Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | P&F INDUSTRIES INC | |
Entity Central Index Key | 75,340 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | PFIN | |
Entity Common Stock, Shares Outstanding | 3,700,975 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 1,488,000 | $ 1,241,000 |
Accounts receivable - net | 10,188,000 | 10,047,000 |
Inventories | 20,970,000 | 19,657,000 |
Prepaid expenses and other current assets | 1,489,000 | 1,224,000 |
TOTAL CURRENT ASSETS | 34,135,000 | 32,169,000 |
PROPERTY AND EQUIPMENT | ||
Land | 1,281,000 | 1,281,000 |
Buildings and improvements | 6,150,000 | 6,138,000 |
Machinery and equipment | 21,694,000 | 20,579,000 |
Property, Plant and Equipment, Gross | 29,125,000 | 27,998,000 |
Less accumulated depreciation and amortization | 19,673,000 | 19,091,000 |
NET PROPERTY AND EQUIPMENT | 9,452,000 | 8,907,000 |
GOODWILL | 4,443,000 | 4,447,000 |
OTHER INTANGIBLE ASSETS - net | 8,163,000 | 8,533,000 |
DEFERRED INCOME TAXES - net | 775,000 | 872,000 |
OTHER ASSETS - net | 78,000 | 110,000 |
TOTAL ASSETS | 57,046,000 | 55,038,000 |
CURRENT LIABILITIES | ||
Short-term borrowings | 2,239,000 | 1,928,000 |
Accounts payable | 4,304,000 | 2,443,000 |
Accrued compensation and benefits | 1,339,000 | 1,944,000 |
Accrued other liabilities | 1,178,000 | 1,576,000 |
Current maturities of long-term debt | 490,000 | 0 |
Other current liabilities | 907,000 | 0 |
TOTAL CURRENT LIABILITIES | 10,457,000 | 7,891,000 |
Long-term debt, less current maturities | 0 | 94,000 |
Other liabilities | 179,000 | 1,040,000 |
TOTAL LIABILITIES | 10,636,000 | 9,025,000 |
SHAREHOLDERS' EQUITY | ||
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued | 0 | 0 |
Additional paid-in capital | 13,748,000 | 13,064,000 |
Retained earnings | 34,466,000 | 34,455,000 |
Treasury stock, at cost – 683,000 shares at June 30, 2018 and 631,000 shares at December 31, 2017 | (5,609,000) | (5,179,000) |
Accumulated other comprehensive loss | (589,000) | (530,000) |
TOTAL SHAREHOLDERS' EQUITY | 46,410,000 | 46,013,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 57,046,000 | 55,038,000 |
Common Class A [Member] | ||
SHAREHOLDERS' EQUITY | ||
Common stock | 4,394,000 | 4,203,000 |
TOTAL SHAREHOLDERS' EQUITY | 4,394,000 | 4,203,000 |
Common Class B [Member] | ||
SHAREHOLDERS' EQUITY | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 10 | $ 10 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 683,000 | 631,000 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 7,000,000 | 7,000,000 |
Common stock, shares issued | 4,394,000 | 4,203,000 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock, shares issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net revenue | $ 16,188,000 | $ 15,359,000 | $ 31,930,000 | $ 28,575,000 |
Cost of sales | 10,311,000 | 9,937,000 | 20,619,000 | 18,180,000 |
Gross profit | 5,877,000 | 5,422,000 | 11,311,000 | 10,395,000 |
Selling, general and administrative expenses | 5,361,000 | 5,366,000 | 10,641,000 | 10,413,000 |
Operating income (loss) | 516,000 | 56,000 | 670,000 | (18,000) |
Other expense (income), net | 28,000 | (24,000) | 57,000 | (24,000) |
Interest expense | 55,000 | 64,000 | 92,000 | 74,000 |
Income (loss) | 433,000 | 16,000 | 521,000 | (68,000) |
Income tax expense (benefit) | 128,000 | 0 | 151,000 | (24,000) |
Net income (loss) | $ 305,000 | $ 16,000 | $ 370,000 | $ (44,000) |
Basic and diluted earnings (loss) per share | $ 0.08 | $ 0 | $ 0.10 | $ (0.01) |
Weighted average common shares outstanding: | ||||
Basic | 3,592,000 | 3,611,000 | 3,588,000 | 3,605,000 |
Diluted | 3,682,000 | 3,720,000 | 3,714,000 | 3,605,000 |
Net income (loss) | $ 305,000 | $ 16,000 | $ 370,000 | $ (44,000) |
Other comprehensive (loss) income -foreign currency translation adjustment | (155,000) | 91,000 | (59,000) | 117,000 |
Total comprehensive income | $ 150,000 | $ 107,000 | $ 311,000 | $ 73,000 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - 6 months ended Jun. 30, 2018 - USD ($) | Total | Common Class A [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Treasury stock [Member] | Accumulated other comprehensive loss [Member] |
Balance at Dec. 31, 2017 | $ 46,013,000 | $ 4,203,000 | $ 13,064,000 | $ 34,455,000 | $ (5,179,000) | $ (530,000) |
Balance (in shares) at Dec. 31, 2017 | 4,203,000 | (631,000) | ||||
Net income | 370,000 | $ 0 | 0 | 370,000 | $ 0 | 0 |
Exercise of stock options | 737,000 | $ 184,000 | 553,000 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 184,000 | |||||
Restricted common stock compensation | 18,000 | $ 7,000 | 11,000 | 0 | 0 | 0 |
Restricted common stock compensation (in shares) | 7,000 | |||||
Purchase of Class A common stock | (430,000) | $ 0 | 0 | 0 | $ (430,000) | 0 |
Purchase of Class A common stock (in shares) | (52,000) | |||||
Stock-based compensation | 120,000 | 0 | 120,000 | 0 | $ 0 | 0 |
Dividends | (359,000) | 0 | 0 | (359,000) | 0 | 0 |
Foreign currency translation adjustment | (59,000) | 0 | 0 | 0 | 0 | (59,000) |
Balance at Jun. 30, 2018 | $ 46,410,000 | $ 4,394,000 | $ 13,748,000 | $ 34,466,000 | $ (5,609,000) | $ (589,000) |
Balance (in shares) at Jun. 30, 2018 | 4,394,000 | (683,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 370,000 | $ (44,000) |
Non-cash charges: | ||
Depreciation and amortization | 660,000 | 650,000 |
Amortization of other intangible assets | 359,000 | 439,000 |
Amortization of debt issue costs | 50,000 | 25,000 |
Provision for (recovery of) losses on accounts receivable - net | 95,000 | (5,000) |
Stock-based compensation | 120,000 | 0 |
Gain on sale of fixed assets | (6,000) | (1,000) |
Restricted stock-based compensation | 18,000 | 22,000 |
Deferred income taxes | 99,000 | (24,000) |
Fair value increase in contingent consideration | 57,000 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (250,000) | (1,059,000) |
Inventories | (1,332,000) | 1,399,000 |
Prepaid expenses and other current assets | (267,000) | 199,000 |
Other assets | 0 | 32,000 |
Accounts payable | 1,866,000 | 384,000 |
Accrued compensation and benefits | (603,000) | (618,000) |
Accrued other liabilities | (397,000) | (822,000) |
Other liabilities | (10,000) | (9,000) |
Total adjustments | 459,000 | 612,000 |
Net cash provided by operating activities | 829,000 | 568,000 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (1,224,000) | (358,000) |
Purchase of net assets of Jiffy Air Tool, Inc. | 0 | (6,845,000) |
Proceeds from disposal of assets | 25,000 | 1,000 |
Net cash used in investing activities | (1,199,000) | (7,202,000) |
Cash Flows from Financing Activities: | ||
Dividend payments | (359,000) | (360,000) |
Proceeds from exercise of stock options | 737,000 | 62,000 |
Purchase of Class A common stock | (430,000) | 0 |
Net proceeds from short-term borrowings | 311,000 | 4,537,000 |
Proceeds from long-term debt | 400,000 | 0 |
Repayments of long-term debt | (7,000) | (10,000) |
Payment of debt issue costs | (15,000) | (50,000) |
Net cash provided by financing activities | 637,000 | 4,179,000 |
Effect of exchange rate changes on cash | (20,000) | 25,000 |
Net increase (decrease) in cash | 247,000 | (2,430,000) |
Cash at beginning of period | 1,241,000 | 3,699,000 |
Cash at end of period | 1,488,000 | 1,269,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for: Interest | 44,000 | 36,000 |
Cash paid for: Income taxes | 21,000 | 335,000 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Contingent consideration on acquisition | $ 0 | $ 692,000 |
BUSINESS AND SUMMARY OF ACCOUNT
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2017 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). The interim financial statements contained herein should be read in conjunction with the 2017 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive (loss) income - foreign currency translation adjustment”. Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc. and its subsidiaries, (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. Customer concentration At June 30, 2018 and December 31, 2017, accounts receivable from The Home Depot was 35.5% and 31.0%, respectively, of our total accounts receivable. Additionally, revenue from The Home Depot during the three and six-month periods ended June 30, 2018 was 24.8% and 24.2%, for the same three and six month periods in 2017 The Home Depot revenue accounted for 29.0% and 29.8%, respectively. The Company P&F is a Delaware corporation incorporated on April 19, 1963. The Company conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Exhaust Technologies Inc. (“ETI”) and Universal Air Tool Company Limited (“UAT”) are wholly-owned subsidiaries of Florida Pneumatic. Effective April 5, 2017, the Company purchased substantially all of the operating assets, less certain payables of Jiffy Air Tool, Inc., (“Jiffy”) through a wholly-owned subsidiary of Florida Pneumatic. See Note 2 to our consolidated financial statements for further discussion. Lastly, the business of Air Tool Service Company (“ATSCO”) operates through a wholly-owned subsidiary of Hy-Tech. Florida Pneumatic manufactures, imports, and sells pneumatic hand tools, most of which are of its own design, primarily to the retail, industrial, automotive and aerospace markets. It also markets, through its Berkley Tool division (“Berkley”), a product line which includes pipe and bolt dies, pipe taps, wrenches, vises and stands, pipe and tubing cutting equipment, hydrostatic test pumps, and replacement electrical components for a widely-used brand of pipe cutting and threading machines. Hy-Tech designs, manufactures and distributes industrial pneumatic tools, industrial gears, hydrostatic test plugs and a wide variety of parts under the brands ATP, ATSCO, OZAT, Numatx, Thaxton and Quality Gear. Industries served include power generation, petrochemical, construction, railroad, mining, ship building and fabricated metals. Hy-Tech also manufactures components, assemblies, finished product and systems for various Original Equipment Manufacturers under their own brand names. Management Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s 2017 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Significant Accounting Policies – Revenue Recognition Our significant accounting policies are described in "Note 1: Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2017. Our significant accounting policy relating to revenue recognition reflects the impact of the adoption of ASC 606, defined below, effective January 1, 2018. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers The Company's performance obligations underlying its core revenue sources remain substantially unchanged. Its revenue is generated through the sale of finished products, and is generally recognized at the point in time when merchandise is transferred to the customer with a fixed payment due generally within 30 to 90 days, and in an amount that considers the impacts of estimated allowances. Further, the Company has made a policy election to account for shipping and handling activities that occur after the customer has obtained control of the products as fulfillment costs rather than as an additional promised service. This election is consistent with the Company’s prior policy, and therefore the adoption of ASC 606 relating to shipping and handling activities did not have any impact on its financial results. Additionally, as the result of the adoption of ASC 606, the Company will account for certain expenses that in prior periods were accounted for as a selling expense, which will now be treated as an adjustment to gross revenue. Accordingly, during the three and six-month period ended June 30, 2018 the Company reduced its net revenue, gross margin and selling expenses by approximately $243,000 and $457,000, respectively. Additionally, the Company at June 30, 2018 has included in its allowance for doubtful accounts approximately $89,000 that would have been accounted for in its current liabilities prior to the adoption of ASC 606. There are no remaining performance obligations as of June 30, 2018. The Company analyzes its revenue as follows: Revenue generated at Florida Pneumatic. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 4,215,000 33.8 % $ 5,411,000 44.6 % Automotive 3,774,000 30.3 3,390,000 27.9 Industrial/catalog 1,422,000 11.4 1,250,000 10.3 Aerospace 2,885,000 23.1 1,862,000 15.4 Other 174,000 1.4 219,000 1.8 Total $ 12,470,000 100.0 % $ 12,132,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 8,305,000 33.6 % $ 10,764,000 47.5 % Automotive 7,710,000 31.2 7,003,000 30.9 Industrial/catalog 2,898,000 11.7 2,439,000 10.8 Aerospace 5,443,000 22.0 2,008,000 8.9 Other 378,000 1.5 427,000 1.9 Total $ 24,734,000 100.0 % $ 22,641,000 100.0 % Revenue generated at Hy-Tech. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 3,384,000 91.0 % $ 2,888,000 89.5 % Other brands 334,000 9.0 339,000 10.5 Total $ 3,718,000 100.0 % $ 3,227,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 6,460,000 89.8 % $ 5,294,000 89.2 % Other brands 736,000 10.2 640,000 10.8 Total $ 7,196,000 100.0 % $ 5,934,000 100.0 % New Accounting Pronouncements Recently Adopted In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplified the testing of goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measured a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company concluded that ASU 2017-04 is preferable to the current guidance due to efficiency, since ASU 2017-04 eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. The Company adopted ASU 2017-04 in 2017, in conjunction with its annual impairment test of goodwill for all reporting units. The adoption of ASU 2017-04 did not have a material impact on the Company’s financial results. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments . The amendments in ASU 2016-15 are intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows, with the intent of reducing diversity in practice for the eight types of cash flows identified. ASU 2016-15 is effective for public companies' fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017. The adoption of ASU 2016-15 as of January 1, 2018 had no material effect on the Company’s financial position, results of operations or cash flows. The Company adopted ASC 606 on the first day of fiscal 2018. Its underlying principle is to use a five-step analysis of transactions to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company has elected to use the modified retrospective approach. As the Company does not have any sales contracts that were not completed as of January 1, 2018, there is no adjustment required to its retained earnings. The adoption of ASC 606 will not have an effect on the Company’s cash flows. Other than discussed earlier in this Note 1, the adoption of ASC 606 did not have a material effect on the Company’s consolidated financial statements. The Company does not believe that any other recently issued accounting standard would have a material effect on its consolidated financial statements. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases currently in the process of completing its assessment of all leases and is assessing the impact the adoption of this standard will have on its consolidated financial statements and related disclosures. Th us far the Company does not believe the adoption of this standard will have a material effect on its consolidated financial statements. However, the Company will continue its evaluation of the standard update through the date of adoption. In February 2018, the FASB issued No. ASU 2018-02, Income Statement – Reporting Comprehensive Income Other Accounting Pronouncement The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries previously deferred from tax, generally eliminates U.S federal income taxes on dividends from foreign subsidiaries and creates a new provision designed to tax global intangible low-taxed income (“GILTI”). Also on December 22, 2017, the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides for a measurement period of up to one year from the enactment for companies to complete their accounting for the Act. The Company is applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. At June 30, 2018 the Company has not completed its accounting for the tax effects of the Act, but has made reasonable estimates of the effects on the re-measurement of its deferred tax assets and liabilities as well as its transition tax liability. During the six month period ended June 30, 2018, the Company made no adjustments to the provisional amounts recorded at December 31, 2017. Additionally, the Company has not yet collected and analyzed all necessary tax and earnings data of its foreign operations and therefore, the Company has also not yet completed its accounting for the income tax effects of the transition tax. The Company will continue to make and refine its calculations as additional analysis is completed. Other than the aforementioned, the Company does not believe that any other recently issued, but not yet effective accounting standard, if adopted, will have a material effect on its consolidated financial statements . |
ACQUISITION
ACQUISITION | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | NOTE 2 – ACQUISITION On April 5, 2017 (the “Jiffy Closing Date”), Bonanza Holdings Corp. (now known as Jiffy Air Tool, Inc.), a Delaware corporation and newly formed wholly-owned subsidiary (“Jiffy”) of Florida Pneumatic, Jiffy Air Tool, Inc. a Nevada corporation (“Jiffy Seller”), The Jack E. Pettit—1996 Trust, the sole shareholder of Jiffy Seller and Jack E. Pettit, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), pursuant to which, among other things, Jiffy acquired (the “Jiffy Acquisition”) substantially all of the operating assets of Jiffy Seller for $5,950,000, in addition to the assumption of certain payables and contractual obligations as set forth in the Asset Purchase Agreement. Jiffy manufactures and distributes pneumatic tools and components, primarily sold to aerospace manufacturers. The purchase price was $5,950,000, less a post-closing working capital adjustment of $155,000, which was paid by Jiffy Seller to the Company in June 2017. Additionally, Jiffy Seller may be entitled to up to $1,000,000 in additional consideration, which is contingent upon Jiffy achieving certain revenue thresholds and other criteria as set forth in the Asset Purchase Agreement within two defined measurement periods occurring within approximately the first two years following the Jiffy Closing Date. As of June 30, 2018, the Company has estimated the fair value of this contingent consideration to be $907,000. In connection with the Asset Purchase Agreement, a separate Purchase and Sale Agreement and Joint Escrow Instructions (the “Purchase and Sale Agreement” and together with the Asset Purchase Agreement, the “Agreements”) was entered into between Jiffy Seller and Bonanza Properties Corp. (“Bonanza Properties”), a Delaware corporation and newly formed wholly-owned subsidiary of Florida Pneumatic, pursuant to which Bonanza Properties purchased certain real property of Jiffy Seller. Pursuant to the Purchase and Sale Agreement, the purchase price for the real property was $1,050,000. The initial total consideration ($5,950,000 plus $1,050,000) paid to Jiffy Seller was from funds available under the Revolver, as defined in Note 9, less certain amounts escrowed pursuant to the terms of the Agreements. Total Cash paid at closing $ 7,000,000 Less working capital adjustment (155,000 ) Fair value of contingent consideration 692,000 Total estimated purchase price $ 7,537,000 The following table presents purchase price allocation: Accounts receivable $ 789,000 Inventories 1,571,000 Other current assets 45,000 Land 131,000 Building 919,000 Machinery and equipment 1,196,000 Identifiable intangible assets: Customer relationships 1,670,000 Trademarks and trade names 790,000 Non-compete agreements 17,000 Liabilities assumed (125,000 ) Goodwill 534,000 Total estimated purchase price $ 7,537,000 The excess of the total purchase price over the fair value of the net assets acquired, including the value of the identifiable intangible assets, has been allocated to goodwill. Goodwill will be amortized over 15 years for tax purposes, but not deductible for financial reporting purposes. The intangible assets subject to amortization will be amortized over 15 years for tax purposes. For financial reporting purposes, useful lives have been assigned as follows: Customer relationships 15 years Trademarks and trade names Indefinite Non-compete agreements 4 years The following unaudited pro-forma combined financial information gives effect to the Jiffy Acquisition as if the Jiffy Acquisition was consummated January 1, 2017. This unaudited pro-forma financial information is presented for information purposes only, and is not intended to present actual results that would have been attained had the Jiffy Acquisition been completed as of January 1, 2017 (the beginning of the earliest period presented) or to project potential operating results as of any future date or for any future periods. Six months ended June 30, 2017 Revenue $ 30,053,000 Net Income $ 62,000 Earnings per share – Basic $ 0.02 Earnings per share – Diluted $ 0.02 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NOTE 3 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per common share is based only on the average number of shares of Common Stock outstanding for the periods. Diluted earnings (loss) per common share reflects the effect of shares of Common Stock issuable upon the exercise of options, unless the effect on earnings is antidilutive. Diluted earnings (loss) per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of Common Stock. The average market value for the period is used as the assumed purchase price. The following table sets forth the elements of basic and diluted earnings (loss) per common share: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 305,000 $ 16,000 $ 370,000 $ (44,000 ) Denominator: Denominator for basic earnings (loss) per share - weighted average common shares outstanding 3,592,000 3,611,000 3,588,000 3,605,000 Dilutive securities (1) 90,000 109,000 126,000 — Denominator for diluted earnings (loss) per share - weighted average common shares outstanding 3,682,000 3,720,000 3,714,000 3,605,000 (1) Dilutive securities consist of “in the money” stock options. At June 30, 2017, there were outstanding stock options whose exercise prices were higher than the average market values of the underlying Common Stock for the period . The weighted average of anti-dilutive stock options outstanding was as follows: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Weighted average antidilutive stock options outstanding — 49,000 25,000 60,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE 4 – STOCK-BASED COMPENSATION There were no options granted or issued during the three and six-month periods ended June 30, 2018. The following is a summary of the changes in outstanding options during the six-month period ended June 30, 2018: Option Shares Weighted Weighted Average Aggregate Outstanding, January 1, 2018 418,233 $ 5.17 3.8 $ 1,343,442 Granted — — Exercised (184,480 ) $ 3.99 Forfeited — — Expired — — Outstanding, June 30, 2018 233,753 $ 6.10 5.9 $ 617,693 Vested, June 30, 2018 144,753 $ 5.49 3.8 $ 470,843 Option Shares Weighted Non-vested options, January 1, 2018 89,000 $ 4.41 Granted — — Vested — — Forfeited — — Non-vested options, June 30, 2018 89,000 $ 4.41 The number of shares of Common Stock available for issuance under the P&F Industries, Inc. 2012 Stock Incentive Plan (the “2012 Plan”) as of June 30, 2018 was 79,437. At June 30, 2018, there were 184,253 options outstanding issued under the 2012 Plan and 49,500 options outstanding issued under the 2002 Stock Incentive Plan. Restricted Stock The Company, in May 2018, granted 1,250 restricted shares of its Common Stock to each non-employee member of its Board of Directors, totaling 6,250 restricted shares. The Company determined that the fair value of these shares was $8.43 per share, which was the closing price of the Company’s Common Stock on the date of the grant. These shares cannot be traded earlier than the first anniversary of the grant date. The Company will ratably amortize the total non-cash compensation expense of approximately $53,000 in its selling, general and administrative expenses through May 2019. The Company, in May 2017, granted 1,000 restricted shares of its common stock to each non-employee member of its Board of Directors, totaling 5,000 restricted shares. The Company determined that the fair value of these shares was $6.17 per share, which was the closing price of the Company’s Common Stock on the date of the grant. These shares could not have been traded earlier than the first anniversary of the grant date. The Company ratably amortized the total non-cash compensation expense of approximately $30,000 in its selling, general and administrative expenses. Treasury Stock On August 9, 2017, the Company’s Board of Directors authorized the Company to repurchase up to 100,000 shares of its common stock over a period of up to twelve months (the “Repurchase Program”). On August 24, 2017, the Company announced that, pursuant to the Repurchase Program, it had adopted a written trading plan in accordance with the guidelines specified under Rule 10b5-1 under the Securities Exchange Act of 1934. A plan under Rule 10b5-1 allows the Company to repurchase shares at times when it might otherwise be prevented from doing so by securities laws or because of self-imposed trading blackout periods. Repurchases made under the plan are subject to the SEC’s regulations, as well as certain price, market, volume, and timing constraints specified in the plan. Since repurchases under the plan are subject to certain constraints, there is no guarantee as to the exact number of shares that will be repurchased under the plan. Since the inception of the Repurchase Program through June 30 2018, the Company repurchased approximately 81,000 shares of its common stock at an aggregate cost of approximately $638,000. During the period January 1, 2018 through June 30, 2018, the Company repurchased 34,000 shares of its common stock at an aggregate cost of $280,000. Additionally, in June 2018, the Company purchased 18,140 shares of its common stock in a privately negotiated transaction outside of the Repurchase Program pursuant to an additional authorization of the Company’s Board of Directors at a total cost of $150,000. The purchase price per share was equal to five percent below the average of the closing price of its common stock for the three days prior to the transaction. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 5 – FAIR VALUE MEASUREMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of June 30, 2018 and December 31, 2017, the carrying amounts reflected in the accompanying consolidated balance sheets for current assets and current liabilities approximated fair value due to the short-term nature of these accounts. Assets and liabilities measured at fair value on a non-recurring basis include goodwill and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (level 3). |
ACCOUNTS RECEIVABLE AND ALLOWAN
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 6 – ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consists of: June 30, 2018 December 31, 2017 Accounts receivable $ 10,435,000 $ 10,199,000 Allowance for doubtful accounts, sales discounts and chargebacks (247,000 ) (152,000 ) $ 10,188,000 $ 10,047,000 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | NOTE 7 – INVENTORIES Inventories consist of: June 30, 2018 December 31, 2017 Raw material $ 1,964,000 $ 1,871,000 Work in process 2,225,000 1,556,000 Finished goods 16,781,000 16,230,000 $ 20,970,000 $ 19,657,000 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2018 $ 4,447,000 Currency translation adjustment (4,000 ) Balance, June 30, 2018 $ 4,443,000 Other intangible assets were as follows: June 30, 2018 December 31, 2017 Cost Accumulated amortization Net book value Cost Accumulated amortization Net book value Other intangible assets: Customer relationships (1) $ 6,831,000 $ 1,853,000 $ 4,978,000 $ 6,836,000 $ 1,570,000 $ 5,266,000 Trademarks and trade names (1) 2,321,000 — 2,321,000 2,329,000 — 2,329,000 Trademarks and trade names (2) 200,000 25,000 175,000 200,000 19,000 181,000 Engineering drawings 330,000 188,000 142,000 330,000 175,000 155,000 Non-compete agreements (1) 236,000 225,000 11,000 239,000 210,000 29,000 Patents 1,405,000 869,000 536,000 1,405,000 832,000 573,000 Totals $ 11,323,000 $ 3,160,000 $ 8,163,000 $ 11,339,000 $ 2,806,000 $ 8,533,000 (1) A portion of these intangibles are maintained in a foreign currency, and are therefore subject to foreign exchange rate fluctuations. (2) These were previously considered an indefinite-lived intangible asset of Hy-Tech. However, as the result of a prior impairment, the Company began amortizing these intangible assets over a 15 year useful life. Amortization expense of intangible assets subject to amortization was as follows: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 $ 180,000 $ 233,000 $ 359,000 $ 439,000 The weighted average amortization period for intangible assets was as follows: June 30, 2018 December 31, 2017 Customer relationships 9.7 10.1 Trademarks and trade names 13.0 13.5 Engineering drawings 7.9 8.1 Non-compete agreements 2.8 1.8 Patents 8.4 8.8 Amortization expense for each of the next five years and thereafter is estimated to be as follows: 2019 $ 687,000 2020 663,000 2021 638,000 2022 635,000 2023 635,000 Thereafter 2,584,000 $ 5,842,000 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 9 – DEBT In October 2010, the Company entered into a Loan and Security Agreement (“Credit Agreement”) with an affiliate of Capital One, National Association (“Capital One” or the “Bank”). The Credit Agreement, as amended from time to time, among other things, provides the ability to borrow funds under a Revolver arrangement. Revolver borrowings are secured by the Company’s accounts receivable, inventory, equipment and mortgages on real property. Additionally, there is a $1,600,000 line available for capital expenditures (“Capex line”). The Credit Agreement includes a $100,000 Term Loan, as defined in the Credit Agreement. This Term Loan remains in place to enable the Company and Capital One to facilitate future term loan borrowings more efficiently and in a less costly manner. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross-guaranteed by certain other subsidiaries. The Credit Agreement expires in February 2019, unless extended by the parties. At the Company’s option, Revolver borrowings bear interest at either LIBOR (“London InterBank Offered Rate”) or the Base Rate, as the term is defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. We are subject to limitations on the number of LIBOR borrowings. Contemporaneously with the acquisition of the Jiffy business discussed in Note 2 to the consolidated financial statements, the Company entered into a Second Amended and Restated Loan and Security Agreement, (the “2017 Agreement”), with Capital One. The 2017 Agreement, among other things, amended the Credit Agreement by: (1) increasing the maximum amount it can borrow under the Revolver Commitment (as defined) to $16,000,000, subject to certain borrowing base criteria, and (2) modifying certain borrowing base criteria as well as financial and other covenants. The Company incurred $84,000 of debt issue costs in connection with this 2017 Agreement. The Company provides Capital One monthly financial statements, borrowing base certificates and certificates of compliance with various financial covenants. Should an event of default occur, the interest rate would increase by two percent per annum during the period of default, in addition to other remedies provided to Capital One. SHORT–TERM BORROWINGS Short-term borrowings can be at either LIBOR or at the Base Rate, or a combination of the two, plus the Applicable Margins. At June 30, 2018 and December 31, 2017, the Company’s short-term borrowings were $2,239,000 and $1,928,000, respectively. The Applicable LIBOR Margin at June 30, 2018 and December 31, 2017 was 1.50%, and the Applicable Base Rate Margin was 0.50% at both dates. TERM LOAN BORROWINGS The Term Loan borrowings can be at either LIBOR or at the Base Rate, or a combination of the two, plus the Applicable Margins. LIBOR borrowings at June 30, 2018 and December 31, 2017 were 1.50%. The Applicable Margin for borrowings at the Base Rate for the same timeframes was 0.50%. At June 30 2018, the Company had a $100,000 Term Loan, which is included in Current maturities of long-term debt on the consolidated balance sheet. At December 31, 2017, this obligation was included in Long-term debt, less current maturities on the consolidated balance sheet. At both June 30, 2018 and December 31, 2017 this Term Loan was at LIBOR plus the Applicable Margin. In April 2018, the Company borrowed $400,000 against the Capex line. This borrowing is to be repaid in equal installments of approximately $6,700, payable monthly, with the balance due in February 2019, unless the Credit Agreement is renewed or extended by the parties. $300,000 of this borrowing is at LIBOR plus Applicable Margin, with the balance of $100,000 at the Base Rate, or prime rate plus Applicable Margin. While the Company intends to renew or extend the Credit Agreement currently in place, this obligation at June 30, 2018, is included in Current maturities of long-term debt on its consolidated balance sheet. At June 30, 2018 and December 31, 2017, the Company, in accordance with ASU 2015-03, reduced its long-term debt by $4,000 and $6,000, respectively. June 30, 2018 December 31, 2017 Term Loan $ 100,000 $ 100,000 Capex borrowing 394,000 — Debt issue costs (4,000 ) (6,000 ) 490,000 94,000 Less current maturities 490,000 — $ — $ 94,000 |
DIVIDEND PAYMENTS
DIVIDEND PAYMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Dividends Payable and Options Adjustments [Text Block] | NOTE 10 – DIVIDEND PAYMENTS On May 8, 2018, the Company’s Board of Directors, in accordance with its dividend policy, declared a quarterly cash dividend of $0.05 per common share, which was paid on May 25, 2018, to shareholders of record at the close of business on May 21, 2018. The total amount of this dividend payment was approximately $179,000. During the six-month period ended June 30, 2018, the Company paid approximately $359,000 in dividend payments. |
BUSINESS AND SUMMARY OF ACCOU17
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2017 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). The interim financial statements contained herein should be read in conjunction with the 2017 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive (loss) income - foreign currency translation adjustment”. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc. and its subsidiaries, (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Customer concentration At June 30, 2018 and December 31, 2017, accounts receivable from The Home Depot was 35.5% and 31.0%, respectively, of our total accounts receivable. Additionally, revenue from The Home Depot during the three and six-month periods ended June 30, 2018 was 24.8% and 24.2%, for the same three and six month periods in 2017 The Home Depot revenue accounted for 29.0% and 29.8%, respectively. |
Reclassification, Policy [Policy Text Block] | The Company P&F is a Delaware corporation incorporated on April 19, 1963. The Company conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Exhaust Technologies Inc. (“ETI”) and Universal Air Tool Company Limited (“UAT”) are wholly-owned subsidiaries of Florida Pneumatic. Effective April 5, 2017, the Company purchased substantially all of the operating assets, less certain payables of Jiffy Air Tool, Inc., (“Jiffy”) through a wholly-owned subsidiary of Florida Pneumatic. See Note 2 to our consolidated financial statements for further discussion. Lastly, the business of Air Tool Service Company (“ATSCO”) operates through a wholly-owned subsidiary of Hy-Tech. Florida Pneumatic manufactures, imports, and sells pneumatic hand tools, most of which are of its own design, primarily to the retail, industrial, automotive and aerospace markets. It also markets, through its Berkley Tool division (“Berkley”), a product line which includes pipe and bolt dies, pipe taps, wrenches, vises and stands, pipe and tubing cutting equipment, hydrostatic test pumps, and replacement electrical components for a widely-used brand of pipe cutting and threading machines. Hy-Tech designs, manufactures and distributes industrial pneumatic tools, industrial gears, hydrostatic test plugs and a wide variety of parts under the brands ATP, ATSCO, OZAT, Numatx, Thaxton and Quality Gear. Industries served include power generation, petrochemical, construction, railroad, mining, ship building and fabricated metals. Hy-Tech also manufactures components, assemblies, finished product and systems for various Original Equipment Manufacturers under their own brand names. Management Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s 2017 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Revenue Recognition, Policy [Policy Text Block] | Significant Accounting Policies – Revenue Recognition Our significant accounting policies are described in "Note 1: Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2017. Our significant accounting policy relating to revenue recognition reflects the impact of the adoption of ASC 606, defined below, effective January 1, 2018. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers The Company's performance obligations underlying its core revenue sources remain substantially unchanged. Its revenue is generated through the sale of finished products, and is generally recognized at the point in time when merchandise is transferred to the customer with a fixed payment due generally within 30 to 90 days, and in an amount that considers the impacts of estimated allowances. Further, the Company has made a policy election to account for shipping and handling activities that occur after the customer has obtained control of the products as fulfillment costs rather than as an additional promised service. This election is consistent with the Company’s prior policy, and therefore the adoption of ASC 606 relating to shipping and handling activities did not have any impact on its financial results. Additionally, as the result of the adoption of ASC 606, the Company will account for certain expenses that in prior periods were accounted for as a selling expense, which will now be treated as an adjustment to gross revenue. Accordingly, during the three and six-month period ended June 30, 2018 the Company reduced its net revenue, gross margin and selling expenses by approximately $243,000 and $457,000, respectively. Additionally, the Company at June 30, 2018 has included in its allowance for doubtful accounts approximately $89,000 that would have been accounted for in its current liabilities prior to the adoption of ASC 606. There are no remaining performance obligations as of June 30, 2018. The Company analyzes its revenue as follows: Revenue generated at Florida Pneumatic. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 4,215,000 33.8 % $ 5,411,000 44.6 % Automotive 3,774,000 30.3 3,390,000 27.9 Industrial/catalog 1,422,000 11.4 1,250,000 10.3 Aerospace 2,885,000 23.1 1,862,000 15.4 Other 174,000 1.4 219,000 1.8 Total $ 12,470,000 100.0 % $ 12,132,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 8,305,000 33.6 % $ 10,764,000 47.5 % Automotive 7,710,000 31.2 7,003,000 30.9 Industrial/catalog 2,898,000 11.7 2,439,000 10.8 Aerospace 5,443,000 22.0 2,008,000 8.9 Other 378,000 1.5 427,000 1.9 Total $ 24,734,000 100.0 % $ 22,641,000 100.0 % Revenue generated at Hy-Tech. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 3,384,000 91.0 % $ 2,888,000 89.5 % Other brands 334,000 9.0 339,000 10.5 Total $ 3,718,000 100.0 % $ 3,227,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 6,460,000 89.8 % $ 5,294,000 89.2 % Other brands 736,000 10.2 640,000 10.8 Total $ 7,196,000 100.0 % $ 5,934,000 100.0 % |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements Recently Adopted In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplified the testing of goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measured a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company concluded that ASU 2017-04 is preferable to the current guidance due to efficiency, since ASU 2017-04 eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. The Company adopted ASU 2017-04 in 2017, in conjunction with its annual impairment test of goodwill for all reporting units. The adoption of ASU 2017-04 did not have a material impact on the Company’s financial results. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments . The amendments in ASU 2016-15 are intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows, with the intent of reducing diversity in practice for the eight types of cash flows identified. ASU 2016-15 is effective for public companies' fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017. The adoption of ASU 2016-15 as of January 1, 2018 had no material effect on the Company’s financial position, results of operations or cash flows. The Company adopted ASC 606 on the first day of fiscal 2018. Its underlying principle is to use a five-step analysis of transactions to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company has elected to use the modified retrospective approach. As the Company does not have any sales contracts that were not completed as of January 1, 2018, there is no adjustment required to its retained earnings. The adoption of ASC 606 will not have an effect on the Company’s cash flows. Other than discussed earlier in this Note 1, the adoption of ASC 606 did not have a material effect on the Company’s consolidated financial statements. The Company does not believe that any other recently issued accounting standard would have a material effect on its consolidated financial statements. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases currently in the process of completing its assessment of all leases and is assessing the impact the adoption of this standard will have on its consolidated financial statements and related disclosures. Th us far the Company does not believe the adoption of this standard will have a material effect on its consolidated financial statements. However, the Company will continue its evaluation of the standard update through the date of adoption. In February 2018, the FASB issued No. ASU 2018-02, Income Statement – Reporting Comprehensive Income Other Accounting Pronouncement The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries previously deferred from tax, generally eliminates U.S federal income taxes on dividends from foreign subsidiaries and creates a new provision designed to tax global intangible low-taxed income (“GILTI”). Also on December 22, 2017, the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides for a measurement period of up to one year from the enactment for companies to complete their accounting for the Act. The Company is applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. At June 30, 2018 the Company has not completed its accounting for the tax effects of the Act, but has made reasonable estimates of the effects on the re-measurement of its deferred tax assets and liabilities as well as its transition tax liability. During the six month period ended June 30, 2018, the Company made no adjustments to the provisional amounts recorded at December 31, 2017. Additionally, the Company has not yet collected and analyzed all necessary tax and earnings data of its foreign operations and therefore, the Company has also not yet completed its accounting for the income tax effects of the transition tax. The Company will continue to make and refine its calculations as additional analysis is completed. Other than the aforementioned, the Company does not believe that any other recently issued, but not yet effective accounting standard, if adopted, will have a material effect on its consolidated financial statements . |
BUSINESS AND SUMMARY OF ACCOU18
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Revenue generated at Florida Pneumatic. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 4,215,000 33.8 % $ 5,411,000 44.6 % Automotive 3,774,000 30.3 3,390,000 27.9 Industrial/catalog 1,422,000 11.4 1,250,000 10.3 Aerospace 2,885,000 23.1 1,862,000 15.4 Other 174,000 1.4 219,000 1.8 Total $ 12,470,000 100.0 % $ 12,132,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue Retail $ 8,305,000 33.6 % $ 10,764,000 47.5 % Automotive 7,710,000 31.2 7,003,000 30.9 Industrial/catalog 2,898,000 11.7 2,439,000 10.8 Aerospace 5,443,000 22.0 2,008,000 8.9 Other 378,000 1.5 427,000 1.9 Total $ 24,734,000 100.0 % $ 22,641,000 100.0 % Revenue generated at Hy-Tech. Three months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 3,384,000 91.0 % $ 2,888,000 89.5 % Other brands 334,000 9.0 339,000 10.5 Total $ 3,718,000 100.0 % $ 3,227,000 100.0 % Six months ended June 30, 2018 2017 Revenue Percent of revenue Revenue Percent of revenue ATP brands $ 6,460,000 89.8 % $ 5,294,000 89.2 % Other brands 736,000 10.2 640,000 10.8 Total $ 7,196,000 100.0 % $ 5,934,000 100.0 % |
ACQUISITION (Tables)
ACQUISITION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The initial total consideration ($5,950,000 plus $1,050,000) paid to Jiffy Seller was from funds available under the Revolver, as defined in Note 9, less certain amounts escrowed pursuant to the terms of the Agreements. Total Cash paid at closing $ 7,000,000 Less working capital adjustment (155,000 ) Fair value of contingent consideration 692,000 Total estimated purchase price $ 7,537,000 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table presents purchase price allocation: Accounts receivable $ 789,000 Inventories 1,571,000 Other current assets 45,000 Land 131,000 Building 919,000 Machinery and equipment 1,196,000 Identifiable intangible assets: Customer relationships 1,670,000 Trademarks and trade names 790,000 Non-compete agreements 17,000 Liabilities assumed (125,000 ) Goodwill 534,000 Total estimated purchase price $ 7,537,000 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | The intangible assets subject to amortization will be amortized over 15 years for tax purposes. For financial reporting purposes, useful lives have been assigned as follows: Customer relationships 15 years Trademarks and trade names Indefinite Non-compete agreements 4 years |
Business Acquisition, Pro Forma Information [Table Text Block] | Six months ended June 30, 2017 Revenue $ 30,053,000 Net Income $ 62,000 Earnings per share – Basic $ 0.02 Earnings per share – Diluted $ 0.02 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the elements of basic and diluted earnings (loss) per common share: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 305,000 $ 16,000 $ 370,000 $ (44,000 ) Denominator: Denominator for basic earnings (loss) per share - weighted average common shares outstanding 3,592,000 3,611,000 3,588,000 3,605,000 Dilutive securities (1) 90,000 109,000 126,000 — Denominator for diluted earnings (loss) per share - weighted average common shares outstanding 3,682,000 3,720,000 3,714,000 3,605,000 (1) Dilutive securities consist of “in the money” stock options. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The weighted average of anti-dilutive stock options outstanding was as follows: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Weighted average antidilutive stock options outstanding — 49,000 25,000 60,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following is a summary of the changes in outstanding options during the six-month period ended June 30, 2018: Option Shares Weighted Weighted Average Aggregate Outstanding, January 1, 2018 418,233 $ 5.17 3.8 $ 1,343,442 Granted — — Exercised (184,480 ) $ 3.99 Forfeited — — Expired — — Outstanding, June 30, 2018 233,753 $ 6.10 5.9 $ 617,693 Vested, June 30, 2018 144,753 $ 5.49 3.8 $ 470,843 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable [Table Text Block] | Option Shares Weighted Non-vested options, January 1, 2018 89,000 $ 4.41 Granted — — Vested — — Forfeited — — Non-vested options, June 30, 2018 89,000 $ 4.41 |
ACCOUNTS RECEIVABLE AND ALLOW22
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accounts receivable - net consists of: June 30, 2018 December 31, 2017 Accounts receivable $ 10,435,000 $ 10,199,000 Allowance for doubtful accounts, sales discounts and chargebacks (247,000 ) (152,000 ) $ 10,188,000 $ 10,047,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consist of: June 30, 2018 December 31, 2017 Raw material $ 1,964,000 $ 1,871,000 Work in process 2,225,000 1,556,000 Finished goods 16,781,000 16,230,000 $ 20,970,000 $ 19,657,000 |
GOODWILL AND OTHER INTANGIBLE24
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2018 $ 4,447,000 Currency translation adjustment (4,000 ) Balance, June 30, 2018 $ 4,443,000 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Other intangible assets were as follows: June 30, 2018 December 31, 2017 Cost Accumulated amortization Net book value Cost Accumulated amortization Net book value Other intangible assets: Customer relationships (1) $ 6,831,000 $ 1,853,000 $ 4,978,000 $ 6,836,000 $ 1,570,000 $ 5,266,000 Trademarks and trade names (1) 2,321,000 — 2,321,000 2,329,000 — 2,329,000 Trademarks and trade names (2) 200,000 25,000 175,000 200,000 19,000 181,000 Engineering drawings 330,000 188,000 142,000 330,000 175,000 155,000 Non-compete agreements (1) 236,000 225,000 11,000 239,000 210,000 29,000 Patents 1,405,000 869,000 536,000 1,405,000 832,000 573,000 Totals $ 11,323,000 $ 3,160,000 $ 8,163,000 $ 11,339,000 $ 2,806,000 $ 8,533,000 (1) A portion of these intangibles are maintained in a foreign currency, and are therefore subject to foreign exchange rate fluctuations. (2) These were previously considered an indefinite-lived intangible asset of Hy-Tech. However, as the result of a prior impairment, the Company began amortizing these intangible assets over a 15 year useful life. The weighted average amortization period for intangible assets was as follows: June 30, 2018 December 31, 2017 Customer relationships 9.7 10.1 Trademarks and trade names 13.0 13.5 Engineering drawings 7.9 8.1 Non-compete agreements 2.8 1.8 Patents 8.4 8.8 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Amortization expense of intangible assets subject to amortization was as follows: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 $ 180,000 $ 233,000 $ 359,000 $ 439,000 Amortization expense for each of the next five years and thereafter is estimated to be as follows: 2019 $ 687,000 2020 663,000 2021 638,000 2022 635,000 2023 635,000 Thereafter 2,584,000 $ 5,842,000 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | At June 30, 2018 and December 31, 2017, the Company, in accordance with ASU 2015-03, reduced its long-term debt by $4,000 and $6,000, respectively. June 30, 2018 December 31, 2017 Term Loan $ 100,000 $ 100,000 Capex borrowing 394,000 — Debt issue costs (4,000 ) (6,000 ) 490,000 94,000 Less current maturities 490,000 — $ — $ 94,000 |
BUSINESS AND SUMMARY OF ACCOU26
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 16,188,000 | $ 15,359,000 | $ 31,930,000 | $ 28,575,000 |
Florida Pneumatic [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 12,470,000 | $ 12,132,000 | $ 24,734,000 | $ 22,641,000 |
Percentage Of Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Florida Pneumatic [Member] | Retail [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 4,215,000 | $ 5,411,000 | $ 8,305,000 | $ 10,764,000 |
Percentage Of Revenue | 33.80% | 44.60% | 33.60% | 47.50% |
Florida Pneumatic [Member] | Automotive [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,774,000 | $ 3,390,000 | $ 7,710,000 | $ 7,003,000 |
Percentage Of Revenue | 30.30% | 27.90% | 31.20% | 30.90% |
Florida Pneumatic [Member] | Industrial/catalog [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 1,422,000 | $ 1,250,000 | $ 2,898,000 | $ 2,439,000 |
Percentage Of Revenue | 11.40% | 10.30% | 11.70% | 10.80% |
Florida Pneumatic [Member] | Aerospace [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 2,885,000 | $ 1,862,000 | $ 5,443,000 | $ 2,008,000 |
Percentage Of Revenue | 23.10% | 15.40% | 22.00% | 8.90% |
Florida Pneumatic [Member] | Other brands [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 174,000 | $ 219,000 | $ 378,000 | $ 427,000 |
Percentage Of Revenue | 1.40% | 1.80% | 1.50% | 1.90% |
Hy-Tech [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,718,000 | $ 3,227,000 | $ 7,196,000 | $ 5,934,000 |
Percentage Of Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Hy-Tech [Member] | Other brands [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 334,000 | $ 339,000 | $ 736,000 | $ 640,000 |
Percentage Of Revenue | 9.00% | 10.50% | 10.20% | 10.80% |
Hy-Tech [Member] | ATP brands [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,384,000 | $ 2,888,000 | $ 6,460,000 | $ 5,294,000 |
Percentage Of Revenue | 91.00% | 89.50% | 89.80% | 89.20% |
BUSINESS AND SUMMARY OF ACCOU27
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Summary Of Accounting Policies [Line Items] | ||||||
Selling Expense | $ 243,000 | $ 457,000 | ||||
Prior Period Reclassification Adjustment | $ 89,000 | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||||
Scenario, Plan [Member] | ||||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||||
Accounts Receivable [Member] | Home Depot [Member] | ||||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||||
Concentration Risk, Percentage | 35.50% | 31.00% | ||||
Sales Revenue, Net [Member] | Home Depot [Member] | ||||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||||
Concentration Risk, Percentage | 24.80% | 29.00% | 24.20% | 29.80% |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||
Cash paid at closing | $ 0 | $ 6,845,000 |
Jiffy Air Tool [Member] | ||
Business Acquisition [Line Items] | ||
Cash paid at closing | 7,000,000 | |
Less working capital adjustment | (155,000) | |
Fair value of contingent consideration | 692,000 | |
Total estimated purchase price | $ 7,537,000 |
ACQUISITION (Details 1)
ACQUISITION (Details 1) - Jiffy Air Tool [Member] | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | |
Accounts receivable | $ 789,000 |
Inventories | 1,571,000 |
Other current assets | 45,000 |
Land | 131,000 |
Building | 919,000 |
Machinery and equipment | 1,196,000 |
Identifiable intangible assets: | |
Liabilities assumed | (125,000) |
Goodwill | 534,000 |
Total estimated purchase price | 7,537,000 |
Trademarks and Trade Names [Member] | |
Identifiable intangible assets: | |
Trademarks and trade names | 790,000 |
Customer Relationships [Member] | |
Identifiable intangible assets: | |
Customer relationships | 1,670,000 |
Non-compete Agreements [Member] | |
Identifiable intangible assets: | |
Non-compete agreements | $ 17,000 |
ACQUISITION (Details 2)
ACQUISITION (Details 2) | Apr. 05, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Jiffy Air Tool Inc [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | ||
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 8 months 12 days | 10 years 1 month 6 days | |
Customer Relationships [Member] | Jiffy Air Tool Inc [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | ||
Non-compete agreements [Member] | Jiffy Air Tool Inc [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
ACQUISITION (Details 3)
ACQUISITION (Details 3) | 6 Months Ended |
Jun. 30, 2017USD ($)$ / shares | |
Revenue | $ | $ 30,053,000 |
Net Income | $ | $ 62,000 |
Earnings per share - Basic | $ / shares | $ 0.02 |
Earnings per share - Diluted | $ / shares | $ 0.02 |
ACQUISITION (Details Textual)
ACQUISITION (Details Textual) - USD ($) | Apr. 05, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 0 | $ 6,845,000 | |
Contingent Consideration Classified as Equity, Fair Value Disclosure | $ 907,000 | ||
Jiffy Air Tool Inc [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Contingent Consideration, Liability | $ 1,000,000 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | $ 5,950,000 | ||
Payments to Acquire Businesses, Gross | 5,950,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 1,050,000 | ||
Working Capital Adjustment | 155,000 | ||
Jiffy Air Tool Inc [Member] | Real Property [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | 1,050,000 | ||
Jiffy Air Tool Inc [Member] | Current Assets [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 5,950,000 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Numerator for basic and diluted earnings (loss) per common share: | |||||
Net income (loss) | $ 305,000 | $ 16,000 | $ 370,000 | $ (44,000) | |
Denominator: | |||||
Denominator for basic earnings (loss) per share - weighted average common shares outstanding | 3,592,000 | 3,611,000 | 3,588,000 | 3,605,000 | |
Dilutive securities | [1] | 90,000 | 109,000 | 126,000 | 0 |
Denominator for diluted earnings (loss) per share - weighted average common shares outstanding | 3,682,000 | 3,720,000 | 3,714,000 | 3,605,000 | |
[1] | Dilutive securities consist of “in the money” stock options. |
EARNINGS (LOSS) PER SHARE (De34
EARNINGS (LOSS) PER SHARE (Details 1) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average antidilutive stock options outstanding | 0 | 49,000 | 25,000 | 60,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - Employee Stock Option [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding | 418,233 | |
Number of Shares, Granted | 0 | |
Number of Shares, Exercised | (184,480) | |
Number of Shares, Forfeited | 0 | |
Number of Shares, Expired | 0 | |
Number of Shares, Outstanding | 233,753 | 418,233 |
Number of Shares, Vested | 144,753 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | $ 5.17 | |
Weighted Average Exercise Price per share, Granted (in dollars per share) | 0 | |
Weighted Average Exercise Price per share, Exercised (in dollars per share) | 3.99 | |
Weighted Average Exercise Price per share, Forfeited (in dollars per share) | 0 | |
Weighted Average Exercise Price per share, Expired (in dollars per share) | 0 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | 6.10 | $ 5.17 |
Weighted Average Exercise Price per share, Vested (in dollars per share) | $ 5.49 | |
Weighted Average Remaining ContractualLife, Outstanding (Years) | 5 years 10 months 24 days | 3 years 9 months 18 days |
Weighted Average Remaining Contractual Life, Vested (Years) | 3 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding and Vested (in dollars) | $ 617,693 | $ 1,343,442 |
Aggregate Intrinsic Value, Vested (in dollars) | $ 470,843 |
STOCK-BASED COMPENSATION (Det36
STOCK-BASED COMPENSATION (Details 1) - Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option Shares, Nonvested shares, beginning of year | shares | 89,000 |
Option Shares, Granted | shares | 0 |
Option Shares, Vested | shares | 0 |
Option Shares, Forfeited | shares | 0 |
Option Shares, Nonvested shares, end of year | shares | 89,000 |
Weighted Average Grant-Date Fair Value, Non-vested shares, beginning of year (in dollars per share) | $ / shares | $ 4.41 |
Weighted Average Grant-Date Fair Value, Granted (in dollars per share) | $ / shares | 0 |
Weighted Average Grant-Date Fair Value, Vested (in dollars per share) | $ / shares | 0 |
Weighted Average Grant-Date Fair Value, Forfeited (in dollars per share) | $ / shares | 0 |
Weighted Average Grant-Date Fair Value, Non-vested shares, end of year (in dollars per share) | $ / shares | $ 4.41 |
STOCK-BASED COMPENSATION (Det37
STOCK-BASED COMPENSATION (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | |||
May 31, 2018 | May 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 09, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 79,437 | ||||
Restricted stock-based compensation (in dollars) | $ 18,000 | $ 22,000 | |||
Stock Repurchased During Period, Value | $ 430,000 | ||||
Treasury Stock, Shares, Acquired | 18,140 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 150,000 | ||||
Common Stock Repurchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock Repurchased During Period, Shares | 81,000 | ||||
Stock Repurchased During Period, Value | $ 638,000 | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 100,000 | ||||
Treasury Stock, Shares, Acquired | 34,000 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 280,000 | ||||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,250 | 1,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 6,250 | 5,000 | |||
Restricted stock-based compensation (in dollars) | $ 53,000 | $ 30,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 8.43 | $ 6.17 | |||
Incentive Stock Option Plan 2002 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 49,500 | ||||
Incentive Stock Option Plan 2012 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 184,253 |
ACCOUNTS RECEIVABLE AND ALLOW38
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 10,435,000 | $ 10,199,000 |
Allowance for doubtful accounts, sales discounts and chargebacks | (247,000) | (152,000) |
Accounts Receivable, Net, Current, Total | $ 10,188,000 | $ 10,047,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Raw material | $ 1,964,000 | $ 1,871,000 |
Work in process | 2,225,000 | 1,556,000 |
Finished goods | 16,781,000 | 16,230,000 |
Inventory net | $ 20,970,000 | $ 19,657,000 |
GOODWILL AND OTHER INTANGIBLE40
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Balance, beginning | $ 4,447,000 |
Currency translation adjustment | (4,000) |
Balance, ending | $ 4,443,000 |
GOODWILL AND OTHER INTANGIBLE41
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | |
Other intangible assets: | |||
Cost | $ 11,323,000 | $ 11,339,000 | |
Accumulated amortization | 3,160,000 | 2,806,000 | |
Net book value | 8,163,000 | 8,533,000 | |
Customer relationships [Member] | |||
Other intangible assets: | |||
Cost | [1] | 6,831,000 | 6,836,000 |
Accumulated amortization | [1] | 1,853,000 | 1,570,000 |
Net book value | [1] | 4,978,000 | 5,266,000 |
Trademarks and trade names one [Member] | |||
Other intangible assets: | |||
Cost | [1] | 2,321,000 | 2,329,000 |
Accumulated amortization | [1] | 0 | 0 |
Net book value | [1] | 2,321,000 | 2,329,000 |
Trademarks And Trade Names Two [Member] | |||
Other intangible assets: | |||
Cost | [2] | 200,000 | 200,000 |
Accumulated amortization | [2] | 25,000 | 19,000 |
Net book value | [2] | 175,000 | 181,000 |
Engineering drawings [Member] | |||
Other intangible assets: | |||
Cost | 330,000 | 330,000 | |
Accumulated amortization | 188,000 | 175,000 | |
Net book value | 142,000 | 155,000 | |
Non-compete agreements [Member] | |||
Other intangible assets: | |||
Cost | [1] | 236,000 | 239,000 |
Accumulated amortization | [1] | 225,000 | 210,000 |
Net book value | [1] | 11,000 | 29,000 |
Patents [Member] | |||
Other intangible assets: | |||
Cost | 1,405,000 | 1,405,000 | |
Accumulated amortization | 869,000 | 832,000 | |
Net book value | $ 536,000 | $ 573,000 | |
[1] | A portion of these intangibles are maintained in a foreign currency, and are therefore subject to foreign exchange rate fluctuations. | ||
[2] | These were previously considered an indefinite-lived intangible asset of Hy-Tech. However, as the result of a prior impairment, the Company began amortizing these intangible assets over a 15 year useful life. |
GOODWILL AND OTHER INTANGIBLE42
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 180,000 | $ 233,000 | $ 359,000 | $ 439,000 |
GOODWILL AND OTHER INTANGIBLE43
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Customer relationships [Member] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 8 months 12 days | 10 years 1 month 6 days |
Trademarks and trade names one [Member] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | 13 years 6 months |
Engineering drawings [Member] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years 10 months 24 days | 8 years 1 month 6 days |
Non-compete agreements [Member] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 9 months 18 days | 1 year 9 months 18 days |
Patents [Member] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years 4 months 24 days | 8 years 9 months 18 days |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 4) | Jun. 30, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2,019 | $ 687,000 |
2,020 | 663,000 |
2,021 | 638,000 |
2,022 | 635,000 |
2,023 | 635,000 |
Thereafter | 2,584,000 |
Total | $ 5,842,000 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textual) | 6 Months Ended |
Jun. 30, 2018 | |
Trademarks and Trade Names [Member] | |
Goodwill [Line Items] | |
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years |
DEBT (Details)
DEBT (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Long-term Debt | $ 490,000 | $ 94,000 |
Debt issue costs | (4,000) | (6,000) |
Less current maturities | 490,000 | 0 |
Long-term Debt, Excluding Current Maturities | 0 | 94,000 |
Term Loan [Member] | ||
Long-term Debt | 100,000 | 100,000 |
Less current maturities | 100,000 | |
Capex Borrowing [Member] | ||
Long-term Debt | $ 394,000 | $ 0 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Apr. 05, 2017 | |
Debt Instrument [Line Items] | |||||
Debt Issuance Costs, Net | $ 4,000 | $ 6,000 | |||
Short-term Debt | 2,239,000 | 1,928,000 | |||
Payments of Debt Issuance Costs | 15,000 | $ 50,000 | |||
Long-term Debt, Current Maturities | $ 490,000 | $ 0 | |||
Short-term Debt [Member] | Base Rate borrowing [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | 0.50% | |||
Short-term Debt [Member] | LIBOR Margin [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | 0.50% | |||
Term Loan A [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Current Maturities | $ 100,000 | ||||
Term Loan A [Member] | Nationwide Industries Inc [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Periodic Payment, Principal | 100,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000,000 | ||||
Payments of Debt Issuance Costs | 84,000 | ||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | $ 1,600,000 | ||||
Capex Borrowing [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 400,000 | ||||
Debt Instrument, Periodic Payment | $ 6,700 | ||||
Debt Instrument, Maturity Date | Feb. 28, 2019 | ||||
Capex Borrowing 300000 Principal [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 300,000 | ||||
Debt Instrument, Interest Rate Terms | LIBOR plus Applicable Margin | ||||
Capex Borrowing 100000 Principal [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 100,000 | ||||
Debt Instrument, Interest Rate Terms | Base Rate, or prime rate plus Applicable Margin |
DIVIDEND PAYMENTS (Details Text
DIVIDEND PAYMENTS (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | May 08, 2018 | |
Dividends Payable, Amount Per Share | $ 0.05 | |
Dividends Payable, Current | $ 179,000 | |
Payments of Ordinary Dividends, Common Stock | $ 359,000 |