Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 08, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-5332 | |
Entity Registrant Name | P&F INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-1657413 | |
Entity Address, Address Line One | 445 Broadhollow Road, Suite 100 | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | 631 | |
Local Phone Number | 694-9800 | |
Title of 12(b) Security | Class A common stock, $1.00 par value | |
Trading Symbol | PFIN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,194,699 | |
Entity Central Index Key | 0000075340 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash | $ 657,000 | $ 667,000 |
Accounts receivable - net | 9,885,000 | 7,370,000 |
Inventories | 21,096,000 | 24,491,000 |
Prepaid expenses and other current assets | 1,018,000 | 2,753,000 |
TOTAL CURRENT ASSETS | 32,656,000 | 35,281,000 |
PROPERTY AND EQUIPMENT | ||
Land | 507,000 | 507,000 |
Buildings and improvements | 4,007,000 | 4,087,000 |
Machinery and equipment | 29,445,000 | 28,057,000 |
Property and Equipment, Gross | 33,959,000 | 32,651,000 |
Less accumulated depreciation and amortization | 23,951,000 | 23,288,000 |
NET PROPERTY AND EQUIPMENT | 10,008,000 | 9,363,000 |
GOODWILL | 4,829,000 | 4,822,000 |
OTHER INTANGIBLE ASSETS - net | 4,991,000 | 5,326,000 |
DEFERRED INCOME TAXES - net | 431,000 | 629,000 |
RIGHT-OF-USE ASSETS - OPERATING LEASES | 5,103,000 | 5,521,000 |
OTHER ASSETS - net | 75,000 | 62,000 |
TOTAL ASSETS | 58,093,000 | 61,004,000 |
CURRENT LIABILITIES | ||
Short-term borrowings | 5,340,000 | 7,570,000 |
Accounts payable | 1,958,000 | 3,094,000 |
Accrued compensation and benefits | 1,500,000 | 1,757,000 |
Accrued other liabilities | 1,796,000 | 1,002,000 |
Current leased liabilities - operating leases | 817,000 | 1,020,000 |
TOTAL CURRENT LIABILITIES | 11,411,000 | 14,443,000 |
Noncurrent leased liabilities - operating leases | 4,317,000 | 4,535,000 |
Other liabilities | 56,000 | 70,000 |
TOTAL LIABILITIES | 15,784,000 | 19,048,000 |
SHAREHOLDERS' EQUITY | ||
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued | ||
Additional paid-in capital | 14,276,000 | 14,246,000 |
Retained earnings | 34,505,000 | 34,251,000 |
Treasury stock, at cost - 1,273,000 shares at June 30, 2023, and December 31, 2022 | (10,213,000) | (10,213,000) |
Accumulated other comprehensive loss | (726,000) | (795,000) |
TOTAL SHAREHOLDERS' EQUITY | 42,309,000 | 41,956,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 58,093,000 | 61,004,000 |
Class A Common Stock | ||
SHAREHOLDERS' EQUITY | ||
Common stock | $ 4,467,000 | $ 4,467,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
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 | 1,273,000 | 1,273,000 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 7,000,000 | 7,000,000 |
Common stock, shares issued | 4,467,000 | 4,467,000 |
Class B Common Stock | ||
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 (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
Net revenue | $ 16,163,000 | $ 17,810,000 | $ 31,906,000 | $ 31,831,000 |
Cost of sales | 10,328,000 | 12,174,000 | 20,328,000 | 21,684,000 |
Gross profit | 5,835,000 | 5,636,000 | 11,578,000 | 10,147,000 |
Selling, general and administrative expenses | 5,368,000 | 5,479,000 | 10,543,000 | 10,652,000 |
Operating income (loss) | 467,000 | 157,000 | 1,035,000 | (505,000) |
Other (expense) income | (4,000) | (16,000) | 31,000 | (16,000) |
Interest expense | (107,000) | (86,000) | (216,000) | (138,000) |
Income (loss) before income tax | 356,000 | 55,000 | 850,000 | (659,000) |
Income tax (expense) benefit | (119,000) | (76,000) | (276,000) | 20,000 |
Net income (loss) | $ 237,000 | $ (21,000) | $ 574,000 | $ (639,000) |
Basic income (loss) per share | $ 0.07 | $ (0.01) | $ 0.18 | $ (0.20) |
Diluted income (loss) per share | $ 0.07 | $ (0.01) | $ 0.18 | $ (0.20) |
Weighted average common shares outstanding: | ||||
Basic | 3,195,000 | 3,185,000 | 3,195,000 | 3,177,000 |
Diluted | 3,195,000 | 3,185,000 | 3,195,000 | 3,177,000 |
Net income (loss) | $ 237,000 | $ (21,000) | $ 574,000 | $ (639,000) |
Other comprehensive income (loss) - foreign currency translation adjustment | 35,000 | (146,000) | 69,000 | (196,000) |
Total comprehensive income (loss) | $ 272,000 | $ (167,000) | $ 643,000 | $ (835,000) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Class A Common Stock Common Stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total |
Balance at Dec. 31, 2021 | $ 4,453,000 | $ 14,167,000 | $ 36,046,000 | $ (10,213,000) | $ (613,000) | $ 43,840,000 |
Balance (in shares) at Dec. 31, 2021 | 4,453,000 | |||||
Treasury stock (in shares) at Dec. 31, 2021 | (1,273,000) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (639,000) | (639,000) | ||||
Restricted common stock-based compensation | $ 7,000 | 13,000 | 20,000 | |||
Restricted common stock-based compensation (in shares) | 7,000 | |||||
Exercise of Stock Options | $ 7,000 | 33,000 | 40,000 | |||
Exercise of Stock Options (in shares) | 7,000 | |||||
Stock - based compensation | 1,000 | 1,000 | ||||
Foreign currency translation adjustment | (196,000) | (196,000) | ||||
Treasury stock (in shares) at Jun. 30, 2022 | (1,273,000) | |||||
Balance at Jun. 30, 2022 | $ 4,467,000 | 14,214,000 | 35,407,000 | $ (10,213,000) | (809,000) | 43,066,000 |
Balance (in shares) at Jun. 30, 2022 | 4,467,000 | |||||
Balance at Mar. 31, 2022 | $ 4,453,000 | 14,176,000 | 35,428,000 | $ (10,213,000) | (663,000) | 43,181,000 |
Balance (in shares) at Mar. 31, 2022 | 4,453,000 | |||||
Treasury stock (in shares) at Mar. 31, 2022 | (1,273,000) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (21,000) | (21,000) | ||||
Restricted common stock-based compensation | $ 7,000 | 5,000 | 12,000 | |||
Restricted common stock-based compensation (in shares) | 7,000 | |||||
Exercise of Stock Options | $ 7,000 | 33,000 | 40,000 | |||
Exercise of Stock Options (in shares) | 7,000 | |||||
Foreign currency translation adjustment | (146,000) | (146,000) | ||||
Treasury stock (in shares) at Jun. 30, 2022 | (1,273,000) | |||||
Balance at Jun. 30, 2022 | $ 4,467,000 | 14,214,000 | 35,407,000 | $ (10,213,000) | (809,000) | 43,066,000 |
Balance (in shares) at Jun. 30, 2022 | 4,467,000 | |||||
Balance at Dec. 31, 2022 | $ 4,467,000 | 14,246,000 | 34,251,000 | $ (10,213,000) | (795,000) | $ 41,956,000 |
Treasury stock (in shares) at Dec. 31, 2022 | (1,273,000) | 1,273,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 574,000 | $ 574,000 | ||||
Restricted common stock-based compensation | 14,000 | 14,000 | ||||
Stock - based compensation | 16,000 | 16,000 | ||||
Dividends | (320,000) | (320,000) | ||||
Foreign currency translation adjustment | 69,000 | $ 69,000 | ||||
Treasury stock (in shares) at Jun. 30, 2023 | (1,273,000) | 1,273,000 | ||||
Balance at Jun. 30, 2023 | $ 4,467,000 | 14,276,000 | 34,505,000 | $ (10,213,000) | (726,000) | $ 42,309,000 |
Balance (in shares) at Jun. 30, 2023 | 4,467,000 | |||||
Balance at Mar. 31, 2023 | $ 4,467,000 | 14,263,000 | 34,428,000 | $ (10,213,000) | (761,000) | 42,184,000 |
Balance (in shares) at Mar. 31, 2023 | 4,467,000 | |||||
Treasury stock (in shares) at Mar. 31, 2023 | (1,273,000) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 237,000 | 237,000 | ||||
Restricted common stock-based compensation | 5,000 | 5,000 | ||||
Stock - based compensation | 8,000 | 8,000 | ||||
Dividends | (160,000) | (160,000) | ||||
Foreign currency translation adjustment | 35,000 | $ 35,000 | ||||
Treasury stock (in shares) at Jun. 30, 2023 | (1,273,000) | 1,273,000 | ||||
Balance at Jun. 30, 2023 | $ 4,467,000 | $ 14,276,000 | $ 34,505,000 | $ (10,213,000) | $ (726,000) | $ 42,309,000 |
Balance (in shares) at Jun. 30, 2023 | 4,467,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 574,000 | $ (639,000) |
Non-cash and other charges: | ||
Depreciation | 1,020,000 | 881,000 |
Amortization of other intangible assets | 346,000 | 341,000 |
Amortization of operating lease assets | 474,000 | 471,000 |
Amortization of debt issue costs | 21,000 | 8,000 |
Amortization of consideration payable to a customer | 135,000 | |
Provision for losses on accounts receivable | 47,000 | 42,000 |
Stock-based compensation | 16,000 | 1,000 |
Stock-based compensation-options exercised | 38,000 | |
Restricted stock-based compensation | 14,000 | 19,000 |
Deferred income taxes | 287,000 | (20,000) |
Gain on disposal of fixed assets | (16,000) | (5,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,547,000) | (2,276,000) |
Inventories | 3,445,000 | (353,000) |
Prepaid expenses and other current assets | 1,735,000 | 1,302,000 |
Accounts payable | (1,138,000) | (778,000) |
Accrued compensation and benefits | (261,000) | 681,000 |
Accrued other liabilities and other current liabilities | 708,000 | (524,000) |
Operating lease liabilities | (477,000) | (461,000) |
Other liabilities | (14,000) | (17,000) |
Total adjustments | 3,660,000 | (515,000) |
Net cash provided by (used in) operating activities | 4,234,000 | (1,154,000) |
Cash Flows from Investing Activities: | ||
Capital expenditures | (1,682,000) | (923,000) |
Proceeds from the sale of fixed assets | 34,000 | |
Purchase of net assets of the Jackson Gear Company business | (2,300,000) | |
Net cash used in investing activities | (1,648,000) | (3,223,000) |
Cash Flows from Financing Activities: | ||
Dividend payments | (320,000) | |
Net (repayments on) proceeds from short-term borrowings | (2,230,000) | 4,304,000 |
Proceeds from exercise of stock options | 2,000 | |
Bank financing costs | (35,000) | |
Net cash (used in) provided by financing activities | (2,585,000) | 4,306,000 |
Effect of exchange rate changes on cash | (11,000) | (37,000) |
Net decrease in cash | (10,000) | (108,000) |
Cash at beginning of period | 667,000 | 539,000 |
Cash at end of period | 657,000 | 431,000 |
Cash paid for: | ||
Taxes | 10,000 | 124,000 |
Interest | $ 255,000 | 114,000 |
Non-cash information: | ||
Right of Use ("ROU") assets recognized for new operating lease liabilities | $ 987,000 |
BUSINESS AND SUMMARY OF ACCOUNT
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | 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 (“US 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 consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring 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, 2022, 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, 2022 (“2022 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2022 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 income (loss) - 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. The Company P&F, a Delaware corporation incorporated in 1963, 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”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools and related products of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to generally offer a better power-to-weight ratio than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production personnel, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) The Company - Continued Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $62,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEMs”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold directly to OEMs, end-users and gearbox repair companies. PTG works directly with its customers’ engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, we acquired substantially all the non-real estate assets comprising the business of Jackson Gear Company (“JGC”), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. This business was consolidated into PTG and provides added market exposure into the larger gears market. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. COVID-19 The adverse effects of the COVID-19 global pandemic on the Company’s results of operations and financial condition during the three and six-month periods ended June 30, 2023, have decreased significantly, compared to the adverse effects the pandemic caused during the prior two years. The Company, however, continues to encounter intermittent supply-chain issues, most notably shipping and receiving delays of inventory from its Asian suppliers, in turn causing shortages of inventory. While the negative effects that the Company was encountering during the COVID-19 pandemic in general have eased, it is difficult for the Company to be certain that the inventory issue discussed above is in fact COVID-19 related. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. As of June 30, 2023, the Company had borrowing availability on its bank facility of $9,324,000. The Company is not in default on any bank covenant and believes its relationship with the bank is good. See Note 8 – Debt, for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Customer Concentration The Company had one customer that accounted for 24.7% and 24.3% of its consolidated accounts receivable at June 30, 2023, and December 31, 2022, respectively. Further, this customer accounted for 18.1% and 27.1% of the Company’s consolidated revenue during the three-month periods ended June 30, 2023, and 2022, respectively, and 17.1% and 24.6% for the six months ended June 30, 2023, and 2022, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue during these periods. Management Estimates The preparation of financial statements and related disclosures in conformity with US 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, income taxes, deferred taxes. Descriptions of these policies are discussed in the Company’s 2022 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 adjusts 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 The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” to the Company’s 2022 Form 10-K. NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification No. 842, Leases As permitted under ASC Topic 842, if the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases during the three-month period ended June 30, 2023. The Company considers any options to extend the term of a lease when measuring the right-of-use lease asset. For the three and six-month periods ended June 30, 2023, the Company had $237,000 and $474,000, respectively, in operating lease expense, and $240,000 and $471,000, respectively, for the same three and six-month periods in 2022. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities: 2023 (excluding the six months ended June 30, 2023) $ 369,000 2024 923,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,727,000 Total operating lease payments 6,245,000 Less imputed interest (1,111,000) Total operating lease liabilities $ 5,134,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.02 % NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition The Company’s revenue recognition policies are detailed in its 2022 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three and six-month periods ended June 30, 2023, and 2022. Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,503,000 32.3 % $ 3,853,000 30.4 % $ (350,000) (9.1) % Retail 2,920,000 26.9 4,826,000 38.1 (1,906,000) (39.5) Industrial 1,337,000 12.3 1,705,000 13.5 (368,000) (21.6) Aerospace 2,963,000 27.3 2,179,000 17.2 784,000 36.0 Other 122,000 1.2 103,000 0.8 19,000 18.4 Total $ 10,845,000 100.0 % $ 12,666,000 100.0 % $ (1,821,000) (14.4) % Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 6,762,000 32.6 % $ 7,734,000 33.7 % $ (972,000) (12.6) % Retail 5,470,000 26.3 7,845,000 34.2 (2,375,000) (30.3) Industrial 2,914,000 14.0 3,111,000 13.6 (197,000) (6.3) Aerospace 5,374,000 25.9 3,994,000 17.4 1,380,000 34.6 Other 249,000 1.2 263,000 1.1 (14,000) (5.3) Total $ 20,769,000 100.0 % $ 22,947,000 100.0 % $ (2,178,000) (9.5) % Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,676,000 50.3 % $ 2,542,000 49.4 % $ 134,000 5.3 % ATP 808,000 15.2 945,000 18.4 (137,000) (14.5) PTG 1,742,000 32.8 1,583,000 30.8 159,000 10.0 Other 92,000 1.7 74,000 1.4 18,000 24.3 Total $ 5,318,000 100.0 % $ 5,144,000 100.0 % $ 174,000 3.4 % NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition – Continued Hy-Tech Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,749,000 51.6 % $ 4,507,000 50.7 % $ 1,242,000 27.6 % ATP 1,505,000 13.5 1,687,000 19.0 (182,000) (10.8) PTG 3,674,000 33.0 2,522,000 28.4 1,152,000 45.7 Other 209,000 1.9 168,000 1.9 41,000 24.4 Total $ 11,137,000 100.0 % $ 8,884,000 100.0 % $ 2,253,000 25.4 % Recently Adopted Accounting Pronouncements During the three-month period ended June 30, 2023, there were no accounting pronouncements or other authoritative guidance issued or that became effective, that had, or is expected to have, a material impact on the Company’s consolidated financial statements. |
EARNINGS _(LOSS) PER SHARE
EARNINGS /(LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS /(LOSS) PER SHARE | |
EARNINGS /(LOSS) PER SHARE | NOTE 2 - EARNINGS /(LOSS) PER SHARE Basic earnings (loss) per common share is based only on the weighted average number of shares of Common Stock outstanding for the periods presented. 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 anti-dilutive. 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) income per common share: Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Numerator for basic and diluted (loss) income per common share: Net income (loss) $ 237,000 $ (21,000) $ 574,000 $ (639,000) Denominator: Denominator for basic income (loss) per share - weighted average common shares outstanding 3,195,000 3,185,000 3,195,000 3,177,000 Dilutive securities (1) — — — — Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,195,000 3,185,000 3,195,000 3,177,000 (1) Dilutive securities consist of the “in the money” stock options. There were no “in the money” stock options at June 30, 2023. In the event of a loss, options are considered anti-dilutive and would therefore not be included in the calculation of diluted loss per share. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 3 – STOCK-BASED COMPENSATION There were no options or shares of the Company’s common stock granted or issued during the three-month period ended June 30, 2023. The table below presents stock options for the six-month period ended June 30, 2023. Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2023 127,600 $ 7.41 3.3 $ — Forfeited (5,000) — — — Expired (43,850) — — — Outstanding, June 30, 2023 78,750 7.15 4.2 $ — Vested, June 30, 2023 78,750 7.15 4.2 $ — Restricted Stock On May 25, 2022, the Company 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 $5.50 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 $34,000 to selling, general and administrative expenses during the period beginning May 2022 through May 2023. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 4 – 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 instrument’s valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of June 30, 2023, and December 31, 2022, 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, 2023 | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 5 – ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consists of: June 30, 2023 December 31, 2022 Accounts receivable $ 10,245,000 $ 7,683,000 Allowance for doubtful accounts, sales discounts and chargebacks (360,000) (313,000) $ 9,885,000 $ 7,370,000 Net accounts receivable at January 1, 2022, was $ 7,550,000. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 6 – INVENTORIES Inventories consist of: June 30, 2023 December 31, 2022 Raw material $ 1,579,000 $ 2,000,000 Work in process 2,115,000 2,242,000 Finished goods 17,402,000 20,249,000 $ 21,096,000 $ 24,491,000 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2023 $ 4,822,000 Currency translation adjustment 7,000 Balance, June 30, 2023 $ 4,829,000 Other intangible assets June 30, 2023 December 31, 2022 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,932,000 $ 4,395,000 $ 2,537,000 $ 6,921,000 $ 4,099,000 $ 2,822,000 Trademarks and trade names (1) 2,174,000 — 2,174,000 2,166,000 — 2,166,000 Trademarks and trade names 200,000 93,000 107,000 200,000 86,000 114,000 Engineering drawings 330,000 276,000 54,000 330,000 268,000 62,000 Non-compete agreements (1) 327,000 319,000 8,000 322,000 303,000 19,000 Patents 1,286,000 1,175,000 111,000 1,286,000 1,143,000 143,000 Totals $ 11,249,000 $ 6,258,000 $ 4,991,000 $ 11,225,000 $ 5,899,000 $ 5,326,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS – (Continued) Amortization expense of intangible assets subject to amortization was as follows: Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 $ 167,000 $ 164,000 $ 346,000 $ 341,000 Amortization expense for the balance of 2023, and for each of the next four years and thereafter is estimated to be as follows: July 1 through December 31, 2023 $ 341,000 2024 640,000 2025 611,000 2026 412,000 2027 198,000 Thereafter 615,000 $ 2,817,000 The weighted average amortization period for intangible assets was as follows: June 30, 2023 December 31, 2022 Customer relationships 5.6 5.9 Trademarks and trade names 8.0 8.5 Engineering drawings 3.6 4.1 Non-compete agreements 0.5 1.0 Patents 4.2 4.1 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
DEBT | |
DEBT | NOTE 8 – 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 and restated in April 2017, and further amended from time-to-time, among other things, provides the ability to borrow funds under a $16,000,000 revolver line (“Revolver”), subject to certain borrowing base criteria. Revolver borrowings are secured by the Company’s accounts receivable, inventory, equipment, and real property, among other things. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross guaranteed by certain other subsidiaries. On March 24, 2023, the Company and the Bank entered into Amendment No. 11 (“Amendment 11”) to the Credit Agreement, which among other things: ● extended the expiration date to February 8, 2027; and ● eliminated a $1,600,000 Capex Loan line of credit. Under the terms of Amendment No. 10, to the Credit Agreement, dated April 12, 2022, the Company began applying Secured Overnight Financing Rate, (“SOFR”) SOFR rates instead of the London Inter-Bank Offered Rate, (LIBOR). The Company will continue to be subject to the number of SOFR borrowings. The change from LIBOR to SOFR did not have a significant effect on the Company’s consolidated financial statements. At June 30, 2023, short-term or Revolver borrowing was $5,340,000, compared to $7,570,000 at December 31, 2022. The average balance of short-term borrowings during the three and six-month periods ended June 30, 2023, were $7,060,000 and $7,173,000, respectively, compared to $11,544,000 and $10,855,000, respectively, for the same periods in 2022. NOTE 8 – DEBT – (Continued) The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, it is required to deliver monthly financial statements 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. During the three and six-month periods ended June 30, 2023, and at December 31, 2022, Applicable Margin Rates, as defined in the Credit Agreement were 2.10% and 1.10%, respectively for SOFR and Base Rate borrowings. Additionally, at June 30, 2023, and December 31, 2022, there was approximately $9,324,000 and $7,678,000, respectively, available to the Company under its Revolver arrangement. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENT On August 8, 2023, the Company’s Board of Directors declared a quarterly cash dividend in the amount equal to $0.05 per share, which will be payable on August 25, 2023 to all shareholders of record as of the close of business on August 21, 2023. The Company estimates the total cash outlay to be approximately $160,000. |
BUSINESS AND SUMMARY OF ACCOU_2
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
Basis of Financial Statement Presentation | 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 (“US 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 consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring 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, 2022, 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, 2022 (“2022 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2022 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 income (loss) - foreign currency translation adjustment.” |
Principles of Consolidation | 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. |
The Company | The Company P&F, a Delaware corporation incorporated in 1963, 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”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools and related products of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to generally offer a better power-to-weight ratio than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production personnel, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $62,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEMs”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold directly to OEMs, end-users and gearbox repair companies. PTG works directly with its customers’ engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, we acquired substantially all the non-real estate assets comprising the business of Jackson Gear Company (“JGC”), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. This business was consolidated into PTG and provides added market exposure into the larger gears market. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. COVID-19 The adverse effects of the COVID-19 global pandemic on the Company’s results of operations and financial condition during the three and six-month periods ended June 30, 2023, have decreased significantly, compared to the adverse effects the pandemic caused during the prior two years. The Company, however, continues to encounter intermittent supply-chain issues, most notably shipping and receiving delays of inventory from its Asian suppliers, in turn causing shortages of inventory. While the negative effects that the Company was encountering during the COVID-19 pandemic in general have eased, it is difficult for the Company to be certain that the inventory issue discussed above is in fact COVID-19 related. |
Going Concern Assessment | Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. As of June 30, 2023, the Company had borrowing availability on its bank facility of $9,324,000. The Company is not in default on any bank covenant and believes its relationship with the bank is good. See Note 8 – Debt, for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. |
Customer Concentration | Customer Concentration The Company had one customer that accounted for 24.7% and 24.3% of its consolidated accounts receivable at June 30, 2023, and December 31, 2022, respectively. Further, this customer accounted for 18.1% and 27.1% of the Company’s consolidated revenue during the three-month periods ended June 30, 2023, and 2022, respectively, and 17.1% and 24.6% for the six months ended June 30, 2023, and 2022, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue during these periods. |
Management Estimates | Management Estimates The preparation of financial statements and related disclosures in conformity with US 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, income taxes, deferred taxes. Descriptions of these policies are discussed in the Company’s 2022 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 adjusts 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 The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” to the Company’s 2022 Form 10-K. |
Lease Accounting | Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification No. 842, Leases As permitted under ASC Topic 842, if the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases during the three-month period ended June 30, 2023. The Company considers any options to extend the term of a lease when measuring the right-of-use lease asset. For the three and six-month periods ended June 30, 2023, the Company had $237,000 and $474,000, respectively, in operating lease expense, and $240,000 and $471,000, respectively, for the same three and six-month periods in 2022. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities: 2023 (excluding the six months ended June 30, 2023) $ 369,000 2024 923,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,727,000 Total operating lease payments 6,245,000 Less imputed interest (1,111,000) Total operating lease liabilities $ 5,134,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.02 % |
Revenue Recognition | NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition The Company’s revenue recognition policies are detailed in its 2022 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three and six-month periods ended June 30, 2023, and 2022. Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,503,000 32.3 % $ 3,853,000 30.4 % $ (350,000) (9.1) % Retail 2,920,000 26.9 4,826,000 38.1 (1,906,000) (39.5) Industrial 1,337,000 12.3 1,705,000 13.5 (368,000) (21.6) Aerospace 2,963,000 27.3 2,179,000 17.2 784,000 36.0 Other 122,000 1.2 103,000 0.8 19,000 18.4 Total $ 10,845,000 100.0 % $ 12,666,000 100.0 % $ (1,821,000) (14.4) % Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 6,762,000 32.6 % $ 7,734,000 33.7 % $ (972,000) (12.6) % Retail 5,470,000 26.3 7,845,000 34.2 (2,375,000) (30.3) Industrial 2,914,000 14.0 3,111,000 13.6 (197,000) (6.3) Aerospace 5,374,000 25.9 3,994,000 17.4 1,380,000 34.6 Other 249,000 1.2 263,000 1.1 (14,000) (5.3) Total $ 20,769,000 100.0 % $ 22,947,000 100.0 % $ (2,178,000) (9.5) % Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,676,000 50.3 % $ 2,542,000 49.4 % $ 134,000 5.3 % ATP 808,000 15.2 945,000 18.4 (137,000) (14.5) PTG 1,742,000 32.8 1,583,000 30.8 159,000 10.0 Other 92,000 1.7 74,000 1.4 18,000 24.3 Total $ 5,318,000 100.0 % $ 5,144,000 100.0 % $ 174,000 3.4 % Revenue Recognition – Continued Hy-Tech Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,749,000 51.6 % $ 4,507,000 50.7 % $ 1,242,000 27.6 % ATP 1,505,000 13.5 1,687,000 19.0 (182,000) (10.8) PTG 3,674,000 33.0 2,522,000 28.4 1,152,000 45.7 Other 209,000 1.9 168,000 1.9 41,000 24.4 Total $ 11,137,000 100.0 % $ 8,884,000 100.0 % $ 2,253,000 25.4 % |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements During the three-month period ended June 30, 2023, there were no accounting pronouncements or other authoritative guidance issued or that became effective, that had, or is expected to have, a material impact on the Company’s consolidated financial statements. |
BUSINESS AND SUMMARY OF ACCOU_3
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
Schedule of operating lease liabilities | 2023 (excluding the six months ended June 30, 2023) $ 369,000 2024 923,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,727,000 Total operating lease payments 6,245,000 Less imputed interest (1,111,000) Total operating lease liabilities $ 5,134,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.02 % |
Schedule of revenue | Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,503,000 32.3 % $ 3,853,000 30.4 % $ (350,000) (9.1) % Retail 2,920,000 26.9 4,826,000 38.1 (1,906,000) (39.5) Industrial 1,337,000 12.3 1,705,000 13.5 (368,000) (21.6) Aerospace 2,963,000 27.3 2,179,000 17.2 784,000 36.0 Other 122,000 1.2 103,000 0.8 19,000 18.4 Total $ 10,845,000 100.0 % $ 12,666,000 100.0 % $ (1,821,000) (14.4) % Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 6,762,000 32.6 % $ 7,734,000 33.7 % $ (972,000) (12.6) % Retail 5,470,000 26.3 7,845,000 34.2 (2,375,000) (30.3) Industrial 2,914,000 14.0 3,111,000 13.6 (197,000) (6.3) Aerospace 5,374,000 25.9 3,994,000 17.4 1,380,000 34.6 Other 249,000 1.2 263,000 1.1 (14,000) (5.3) Total $ 20,769,000 100.0 % $ 22,947,000 100.0 % $ (2,178,000) (9.5) % Three months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,676,000 50.3 % $ 2,542,000 49.4 % $ 134,000 5.3 % ATP 808,000 15.2 945,000 18.4 (137,000) (14.5) PTG 1,742,000 32.8 1,583,000 30.8 159,000 10.0 Other 92,000 1.7 74,000 1.4 18,000 24.3 Total $ 5,318,000 100.0 % $ 5,144,000 100.0 % $ 174,000 3.4 % Six months ended June 30, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,749,000 51.6 % $ 4,507,000 50.7 % $ 1,242,000 27.6 % ATP 1,505,000 13.5 1,687,000 19.0 (182,000) (10.8) PTG 3,674,000 33.0 2,522,000 28.4 1,152,000 45.7 Other 209,000 1.9 168,000 1.9 41,000 24.4 Total $ 11,137,000 100.0 % $ 8,884,000 100.0 % $ 2,253,000 25.4 % |
EARNINGS _(LOSS) PER SHARE (Tab
EARNINGS /(LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS /(LOSS) PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) income per common share | Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Numerator for basic and diluted (loss) income per common share: Net income (loss) $ 237,000 $ (21,000) $ 574,000 $ (639,000) Denominator: Denominator for basic income (loss) per share - weighted average common shares outstanding 3,195,000 3,185,000 3,195,000 3,177,000 Dilutive securities (1) — — — — Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,195,000 3,185,000 3,195,000 3,177,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
Schedule of share-based compensation stock options | Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2023 127,600 $ 7.41 3.3 $ — Forfeited (5,000) — — — Expired (43,850) — — — Outstanding, June 30, 2023 78,750 7.15 4.2 $ — Vested, June 30, 2023 78,750 7.15 4.2 $ — |
ACCOUNTS RECEIVABLE AND ALLOW_2
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of accounts receivable - net | June 30, 2023 December 31, 2022 Accounts receivable $ 10,245,000 $ 7,683,000 Allowance for doubtful accounts, sales discounts and chargebacks (360,000) (313,000) $ 9,885,000 $ 7,370,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INVENTORIES | |
Schedule of inventories | June 30, 2023 December 31, 2022 Raw material $ 1,579,000 $ 2,000,000 Work in process 2,115,000 2,242,000 Finished goods 17,402,000 20,249,000 $ 21,096,000 $ 24,491,000 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Balance, January 1, 2023 $ 4,822,000 Currency translation adjustment 7,000 Balance, June 30, 2023 $ 4,829,000 |
Schedule of other intangible assets | June 30, 2023 December 31, 2022 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,932,000 $ 4,395,000 $ 2,537,000 $ 6,921,000 $ 4,099,000 $ 2,822,000 Trademarks and trade names (1) 2,174,000 — 2,174,000 2,166,000 — 2,166,000 Trademarks and trade names 200,000 93,000 107,000 200,000 86,000 114,000 Engineering drawings 330,000 276,000 54,000 330,000 268,000 62,000 Non-compete agreements (1) 327,000 319,000 8,000 322,000 303,000 19,000 Patents 1,286,000 1,175,000 111,000 1,286,000 1,143,000 143,000 Totals $ 11,249,000 $ 6,258,000 $ 4,991,000 $ 11,225,000 $ 5,899,000 $ 5,326,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. June 30, 2023 December 31, 2022 Customer relationships 5.6 5.9 Trademarks and trade names 8.0 8.5 Engineering drawings 3.6 4.1 Non-compete agreements 0.5 1.0 Patents 4.2 4.1 |
Schedule of amortization expense of intangible assets | Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 $ 167,000 $ 164,000 $ 346,000 $ 341,000 July 1 through December 31, 2023 $ 341,000 2024 640,000 2025 611,000 2026 412,000 2027 198,000 Thereafter 615,000 $ 2,817,000 |
BUSINESS AND SUMMARY OF ACCOU_4
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Maturity analysis of the annual undiscounted cash flows (Details) | Jun. 30, 2023 USD ($) |
Operating lease liabilities | |
2023 (excluding the six months ended June 30, 2023) | $ 369,000 |
2024 | 923,000 |
2025 | 816,000 |
2026 | 691,000 |
2027 | 719,000 |
Thereafter | 2,727,000 |
Total operating lease payments | 6,245,000 |
Less imputed interest | (1,111,000) |
Total operating lease liabilities | $ 5,134,000 |
Weighted average remaining lease term | 7 years 8 months 12 days |
Weighted average discount rate | 5.02% |
BUSINESS AND SUMMARY OF ACCOU_5
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Retail automotive industrial and aerospace (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 16,163,000 | $ 17,810,000 | $ 31,906,000 | $ 31,831,000 |
Florida Pneumatic | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 10,845,000 | $ 12,666,000 | $ 20,769,000 | $ 22,947,000 |
Percentage of revenue | 100% | 100% | 100% | 100% |
Increase (decrease) | $ (1,821,000) | $ (2,178,000) | ||
Percentage of Increase (decrease) | (14.40%) | (9.50%) | ||
Florida Pneumatic | Automotive | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 3,503,000 | $ 3,853,000 | $ 6,762,000 | $ 7,734,000 |
Percentage of revenue | 32.30% | 30.40% | 32.60% | 33.70% |
Increase (decrease) | $ (350,000) | $ (972,000) | ||
Percentage of Increase (decrease) | (9.10%) | (12.60%) | ||
Florida Pneumatic | Retail | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 2,920,000 | $ 4,826,000 | $ 5,470,000 | $ 7,845,000 |
Percentage of revenue | 26.90% | 38.10% | 26.30% | 34.20% |
Increase (decrease) | $ (1,906,000) | $ (2,375,000) | ||
Percentage of Increase (decrease) | (39.50%) | (30.30%) | ||
Florida Pneumatic | Industrial | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 1,337,000 | $ 1,705,000 | $ 2,914,000 | $ 3,111,000 |
Percentage of revenue | 12.30% | 13.50% | 14% | 13.60% |
Increase (decrease) | $ (368,000) | $ (197,000) | ||
Percentage of Increase (decrease) | (21.60%) | (6.30%) | ||
Florida Pneumatic | Aerospace | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 2,963,000 | $ 2,179,000 | $ 5,374,000 | $ 3,994,000 |
Percentage of revenue | 27.30% | 17.20% | 25.90% | 17.40% |
Increase (decrease) | $ 784,000 | $ 1,380,000 | ||
Percentage of Increase (decrease) | 36% | 34.60% | ||
Florida Pneumatic | Other | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 122,000 | $ 103,000 | $ 249,000 | $ 263,000 |
Percentage of revenue | 1.20% | 0.80% | 1.20% | 1.10% |
Increase (decrease) | $ 19,000 | $ (14,000) | ||
Percentage of Increase (decrease) | 18.40% | (5.30%) | ||
Hy-Tech | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 5,318,000 | $ 5,144,000 | $ 11,137,000 | $ 8,884,000 |
Percentage of revenue | 100% | 100% | 100% | 100% |
Increase (decrease) | $ 174,000 | $ 2,253,000 | ||
Percentage of Increase (decrease) | 3.40% | 25.40% | ||
Hy-Tech | Other | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 92,000 | $ 74,000 | $ 209,000 | $ 168,000 |
Percentage of revenue | 1.70% | 1.40% | 1.90% | 1.90% |
Increase (decrease) | $ 18,000 | $ 41,000 | ||
Percentage of Increase (decrease) | 24.30% | 24.40% | ||
Hy-Tech | OEM | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 2,676,000 | $ 2,542,000 | $ 5,749,000 | $ 4,507,000 |
Percentage of revenue | 50.30% | 49.40% | 51.60% | 50.70% |
Increase (decrease) | $ 134,000 | $ 1,242,000 | ||
Percentage of Increase (decrease) | 5.30% | 27.60% | ||
Hy-Tech | PTG | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 1,742,000 | $ 1,583,000 | $ 3,674,000 | $ 2,522,000 |
Percentage of revenue | 32.80% | 30.80% | 33% | 28.40% |
Increase (decrease) | $ 159,000 | $ 1,152,000 | ||
Percentage of Increase (decrease) | 10% | 45.70% | ||
Hy-Tech | ATP | ||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | ||||
Revenues | $ 808,000 | $ 945,000 | $ 1,505,000 | $ 1,687,000 |
Percentage of revenue | 15.20% | 18.40% | 13.50% | 19% |
Increase (decrease) | $ (137,000) | $ (182,000) | ||
Percentage of Increase (decrease) | (14.50%) | (10.80%) |
BUSINESS AND SUMMARY OF ACCOU_6
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Customer Concentration (Details) - Accounts Receivable - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Home depot | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Concentration risk, percentage | 24.70% | 24.30% | |||
Amazon.com | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Concentration risk, percentage | 18.10% | 27.10% | 17.10% | 24.60% |
BUSINESS AND SUMMARY OF ACCOU_7
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Additional information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) item $ / product | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Operating lease expense | $ | $ 237,000 | $ 240,000 | $ 474,000 | $ 471,000 | |
Short-term Debt | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Remaining borrowing capacity | $ | $ 9,324,000 | $ 9,324,000 | $ 7,678,000 | ||
Florida Pneumatic | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Number of types of pneumatic hand tools imported or manufactured | item | 75 | ||||
Florida Pneumatic | Minimum | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Sale price per product | 50 | ||||
Florida Pneumatic | Maximum | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Sale price per product | 1,000 | ||||
Hy-Tech | Minimum | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Sale price per product | 300 | ||||
Hy-Tech | Maximum | |||||
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |||||
Sale price per product | 62,000 |
EARNINGS _(LOSS) PER SHARE- Los
EARNINGS /(LOSS) PER SHARE- Loss per share basic and diluted (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator for basic and diluted (loss) income per common share: | ||||
Net income (loss) | $ 237,000 | $ (21,000) | $ 574,000 | $ (639,000) |
Denominator: | ||||
Denominator for basic earnings (loss) per share - weighted average common shares outstanding | 3,195,000 | 3,185,000 | 3,195,000 | 3,177,000 |
Denominator for diluted earnings (loss) per share - weighted average common shares outstanding | 3,195,000 | 3,185,000 | 3,195,000 | 3,177,000 |
STOCK-BASED COMPENSATION - Outs
STOCK-BASED COMPENSATION - Outstanding options (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | ||
Number of Shares, Outstanding | 127,600 | |
Number of Shares, Forfeited | (5,000) | |
Number of Shares, Expired | (43,850) | |
Number of Shares, Outstanding | 78,750 | 127,600 |
Number of Shares, Vested | 78,750 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | $ 7.41 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | 7.15 | $ 7.41 |
Weighted Average Exercise Price per share, Vested (in dollars per share) | $ 7.15 | |
Weighted Average Remaining Contractual Life, Vested (Years) | 4 years 2 months 12 days | |
Weighted Average Remaining Contractual Life, Outstanding (Years) | 4 years 2 months 12 days | 3 years 3 months 18 days |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock (Details) - USD ($) | May 25, 2022 | Jun. 30, 2023 | Dec. 31, 2022 |
STOCK-BASED COMPENSATION | |||
Share-based compensation arrangement by share-based payment award, options, outstanding, number, beginning balance | 78,750 | 127,600 | |
Restricted Stock | |||
STOCK-BASED COMPENSATION | |||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 1,250 | ||
Share-based compensation arrangement by share-based payment award, options, outstanding, number, beginning balance | 6,250 | ||
Weighted average fair value of options granted | $ 5.50 | ||
Restricted stock-based compensation | $ 34,000 |
ACCOUNTS RECEIVABLE AND ALLOW_3
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |||
Accounts receivable | $ 10,245,000 | $ 7,683,000 | |
Allowance for doubtful accounts, sales discounts and chargebacks | (360,000) | (313,000) | |
Accounts receivable - net | $ 9,885,000 | $ 7,370,000 | $ 7,550,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Raw material | $ 1,579,000 | $ 2,000,000 |
Work in process | 2,115,000 | 2,242,000 |
Finished goods | 17,402,000 | 20,249,000 |
INVENTORIES | $ 21,096,000 | $ 24,491,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying amount of goodwill (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Balance, beginning | $ 4,822,000 |
Currency translation adjustment | 7,000 |
Balance, ending | $ 4,829,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other intangible assets - (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Other intangible assets: | ||
Cost | $ 11,249,000 | $ 11,225,000 |
Accumulated amortization | 6,258,000 | 5,899,000 |
Net book value | 4,991,000 | 5,326,000 |
Customer relationships | ||
Other intangible assets: | ||
Cost | 6,932,000 | 6,921,000 |
Accumulated amortization | 4,395,000 | 4,099,000 |
Net book value | $ 2,537,000 | $ 2,822,000 |
Acquired finite-lived intangible assets, weighted average useful life | 5 years 7 months 6 days | 5 years 10 months 24 days |
Trademarks and trade names | ||
Other intangible assets: | ||
Cost | $ 2,174,000 | $ 2,166,000 |
Accumulated amortization | 0 | 0 |
Net book value | $ 2,174,000 | $ 2,166,000 |
Acquired finite-lived intangible assets, weighted average useful life | 8 years | 8 years 6 months |
Trademarks and trade names | ||
Other intangible assets: | ||
Cost | $ 200,000 | $ 200,000 |
Accumulated amortization | 93,000 | 86,000 |
Net book value | 107,000 | 114,000 |
Engineering drawings | ||
Other intangible assets: | ||
Cost | 330,000 | 330,000 |
Accumulated amortization | 276,000 | 268,000 |
Net book value | $ 54,000 | $ 62,000 |
Acquired finite-lived intangible assets, weighted average useful life | 3 years 7 months 6 days | 4 years 1 month 6 days |
Non-compete agreements | ||
Other intangible assets: | ||
Cost | $ 327,000 | $ 322,000 |
Accumulated amortization | 319,000 | 303,000 |
Net book value | $ 8,000 | $ 19,000 |
Acquired finite-lived intangible assets, weighted average useful life | 6 months | 1 year |
Patents | ||
Other intangible assets: | ||
Cost | $ 1,286,000 | $ 1,286,000 |
Accumulated amortization | 1,175,000 | 1,143,000 |
Net book value | $ 111,000 | $ 143,000 |
Acquired finite-lived intangible assets, weighted average useful life | 4 years 2 months 12 days | 4 years 1 month 6 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense of intangible assets - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||
Amortization expense of intangible assets | $ 167,000 | $ 164,000 | $ 346,000 | $ 341,000 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated amortization expense (Details) | Jun. 30, 2023 USD ($) |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
July 1 through December 31, 2023 | $ 341,000 |
2024 | 640,000 |
2025 | 611,000 |
2026 | 412,000 |
2027 | 198,000 |
Thereafter | 615,000 |
Total | $ 2,817,000 |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Mar. 24, 2023 | Apr. 30, 2017 | |
DEBT | |||||||
Short-term or Revolver borrowings | $ 5,340,000 | $ 5,340,000 | $ 7,570,000 | ||||
Increase in interest rate | 2% | ||||||
Short-term Debt | |||||||
DEBT | |||||||
Average balances of short-term borrowings | 7,060,000 | $ 11,544,000 | $ 7,173,000 | $ 10,855,000 | |||
Remaining borrowing capacity | $ 9,324,000 | $ 9,324,000 | $ 7,678,000 | ||||
Short-term Debt | Base Rate | |||||||
DEBT | |||||||
Variable rate | 1.10% | ||||||
Short-term Debt | SOFR | |||||||
DEBT | |||||||
Variable rate | 2.10% | 2.10% | |||||
Revolving Credit Facility | |||||||
DEBT | |||||||
Maximum borrowing capacity | $ 16,000,000 | ||||||
Short-term or Revolver borrowings | $ 5,340,000 | $ 5,340,000 | $ 7,570,000 | ||||
Capex Borrowing | |||||||
DEBT | |||||||
Eliminated loan | $ 1,600,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | Aug. 08, 2023 USD ($) $ / shares |
SUBSEQUENT EVENTS | |
Quarterly cash dividend | $ / shares | $ 0.05 |
Dividend cash outlays | $ | $ 160,000 |