in the bank as well as money market funds and debt securities with maturities at the time of purchase of 90 days or less. Cash deposits in the bank include amounts in operating accounts, savings accounts and money market accounts. Our investments consist of corporate and government bonds, commercial paper, mutual funds and equity securities. We classify our investment securities in one of three categories: held-to-maturity, available-for-sale, or trading. Securities that we have the positive intent and ability to hold to maturity are reported at amortized cost and classified as held-to-maturity securities. We report our available-for-sale and trading securities at fair value with changes in fair value recognized in other investment income (loss) in the Consolidated Statement of Income. Prior to our adoption of ASU 2016-01, Financial Instruments-Overall, Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) We consider as current assets those investments which will mature in the next 12 months including interest receivable on long-term bonds. The remaining investments are considered non-current assets including our investment in equity securities which we intend to hold longer than 12 months. We periodically evaluate our investments for impairment. The components of the Company’s cash and cash equivalents and our short and long-term investments as of December 31, 2020 and 2019 are as follows (in thousands): December 31, 2020 December 31, 2019 Cash and cash equivalents: Cash deposits $ 16,628 $ 38,942 Money market funds 4,822 3,460 Commercial paper 1,000 2,646 Total cash and cash equivalents $ 22,450 $ 45,048 Short-term investments: Commercial paper (held-to-maturity) $ 5,178 $ 6,778 Bonds (held-to-maturity) 14,101 16,988 Allowance for credit losses (21 ) - Total short-term investments $ 19,258 $ 23,766 Long-term investments: Mutual funds (available for sale) $ 563 $ 1,105 Bonds (held-to-maturity) 41,619 27,845 Allowance for credit losses (52 ) - Equity securities (available for sale) 4,077 2,822 Total long-term investments $ 46,207 $ 31,772 Total cash, cash equivalents and short and long-term investments $ 87,915 $ 100,586 Accounts Payable We reflect disbursements as trade accounts payable until such time as payments are presented to our bank for payment. At December 31, 2020 and 2019, disbursements totaling approximately $1,434,000 and $1,236,000, respectively, had not been presented for payment to our bank. Income Taxes We account for income taxes utilizing Accounting Standards Codification (ASC 740), Income Taxes ASC 740 also requires the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attributes of income tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more-likely-than-not of being sustained. Our uncertain tax positions are recorded within “Other non-current liabilities” in the accompanying consolidated balance sheets. We classify interest expense on underpayments of income taxes and accrued penalties related to unrecognized tax benefits in the income tax provision. We account for excess tax benefits (“windfalls”) and deficiencies (“shortfalls”) related to employee stock compensation as required by ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting During the years ended December 31, 2020 and 2019, we made quarterly payments in excess of federal and state income taxes due of approximately $1,525,000 and $4,000, respectively. These amounts were recorded in prepaid expenses and other current assets on our consolidated balance sheets. Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Additions and improvements are capitalized, including all material, labor and engineering costs to design, install or improve the asset. Expenditures for repairs and maintenance are charged to expense as incurred. The following table represents a summary of property, plant and equipment at original cost (in thousands): December 31, Useful 2020 2019 Lives Land $ 5,511 $ 5,511 — Buildings 35,114 34,582 30-40 yrs. Machinery and equipment 178,287 160,897 3-15 yrs. Total property, plant and equipment $ 218,912 $ 200,990 Depreciation expense of $11,533,000, $10,733,000 and $9,003,000 was recorded for the years ended December 31, 2020, 2019 and 2018, respectively. Depreciation expense is recorded in either cost of goods sold or operating expenses based on the associated assets’ usage. Patents and Licenses Costs for patents and licenses acquired are determined at acquisition date. Patents and licenses are amortized over the useful lives of the individual patents and licenses, which are from seven to 20 years. Patents and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Goodwill Goodwill represents the excess of cost over the fair value of tangible and identifiable intangible net assets acquired. Annual impairment testing for goodwill is performed in the fourth quarter of each year using a qualitative assessment on goodwill impairment to determine whether it is more likely than not that the carrying value of our reporting units exceeds their fair value. If necessary, a two-step goodwill impairment analysis is performed. Goodwill is also reviewed whenever events or changes in circumstances indicate a change in value may have occurred. We have identified three reporting units where goodwill was recorded for purposes of testing goodwill impairment annually: (1) Atrion Medical Products, Inc., (2) Halkey-Roberts Corporation and (3) Quest Medical, Inc. The total carrying amount of goodwill in each of the years ended December 31, 2020 and 2019 was $9,730,000. Our evaluation of goodwill during each year resulted in no impairment losses. Current Accrued Liabilities The items comprising current accrued liabilities are as follows (in thousands): December 31, 2020 2019 Accrued payroll and related expenses $ 5,656 $ 4,233 Accrued vacation 276 311 Other accrued liabilities 633 604 Total accrued liabilities $ 6,565 $ 5,148 A summary of revenues by geographic area, based on shipping destination, for 2020, 2019 and 2018 is as follows (in thousands): Year ended December 31, 2020 2019 2018 United States $ 85,682 $ 98,496 $ 95,757 Germany 9,712 7,996 8,898 Other countries less than 5% of revenues 52,197 48,574 47,793 Total $ 147,591 $ 155,066 $ 152,448 A summary of revenues by product line for 2020, 2019 and 2018 is as follows (in thousands): ` Year ended December 31, 2020 2019 2018 Fluid Delivery $ 75,228 $ 72,117 $ 70,606 Cardiovascular 48,524 54,799 50,904 Ophthalmology 4,700 7,124 10,473 Other 19,139 21,026 20,465 Total $ 147,591 $ 155,066 $ 152,448 We expense sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within selling expense. Atrion has contracts in place with customers for equipment leases, equipment financing, and equipment and other services. These contracts represent less than four percent of our total revenue in all periods presented herein. A portion of these contracts contain multiple performance obligations including embedded leases. For such arrangements, we historically allocated revenue to each performance obligation which is capable of being distinct and accounted for as a separate performance obligation based on relative standalone selling prices. We generally determine standalone selling prices based on observable inputs, primarily the prices charged to customers. Beginning July 1, 2018, for agreements with an embedded lease component, we adopted the practical expedient in ASU 2018-11 Leases: Targeted Improvements Our fixed monthly equipment rentals to customers are accounted for as operating leases under ASU 2016-02, Leases A limited number of our contracts have variable consideration including tiered pricing and rebates which we monitor closely for potential constraints on revenue. For these contracts we estimate our position quarterly using the most-likely-outcome method, including customer-provided forecasts and historical buying patterns, and we accrue for any asset or liability these arrangements may create. The effect of accruals for variable consideration on our consolidated financial statements is immaterial. We do not disclose the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount which we have the right to invoice. We believe that the complexity added to our disclosures by the inclusion of a large amount of insignificant detail in attempting to disclose information under ASC 606 about immaterial contracts would potentially obscure more useful and important information. Leases to Customers The lease assets from our sales type leases are recorded in our accounts receivable in the accompanying consolidated balance sheets, and as of December 31, 2020 and 2019 the balance totaled $315,000 and $398,000 respectively. Our equipment treated as leases to customers under ASC 842 is included in our Property, Plant and Equipment on our consolidated balance sheets. After our adoption of ASU 2018-11, the cost of the assets and associated depreciation that remain under lease agreements is immaterial. Due to the immaterial amount of revenue from our lessor activity, all other lessor disclosures under ASC 842 have been omitted. Leased Property and Equipment As a lessee, we have three leases in total for equipment and facilities used internally, which we account for as operating leases. At December 31, 2020, our right-of-use asset balance was $295,000 and our lease liability at December 31, 2020 for these leases was $272,000. The monthly expense of $27,000 for these operating leases, which are our only lessee arrangements, is immaterial and therefore all other lessee disclosures under ASC 842 have been omitted. Research and Development Costs Research and Development, or R&D, costs relating to the development of new products and improvements of existing products are expensed as incurred. Stock-Based Compensation We have a stock-based compensation plan covering certain of our officers, directors and key employees. As explained in detail in Note 8, we account for stock-based compensation utilizing the fair value recognition provisions of ASC 718, Compensation-Stock Compensation, Liability-classified awards The Company classifies certain awards that can or will be settled in cash as liability awards. The fair value of a liability-classified award is determined on a quarterly basis beginning at the grant date until final vesting. Changes in the fair value of liability-classified awards are recorded to general and administrative expense over the vesting period of the award. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities and trade and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. On January 1, 2020, we adopted the guidance prospectively with a cumulative adjustment to retained earnings. Atrion has not restated comparative information for 2019 and, therefore, the comparative information for 2019 is reported under the old model and is not comparable to the information presented for 2020. At adoption, we recognized an incremental allowance for credit losses on our allowance for credit losses related to our held-to-maturity debt securities of approximately $42,000 and our trade accounts receivable of approximately $4,000. Additionally, we recorded an approximately $36,000 decrease in retained earnings associated with the increased estimated credit losses on our trade accounts receivable and investments. The impact on our operating results for 2020 from our adoption of this pronouncement was not material. From time to time new accounting pronouncements applicable to us are issued by the FASB, or other standards setting bodies, which we will adopt as of the specified effective date. Unless otherwise discussed, we believe the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. Fair Value Measurements Accounting standards use a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers are: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists therefore requiring an entity to develop its own assumptions. As of December 31, 2020 and 2019, we held investments in commercial paper, bonds, money market funds, mutual funds and equity securities that are required to be measured for disclosure purposes at fair value on a recurring basis. The fair values of these investments and their tier levels are shown in Note 2 below. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. We have investments in money market funds, bonds and commercial paper. As a result, we are exposed to potential loss from market risks that may occur as a result of changes in interest rates, changes in credit quality of the issuer and otherwise. These securities have a higher degree of, and a greater exposure to, credit or default risk and may be less liquid in times of economic weakness or market disruptions as compared with cash deposits. For accounts receivable, we perform ongoing credit evaluations of our customers’ financial condition and generally do not require collateral. We maintain reserves for possible credit losses. As of December 31, 2020 and 2019, we had allowances for doubtful accounts of approximately $41,000 and $36,000, respectively. The carrying amount of the receivables approximates their fair value. We had two customers which accounted for 12% each of our accounts receivable as of December 31, 2020 and one customer which accounted for 12% of our accounts receivable as of December 31, 2019. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments | |
2- Investments | (2) Investments As of December 31, 2020 and 2019, we held investments in commercial paper, bonds, money market funds, mutual funds and equity securities that are required to be measured for disclosure purposes at fair value on a recurring basis. The commercial paper and bonds are considered held-to-maturity and are recorded at amortized cost in the accompanying consolidated balance sheets. The money market funds, equity securities and mutual funds are recorded at fair value in the accompanying consolidated balance sheets. These investments are considered Level 1 or Level 2 as detailed in the table below. We consider as current assets those investments which will mature in the next 12 months including interest receivable on the long-term bonds. The remaining investments are considered non-current assets including our investment in equity securities we intend to hold longer than 12 months. The fair values of these investments were estimated using recently executed transactions and market price quotations. The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of the dates shown below (in thousands): Gross Unrealized Level Cost Gains Losses Fair Value As of December 31, 2020: Money market funds 1 4,822 $ — $ — $ 4,822 Commercial paper 2 6,178 $ — $ — $ 6,178 Bonds 2 55,720 $ 505 $ (44 ) $ 56,181 Mutual funds 1 599 $ — $ (36 ) $ 563 Equity investments 2 5,675 $ — $ (1,598 ) $ 4,077 As of December 31, 2019: Money market funds 1 3,460 $ — $ — $ 3,460 Commercial paper 2 9,424 $ 2 $ — $ 9,426 Bonds 2 44,833 $ 138 $ (19 ) $ 44,952 Mutual funds 1 1,052 $ 53 $ — $ 1,105 Equity investments 2 5,675 $ — $ (2,853 ) $ 2,822 The above equity investments represent an investment in one company at December 31, 2020 and is classified as available for sale. The carrying value of our investments is reviewed quarterly for changes in circumstances or the occurrence of events that suggest an investment may not be recoverable. As of December 31, 2020 we had no bond investments in a loss position for more than 12 months. At December 31, 2020, the length of time until maturity of the bonds we currently own ranged from one to 51 months and the length of time until maturity of the commercial paper ranged from one to nine months. Topic 326 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. Our credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as our portfolio. We also apply an adjustment factor to these credit loss calculations based upon our assessment of the expected impact from current economic conditions on our investments, including the impact of COVID-19. We monitor the credit quality of debt securities classified as held-to-maturity through the use of their respective credit ratings and update them on a quarterly basis with our latest assessment completed on December 31, 2020. During the year 2020, our allowance for credit losses related to short-term and long-term investments increased by $12,000 and $18,000, respectively. The following table summarizes the amortized cost of our held-to-maturity bonds at December 31, 2020, aggregated by credit quality indicator (in thousands): Held-to-Maturity Bonds Credit Quality Indicators Asset Backed Bonds Fed Govt. Bonds/Notes Municipal Bonds Corporate Bonds Totals AAA/AA/A $ 1,413 $ 3,222 $ 637 $ 32,126 $ 37,398 BBB/BB - - - 18,322 18,322 TOTAL $ 1,413 $ 3,222 $ 637 $ 50,448 $ 55,720 |
Patents and Licenses
Patents and Licenses | 12 Months Ended |
Dec. 31, 2020 | |
Patents and Licenses | |
3- Patents and Licenses | (3) Patents and Licenses Purchased patents and licenses paid for the use of other entities’ patents are amortized over the useful life of the patent or license. The following tables provide information regarding patents and licenses (dollars in thousands): December 31, 2020 December 31, 2019 Weighted Average Gross Accumulated Weighted Average Gross Accumulated 15.67 $ 13,840 $ 12,419 15.67 $ 13,840 $ 12,301 Aggregate amortization expense for patents and licenses was $119,000 for both 2020 and 2019. Estimated future amortization expense for each of the years set forth below ending December 31 is as follows (in thousands): 2021 $ 119 2022 $ 117 2023 $ 113 2024 $ 113 2025 $ 112 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Line of Credit | |
4- Line of Credit | (4) Line of Credit As of December 31, 2020 and 2019, we had a $75.0 million revolving credit facility with a money center bank pursuant to which the lender is obligated to make advances until February 28, 2022. On February 12, 2021 this credit facility was amended to, among other things, extend the date for advances to February 28, 2024. The credit facility is secured by substantially all our inventories, equipment and accounts receivable. Interest under the credit facility is assessed at 30-day, 60-day or 90-day LIBOR, as selected by us, plus 0.875 percent (1.035 percent at December 31, 2020) and is payable monthly. We had no outstanding borrowings under the credit facility at December 31, 2020 or December 31, 2019. Our ability to borrow funds under the credit facility from time to time is contingent on meeting certain covenants in the loan agreement, the most restrictive of which is the ratio of total debt to earnings before interest, income tax, depreciation and amortization. At December 31, 2020, we were in compliance with all of the covenants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
5- Income taxes | (5) Income Taxes The items comprising Provision for Income Taxes are as follows (in thousands): Year ended December 31, 2020 2019 2018 Current — Federal $ 3,166 $ 3,508 $ 6,405 — State 904 1,090 2,001 4,070 4,598 8,406 Deferred — Federal 2,111 1,660 (626 ) — State 171 149 1 2,282 1,809 (625 ) Provision for Income Taxes $ 6,352 $ 6,407 $ 7,781 Temporary differences and carryforwards which have given rise to deferred tax liabilities as of December 31, 2020 and 2019 are as follows (in thousands): 2020 2019 Deferred tax liabilities (assets): Property, plant and equipment $ 11,532 $ 9,697 Patents and goodwill 1,775 1,756 Benefit plans (1,976 ) (2,131 ) Inventories (420 ) (350 ) Capital loss carryover (544 ) (556 ) Other (179 ) (513 ) 10,188 7,903 Plus: Valuation allowance 580 593 Total deferred tax liabilities $ 10,768 $ 8,496 Total income tax expense differs from the amount that would be provided by applying the statutory federal income tax rate to pretax earnings as illustrated below (in thousands): Year ended December 31, 2020 2019 2018 Income tax expense at the statutory federal income tax rate $ 8,078 $ 9,065 $ 8,828 Increase (decrease) resulting from: State income taxes 838 978 1,572 R&D tax credits (1,589 ) (1,470 ) (1,212 ) Foreign-derived intangible income deduction (1,051 ) (1,700 ) (1,000 ) Excess tax benefit from stock compensation (81 ) (412 ) (95 ) Change in valuation allowance (13 ) (16 ) - Uncertain tax positions (450 ) (42 ) (373 ) Other, net 619 4 61 Provision for Income Taxes $ 6,352 $ 6,407 $ 7,781 A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits as required by ASC 740 is as follows (in thousands): Gross unrecognized tax benefits at January 1, 2018 $ 865 Increase in tax positions for prior years 25 Increase in tax positions for current years — Lapse in statutes of limitation (397 ) Gross unrecognized tax benefits at December 31, 2018 $ 493 Increase in tax positions for prior years 19 Increase in tax positions for current year — Lapse in statutes of limitation (62 ) Gross unrecognized tax benefits at December 31, 2019 $ 450 Increase in tax positions for prior years 8 Increase in tax positions for current year — Lapse in statutes of limitation (458 ) Gross unrecognized tax benefits at December 31, 2020 $ — We are subject to United States federal income tax as well as to income tax of multiple state jurisdictions. We have concluded all United States federal income tax matters, as well as all material state and local income tax matters, for years through 2016. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The liability for unrecognized tax benefits included accrued interest of $20,000 and $19,000 at December 31, 2019 and 2018, respectively. Tax expense for the years ended December 31, 2020, 2019 and 2018 included a net interest benefit of $35,000, $16,000 and $18,000, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity: | |
6- Stockholders's Equity | (6) Stockholders’ Equity Our Board of Directors has at various times authorized repurchases of our stock in open-market or privately-negotiated transactions at such times and at such prices as management may from time to time determine. On May 21, 2015 our Board of Directors adopted a stock repurchase program authorizing the repurchase of up to 250,000 shares of our common stock in open-market or privately-negotiated transactions. This program has no expiration date but may be terminated by the Board of Directors at any time. As of December 31, 2020, there remained 202,018 for repurchasing under this program. As of December 31, 2019, there remained 231,765 shares available for repurchase under this program. During 2020 we repurchased a total of 29,747 shares of our common stock in the open-market. There were no stock repurchases during 2019 or 2018. We increased our quarterly cash dividend payments in September of each of the past three years. The quarterly dividend was increased to $1.35 per share in September 2018, to $1.55 per share in September 2019 and to $1.75 per share in September 2020. Holders of our stock units earned non-cash dividend equivalents of $24,000 in 2020, $22,000 in 2019 and $25,000 in 2018. |
Income Per Share
Income Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Income Per Share | |
7- Income Per Share | (7) Income Per Share The following is the computation of basic and diluted income per share: Year ended December 31, 2020 2019 2018 (In thousands, except per share amounts) Net Income $ 32,115 $ 36,761 $ 34,255 Weighted average basic shares outstanding 1,836 1,855 1,853 Add: Effect of dilutive securities 5 8 5 Weighted average diluted shares outstanding 1,841 1,863 1,858 Net Income per share Basic $ 17.49 $ 19.82 $ 18.49 Diluted $ 17.44 $ 19.73 $ 18.44 As required by ASC 260, Earnings per Share Incremental shares from stock options and restricted stock units were included in the calculation of weighted average diluted shares outstanding using the treasury stock method. Securities representing six, seven and 501 shares of common stock for the years ended December 31, 2020, 2019 and 2018, respectively, were excluded from the computation of weighted average diluted shares outstanding because their effect would have been anti-dilutive. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
8- Stock-based Compensation | (8) Stock-based Compensation At December 31, 2020, we had one stock-based compensation plan that is described below. We account for our plan under ASC 718, and the disclosures that follow are based on applying ASC 718. Our Amended and Restated 2006 Equity Incentive Plan, or 2006 Plan, provides for awards to key employees, non-employee directors and consultants of incentive and nonqualified stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance shares and other stock-based awards. Under the 2006 Plan, 200,000 shares, in the aggregate, of common stock were reserved for awards. The purchase price of shares issued on the exercise of options were required to be at least equal to the fair market value of such shares on the date of grant. The options granted become exercisable and expire as determined by the Compensation Committee. As of December 31, 2020, no future stock-based awards were permitted under the 2006 Plan. A summary of stock option transactions for the year ended December 31, 2020, is presented below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2019 20,000 $ 501.03 2.3 years Granted — — Exercised — — Outstanding at December 31, 2020 20,000 $ 501.03 1.3 years Exercisable at December 31, 2020 12,000 $ 501.03 1.3 years All nonvested options outstanding at December 31, 2020 are expected to vest. None of our grants includes performance-based or market-based vesting conditions. We estimate the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. Our Black-Scholes valuation uses a volatility factor based on our historical stock trading history, a risk-free interest rate based on the implied yield currently available on U.S. Treasury securities with an equivalent term, and a dividend yield based on our dividend history. Our expected life assumption represents the period that our stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. There were no options granted in 2020 and 2019. The weighted average grant date fair value of the options granted in 2017 was $130.35. The total intrinsic value of options outstanding at December 31, 2020, was $2.8 million. The total intrinsic value of exercisable options at December 31, 2020, was $1.7 million. There were no restricted stock grants during 2020 and 2019. During 2017, we granted two awards of restricted stock under the 2006 Plan. Under the terms of our restricted stock awards, the restrictions usually lapse over a five-year period. Both awards include restrictions on transfer for a two-year period following vesting. During the vesting period, holders of restricted stock have voting rights and earn dividends, but the shares may not be sold, assigned, transferred, pledged or otherwise encumbered. Nonvested shares are generally forfeited on termination of employment unless otherwise provided in the participant’s employment agreement or the termination is in connection with a change in control. We calculated the weighted average fair value per share of the restricted stock awarded in 2017 using the market value of our common stock on the date of the grant with a discount for post-vesting restrictions of 11.2%. We estimated this discount using the Chaffe protective put method. A summary of changes in nonvested restricted stock for the year ended December 31, 2020, is presented below: Nonvested Shares Shares Weighted Average Award Date Fair Value Per Share Restricted stock at December 31, 2019 3,540 $ 445.47 Granted in 2020 — — Vested in 2020 (1,180 ) $ 445.47 Restricted stock at December 31, 2020 2,360 $ 445.47 During 2020, restricted stock units were added to certain employee accounts under the 2006 Plan as dividend equivalents. All of our restricted stock units granted under the 2006 Plan are convertible to shares of stock on a one-for-one basis when the restrictions lapse, which is generally after a five-year period. Nonvested restricted stock units are generally forfeited on termination of employment unless the termination is in connection with a change in control. During the vesting period, holders of restricted stock units earn dividends in the form of additional units. During 2020, one non-employee director elected to receive stock units in lieu of a portion of his cash fees for his services as a member of the Board of Directors. A summary of changes in stock units for the year ended December 31, 2020, is presented below: Nonvested Stock Units Restricted Stock Units Weighted Average Award Date Fair Value Per Unit Director’s Stock Units Weighted Average Award Date Fair Value Per Unit Nonvested at December 31, 2019 3,601 $ 623.19 — Added 33 $ 635.04 16 $ 711.75 Forfeited (40 ) $ 766.48 — Vested (479 ) $ 388.02 (16 ) $ 711.75 Nonvested at December 31, 2020 3,115 $ 657.70 — All nonvested restricted stock units set forth above at December 31, 2020 are expected to vest. The total intrinsic value of these outstanding stock units which were not convertible at December 31, 2020, including 503 stock units held for the accounts of non-employee directors, was $2,324,000. The total fair value of directors’ stock units that vested during 2020, 2019 and 2018 was $11,000, $7,000 and $6,000, respectively. In addition to the above, during 2020 we granted 3,865 restricted stock units to three employees outside of the 2006 Plan that will be settled in cash and are treated as liability-classified awards. The grant-date fair value per unit for these awards was $646.90. No grants of this type were made outside the 2006 Plan prior to 2020. These units will vest 20 percent each year over a five-year period beginning in 2021. Changes in the fair value of these awards are recorded to G&A expense over the vesting period of the award. The liability recorded for these units is adjusted to the current market value at the end of each reporting period. At December 31, 2020, none of these units had vested and our recorded liability for these units was $250,000. The intrinsic value of these units at December 31, 2020 was $2,496,000 including accrued amounts for dividend equivalents. There were no stock awards to nonemployee directors under the 2006 Plan in 2020. The total value of stock awards to nonemployee directors awarded under the 2006 Plan was $240,000 in each of 2019 and 2018. These awards vested immediately at the time of the grants. Compensation related to stock awards, restricted stock and stock units that are treated as equity-classified awards is based on the fair market value of the stock on the date of the award. These fair values are then amortized on a straight-line basis over the requisite service periods of the entire awards, which is generally the vesting period. Compensation related to stock options is based on the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. For the years ended December 31, 2020, 2019 and 2018, we recorded stock-based compensation expense as a G&A expense in the amount of $1,731,000, $1,682,000 and $1,659,000, respectively, for all of the above-mentioned stock-based compensation arrangements. The total tax benefit recognized in the income statement from stock-based compensation arrangements for the years ended December 31, 2020, 2019 and 2018 was $444,000, $765,000 and $441,000, respectively. These amounts include excess tax benefits in each year. Unrecognized compensation cost information for our various stock-based compensation awards is shown below as of December 31, 2020: Unrecognized Compensation Cost Weighted Average Remaining Years in Amortization Period Stock options $ 682,000 1.3 Restricted stock 687,000 1.3 Restricted stock units 990,000 2.8 Restricted stock units (to be settled in cash) 2,246,000 4.5 Total $ 4,605,000 We have a policy of utilizing treasury shares to satisfy stock option exercises, stock unit conversions and restricted stock awards that are equity-classified awards. |
Industry Segment and Geographic
Industry Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2020 | |
9- Industry Segment and Geographic Information | (9) Industry Segment and Geographic Information We operate in one reportable industry segment: developing and manufacturing products primarily for medical applications and have no foreign operating subsidiaries. We have other product lines which include pressure relief valves and inflation systems, which are sold primarily to the aviation and marine industries. Due to the similarities in product technologies and manufacturing processes, these products are managed as part of our medical products segment. Our revenues from sales to customers outside the United States totaled approximately 42 percent, 36 percent and 37 percent of our net revenues in 2020, 2019 and 2018, respectively. We have no assets located outside the United States. |
Employee Retirement and Benefit
Employee Retirement and Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Retirement and Benefit Plans | |
10- Employee Retirement and Benefit Plans | (10) Employee Retirement and Benefit Plans We sponsor a defined contribution 401(k) plan for all employees. Each participant may contribute certain amounts of eligible compensation. We make a matching contribution to the plan. Our contributions under this plan were $917,000, $845,000 and $752,000 in 2020, 2019 and 2018, respectively. The Company has a Nonqualified Deferred Compensation Plan for certain key management or highly-compensated employees. The plan allows for the deferral of salary and bonus compensation until retirement or other specified payment events occur. Employees’ deferred compensation amounts are deemed to be invested in certain investment funds, indexes or vehicles selected by our Compensation Committee and designated by each participant and their deferral balances are adjusted for earnings based upon the performance of these deemed investments. Our deferred compensation obligation under the plan was $1,544,000 and $3,266,000 at December 31, 2020 and 2019, respectively. These amounts are reflected in “Other Liabilities and Deferred Credits” in the accompanying consolidated balance sheets. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitment and Contingencies | |
11- Commitment and Contingencies | (11) Commitments and Contingencies From time to time and in the ordinary course of business, we may be subject to various claims, charges and litigation. In some cases, the claimants may seek damages, as well as other relief, which, if granted, could require significant expenditures. We accrue the estimated costs of settlement or damages when a loss is deemed probable and such costs are estimable, and accrue for legal costs associated with a loss contingency when a loss is probable and such amounts are estimable. Otherwise, these costs are expensed as incurred. If the estimate of a probable loss or defense costs is a range and no amount within the range is more likely, we accrue the minimum amount of the range. As of December 31, 2020, we had no ongoing litigation or arbitration for such matters. We had a dispute which was favorably settled in the third quarter of 2007. This settlement was amended in December 2008. The amended settlement agreement provides that we may receive annual payments from 2009 through 2024. We have not recorded $2.0 million in potential future payments under this settlement as of December 31, 2020 due to the uncertainty of payment. We have arrangements with three of our executive officers pursuant to which the termination of their employment under certain circumstances would result in lump sum payments to them. Termination under such circumstances at December 31, 2020, could have resulted in payments aggregating $4.9 million. At December 31, 2020, the Company had lease obligations totaling $272,000 with certain lessors for equipment and facilities for 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | The consolidated financial statements include the accounts of Atrion Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior-year balances have been reclassified in order to conform to the current year presentation. |
Estimates | The preparation of the consolidated 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 amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Cash and Cash Equivalents and Investments | Cash and cash equivalents include cash on hand and cash deposits in the bank as well as money market funds and debt securities with maturities at the time of purchase of 90 days or less. Cash deposits in the bank include amounts in operating accounts, savings accounts and money market accounts. Our investments consist of corporate and government bonds, commercial paper, mutual funds and equity securities. We classify our investment securities in one of three categories: held-to-maturity, available-for-sale, or trading. Securities that we have the positive intent and ability to hold to maturity are reported at amortized cost and classified as held-to-maturity securities. We report our available-for-sale and trading securities at fair value with changes in fair value recognized in other investment income (loss) in the Consolidated Statement of Income. Prior to our adoption of ASU 2016-01, Financial Instruments-Overall, Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) We consider as current assets those investments which will mature in the next 12 months including interest receivable on long-term bonds. The remaining investments are considered non-current assets including our investment in equity securities which we intend to hold longer than 12 months. We periodically evaluate our investments for impairment. The components of the Company’s cash and cash equivalents and our short and long-term investments as of December 31, 2020 and 2019 are as follows (in thousands): December 31, 2020 December 31, 2019 Cash and cash equivalents: Cash deposits $ 16,628 $ 38,942 Money market funds 4,822 3,460 Commercial paper 1,000 2,646 Total cash and cash equivalents $ 22,450 $ 45,048 Short-term investments: Commercial paper (held-to-maturity) $ 5,178 $ 6,778 Bonds (held-to-maturity) 14,101 16,988 Allowance for credit losses (21 ) - Total short-term investments $ 19,258 $ 23,766 Long-term investments: Mutual funds (available for sale) $ 563 $ 1,105 Bonds (held-to-maturity) 41,619 27,845 Allowance for credit losses (52 ) - Equity securities (available for sale) 4,077 2,822 Total long-term investments $ 46,207 $ 31,772 Total cash, cash equivalents and short and long-term investments $ 87,915 $ 100,586 |
Account Receivables | Accounts receivable are recorded at the original sales price to the customer. We maintain an allowance for doubtful accounts to reflect estimated losses resulting from the failure of customers to make required payments. The allowance for doubtful accounts is updated periodically to reflect our estimate of collectability. Accounts are written off when we determine the receivable will not be collected. |
Inventories | Inventories are stated at the lower of cost (including materials, direct labor and applicable overhead) or net realizable value. Cost is determined by using the first-in, first-out method. The following table details the major components of inventory (in thousands): December 31, 2020 2019 Raw materials $ 20,308 $ 18,157 Work in process 11,339 8,525 Finished goods 18,651 15,411 Total inventories $ 50,298 $ 42,093 |
Accounts Payable | We reflect disbursements as trade accounts payable until such time as payments are presented to our bank for payment. At December 31, 2020 and 2019, disbursements totaling approximately $1,434,000 and $1,236,000, respectively, had not been presented for payment to our bank. |
Income Taxes | We account for income taxes utilizing Accounting Standards Codification (ASC 740), Income Taxes ASC 740 also requires the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attributes of income tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more-likely-than-not of being sustained. Our uncertain tax positions are recorded within “Other non-current liabilities” in the accompanying consolidated balance sheets. We classify interest expense on underpayments of income taxes and accrued penalties related to unrecognized tax benefits in the income tax provision. We account for excess tax benefits (“windfalls”) and deficiencies (“shortfalls”) related to employee stock compensation as required by ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting During the years ended December 31, 2020 and 2019, we made quarterly payments in excess of federal and state income taxes due of approximately $1,525,000 and $4,000, respectively. These amounts were recorded in prepaid expenses and other current assets on our consolidated balance sheets. |
Property, Plant and Equipment | Property, plant and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Additions and improvements are capitalized, including all material, labor and engineering costs to design, install or improve the asset. Expenditures for repairs and maintenance are charged to expense as incurred. The following table represents a summary of property, plant and equipment at original cost (in thousands): December 31, Useful 2020 2019 Lives Land $ 5,511 $ 5,511 — Buildings 35,114 34,582 30-40 yrs. Machinery and equipment 178,287 160,897 3-15 yrs. Total property, plant and equipment $ 218,912 $ 200,990 Depreciation expense of $11,533,000, $10,733,000 and $9,003,000 was recorded for the years ended December 31, 2020, 2019 and 2018, respectively. Depreciation expense is recorded in either cost of goods sold or operating expenses based on the associated assets’ usage. |
Patents and Licenses | Costs for patents and licenses acquired are determined at acquisition date. Patents and licenses are amortized over the useful lives of the individual patents and licenses, which are from seven to 20 years. Patents and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. |
Goodwill | Goodwill represents the excess of cost over the fair value of tangible and identifiable intangible net assets acquired. Annual impairment testing for goodwill is performed in the fourth quarter of each year using a qualitative assessment on goodwill impairment to determine whether it is more likely than not that the carrying value of our reporting units exceeds their fair value. If necessary, a two-step goodwill impairment analysis is performed. Goodwill is also reviewed whenever events or changes in circumstances indicate a change in value may have occurred. We have identified three reporting units where goodwill was recorded for purposes of testing goodwill impairment annually: (1) Atrion Medical Products, Inc., (2) Halkey-Roberts Corporation and (3) Quest Medical, Inc. The total carrying amount of goodwill in each of the years ended December 31, 2020 and 2019 was $9,730,000. Our evaluation of goodwill during each year resulted in no impairment losses. |
Current Accrued Liabilities | The items comprising current accrued liabilities are as follows (in thousands): December 31, 2020 2019 Accrued payroll and related expenses $ 5,656 $ 4,233 Accrued vacation 276 311 Other accrued liabilities 633 604 Total accrued liabilities $ 6,565 $ 5,148 |
Revenues | We recognize revenue when obligations under the terms of a contract with our customer are satisfied. This occurs with the transfer of control of our products to customers when products are shipped. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services. Sales and other taxes we may collect concurrent with revenue-producing activities are excluded from revenue. We believe that our medical device business will benefit in the long term from an aging world population along with an increase in life expectancy. In the near term however, demand for our products fluctuates based on our customers’ requirements which are driven in large part by their customers’ or patients’ needs for medical care which does not always follow broad economic trends. This affects the nature, amount, timing and uncertainty of our revenue. Also, changes in the value of the United States dollar relative to foreign currencies could make our products more or less affordable and therefore affect our sales in international markets. A summary of revenues by geographic area, based on shipping destination, for 2020, 2019 and 2018 is as follows (in thousands): Year ended December 31, 2020 2019 2018 United States $ 85,682 $ 98,496 $ 95,757 Germany 9,712 7,996 8,898 Other countries less than 5% of revenues 52,197 48,574 47,793 Total $ 147,591 $ 155,066 $ 152,448 We expense sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within selling expense. Atrion has contracts in place with customers for equipment leases, equipment financing, and equipment and other services. These contracts represent less than four percent of our total revenue in all periods presented herein. A portion of these contracts contain multiple performance obligations including embedded leases. For such arrangements, we historically allocated revenue to each performance obligation which is capable of being distinct and accounted for as a separate performance obligation based on relative standalone selling prices. We generally determine standalone selling prices based on observable inputs, primarily the prices charged to customers. Beginning July 1, 2018, for agreements with an embedded lease component, we adopted the practical expedient in ASU 2018-11 Leases: Targeted Improvements Our fixed monthly equipment rentals to customers are accounted for as operating leases under ASU 2016-02, Leases A limited number of our contracts have variable consideration including tiered pricing and rebates which we monitor closely for potential constraints on revenue. For these contracts we estimate our position quarterly using the most-likely-outcome method, including customer-provided forecasts and historical buying patterns, and we accrue for any asset or liability these arrangements may create. The effect of accruals for variable consideration on our consolidated financial statements is immaterial. We do not disclose the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount which we have the right to invoice. We believe that the complexity added to our disclosures by the inclusion of a large amount of insignificant detail in attempting to disclose information under ASC 606 about immaterial contracts would potentially obscure more useful and important information. |
Leases to Customers | The lease assets from our sales type leases are recorded in our accounts receivable in the accompanying consolidated balance sheets, and as of December 31, 2020 and 2019 the balance totaled $315,000 and $398,000 respectively. Our equipment treated as leases to customers under ASC 842 is included in our Property, Plant and Equipment on our consolidated balance sheets. After our adoption of ASU 2018-11, the cost of the assets and associated depreciation that remain under lease agreements is immaterial. Due to the immaterial amount of revenue from our lessor activity, all other lessor disclosures under ASC 842 have been omitted. |
Leased Property and Equipment | As a lessee, we have three leases in total for equipment and facilities used internally, which we account for as operating leases. At December 31, 2020, our right-of-use asset balance was $295,000 and our lease liability at December 31, 2020 for these leases was $272,000. The monthly expense of $27,000 for these operating leases, which are our only lessee arrangements, is immaterial and therefore all other lessee disclosures under ASC 842 have been omitted. |
Research and Development Costs | Research and Development, or R&D, costs relating to the development of new products and improvements of existing products are expensed as incurred. |
Stock-Based Compensation | We have a stock-based compensation plan covering certain of our officers, directors and key employees. As explained in detail in Note 8, we account for stock-based compensation utilizing the fair value recognition provisions of ASC 718, Compensation-Stock Compensation, |
Liability-classified awards | The Company classifies certain awards that can or will be settled in cash as liability awards. The fair value of a liability-classified award is determined on a quarterly basis beginning at the grant date until final vesting. Changes in the fair value of liability-classified awards are recorded to general and administrative expense over the vesting period of the award. |
New Accounting Pronouncements | In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities and trade and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. On January 1, 2020, we adopted the guidance prospectively with a cumulative adjustment to retained earnings. Atrion has not restated comparative information for 2019 and, therefore, the comparative information for 2019 is reported under the old model and is not comparable to the information presented for 2020. At adoption, we recognized an incremental allowance for credit losses on our allowance for credit losses related to our held-to-maturity debt securities of approximately $42,000 and our trade accounts receivable of approximately $4,000. Additionally, we recorded an approximately $36,000 decrease in retained earnings associated with the increased estimated credit losses on our trade accounts receivable and investments. The impact on our operating results for 2020 from our adoption of this pronouncement was not material. From time to time new accounting pronouncements applicable to us are issued by the FASB, or other standards setting bodies, which we will adopt as of the specified effective date. Unless otherwise discussed, we believe the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. |
Fair Value Measurements | Accounting standards use a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers are: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists therefore requiring an entity to develop its own assumptions. As of December 31, 2020 and 2019, we held investments in commercial paper, bonds, money market funds, mutual funds and equity securities that are required to be measured for disclosure purposes at fair value on a recurring basis. The fair values of these investments and their tier levels are shown in Note 2 below. |
Concentration of Credit Risk | Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. We have investments in money market funds, bonds and commercial paper. As a result, we are exposed to potential loss from market risks that may occur as a result of changes in interest rates, changes in credit quality of the issuer and otherwise. These securities have a higher degree of, and a greater exposure to, credit or default risk and may be less liquid in times of economic weakness or market disruptions as compared with cash deposits. For accounts receivable, we perform ongoing credit evaluations of our customers’ financial condition and generally do not require collateral. We maintain reserves for possible credit losses. As of December 31, 2020 and 2019, we had allowances for doubtful accounts of approximately $41,000 and $36,000, respectively. The carrying amount of the receivables approximates their fair value. We had two customers which accounted for 12% each of our accounts receivable as of December 31, 2020 and one customer which accounted for 12% of our accounts receivable as of December 31, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of Cash and Cash equivalents | December 31, 2020 December 31, 2019 Cash and cash equivalents: Cash deposits $ 16,628 $ 38,942 Money market funds 4,822 3,460 Commercial paper 1,000 2,646 Total cash and cash equivalents $ 22,450 $ 45,048 Short-term investments: Commercial paper (held-to-maturity) $ 5,178 $ 6,778 Bonds (held-to-maturity) 14,101 16,988 Allowance for credit losses (21 ) - Total short-term investments $ 19,258 $ 23,766 Long-term investments: Mutual funds (available for sale) $ 563 $ 1,105 Bonds (held-to-maturity) 41,619 27,845 Allowance for credit losses (52 ) - Equity securities (available for sale) 4,077 2,822 Total long-term investments $ 46,207 $ 31,772 Total cash, cash equivalents and short and long-term investments $ 87,915 $ 100,586 |
Schedule of Inventories | December 31, 2020 2019 Raw materials $ 20,308 $ 18,157 Work in process 11,339 8,525 Finished goods 18,651 15,411 Total inventories $ 50,298 $ 42,093 |
Schedule of Property, Plant and Equipment | December 31, Useful 2020 2019 Lives Land $ 5,511 $ 5,511 — Buildings 35,114 34,582 30-40 yrs. Machinery and equipment 178,287 160,897 3-15 yrs. Total property, plant and equipment $ 218,912 $ 200,990 |
Schedule of Current Accrued Liabilities | December 31, 2020 2019 Accrued payroll and related expenses $ 5,656 $ 4,233 Accrued vacation 276 311 Other accrued liabilities 633 604 Total accrued liabilities $ 6,565 $ 5,148 |
Schedule of geographic area | Year ended December 31, 2020 2019 2018 United States $ 85,682 $ 98,496 $ 95,757 Germany 9,712 7,996 8,898 Other countries less than 5% of revenues 52,197 48,574 47,793 Total $ 147,591 $ 155,066 $ 152,448 |
Schedule of product line Information | ` Year ended December 31, 2020 2019 2018 Fluid Delivery $ 75,228 $ 72,117 $ 70,606 Cardiovascular 48,524 54,799 50,904 Ophthalmology 4,700 7,124 10,473 Other 19,139 21,026 20,465 Total $ 147,591 $ 155,066 $ 152,448 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments | |
Schedule of investments, held-to-maturity securities | Held-to-Maturity Bonds Credit Quality Indicators Asset Backed Bonds Fed Govt. Bonds/Notes Municipal Bonds Corporate Bonds Totals AAA/AA/A $ 1,413 $ 3,222 $ 637 $ 32,126 $ 37,398 BBB/BB - - - 18,322 18,322 TOTAL $ 1,413 $ 3,222 $ 637 $ 50,448 $ 55,720 |
Schedule of unrealized gains and losses | Gross Unrealized Level Cost Gains Losses Fair Value As of December 31, 2020: Money market funds 1 4,822 $ — $ — $ 4,822 Commercial paper 2 6,178 $ — $ — $ 6,178 Bonds 2 55,720 $ 505 $ (44 ) $ 56,181 Mutual funds 1 599 $ — $ (36 ) $ 563 Equity investments 2 5,675 $ — $ (1,598 ) $ 4,077 As of December 31, 2019: Money market funds 1 3,460 $ — $ — $ 3,460 Commercial paper 2 9,424 $ 2 $ — $ 9,426 Bonds 2 44,833 $ 138 $ (19 ) $ 44,952 Mutual funds 1 1,052 $ 53 $ — $ 1,105 Equity investments 2 5,675 $ — $ (2,853 ) $ 2,822 |
Patents and Licenses (Tables)
Patents and Licenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Patents and Licenses | |
Schedule of Patents and Licenses | December 31, 2020 December 31, 2019 Weighted Average Gross Accumulated Weighted Average Gross Accumulated 15.67 $ 13,840 $ 12,419 15.67 $ 13,840 $ 12,301 |
Schedule of Future Amortization Expense | 2021 $ 119 2022 $ 117 2023 $ 113 2024 $ 113 2025 $ 112 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of Provision for Income Taxes | Year ended December 31, 2020 2019 2018 Current — Federal $ 3,166 $ 3,508 $ 6,405 — State 904 1,090 2,001 4,070 4,598 8,406 Deferred — Federal 2,111 1,660 (626 ) — State 171 149 1 2,282 1,809 (625 ) Provision for Income Taxes $ 6,352 $ 6,407 $ 7,781 |
Schedule of Deferred Tax Liabilities | 2020 2019 Deferred tax liabilities (assets): Property, plant and equipment $ 11,532 $ 9,697 Patents and goodwill 1,775 1,756 Benefit plans (1,976 ) (2,131 ) Inventories (420 ) (350 ) Capital loss carryover (544 ) (556 ) Other (179 ) (513 ) 10,188 7,903 Plus: Valuation allowance 580 593 Total deferred tax liabilities $ 10,768 $ 8,496 |
Schedule of Statutory Federal Income Tax Rate | Year ended December 31, 2020 2019 2018 Income tax expense at the statutory federal income tax rate $ 8,078 $ 9,065 $ 8,828 Increase (decrease) resulting from: State income taxes 838 978 1,572 R&D tax credits (1,589 ) (1,470 ) (1,212 ) Foreign-derived intangible income deduction (1,051 ) (1,700 ) (1,000 ) Excess tax benefit from stock compensation (81 ) (412 ) (95 ) Change in valuation allowance (13 ) (16 ) - Uncertain tax positions (450 ) (42 ) (373 ) Other, net 619 4 61 Provision for Income Taxes $ 6,352 $ 6,407 $ 7,781 |
Schedule of Deferred Tax Valuation Allowance | Gross unrecognized tax benefits at January 1, 2018 $ 865 Increase in tax positions for prior years 25 Increase in tax positions for current years — Lapse in statutes of limitation (397 ) Gross unrecognized tax benefits at December 31, 2018 $ 493 Increase in tax positions for prior years 19 Increase in tax positions for current year — Lapse in statutes of limitation (62 ) Gross unrecognized tax benefits at December 31, 2019 $ 450 Increase in tax positions for prior years 8 Increase in tax positions for current year — Lapse in statutes of limitation (458 ) Gross unrecognized tax benefits at December 31, 2020 $ — |
Income Per Share (Tables)
Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Per Share | |
Schedule of Computation for Basic and Diluted Income Per Share | Year ended December 31, 2020 2019 2018 (In thousands, except per share amounts) Net Income $ 32,115 $ 36,761 $ 34,255 Weighted average basic shares outstanding 1,836 1,855 1,853 Add: Effect of dilutive securities 5 8 5 Weighted average diluted shares outstanding 1,841 1,863 1,858 Net Income per share Basic $ 17.49 $ 19.82 $ 18.49 Diluted $ 17.44 $ 19.73 $ 18.44 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
Schedule of stock option transactions | Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2019 20,000 $ 501.03 2.3 years Granted — — Exercised — — Outstanding at December 31, 2020 20,000 $ 501.03 1.3 years Exercisable at December 31, 2020 12,000 $ 501.03 1.3 years |
Schedule of non- vested restricted stock | Nonvested Shares Shares Weighted Average Award Date Fair Value Per Share Restricted stock at December 31, 2019 3,540 $ 445.47 Granted in 2020 — — Vested in 2020 (1,180 ) $ 445.47 Restricted stock at December 31, 2020 2,360 $ 445.47 |
Schedule of restricted stock units | Nonvested Stock Units Restricted Stock Units Weighted Average Award Date Fair Value Per Unit Director’s Stock Units Weighted Average Award Date Fair Value Per Unit Nonvested at December 31, 2019 3,601 $ 623.19 — Added 33 $ 635.04 16 $ 711.75 Forfeited (40 ) $ 766.48 — Vested (479 ) $ 388.02 (16 ) $ 711.75 Nonvested at December 31, 2020 3,115 $ 657.70 — |
Schedule of stock based compensation | Unrecognized Compensation Cost Weighted Average Remaining Years in Amortization Period Stock options $ 682,000 1.3 Restricted stock 687,000 1.3 Restricted stock units 990,000 2.8 Restricted stock units (to be settled in cash) 2,246,000 4.5 Total $ 4,605,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents | ||||
Cash deposits | $ 16,628,000 | $ 38,942,000 | ||
Money market funds | 4,822,000 | 3,460,000 | ||
Commercial paper | 1,000,000 | 2,646,000 | ||
Total cash and cash equivalents | 22,450,000 | 45,048,000 | $ 58,753,000 | $ 30,136,000 |
Short-term investments | ||||
Commercial paper (held-to-maturity) | 5,178,000 | 6,778,000 | ||
Bonds (held-to-maturity) | 14,101,000 | 16,988,000 | ||
Allowance for credit losses | (21,000) | 0 | ||
Total short-term investments | 19,258,000 | 23,766,000 | ||
Long-term investments | ||||
Mutual funds (available for sale) | 563,000 | 1,105,000 | ||
Bonds (held-to-maturity) | 41,619,000 | 27,845,000 | ||
Allowance for credit losses | (52,000) | 0 | ||
Equity securities (available for sale) | 4,077,000 | 2,822,000 | ||
Total long-term investments | 46,207,000 | 31,772,000 | ||
Total cash, cash equivalents and short and long-term investments | $ 87,915,000 | $ 100,586,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||
Raw material | $ 20,308 | $ 18,157 |
Work in process | 11,339 | 8,525 |
Finished goods | 18,651 | 15,411 |
Total inventories | $ 50,298 | $ 42,093 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total Property, plan and Equipment | $ 218,912 | $ 200,990 |
Property and Equipment | 94,935 | 84,606 |
Machinery and Equipment [Member] | ||
Property and Equipment | $ 178,287 | 160,897 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property and Equipment estimated useful lives | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property and Equipment estimated useful lives | 15 years | |
Land [Member] | ||
Property and Equipment | $ 5,511 | 5,511 |
Buildings [Member] | ||
Property and Equipment | $ 35,114 | $ 34,582 |
Buildings [Member] | Minimum [Member] | ||
Property and Equipment estimated useful lives | 30 years | |
Buildings [Member] | Maximum [Member] | ||
Property and Equipment estimated useful lives | 40 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||
Accrued payroll and related expenses | $ 5,656 | $ 4,233 |
Accrued vacation | 276 | 311 |
Other accrued liabilities | 633 | 604 |
Total accrued liabilties | $ 6,565 | $ 5,148 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenues | $ 147,591 | $ 155,066 | $ 152,448 |
Other countries less than 5% of revenues | 52,197 | 48,574 | 47,793 |
Unites States [Member] | |||
Total Revenues | 85,682 | 98,496 | 95,757 |
Germany [Member] | |||
Total Revenues | $ 9,712 | $ 7,996 | $ 8,898 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenues | $ 147,591 | $ 155,066 | $ 152,448 |
Other | 19,139 | 21,026 | 20,465 |
Ophthalmology [Member] | |||
Total Revenues | 4,700 | 7,124 | 10,473 |
Cardiovascular [Member] | |||
Total Revenues | 48,524 | 54,799 | 50,904 |
Fluid Delivery [Member] | |||
Total Revenues | $ 75,228 | $ 72,117 | $ 70,606 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes due | $ 1,525,000 | $ 4,000 | |
Goodwill | 9,730,000 | 9,730,000 | |
Allowances for doubtful accounts | 41,000 | 36,000 | |
Trade account receivable | 4,000 | ||
Decrease in retained earnings | 36,000 | ||
Monthly expense | 27,000 | ||
Right- of- use- asset | 295,000 | ||
Allowance for credit losses | 42,000 | ||
Lease liability | 272,000 | ||
Accounts receivable | $ 315,000 | 398,000 | |
Payment due | 30 days | ||
Useful lives | 20 years | ||
Depereciation expense | $ 11,533,000 | 10,733,000 | $ 9,003,000 |
Accounts payable | $ 1,434,000 | $ 1,236,000 | |
Two Customer [Member] | |||
Accounts receivables carrying rate | 12.00% | ||
One Customer [Member] | |||
Accounts receivables carrying rate | 12.00% |
Investments (Details)
Investments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt securities, held-to-maturity | $ 55,720,000 | |
Mutual funds (available for sale) [Member] | ||
Debt securities, held-to-maturity | 599,000 | $ 1,052,000 |
Gross Unrealized Fair Value | 563,000 | 1,105,000 |
Gross Unrealized Gains | 0 | 53,000 |
Gross Unrealized Losses | (36,000) | 0 |
Money Market Funds [Member] | ||
Debt securities, held-to-maturity | 4,822,000 | 3,460,000 |
Gross Unrealized Fair Value | 4,822,000 | 3,460,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Commercial Paper [Member] | ||
Debt securities, held-to-maturity | 6,178,000 | 9,424,000 |
Gross Unrealized Fair Value | 6,178,000 | 9,426,000 |
Gross Unrealized Gains | 0 | 2,000 |
Gross Unrealized Losses | 0 | 0 |
Bonds [Member] | ||
Debt securities, held-to-maturity | 55,720,000 | 44,833,000 |
Gross Unrealized Fair Value | 56,181,000 | 44,952,000 |
Gross Unrealized Gains | 505,000 | 138,000 |
Gross Unrealized Losses | (44,000) | (19,000) |
Equity investments [Member] | ||
Debt securities, held-to-maturity | 5,675,000 | 5,675,000 |
Gross Unrealized Fair Value | 4,077,000 | 2,822,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | $ (1,598,000) | $ (2,853,000) |
Investments (Details 1)
Investments (Details 1) $ in Thousands | Dec. 31, 2020USD ($) |
Debt securities, held-to-maturity | $ 55,720 |
AAA /AA/A [Member] | |
Debt securities, held-to-maturity | 37,398 |
BBB/BB [Member] | |
Debt securities, held-to-maturity | 18,322 |
Assets Baked Bonds [Member] | |
Debt securities, held-to-maturity | 1,413 |
Assets Baked Bonds [Member] | AAA /AA/A [Member] | |
Debt securities, held-to-maturity | 1,413 |
Fed Govt. Bonds/Notes [Member] | |
Debt securities, held-to-maturity | 3,222 |
Fed Govt. Bonds/Notes [Member] | AAA /AA/A [Member] | |
Debt securities, held-to-maturity | 3,222 |
Fed Govt. Bonds/Notes [Member] | BBB/BB [Member] | |
Debt securities, held-to-maturity | 0 |
Municipal Bonds [Member] | |
Debt securities, held-to-maturity | 637 |
Municipal Bonds [Member] | AAA /AA/A [Member] | |
Debt securities, held-to-maturity | 637 |
Municipal Bonds [Member] | BBB/BB [Member] | |
Debt securities, held-to-maturity | 0 |
Corporate Bonds [Member] | |
Debt securities, held-to-maturity | 50,448 |
Corporate Bonds [Member] | AAA /AA/A [Member] | |
Debt securities, held-to-maturity | 32,126 |
Corporate Bonds [Member] | BBB/BB [Member] | |
Debt securities, held-to-maturity | 18,322 |
Asset Backed Bonds [Member] | BBB/BB [Member] | |
Debt securities, held-to-maturity | $ 0 |
Investments (Details Narrative)
Investments (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Allowance for credit losses related to long term investments | $ 18,000 |
Allowance for credit losses related to short term investments | $ 12,000 |
Maximum [Member] | Bonds [Member] | |
Securities Maturity | 12 years |
Patents and Licenses (Details)
Patents and Licenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Patents and Licenses | ||
Accumulated Amortization | $ 12,419 | $ 12,301 |
Weighted Average Original Life (years) | 15 years 8 months 1 day | 15 years 8 months 1 day |
Gross Carrying Amount | $ 13,840 | $ 13,840 |
Patents and Licenses (Details 1
Patents and Licenses (Details 1) $ in Thousands | Dec. 31, 2020USD ($) |
Patents and Licenses | |
2021 | $ 119 |
2022 | 117 |
2023 | 113 |
2024 | 113 |
2025 | $ 112 |
Patents and Licenses (Details N
Patents and Licenses (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Patents and Licenses | ||
Aggregate amortization expense | $ 119,000 | $ 119,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Line of Credit | ||
Credit facility percentage | 1.035% | |
Credit facility percentage plus | 0.875% | |
Credit facility | $ 75,000,000 | $ 75,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Federal income tax, current | $ 3,166 | $ 3,508 | $ 6,405 |
State income tax, current | 904 | 1,090 | 2,001 |
Income tax, current | 4,070 | 4,598 | 8,406 |
Federal income tax, deferred | 2,111 | 1,660 | (626) |
State income tax, deferred | 171 | 149 | 1 |
Income tax, deferred | 2,282 | 1,809 | (625) |
Provision for Income Taxes | $ 6,352 | $ 6,407 | $ 7,781 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax liabilities (assets): | ||
Property, plant and equipment | $ 11,532 | $ 9,697 |
Patents and goodwill | 1,775 | 1,756 |
Benefit plans | (1,976) | (2,131) |
Inventories | (420) | (350) |
Capital loss carryover | (544) | (556) |
Other | (179) | (513) |
Deferred tax liabilities (assets) | 10,188 | 7,903 |
Plus: Valuation allowance | 580 | 593 |
Total deferred tax liabilities | $ 10,768 | $ 8,496 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Income tax expense at the statutory federal income tax rate | $ 8,078,000 | $ 9,065,000 | $ 8,828,000 |
Increase (decrease) resulting from: | |||
State income taxes | 838,000 | 978,000 | 1,572,000 |
R&D tax credits | (1,589,000) | (1,470,000) | (1,212,000) |
Foreign-derived intangible income deduction | (1,051,000) | (1,700,000) | (1,000,000) |
Excess tax benefit from stock compensation | (81,000) | (412,000) | (95,000) |
Change in valuation allowance | (13,000) | (16,000) | 0 |
Uncertain tax positions | (450,000) | (42,000) | (373,000) |
Other, net | 619,000 | 4,000 | 61,000 |
Provision for Income Taxes | $ 6,352,000 | $ 6,407,000 | $ 7,781,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Gross unrecognized tax benefits beginning balance | $ 450,000 | $ 493,000 | $ 865,000 |
Increase in tax positions for prior years | 8,000 | 19,000 | 25,000 |
Increase in tax positions for current year | 0 | 0 | 0 |
Lapse in statutes of limitation | (458,000) | (62,000) | (397,000) |
Gross unrecognized tax benefits ending balance | $ 0 | $ 450,000 | $ 493,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Valuation allowance | $ 580,000 | ||
Remaining capital loss carryover deduction | 2,600,000 | ||
Unrecognized tax benefits, accrued interest | $ 20,000 | $ 19,000 | |
Unrecognized tax benefits, net interest benefit | $ 35,000 | $ 16,000 | $ 18,000 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | May 21, 2015 | |
Stockholders' Equity: | |||||||
Stock repurchase program, shares authorized to be repurchased | 250,000 | ||||||
Stock repurchase program, shares remained eligible for repurchase | 202,018 | 231,765 | |||||
Total repurchased shares of common stock | 29,747 | ||||||
Non-cash dividend equivalents | $ 24,000 | $ 22,000 | $ 25,000 | ||||
Cash dividend payments per share | $ 1.75 | $ 1.55 | $ 1.35 |
Income Per Share (Details)
Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Per Share | |||
Net income | $ 32,115 | $ 36,761 | $ 34,255 |
Weighted average basic shares outstanding | 1,836 | 1,855 | 1,853 |
Add: Effect of dilutive securities | 5 | 8 | 5 |
Weighted average diluted shares outstanding | 1,841 | 1,863 | 1,858 |
Earnings per share: | |||
Basic | $ 17.49 | $ 19.82 | $ 18.49 |
Diluted | $ 17.44 | $ 19.73 | $ 18.44 |
Income Per Share (Details Narra
Income Per Share (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Per Share | |||
Shares excluded from computation of weighted average diluted shares outstanding | 6 | 7 | 501 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Outstanding at December 31, 2019 | shares | 20,000 |
Granted | shares | 0 |
Exercised | shares | 0 |
Outstanding at December 31, 2020 | shares | 20,000 |
Exercisable at December 31, 2020 | shares | 12,000 |
Weighted Average Exercise Price | |
Outstanding at December 31, 2019 | $ / shares | $ 501.03 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Outstanding at December 31, 2020 | $ / shares | 501.03 |
Exercisable at December 31, 2020 | $ / shares | $ 501.03 |
Weighted Average Remaining Contractual Term | |
Outstanding at December 31, 2019 | 2 years 3 months 18 days |
Outstanding at December 31, 2020 | 1 year 3 months 18 days |
Exercisable at December 31, 2020 | 1 year 3 months 18 days |
Stock-based Compensation (Det_2
Stock-based Compensation (Details 1) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Nonvested Shares | |
Nonvested restricted stock outstanding, beginning balance | shares | 3,540 |
Granted in 2020 | shares | 0 |
Vested in 2020 | shares | (1,180) |
Nonvested restricted stock outstanding, Ending balance | shares | 2,360 |
Weighted Average Award Date Fair Value Per Share | |
Weighted Average Award Date Fair Value Per Share, beginning balance | $ / shares | $ 445.47 |
Weighted Average Award Date Fair Value Per Share, Granted in 2020 | $ / shares | 0 |
Weighted Average Award Date Fair Value Per Share, Vested in 2020 | $ / shares | 445.47 |
Weighted Average Award Date Fair Value Per Share, Ending balance | $ / shares | $ 445.47 |
Stock-based Compensation (Det_3
Stock-based Compensation (Details 2) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Restricted Stock Units [Member] | |
Nonvested Stock Units Beginning balance, Shares | 3,601 |
Nonvested Stock Units Added | 33 |
Nonvested Stock Units Forfeited | (40) |
Nonvested Stock Units Vested | (479) |
Nonvested Stock Units Ening balance, Shares | 3,115 |
Weighted Average Award Date Fair Value Per Unit, Added | $ / shares | $ 635.04 |
Weighted Average Award Date Fair Value Per Unit, Vested | $ / shares | 388.02 |
Weighted Average Award Date Fair Value Per Unit, Beginning balance | $ / shares | 623.19 |
Weighted Average Award Date Fair Value Per Unit, Forfeited | $ / shares | 766.48 |
Weighted Average Award Date Fair Value Per Unit, Ending balance | $ / shares | $ 657.70 |
Directors Stock Units [Member] | |
Nonvested Stock Units Beginning balance, Shares | 0 |
Nonvested Stock Units Added | 16 |
Nonvested Stock Units Forfeited | 0 |
Nonvested Stock Units Vested | (16) |
Nonvested Stock Units Ening balance, Shares | 0 |
Weighted Average Award Date Fair Value Per Unit, Added | $ / shares | $ 711.75 |
Weighted Average Award Date Fair Value Per Unit, Vested | $ / shares | $ 711.75 |
Stock-based Compensation (Det_4
Stock-based Compensation (Details 3) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Total Unrecognized Compensation Cost | $ 4,605,000 |
Restricted Stock Units [Member] | |
Weighted Average Remaining Years in Amortization Period | 2 years 9 months 18 days |
Unrecognized Compensation Cost, other than options | $ 990,000 |
Restricted stock units (to be settled in cash) [Member] | |
Unrecognized Compensation Cost | $ 2,246,000 |
Weighted Average Remaining Years in Amortization Period | 4 years 6 months |
Stock Option [Member] | |
Weighted Average Remaining Years in Amortization Period | 1 year 3 months 18 days |
Unrecognized Compensation Cost, stock options | $ 682,000 |
Restricted Stock [Member] | |
Weighted Average Remaining Years in Amortization Period | 1 year 3 months 18 days |
Unrecognized Compensation Cost, other than options | $ 687,000 |
Stock-based Compensation (Det_5
Stock-based Compensation (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock compensation plan, total intrinsic values of options outstanding | $ 2,800,000 | ||
Total intrinsic value of exercisable options | $ 1,700,000 | ||
Discount percentage for post vesting restrictions | 11.20% | ||
Fair value restricted stock awards vested | $ 762,000 | $ 994,000 | $ 699,000 |
Weighted average grant date fair value | $ 130.35 | ||
Accrued dividend equivalents | $ 2,496,000 | ||
Stock-based compensation expense, total tax benefit recognized | 444,000 | 765,000 | 441,000 |
Total fair value of stock units that vested | 250,000 | ||
Stock-based compensation expense | 1,731,000 | 1,682,000 | 1,659,000 |
General And Administrative Expense [Member] | |||
Stock-based compensation expense | 1,731,000 | 1,682,000 | 1,659,000 |
Directors [Member] | |||
Total fair value of stock units that vested | $ 11,000 | 7,000 | 6,000 |
2006 Equity Incentive Plan | |||
Weighted average grant date fair value | $ 646.90 | ||
Number of common shares reserved for future issuance | 200,000 | ||
Granted shares of restricted stock | 3,865 | ||
2006 Equity Incentive Plan | Restricted Stock [Member] | |||
Terms of award | the restrictions usually lapse over a five-year period | ||
Non Employee Directors [Member] | |||
Value of stock units held for the accounts | $ 2,324,000 | ||
Non Employee Directors [Member] | 2006 Plan [Member] | |||
Total value of stock awards | $ 240,000 | $ 240,000 |
Industry Segment and Geograph_2
Industry Segment and Geographic Information (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from sales | 42.00% | 36.00% | 37.00% |
Employee Retirement and Benef_2
Employee Retirement and Benefit Plans (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Retirement and Benefit Plans | |||
Employees compensation | $ 917,000 | $ 845,000 | $ 752,000 |
Deferred compensation | $ 1,544,000 | $ 3,266,000 |
Commitment and contingencies (D
Commitment and contingencies (Details Narrative) | Dec. 31, 2020USD ($) |
Lease obligations | $ 272,000 |
Future payments | 2,000,000 |
Three And Four Executive Officers [Member] | |
Aggeregate amount of employees | $ 4,900,000 |