Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | FALSE |
Document Period End Date | 31-Dec-14 |
Entity Registrant Name | RADA ELECTRONIC INDUSTRIES LTD |
Entity Central Index Key | 761238 |
Current Fiscal Year End Date | -19 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2014 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 8,988,396 |
Entity Current Reporting Status | Yes |
Entity Well-known Seasoned Issuer | No |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $1,786 | $2,137 |
Restricted deposits | 349 | 1,033 |
Trade receivables (net of allowance for doubtful accounts of $24 and $36 at December 31, 2014 and 2013) | 3,455 | 4,890 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 2,657 | 2,031 |
Other accounts receivable and prepaid expenses | 428 | 412 |
Inventories | 6,651 | 6,798 |
Total current assets | 15,326 | 17,301 |
LONG-TERM RECEIVABLES AND OTHER DEPOSITS | 1,394 | 1,133 |
PROPERTY, PLANT AND EQUIPMENT, NET | 2,790 | 2,986 |
GOODWILL | 587 | 587 |
Total assets | 20,097 | 22,007 |
CURRENT LIABILITIES: | ||
Bank credit | 1,589 | 1,887 |
Trade payables | 1,315 | 2,909 |
Convertible Note and Loans from shareholders, net | 8,120 | 8,307 |
Other accounts payable and accrued expenses | 4,267 | 4,350 |
Total current liabilities | 15,291 | 17,453 |
LONG-TERM LIABILITIES: | ||
Accrued severance pay and other long term liability | 634 | 569 |
Total long-term liabilities | 634 | 569 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
EQUITY: | ||
Share capital - Ordinary shares of NIS 0.015 par value each - Authorized: 16,333,333 shares at December 31, 2014 and 2013; Issued and outstanding: 8,988,396 and 8,918,647 shares at December 31, 2014 and December 31, 2013 respectively | 119 | 119 |
Additional paid-in capital | 70,884 | 70,884 |
Accumulated other comprehensive income | 536 | 547 |
Accumulated deficit | -67,992 | -68,200 |
Total RADA Electronic Industries shareholders' equity | 3,547 | 3,350 |
Non-controlling interest | 625 | 635 |
Total equity | 4,172 | 3,985 |
Total liabilities and equity | $20,097 | $22,007 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | USD ($) | ILS | USD ($) | ILS |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||||
Trade receivables, allowance for doubtful accounts | $24 | $36 | ||
Ordinary shares, par value per share | 0.015 | 0.015 | ||
Ordinary shares, shares authorized | 16,333,333 | 16,333,333 | 16,333,333 | 16,333,333 |
Ordinary shares, shares issued | 8,988,396 | 8,988,396 | 8,918,647 | 8,918,647 |
Ordinary shares, shares outstanding | 8,988,396 | 8,988,396 | 8,918,647 | 8,918,647 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Products | $20,927 | $20,443 | $20,073 |
Services | 1,554 | 1,318 | 1,478 |
Total revenues | 22,481 | 21,761 | 21,551 |
Cost of revenues: | |||
Products | 15,124 | 16,487 | 15,453 |
Services | 820 | 673 | 780 |
Total cost of revenues | 15,944 | 17,160 | 16,233 |
Gross profit | 6,537 | 4,601 | 5,318 |
Operating costs and expenses: | |||
Research and development, net | 789 | 1,459 | 2,423 |
Marketing and selling | 2,392 | 1,959 | 1,664 |
General and administrative | 1,901 | 1,919 | 2,137 |
Total operating costs and expenses | 5,082 | 5,337 | 6,224 |
Operating income (loss) | 1,455 | -736 | -906 |
Financial expenses, net | 1,254 | 1,907 | 1,149 |
Net income (loss) | 201 | -2,643 | -2,055 |
Less: Net loss attributable to non-controlling interest | 7 | 8 | 4 |
Net income (loss) attributable to RADA Electronic Industries' shareholders | $208 | ($2,635) | ($2,051) |
Net income (loss) per share attributable to RADA Electronic Industries' shareholders: | |||
Basic and diluted net income (loss) per Ordinary share | $0.02 | ($0.30) | ($0.23) |
Weighted average number of Ordinary shares used for computing basic and diluted net income (loss) per share | 8,944,803 | 8,918,647 | 8,918,647 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | |||
Net income (loss) | $201 | ($2,643) | ($2,055) |
Less: Net loss attributable to non-controlling interest | 7 | 8 | 4 |
Net income (loss) attributable to RADA Electronic Industries' shareholders | 208 | -2,635 | -2,051 |
Other Comprehensive Income: | |||
Change in foreign currency translation adjustment | -14 | 99 | 32 |
Less: other comprehensive income (loss) attributable to non-controlling interest | -3 | 20 | 7 |
Other comprehensive income (loss) attributable to RADA Electronic Industries' shareholders | -11 | 79 | 25 |
Comprehensive income (loss) | 197 | -2,544 | -2,023 |
Less: comprehensive Income (loss) attributable to non-controlling interest | -10 | 12 | 3 |
Comprehensive income (loss) attributable to RADA Electronic Industries' shareholders | $207 | ($2,556) | ($2,026) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Ordinary shares [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (Loss) [Member] | Accumulated deficit [Member] | Noncontrolling interest [Member] | ||
In Thousands, except Share data | ||||||||
Balance at Dec. 31, 2011 | $7,844 | $119 | $70,176 | $443 | ($63,514) | $620 | ||
Balance, shares at Dec. 31, 2011 | 8,918,647 | |||||||
Issuance of warrants to shareholders | 708 | 708 | ||||||
Other comprehensive income | 32 | 25 | 7 | |||||
Net income (loss) | -2,055 | -2,051 | -4 | |||||
Balance at Dec. 31, 2012 | 6,529 | 119 | 70,884 | 468 | -65,565 | 623 | ||
Balance, shares at Dec. 31, 2012 | 8,918,647 | |||||||
Other comprehensive income | 99 | 79 | 20 | |||||
Net income (loss) | -2,643 | -2,635 | -8 | |||||
Balance at Dec. 31, 2013 | 3,985 | 119 | 70,884 | 547 | -68,200 | 635 | ||
Balance, shares at Dec. 31, 2013 | 8,918,647 | 8,918,647 | ||||||
Other comprehensive income | -14 | -11 | -3 | |||||
Cashless Warrants exercise | [1] | [1] | ||||||
Cashless Warrants exercise, shares | 69,749 | |||||||
Net income (loss) | 201 | 208 | -7 | |||||
Balance at Dec. 31, 2014 | $4,172 | $119 | $70,884 | $536 | ($67,992) | $625 | ||
Balance, shares at Dec. 31, 2014 | 8,988,396 | 8,988,396 | ||||||
[1] | Represents an amount lower than $1. |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income (loss) | $201 | ($2,643) | ($2,055) |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 690 | 752 | 897 |
Amortization of discount on convertible note and loans | 43 | 489 | 516 |
Severance pay, net | -15 | 50 | 19 |
Decrease in trade receivables, net | 1,435 | 491 | 1,539 |
Decrease (increase) in other accounts receivable and prepaid expenses | 13 | 484 | -337 |
Grants received from Chief Scientist's Office (OCS) | 15 | 142 | |
Increase in unbilled receivables | -599 | -236 | -943 |
Decrease in inventories | 111 | 449 | 325 |
Increase (decrease) in trade payables | -1,594 | 981 | -463 |
Increase (decrease) in other accounts payable and accrued expenses | -163 | 600 | -392 |
Net cash provided by (used in) operating activities | 122 | 1,432 | -752 |
Cash flows from investing activities: | |||
Purchase of property, plant and equipment | -328 | -370 | -688 |
Increase (decrease) in deposits | 2 | 3 | -3 |
Change in restricted deposits | 392 | 282 | 472 |
Net cash provided by (used in) investing activities | 66 | -85 | -219 |
Cash flows from financing activities: | |||
Proceeds from loans from shareholders, net of issuance expenses | 1,000 | 850 | 3,998 |
Repayment of long term loan from shareholders | -2,229 | ||
Short-term bank credit, net | -298 | -1,285 | -761 |
Repayment of short term loan from shareholders | -1,230 | ||
Net cash provided by (used in) financing activities from continuing operations | -528 | -435 | 1,008 |
Effect of exchange rate changes on cash and cash equivalents | -11 | 61 | 20 |
Increase (decrease) in cash and cash equivalents | -351 | 973 | 57 |
Cash and cash equivalents at the beginning of the year | 2,137 | 1,164 | 1,107 |
Cash and cash equivalents at the end of the year | 1,786 | 2,137 | 1,164 |
Net cash paid during the year for: | |||
Income taxes | 35 | 14 | 84 |
Interest | 57 | 180 | 304 |
Non-cash transactions | |||
Transfer of inventory to property, plant and equipment | 37 | 25 | 58 |
Purchase of property, plant and equipment in credit | $144 | $11 | $31 |
GENERAL
GENERAL | 12 Months Ended | |
Dec. 31, 2014 | ||
GENERAL [Abstract] | ||
GENERAL | NOTE 1:- | GENERAL |
a. RADA Electronic Industries Ltd. ("the Company") is an Israel - based defense electronics contractor that specialize in the development, manufacture and sale of data recording and management systems (such as digital video and data recorders, ground debriefing stations, head-up display cameras), inertial navigation systems for air and land applications, avionics solutions (such as aircraft upgrades, avionics for unmanned aircraft vehicles, or UAVs, store management systems and interface computers) and land radar for defense forces and border protection applications (active protective systems for armored fighting vehicles, hostile fire detection and perimeter surveillance ). The Company also provides test and repair services using its CATS testers and test program sets for commercial aviation electronic systems mainly through its Chinese subsidiary. | ||
The Company is organized and operates as one operating segment. | ||
b.As reflected in the consolidated financial statements as of December 31, 2014, the Company has an accumulated deficit of $67,992. Based on existing and anticipated orders in 2015 and the Company's current credit facilities, management believes that the anticipated cash flows from operations and liquidity resources will enable the Company to finance its operations at least through December 31, 2015. | ||
On April 16, 2015 the Company's shareholders have approved an outline for the repayment of the Company's debts to its lenders. Pursuant to the outline, The Company intends to offer new Ordinary Shares in a registered public offering in order to raise up to approximately US$ 13 million (the "Offering"). In the event that by September 30, 2015 the Offering or the Private Placement is not completed, or if the net proceeds of the Offering or the Private Placement are insufficient to repay the debts in full, the lenders shall be entitled to convert some or all of the remaining debts. | ||
The terms of the conversion were also agreed and are as follows: (i) the minimum amount to be converted at any one time is US$300,000 of Debt; (ii) the share issue price will be the lower of $1.00 or 15% below the preceding 7 days VWAP (volume weighted average price); and (iii) any unconverted debt will continue to be subject to the terms of the extended standstill agreement. See also Note 16. | ||
On April 27, 2015, the standstill agreement was further amended and the termination of the forbearance period has been extended to the earlier of (i) August 31, 2016 or (ii) 30 days after the closing of the Offering resulting in the repayment of at least $7.5M on account of the Debt. Pursuant to such recent amendment, the default interest payable, as of and after February 1, 2015 on all outstanding principal amounts is Libor + 9% (see also Note 8). | ||
c.The Company operates a test and repair shop using its Automated Test Equipment ("ATE") products in Beijing, China through its 80% owned Chinese subsidiary, Beijing Huari Aircraft Components Maintenance and Services Co. Ltd. ("CACS" or "subsidiary"). CACS was established with a Chinese third party, which owns the remaining 20% equity interest. | ||
d.Revenues from major customers accounted for 78%, 81% and 68% of total revenues for the years ended December 31, 2014, 2013 and 2012, respectively (see Note 15c). | ||
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). The significant accounting policies followed in the preparation of the financial statements, applied on a consistent basis, are as follows: | ||||||||||||||||||||
a. | Use of estimates: | |||||||||||||||||||
The preparation of financial statements in conformity with ("US GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. | ||||||||||||||||||||
b. | Financial statements in U.S. dollars: | |||||||||||||||||||
Most of the revenues of the Company are generated in U.S. dollars. In addition, a substantial portion of the costs of the Company is incurred in U.S dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, its functional and reporting currency is the dollar. | ||||||||||||||||||||
Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with ASC 830, "Foreign Currency Matters". All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate, in the period in which the currency exchange rate changes. | ||||||||||||||||||||
The financial statements of the Company's foreign subsidiary, whose functional currency is not the U.S. dollar, have been translated into dollars. All balance sheet amounts have been translated using the exchange rates in effect at balance sheet date. Statement of operation amounts have been translated using the average exchange rate prevailing during the year. Such translation adjustments are reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. | ||||||||||||||||||||
c. | Basis of consolidation: | |||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiary. Inter-company transactions and balances have been eliminated upon consolidation. | ||||||||||||||||||||
d. | Reclassification: | |||||||||||||||||||
Certain amounts in prior years' financial statements have been reclassified to conform to the current year's presentation Withholding tax expenses were reclassified from general and administrative to net financial expenses. This reclassification did not impact total assets, total liabilities, shareholders' equity, and results of operations and cash flows. | ||||||||||||||||||||
e. | Cash equivalents: | |||||||||||||||||||
All highly liquid investments that are readily convertible to cash and are not restricted as to withdrawal or use and the period to maturity of which did not exceed three months at time of deposit, are considered cash equivalents. | ||||||||||||||||||||
f. | Restricted deposit: | |||||||||||||||||||
Restricted cash is invested in long term and short-term bank deposits (less than twelve months), which are mainly used as security for the Company's guarantees to customers. The deposits are in U.S. dollars and bear a variable interest of up to 1.5%. | ||||||||||||||||||||
g. | Inventories: | |||||||||||||||||||
Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories and for market prices lower than cost, (see also Note 5). | ||||||||||||||||||||
Cost is determined as follows: | ||||||||||||||||||||
Raw materials and components - using the FIFO cost method. | ||||||||||||||||||||
Work in progress and finished goods - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs. | ||||||||||||||||||||
Costs incurred on long-term contracts in progress include direct labor, material, subcontractors, other direct costs and an allocation of overhead, which represent recoverable costs incurred for production. | ||||||||||||||||||||
h. | Property, plant and equipment: | |||||||||||||||||||
Property plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: | ||||||||||||||||||||
% | ||||||||||||||||||||
Factory and other buildings | 4 | |||||||||||||||||||
Machinery and equipment | Jul-33 | |||||||||||||||||||
Office furniture and equipment | 15-Jun | |||||||||||||||||||
Leasehold improvements are depreciated over the shorter of the estimated useful life or the lease period. | ||||||||||||||||||||
Assets, in respect of which investment grants have been received, are presented at cost less the related grant amount. Depreciation is based on net cost. | ||||||||||||||||||||
i. | Impairment of long-lived assets: | |||||||||||||||||||
The Company's long-lived assets are reviewed for impairment in accordance with ASC 360, "Property, plant and equipment"; whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2014, 2013 and 2012, no impairment losses have been identified. | ||||||||||||||||||||
j. | Goodwill | |||||||||||||||||||
Goodwill represents excess of the costs over the net assets of businesses acquired. Under ASC 350, "Intangibles - Goodwill and other", goodwill acquired in a business combination should not be amortized. ASC 350 requires goodwill to be tested for impairment at least annually or between annual tests in certain circumstances, and written down when impaired. | ||||||||||||||||||||
ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment while the second phase (if necessary) measures impairment. In the first phase of impairment testing, goodwill attributable to each of the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. The Company determines its fair value according to the Company's market capitalization and the goodwill was tested for impairment by comparing the fair market value with its carrying amount. As of December 31, 2014, no impairment indicators have been identified. As a result, step two was not required. | ||||||||||||||||||||
k. | Research and development costs: | |||||||||||||||||||
Research and development costs, net of participation grants, include costs incurred for research and development and are expensed as incurred. | ||||||||||||||||||||
The Company received royalty-bearing grants, from the Chief Scientist's Office of the Israeli Ministry of Industry, Trade and Labor ("OCS") for the purpose of partially funding research and development projects. The grants are recognized as a deduction from research and development costs incurred (see also Note 10b). | ||||||||||||||||||||
l. | Income taxes: | |||||||||||||||||||
The Company accounts for income taxes in accordance with ASC 740, "Income taxes". This statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax based assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. | ||||||||||||||||||||
The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. | ||||||||||||||||||||
The Company applies ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. | ||||||||||||||||||||
The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The adoption of ASC 740-10 did not result in a change in the Company's accumulated deficit. The Company did not record any provision in connection with ASC 740-10 as of December 31, 2014 and 2013. | ||||||||||||||||||||
m. | Severance pay: | |||||||||||||||||||
The Company's agreements with most of its employees are in accordance with section 14 of the Severance Pay Law -1963, under which the Company's contributions for severance pay shall be instead of severance compensation. Upon release of the policy to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments will be made by the Company to the employee. | ||||||||||||||||||||
The Company's liability for severance pay for the employees that are not covered in section 14 is calculated pursuant to Israel's Severance Pay Law, based on the most recent salary of the employees as of the balance sheet date less monthly deposits for insurance policies and/or pension funds. Employees are entitled to one month's salary for each year of employment or a portion thereof. | ||||||||||||||||||||
The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli severance pay law or labor agreements. | ||||||||||||||||||||
Severance expense recorded in the statement of operations is net of interest and other income accumulated in the deposits. Severance expense for the years ended December 31, 2014, 2013 and 2012 amounted to $674, $483 and $562, respectively. | ||||||||||||||||||||
n. | Fair value of financial instruments: | |||||||||||||||||||
The Company measures its financial instruments at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. | ||||||||||||||||||||
A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: | ||||||||||||||||||||
Level 1 - | Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. | |||||||||||||||||||
Level 2 - | Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | |||||||||||||||||||
Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||||||||||||||||||
The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. | ||||||||||||||||||||
The carrying amount of cash and cash equivalents, restricted deposits, trade receivables, other accounts receivable, bank credit and current maturities of long term loans, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. | ||||||||||||||||||||
Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. | ||||||||||||||||||||
The following table presents the Company's assets (liabilities) measured at fair value on a recurring basis at December 31, 2014 and 2013: | ||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
Total | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
31-Dec-14 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
Total | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
o. | Concentrations of credit risk: | |||||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and long-term receivables. | ||||||||||||||||||||
The Company's cash and cash equivalents and restricted cash are mainly held in U.S. dollars with major banks in Israel. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. | ||||||||||||||||||||
The Company's trade receivables are derived from sales to large and solid organizations located mainly in the United States, Asia, South America and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to these amounts that the Company has determined to be doubtful of collection. The allowance is computed for specific debts and the collectability is determined based upon the Company's experience. | ||||||||||||||||||||
The Company has no off-balance sheet credit risks. | ||||||||||||||||||||
p. | Comprehensive income (loss): | |||||||||||||||||||
The Company accounts for comprehensive income in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components. | ||||||||||||||||||||
Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. | ||||||||||||||||||||
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. Accordingly, the Company adopted ASU 2011-05 on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. Upon adoption of the new guidance, the Company elected to present a separate statement of consolidated comprehensive income. | ||||||||||||||||||||
The total accumulated other comprehensive income, net was as follows: | ||||||||||||||||||||
31-Dec | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Accumulated foreign currency translation differences | $ | 536 | $ | 547 | ||||||||||||||||
The following table summarizes the changes in accumulated balances of other comprehensive income, net of taxes for the year ended December 31, 2014: | ||||||||||||||||||||
Accumulated | Total | |||||||||||||||||||
foreign currency translation | ||||||||||||||||||||
differences | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 547 | $ | 547 | ||||||||||||||||
Current period other comprehensive income (loss) | (11 | ) | (11 | ) | ||||||||||||||||
Balance as of December 31, 2014 | $ | 536 | $ | 536 | ||||||||||||||||
q. | Warranty: | |||||||||||||||||||
In connection with the sale of its products, the Company provides product warranties for periods between one to two years. Based on past experience and engineering estimates, the liability from these warranties is not material as of December 31, 2014 and 2013. | ||||||||||||||||||||
r. | Revenue recognition: | |||||||||||||||||||
The Company generates revenues mainly from the sale of products and from long-term fixed price contracts of defense electronics as follows: data recording and management systems, inertial navigation systems for air and land applications, avionics solutions, avionics for UAVs, and land radar for defense forces and border protection applications. In addition, the Company provides manufacturing, development and product support services. | ||||||||||||||||||||
The Company also generates revenues from repair services using its ATE mainly through CACS. | ||||||||||||||||||||
Product revenues: | ||||||||||||||||||||
The Company recognizes revenue from sales of products in accordance with ASC 605-10, "Revenue Recognition" (Formerly "Staff Accounting Bulletin ("SAB") No. 104"). Product revenue is recognized when there is persuasive evidence of an arrangement, the fee is fixed or determinable, delivery of the product to the customer has occurred and the Company has determined that collection of the fee is probable. If the product requires specific customer acceptance, revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions are satisfied. | ||||||||||||||||||||
Revenues from long-term fixed price contracts which provide a substantial level of development efforts are recognized in accordance with ASC 605-35 ("Construction-Type and Production-Type contracts"), using contract accounting on a percentage of completion method in accordance with the "Input Method". The percentage of completion is determined based on the ratio of actual costs incurred to total costs estimated to be incurred over the duration of the contract. With regard to contracts for which a loss is anticipated, a provision is made for the entire amount of the estimated loss at the time such loss becomes evident. As of December 31, 2014 and 2013, the provision for estimated losses identified is $0 and $41, respectively. | ||||||||||||||||||||
Revenues from long-term fixed-price contracts that involve both development and production are recorded using the cost-to-cost method (development phase) and units-of-delivery method (production phase) as applicable to each phase of the contract, as the basis to measure progress toward completion | ||||||||||||||||||||
Estimated gross profit or loss from long-term contracts may change due to changes in estimates resulting from differences between actual performance and original forecasts. Such changes in estimated gross profit or loss are recorded in results of operations when they are reasonably determinable by management, on a cumulative catch-up basis. | ||||||||||||||||||||
The Company believes that the use of the percentage of completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs. In addition, contracts executed include provisions that clearly specify the enforceable rights regarding services to be provided and received by the parties to the contracts, the consideration to be exchanged and the manner and terms of settlement. In all cases, the Company expects to perform its contractual obligations and its customers are expected to satisfy their obligations under the contract. | ||||||||||||||||||||
Service revenues: | ||||||||||||||||||||
Revenues from services are recognized as the services are performed. | ||||||||||||||||||||
s. | Basic and diluted net income (loss) per share: | |||||||||||||||||||
Basic net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year in accordance with ASC 260, "Earnings per share". For the years ended December 31, 2013 and 2012, all the outstanding options, convertible notes and warrants have been excluded from the computation of diluted net income (loss) per share, since their effect is anti-dilutive. | ||||||||||||||||||||
t. | Derivatives and hedging: | |||||||||||||||||||
The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and hedging", as amended and related Interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for cash flow hedge transactions) or recognized in other comprehensive income until the hedged item is recognized in earnings (for fair value hedge transactions). | ||||||||||||||||||||
The ineffective portion of a derivative's change in fair value is recognized in earnings. If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities. | ||||||||||||||||||||
The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with payroll expenses mainly incurred in NIS. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as financial expenses, net. | ||||||||||||||||||||
As of December 31, 2014 and December 31, 2013, the fair value of the outstanding forward contracts is $216 which was recorded in other accruals against financial expenses and $46 which was recorded in other receivables against financial income, respectively. | ||||||||||||||||||||
u. | Recently Issued Accounting Standards | |||||||||||||||||||
In May 2014, FASB issued comprehensive new revenue recognition guidance, (ASU 2014-09 - Revenue from Contracts with Customers (Topic 606) effectively replacing all current guidance on the topic. Given the significance of this pronouncement, the Company is currently in the process of reviewing the new standard and its potential impact on the Company. The new guidance is effective for the Company's consolidated financial statements beginning on January 1, 2017. The effects of the new guidance on the Company's statements of the financial position, results of operations and cash flows are still being assessed. | ||||||||||||||||||||
CONTRACTS_IN_PROGRESS
CONTRACTS IN PROGRESS | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
CONTRACTS IN PROGRESS [Abstract] | ||||||||||
CONTRACTS IN PROGRESS | NOTE 3:- | CONTRACTS IN PROGRESS | ||||||||
Amounts included in the consolidated financial statements, which relate to unbilled receivables are classified as current assets. Summarized below are the components of the amounts: | ||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts: | ||||||||||
December 31, | ||||||||||
2014 | 2013 | |||||||||
Costs incurred on uncompleted contracts, net (*) | $ | 18,417 | $ | 35,032 | ||||||
Estimated earnings | 8,544 | 5,221 | ||||||||
26,961 | 40,253 | |||||||||
Less - billings and progress payments | 23,287 | 37,205 | ||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 3,674 | 3,048 | ||||||||
Less: Long-term portion | (1,017 | ) | (1,017 | ) | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts - Current portion | $ | 2,657 | $ | 2,031 | ||||||
(*) | Net of OCS grants in the amount of $0 and $15 as of December 31, 2014 and 2013, respectively (see Note 10b). |
OTHER_ACCOUNTS_RECEIVABLE_AND_
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | |||||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 4:- | OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | |||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Prepaid expenses | $ | 279 | $ | 250 | |||||||
Government institutions | 53 | 79 | |||||||||
Derivative instruments | - | 46 | |||||||||
Advance payment to vendors | 96 | 37 | |||||||||
$ | 428 | $ | 412 |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
INVENTORIES [Abstract] | |||||||||||
INVENTORIES | NOTE 5:- INVENTORIES | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Raw materials | $ | 2,891 | $ | 3,833 | |||||||
Work in progress | 2,394 | 2,157 | |||||||||
Finished goods | 1,366 | 808 | |||||||||
$ | 6,651 | $ | 6,798 | ||||||||
Write-offs of inventories for the years ended December 31, 2014, 2013 and 2012 amounted to $138, $313 and $72, respectively. The write-offs were due to slow-moving items and excess inventories and were recorded in cost of revenues. | |||||||||||
LONG_TERM_RECEIVABLES_AND_DEPO
LONG TERM RECEIVABLES AND DEPOSITS | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
LONG TERM RECEIVABLES AND DEPOSITS [Abstract] | |||||||||||
LONG TERM RECEIVABLES AND DEPOSITS | NOTE 6:- LONG TERM RECEIVABLES AND DEPOSITS | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts (see Note 3) | $ | 1,017 | $ | 1,017 | |||||||
Restricted deposits | 330 | 38 | |||||||||
Leasing deposits | 47 | 78 | |||||||||
$ | 1,394 | $ | 1,133 | ||||||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |||||||||||
PROPERTY, PLANT AND EQUIPMENT | NOTE 7:- | PROPERTY, PLANT AND EQUIPMENT, NET | |||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Cost: | |||||||||||
Factory building | $ | 1,989 | $ | 1,989 | |||||||
Other buildings | 1,366 | 1,371 | |||||||||
Machinery and equipment (*) | 9,530 | 9,095 | |||||||||
Office furniture and equipment | 435 | 411 | |||||||||
Leasehold improvements | 231 | 209 | |||||||||
13,551 | 13,075 | ||||||||||
Accumulated depreciation: | |||||||||||
Factory building | 1,898 | 1,821 | |||||||||
Other buildings | 726 | 674 | |||||||||
Machinery and equipment (*) | 7,693 | 7,173 | |||||||||
Office furniture and equipment | 332 | 311 | |||||||||
Leasehold improvements | 112 | 110 | |||||||||
10,761 | 10,089 | ||||||||||
Depreciated cost | $ | 2,790 | $ | 2,986 | |||||||
(*) Write-offs of machinery and equipment (cost and accumulated depreciation) for the years ended December 31, 2014, 2013 and 2012 amounted to $0, $333 and $3,502, respectively. The write-offs are due to fully depreciated assets that are no longer in use. | |||||||||||
Depreciation expense amounted to $690, $752 and $742 for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||
As for charges, see Note 10e. | |||||||||||
BANK_CREDIT_AND_LOANS
BANK CREDIT AND LOANS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BANK CREDIT AND LOANS [Abstract] | |||||||||
BANK CREDIT AND LOANS | NOTE 8:- | BANK CREDIT AND LOANS | |||||||
Current maturities | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Loan in U.S. dollars from shareholders (2,3,4,5) | $ | 5,120 | $ | 5,307 | |||||
Convertible note from controlling shareholder, net (1) | 3,000 | 3,000 | |||||||
Bank credit (8) | 1,589 | 1,887 | |||||||
$ | 9,709 | $ | 10,194 | ||||||
1.In December 2007, the Company issued a convertible note in the amount of $3,000 to its controlling shareholder, and warrants to purchase up to an aggregate of 1,578,947 ordinary shares at an exercise price of $2.38 per share for a term of five years. The principal was due on December 2010. During October 2010, the maturity date of the convertible note was extended to October 2012 and the expiration date of the warrants was extended to October 2014. The convertible note bears interest at a rate of six-month LIBOR + 3.5% which was 3.96% at December 31, 2010 and it is convertible into Ordinary shares at a conversion price of $2.09 per share. The transaction was accounted for as a modification of debt accordance with ASC 470-50, "Debt". As a result, the Company recorded a discount on the convertible note of $451. Due to the modification, the discount was amortized over the term of the extended note using the interest method. | |||||||||
As of December 31, 2014, the company did not repay the convertible note principal of $3,000. From January 2013 the loan bears default increased interest rate of LIBOR+7.5% (see also section 7 below). | |||||||||
2.In July 2008, the Company entered into a $1,500 loan agreement with its controlling shareholder. The loan bears interest of LIBOR+3% payable at the beginning of every quarter. During September 2012 an amendment to the finance agreement was signed, according to which, the controlling shareholder agreed to lend to the company $1,148 in addition to the then remaining unpaid loan amount of $352, to support the development efforts. The loan bears interest of LIBOR+3% which was to be payable in two equal installments of $750 each, in December 2012 and February 2013. During March 2013 $350 out of the open balance due was repaid. In August 2013 the Company and the controlling shareholder amended the loan agreement whereby an additional amount of $350 was provided to the Company to be repaid on December 31, 2013, and the remaining $1,150 to be repaid according to a standstill agreement (see also section 7 below). The Company repaid the $350 in February 2014. | |||||||||
3.In February 2012, in order to finance future operations, the Company entered into a $3,000 loan agreement with an entity affiliated with its controlling shareholder and another shareholder. The controlling shareholder provided $2,700 and the other shareholder provided $300. Of such amount, $1,700 was used to repay in full an outstanding amount due. The loan bears interest at the rate of the greater of three months LIBOR+5% per annum, or 7% per annum. During March 2014 $30 was repaid to the other shareholder. As of December 31, 2014, the principal of the loan is $2,970. Interest is payable quarterly in arrears. The principal of the loan should have been repaid on February 28, 2014. | |||||||||
The loan provided by the controlling shareholder is secured by a floating charge over all of the Company's assets that are subordinated to the specific and floating charges over the Company's assets that were granted to certain banks and financing institutes. | |||||||||
According to the standstill agreement the principle amounts bears additional default interest rate of 5% (see also section 7 below). | |||||||||
As part of this loan agreement, the Company issued 1,200,000 warrants at an exercise price of $2.5 per share exercisable for a term of three years. In September 2014, 120,000 warrants were exercised (see Note 11(c)). The transaction was accounted for as a Debt Instruments with Detachable Warrants in accordance with ASC 470-20. The total amount of discount on the loan as a result of the allocated proceeds attributable to the warrants feature amounting to $708, is amortized over the term of the loan using the effective interest method pursuant to ASC 835. | |||||||||
4.In August 2013, the Company and the controlling shareholder agreed on an additional short-term loan in the amount of up to $1,000 (the "Loan"). The Loan bears an interest rate of LIBOR+3.5%, to be repaid by the Company by December 31, 2013. In September 2013, the controlling shareholder provided us with $850 under the loan. In February 2014, the Company repaid the $850 provided under this Loan. | |||||||||
5.In April 2014 the Company and the controlling shareholder agreed on an additional short term loan in the amount of up to $1,000. The loan bears an interest rate of LIBOR+3.5%, to be repaid by the Company by December 31, 2014. | |||||||||
6.As of December 31, 2014, the principle loans amounts to a total of $8,120 and were not yet repaid. Therefore, the loans were classified as a short term loans. | |||||||||
7.In February 2013, the Company entered into a "standstill agreement" with its controlling shareholder and another shareholder ("the parties"), according to which those shareholders will not take any action, or otherwise exercise their rights, with respect to the collection of loans at least until January 31, 2014. According to the agreement, all remaining balances of unpaid loans bears additional default interest rate as originally agreed in the loan agreements. | |||||||||
In April 2014, the agreement was extended in a year to January 31, 2015. | |||||||||
On April 27, 2015, a second amendment was approved by the parties as follows: the termination of the forbearance period has been extended to the earlier of (i) August 31, 2016 or (ii) 30 days after the closing of the Offering resulting in the repayment of at least $7.5M on account of the debts (see also Note 16). Pursuant to such recent amendment, the default interest payable, as of and after February 1, 2015 on all outstanding principal amounts is Libor + 9%. | |||||||||
8.The Company has an annual line of bank credit of $1,000 out of which $930 was fully utilized as of December 31, 2014, and a line of credit for guarantees of approximately $1,134, out of which $479 was utilized as of December 31, 2014. In addition, the Company may secure borrowing with one of its banks against specific accounts receivables up to $2,250. As of December 31, 2014, the Company secured borrowings against specific accounts receivables in the amount of $659 (see also Note 10f). | |||||||||
The annual average interest rate on the lines of credit is 3.023% at December 31, 2014. | |||||||||
The guarantees are secured by a first priority floating charge on all of the Company's assets and by a fixed charge on goodwill (intangible assets), unpaid share capital and insurance rights (rights to proceeds on insured assets in the event of loss). | |||||||||
The agreements with the Banks prohibit the Company from: (i) selling or otherwise transferring any assets except in the ordinary course of business, (ii) placing a lien on the Company's assets without the Bank's consent, or (iii) declaring dividend to its shareholders. | |||||||||
OTHER_ACCOUNTS_PAYABLE_AND_ACC
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 9:- | OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Payroll and related accruals | $ | 1,476 | $ | 1,895 | |||||||
Accrued expenses - subcontractors | 1,433 | 1,053 | |||||||||
Accrued expenses | 486 | 607 | |||||||||
Accrued commissions | - | 434 | |||||||||
Tax authorities | 602 | 361 | |||||||||
Derivatives Instruments | 216 | - | |||||||||
Others | 54 | - | |||||||||
$ | 4,267 | $ | 4,350 | ||||||||
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |||||
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 10:- | COMMITMENTS AND CONTINGENT LIABILITIES | |||
a.As of December 31, 2014, the Company was not a party to any legal proceedings. | |||||
b.The Company's research and development efforts have been partially financed through royalty-bearing programs sponsored by the OCS. In return for the OCS's participation, the Company is committed to pay royalties at a rate ranging from 3% to 5% of sales of the products whose research was supported by grants received from the OCS, up to 100% of the amount of such participation received linked to the U.S. dollar. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required. The Company's total obligation for royalties, net of royalties paid or accrued, totaled approximately $1.5M as of December 31, 2014. The total amount of royalties charged to operations for the years ended December 31, 2014, 2013 and 2012 was approximately $18, $12 and $6, respectively. As of December 31, 2014, the company received total grants from the OCS in the amount of $5,545. | |||||
Research and development grants received from the OCS, amounted to $0, $15 and $142 in the years ended December 31, 2014, 2013 and 2012, respectively. | |||||
c.Research and development projects undertaken by the Company were partially financed by the Binational Industrial Research and Development Fund ("BIRD") Foundation. The Company is committed to pay royalties to the BIRD Foundation at a rate of 5% of sales proceeds generating from projects for which the BIRD Foundation provided funding up to 150% of the sum financed by the BIRD Foundation. | |||||
The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required. The Company's total obligation for royalties, net of royalties paid or accrued, totaled approximately $2,066 as of December 31, 2014. Since the company had stated to BIRD that no revenues were generated from the funded projects, the foundation had agreed no royalties is due until future revenues, if any. No royalties were charged to operations for the years ended December 31, 2014, 2013 and 2012 | |||||
d.The Company's offices in Netanya, Israel are rented under a non-cancelable operating lease expiring January 31, 2018. In addition, the Company's motor vehicles are rented under operating leases. | |||||
Annual minimum future rental commitments under these leases, at exchange rates in effect on December 31, 2014, are approximately as follows: | |||||
2015 | $ | 549 | |||
2016 | 495 | ||||
2017 | 412 | ||||
2018 | 28 | ||||
$ | 1,484 | ||||
Lease expense for the years ended December 31, 2014, 2013 and 2012 was $754, $747 and $791, respectively. | |||||
e. Floating charges have been recorded on all of the Company's assets and specific charges have been recorded on certain assets in respect of the Company's liabilities to its banks and other creditors, including its shareholders. | |||||
f.The Company provides bank guarantees to its customers and others in the ordinary course of business. The guarantees which are provided to customers are to secure advances received at the commencement of a project or to secure performance of operational milestones. The total amount of bank guarantees provided to customers and others as of December 31, 2014 is approximately $479. | |||||
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | |
Dec. 31, 2014 | ||
SHAREHOLDERS' EQUITY [Abstract] | ||
SHAREHOLDERS' EQUITY | NOTE 11:- | SHAREHOLDERS' EQUITY |
a.Share capital: | ||
Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company. (see also note 16). | ||
b.Stock option plans: | ||
In 2003, the Company's Board approved the adoption of Israeli Employee Stock Option Plan ("the Plan"), which authorized the grant of options to purchase up to an aggregate of 1,666,667 Ordinary shares (in 2006 the Company's Board approved an increase in the plan by an additional 500,000 options), respectively, to officers, directors, consultants and key employees of the Company and its subsidiary. Options granted under the Plan expire within a maximum of ten years from adoption of the plan. One third of the options granted under the Company's Plan vest immediately on the grant date and the remaining two thirds vest ratably over two years. Compensation expense is recognized by the straight-line method. | ||
The exercise price of an option granted to an employee may not be less than 60% of the fair market value of the Ordinary shares on the date of grant of the option. The exercise price of an option granted to a non-employee director or consultant may not be less than 80% of the fair market value of the Ordinary shares on the date of grant of the option. Any options that are cancelled or forfeited before expiration become available for future grants. On December 31, 2014 and 2013, all outstanding options from prior years have been expired due to the plan expiry. | ||
c.Warrants: | ||
During February 2012, pursuant to 2012 loan agreement (Note 8(3)) the Company issued warrants to purchase 1,200,000 Ordinary shares at an exercise price of $2.5 per share for a term of three years. | ||
The fair value of the warrants was based on the Black-Scholes-Merton option-pricing model, assuming a stock price of $2.04, a risk free interest of 0.41%, a volatility factor of 52.5%, dividend yield of 0% and contractual life of three years. | ||
During September 2014, 120,000 warrants were exercised to 69,749 Ordinary shares on a cashless basis as agreed in the warrants agreement. All other 1,080,000 warrants were expired on February 2015 due to the end of their contractual life. | ||
TAXES_ON_INCOME
TAXES ON INCOME | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
TAXES ON INCOME [Abstract] | |||||||||
TAXES ON INCOME | NOTE 12:- | TAXES ON INCOME | |||||||
a.The Israeli corporate tax rate was 25% in 2012 and 2013 and 26.5% in 2014. | |||||||||
On August 5, 2013, the "Knesset" issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 ("the Budget Law"), which consists, among others, of fiscal changes whose main aim is to enhance the collection of taxes in those years. | |||||||||
These changes include, among others, increasing the corporate tax rate from 25% to 26.5% and cancelling the reduction in the tax rates applicable to privileged enterprises (9% in development area A and 16% elsewhere). | |||||||||
b.Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: | |||||||||
The Company qualifies as an "Industrial Company" under the Law for the Encouragement of Industry (Taxes), 1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law defines an “Industrial Company” as a company that is resident in Israel and that derives at least 90% of its income in any tax year, other than income from defense loans, capital gains, interest and dividends, from an enterprise whose major activity in a given tax year is industrial production. | |||||||||
The principal benefit from the above law is the deduction of expenses in connection with a public offering. Also, under the industrial Encouragement Law an "Industrial Company" is entitled to special rates of depreciation for industrial equipment and in addition to amortization of the cost of purchased know-how and patents over an eight year period for tax purposes and an accelerated depreciation rate on equipment. | |||||||||
Eligibility for the benefits under the Industry Encouragement Law is not subject to receipt of prior approval from any governmental authority. | |||||||||
c.As of December 31, 2014, the net operating tax loss carryforward relating to the Company in Israel amounted to approximately $ 61.8 million, including a carryforward capital loss amounting to approximately $ 3.4 million. Carryforward losses in Israel may be carried forward indefinitely and may be offset against future taxable income. | |||||||||
As the Company believes that it is more likely than not that the deferred tax assets in respect of these carryforward losses amounting to approximately $ 16.7 million will not be utilized, the Company recorded a valuation allowance for the entire balance of the deferred tax asset relating to the carryforward losses. | |||||||||
d.The main reconciling items between the statutory tax rate of the Company and the effective tax rate is the valuation allowance recorded in respect of the deferred tax assets relating to net operating loss carryforward and other temporary differences due to the uncertainty of the realization of such tax assets. | |||||||||
Deferred income taxes: | |||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net operating loss carry forward | $ | 16,389 | $ | 16,926 | |||||
Allowance and reserve | 346 | 351 | |||||||
Total deferred tax assets before valuation allowance | 16,735 | 17,277 | |||||||
Valuation allowance | (16,735 | ) | (17,277 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
As of December 31, 2014 and December 31, 2013, the Company has provided valuation allowances in respect of deferred tax assets resulting from tax loss carry forward and other temporary differences, since it has a history of operating losses and current uncertainty concerning its ability to realize these deferred tax assets in the future. | |||||||||
The Company account for its income tax uncertainties in accordance with FASB ASC No. 740 which clarifies the accounting for uncertainties in income taxes recognized in a company's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. | |||||||||
As of December 31, 2014 and 2013, there were no unrecognized tax benefits that if recognized would affect the annual effective tax rate. | |||||||||
FINANCIAL_EXPENSES_NET
FINANCIAL EXPENSES, NET | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
FINANCIAL EXPENSES, NET [Abstract] | |||||||||||||
FINANCIAL EXPENSES, NET | NOTE 13:- FINANCIAL EXPENSES, NET | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income: | |||||||||||||
Foreign currency exchange differences | $ | 208 | $ | 15 | $ | 166 | |||||||
Interest on cash equivalents and restricted deposits | 5 | 12 | 18 | ||||||||||
Others | - | - | 31 | ||||||||||
(213 | ) | (27 | ) | (215 | ) | ||||||||
Expenses: | |||||||||||||
Interest on convertible note and loans from shareholders | 708 | 729 | 376 | ||||||||||
Withholding taxes of Interest to convertible note and loans from shareholders | 294 | 205 | 106 | ||||||||||
Amortization of discount on a convertible note and loans from shareholders | 43 | 489 | 516 | ||||||||||
Foreign currency exchange differences | 271 | 135 | 60 | ||||||||||
Interest on loans from banks and other credit balances | 7 | 84 | 26 | ||||||||||
Bank commissions and others | 144 | 292 | 280 | ||||||||||
1,467 | 1,934 | 1,364 | |||||||||||
Financial Expenses, net | $ | 1,254 | $ | 1,907 | $ | 1,149 | |||||||
RELATED_PARTY_BALANCE_AND_TRAN
RELATED PARTY BALANCE AND TRANSACTIONS | 12 Months Ended | |
Dec. 31, 2014 | ||
RELATED PARTY BALANCE AND TRANSACTIONS [Abstract] | ||
RELATED PARTY BALANCE AND TRANSACTIONS | NOTE 14:- | RELATED PARTY BALANCE AND TRANSACTIONS |
For the year ended December 31, 2014, the Company incurred $473 in respect of interest on loans received from its shareholders. | ||
See also Notes 8 and 11c for transactions with the Company's shareholders. | ||
MAJOR_CUSTOMERS_AND_GEOGRAPHIC
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION [Abstract] | |||||||||||||
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | NOTE 15:- MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | ||||||||||||
a.In accordance with Statement of ASC 280, "Segment reporting", the Company is organized and operates as one business segment, which develops, manufactures and sells ATE products, avionics equipment and aviation data acquisition and debriefing systems (see also Note 1a). | |||||||||||||
b.Revenues by geographic areas: | |||||||||||||
Revenues are attributed to geographic area based on the location of the end customers as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Israel | $ | 5,005 | $ | 4,267 | $ | 5,329 | |||||||
Asia | 6,604 | 5,466 | 4,594 | ||||||||||
North America | 8,072 | 5,091 | 2,370 | ||||||||||
Latin America | 2,731 | 6,798 | 8,943 | ||||||||||
Europe | 69 | 139 | 315 | ||||||||||
Total | $ | 22,481 | $ | 21,761 | $ | 21,551 | |||||||
c.Major customers: | |||||||||||||
Revenues from single customers that exceed 10% of the total revenues in the reported years as a percentage of total revenues are as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
% | |||||||||||||
Customer A | 5 | 1 | 5 | ||||||||||
Customer B | 10 | 12 | 11 | ||||||||||
Customer C | - | 11 | 9 | ||||||||||
Customer D | 16 | 20 | 32 | ||||||||||
Customer E | 2 | 2 | 11 | ||||||||||
Customer F | 22 | 17 | 6 | ||||||||||
Customer G | 13 | 17 | 5 | ||||||||||
Customer H | 10 | - | - | ||||||||||
d.Long-lived assets by geographic areas: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Israel | $ | 2,820 | $ | 2,930 | |||||||||
China | 557 | 644 | |||||||||||
$ | 3,377 | $ | 3,574 | ||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | ||
Dec. 31, 2014 | |||
SUBSEQUENT EVENTS [Abstract] | |||
SUBSEQUENT EVENT | NOTE 16:- | SUBSEQUENT EVENTS: | |
On April 16, 2015, the Company's shareholders have approved the following: | |||
a. | The increase of the Company's authorized share capital by NIS 200,000, such that following the increase, the authorized share capital shall equal NIS 450,000 divided into 30,000,000 ordinary shares, par value NIS 0.015 each, and | ||
b. | An outline for the repayment of the Company's debts to its shareholders, pursuant to which the Company will offer new Ordinary Shares in a registered public Offering in order to raise up to approximately US$ 13 million: | ||
1 | The lenders will have the right to participate in the Offering on the same terms as the underwriter or placement agent for the Offering will establish. | ||
2 | In the event that by September 30, 2015 the Offering is not completed, or if the net proceeds of the Offering are insufficient to repay the debts in full, the lenders shall be entitled to convert some or all of the remaining debt into the Company's ordinary shares. The terms of the Conversion were also agreed and are as follows: (i) the minimum amount to be converted at any one time is US$300,000 of Debt; (ii) the share issue price will be the lower of $1.00 or 15% below the preceding 7 days VWAP; and (iii) any unconverted debt will continue to be subject to the terms of the extended standstill agreement. | ||
c. | Following the approval of the Company's shareholders, the standstill agreement was further amended and the termination of the forbearance period has been extended as further details in Note 8, section 7 above. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||
Use of estimates | a. | Use of estimates: | ||||||||||||||||||
The preparation of financial statements in conformity with ("US GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. | ||||||||||||||||||||
Financial statements in U.S. dollars | b. | Financial statements in U.S. dollars: | ||||||||||||||||||
Most of the revenues of the Company are generated in U.S. dollars. In addition, a substantial portion of the costs of the Company is incurred in U.S dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, its functional and reporting currency is the dollar. | ||||||||||||||||||||
Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with ASC 830, "Foreign Currency Matters". All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate, in the period in which the currency exchange rate changes. | ||||||||||||||||||||
The financial statements of the Company's foreign subsidiary, whose functional currency is not the U.S. dollar, have been translated into dollars. All balance sheet amounts have been translated using the exchange rates in effect at balance sheet date. Statement of operation amounts have been translated using the average exchange rate prevailing during the year. Such translation adjustments are reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. | ||||||||||||||||||||
Basis of consolidation | c. | Basis of consolidation: | ||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiary. Inter-company transactions and balances have been eliminated upon consolidation. | ||||||||||||||||||||
Reclassification | d. | Reclassification: | ||||||||||||||||||
Certain amounts in prior years' financial statements have been reclassified to conform to the current year's presentation Withholding tax expenses were reclassified from general and administrative to net financial expenses. This reclassification did not impact total assets, total liabilities, shareholders' equity, and results of operations and cash flows. | ||||||||||||||||||||
Cash equivalents | e. | Cash equivalents: | ||||||||||||||||||
All highly liquid investments that are readily convertible to cash and are not restricted as to withdrawal or use and the period to maturity of which did not exceed three months at time of deposit, are considered cash equivalents. | ||||||||||||||||||||
Restricted deposit | f. | Restricted deposit: | ||||||||||||||||||
Restricted cash is invested in long term and short-term bank deposits (less than twelve months), which are mainly used as security for the Company's guarantees to customers. The deposits are in U.S. dollars and bear a variable interest of up to 1.5%. | ||||||||||||||||||||
Inventories | g. | Inventories: | ||||||||||||||||||
Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories and for market prices lower than cost, (see also Note 5). | ||||||||||||||||||||
Cost is determined as follows: | ||||||||||||||||||||
Raw materials and components - using the FIFO cost method. | ||||||||||||||||||||
Work in progress and finished goods - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs. | ||||||||||||||||||||
Costs incurred on long-term contracts in progress include direct labor, material, subcontractors, other direct costs and an allocation of overhead, which represent recoverable costs incurred for production. | ||||||||||||||||||||
Property, plant and equipment | h. | Property, plant and equipment: | ||||||||||||||||||
Property plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: | ||||||||||||||||||||
% | ||||||||||||||||||||
Factory and other buildings | 4 | |||||||||||||||||||
Machinery and equipment | Jul-33 | |||||||||||||||||||
Office furniture and equipment | 15-Jun | |||||||||||||||||||
Leasehold improvements are depreciated over the shorter of the estimated useful life or the lease period. | ||||||||||||||||||||
Assets, in respect of which investment grants have been received, are presented at cost less the related grant amount. Depreciation is based on net cost. | ||||||||||||||||||||
Impairment of long-lived assets | i. | Impairment of long-lived assets: | ||||||||||||||||||
The Company's long-lived assets are reviewed for impairment in accordance with ASC 360, "Property, plant and equipment"; whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2014, 2013 and 2012, no impairment losses have been identified. | ||||||||||||||||||||
Goodwill | j. | Goodwill | ||||||||||||||||||
Goodwill represents excess of the costs over the net assets of businesses acquired. Under ASC 350, "Intangibles - Goodwill and other", goodwill acquired in a business combination should not be amortized. ASC 350 requires goodwill to be tested for impairment at least annually or between annual tests in certain circumstances, and written down when impaired. | ||||||||||||||||||||
ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment while the second phase (if necessary) measures impairment. In the first phase of impairment testing, goodwill attributable to each of the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. The Company determines its fair value according to the Company's market capitalization and the goodwill was tested for impairment by comparing the fair market value with its carrying amount. As of December 31, 2014, no impairment indicators have been identified. As a result, step two was not required. | ||||||||||||||||||||
Research and development costs | k. | Research and development costs: | ||||||||||||||||||
Research and development costs, net of participation grants, include costs incurred for research and development and are expensed as incurred. | ||||||||||||||||||||
The Company received royalty-bearing grants, from the Chief Scientist's Office of the Israeli Ministry of Industry, Trade and Labor ("OCS") for the purpose of partially funding research and development projects. The grants are recognized as a deduction from research and development costs incurred (see also Note 10b). | ||||||||||||||||||||
Income taxes | l. | Income taxes: | ||||||||||||||||||
The Company accounts for income taxes in accordance with ASC 740, "Income taxes". This statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax based assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. | ||||||||||||||||||||
The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. | ||||||||||||||||||||
The Company applies ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. | ||||||||||||||||||||
The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The adoption of ASC 740-10 did not result in a change in the Company's accumulated deficit. The Company did not record any provision in connection with ASC 740-10 as of December 31, 2014 and 2013. | ||||||||||||||||||||
Severance pay | m. | Severance pay: | ||||||||||||||||||
The Company's agreements with most of its employees are in accordance with section 14 of the Severance Pay Law -1963, under which the Company's contributions for severance pay shall be instead of severance compensation. Upon release of the policy to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments will be made by the Company to the employee. | ||||||||||||||||||||
The Company's liability for severance pay for the employees that are not covered in section 14 is calculated pursuant to Israel's Severance Pay Law, based on the most recent salary of the employees as of the balance sheet date less monthly deposits for insurance policies and/or pension funds. Employees are entitled to one month's salary for each year of employment or a portion thereof. | ||||||||||||||||||||
The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli severance pay law or labor agreements. | ||||||||||||||||||||
Severance expense recorded in the statement of operations is net of interest and other income accumulated in the deposits. Severance expense for the years ended December 31, 2014, 2013 and 2012 amounted to $674, $483 and $562, respectively. | ||||||||||||||||||||
Fair value of financial instruments | n. | Fair value of financial instruments: | ||||||||||||||||||
The Company measures its financial instruments at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. | ||||||||||||||||||||
A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: | ||||||||||||||||||||
Level 1 - | Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. | |||||||||||||||||||
Level 2 - | Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | |||||||||||||||||||
Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||||||||||||||||||
The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. | ||||||||||||||||||||
The carrying amount of cash and cash equivalents, restricted deposits, trade receivables, other accounts receivable, bank credit and current maturities of long term loans, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. | ||||||||||||||||||||
Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. | ||||||||||||||||||||
The following table presents the Company's assets (liabilities) measured at fair value on a recurring basis at December 31, 2014 and 2013: | ||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
Total | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
31-Dec-14 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
Total | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
Concentrations of credit risk | o. | Concentrations of credit risk: | ||||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and long-term receivables. | ||||||||||||||||||||
The Company's cash and cash equivalents and restricted cash are mainly held in U.S. dollars with major banks in Israel. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. | ||||||||||||||||||||
The Company's trade receivables are derived from sales to large and solid organizations located mainly in the United States, Asia, South America and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to these amounts that the Company has determined to be doubtful of collection. The allowance is computed for specific debts and the collectability is determined based upon the Company's experience. | ||||||||||||||||||||
The Company has no off-balance sheet credit risks. | ||||||||||||||||||||
Comprehensive income (loss) | p. | Comprehensive income (loss): | ||||||||||||||||||
The Company accounts for comprehensive income in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components. | ||||||||||||||||||||
Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. | ||||||||||||||||||||
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. Accordingly, the Company adopted ASU 2011-05 on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders' equity. Upon adoption of the new guidance, the Company elected to present a separate statement of consolidated comprehensive income. | ||||||||||||||||||||
The total accumulated other comprehensive income, net was as follows: | ||||||||||||||||||||
31-Dec | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Accumulated foreign currency translation differences | $ | 536 | $ | 547 | ||||||||||||||||
The following table summarizes the changes in accumulated balances of other comprehensive income, net of taxes for the year ended December 31, 2014: | ||||||||||||||||||||
Accumulated | Total | |||||||||||||||||||
foreign currency translation | ||||||||||||||||||||
differences | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 547 | $ | 547 | ||||||||||||||||
Current period other comprehensive income (loss) | (11 | ) | (11 | ) | ||||||||||||||||
Balance as of December 31, 2014 | $ | 536 | $ | 536 | ||||||||||||||||
Warranty | q. | Warranty: | ||||||||||||||||||
In connection with the sale of its products, the Company provides product warranties for periods between one to two years. Based on past experience and engineering estimates, the liability from these warranties is not material as of December 31, 2014 and 2013. | ||||||||||||||||||||
Revenue recognition | r. | Revenue recognition: | ||||||||||||||||||
The Company generates revenues mainly from the sale of products and from long-term fixed price contracts of defense electronics as follows: data recording and management systems, inertial navigation systems for air and land applications, avionics solutions, avionics for UAVs, and land radar for defense forces and border protection applications. In addition, the Company provides manufacturing, development and product support services. | ||||||||||||||||||||
The Company also generates revenues from repair services using its ATE mainly through CACS. | ||||||||||||||||||||
Product revenues: | ||||||||||||||||||||
The Company recognizes revenue from sales of products in accordance with ASC 605-10, "Revenue Recognition" (Formerly "Staff Accounting Bulletin ("SAB") No. 104"). Product revenue is recognized when there is persuasive evidence of an arrangement, the fee is fixed or determinable, delivery of the product to the customer has occurred and the Company has determined that collection of the fee is probable. If the product requires specific customer acceptance, revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions are satisfied. | ||||||||||||||||||||
Revenues from long-term fixed price contracts which provide a substantial level of development efforts are recognized in accordance with ASC 605-35 ("Construction-Type and Production-Type contracts"), using contract accounting on a percentage of completion method in accordance with the "Input Method". The percentage of completion is determined based on the ratio of actual costs incurred to total costs estimated to be incurred over the duration of the contract. With regard to contracts for which a loss is anticipated, a provision is made for the entire amount of the estimated loss at the time such loss becomes evident. As of December 31, 2014 and 2013, the provision for estimated losses identified is $0 and $41, respectively. | ||||||||||||||||||||
Revenues from long-term fixed-price contracts that involve both development and production are recorded using the cost-to-cost method (development phase) and units-of-delivery method (production phase) as applicable to each phase of the contract, as the basis to measure progress toward completion | ||||||||||||||||||||
Estimated gross profit or loss from long-term contracts may change due to changes in estimates resulting from differences between actual performance and original forecasts. Such changes in estimated gross profit or loss are recorded in results of operations when they are reasonably determinable by management, on a cumulative catch-up basis. | ||||||||||||||||||||
The Company believes that the use of the percentage of completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs. In addition, contracts executed include provisions that clearly specify the enforceable rights regarding services to be provided and received by the parties to the contracts, the consideration to be exchanged and the manner and terms of settlement. In all cases, the Company expects to perform its contractual obligations and its customers are expected to satisfy their obligations under the contract. | ||||||||||||||||||||
Service revenues: | ||||||||||||||||||||
Revenues from services are recognized as the services are performed. | ||||||||||||||||||||
Basic and diluted net income (loss) per share | s. | Basic and diluted net income (loss) per share: | ||||||||||||||||||
Basic net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year in accordance with ASC 260, "Earnings per share". For the years ended December 31, 2013 and 2012, all the outstanding options, convertible notes and warrants have been excluded from the computation of diluted net income (loss) per share, since their effect is anti-dilutive. | ||||||||||||||||||||
Derivatives and hedging | t. | Derivatives and hedging: | ||||||||||||||||||
The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and hedging", as amended and related Interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for cash flow hedge transactions) or recognized in other comprehensive income until the hedged item is recognized in earnings (for fair value hedge transactions). | ||||||||||||||||||||
The ineffective portion of a derivative's change in fair value is recognized in earnings. If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities. | ||||||||||||||||||||
The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with payroll expenses mainly incurred in NIS. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as financial expenses, net. | ||||||||||||||||||||
As of December 31, 2014 and December 31, 2013, the fair value of the outstanding forward contracts is $216 which was recorded in other accruals against financial expenses and $46 which was recorded in other receivables against financial income, respectively. | ||||||||||||||||||||
Recently Issued Accounting Standards | u. | Recently Issued Accounting Standards | ||||||||||||||||||
In May 2014, FASB issued comprehensive new revenue recognition guidance, (ASU 2014-09 - Revenue from Contracts with Customers (Topic 606) effectively replacing all current guidance on the topic. Given the significance of this pronouncement, the Company is currently in the process of reviewing the new standard and its potential impact on the Company. The new guidance is effective for the Company's consolidated financial statements beginning on January 1, 2017. The effects of the new guidance on the Company's statements of the financial position, results of operations and cash flows are still being assessed. | ||||||||||||||||||||
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||
Schedule of Annual Depreciation Rates | % | |||||||||||||||||||
Factory and other buildings | 4 | |||||||||||||||||||
Machinery and equipment | Jul-33 | |||||||||||||||||||
Office furniture and equipment | 15-Jun | |||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | 31-Dec-13 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
Total | $ | - | $ | 46 | $ | - | $ | 46 | ||||||||||||
31-Dec-14 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivatives: | ||||||||||||||||||||
Foreign currencies derivatives | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
Total | $ | - | $ | 216 | $ | - | $ | 216 | ||||||||||||
Schedule of total accumulated other comprehensive income, net | 31-Dec | |||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Accumulated foreign currency translation differences | $ | 536 | $ | 547 | ||||||||||||||||
Summary of the changes in accumulated balances of other comprehensive income, net of taxes | Accumulated | Total | ||||||||||||||||||
foreign currency translation | ||||||||||||||||||||
differences | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 547 | $ | 547 | ||||||||||||||||
Current period other comprehensive income (loss) | (11 | ) | (11 | ) | ||||||||||||||||
Balance as of December 31, 2014 | $ | 536 | $ | 536 |
CONTRACTS_IN_PROGRESS_Tables
CONTRACTS IN PROGRESS (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
CONTRACTS IN PROGRESS [Abstract] | ||||||||||
Schedule of Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | December 31, | |||||||||
2014 | 2013 | |||||||||
Costs incurred on uncompleted contracts, net (*) | $ | 18,417 | $ | 35,032 | ||||||
Estimated earnings | 8,544 | 5,221 | ||||||||
26,961 | 40,253 | |||||||||
Less - billings and progress payments | 23,287 | 37,205 | ||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 3,674 | 3,048 | ||||||||
Less: Long-term portion | (1,017 | ) | (1,017 | ) | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts - Current portion | $ | 2,657 | $ | 2,031 | ||||||
(*) | Net of OCS grants in the amount of $0 and $15 as of December 31, 2014 and 2013, respectively (see Note 10b). |
OTHER_ACCOUNTS_RECEIVABLE_AND_1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | |||||||||||
Schedule of other accounts receivable and prepaid expenses | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Prepaid expenses | $ | 279 | $ | 250 | |||||||
Government institutions | 53 | 79 | |||||||||
Derivative instruments | - | 46 | |||||||||
Advance payment to vendors | 96 | 37 | |||||||||
$ | 428 | $ | 412 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
INVENTORIES [Abstract] | |||||||||||
Inventories | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Raw materials | $ | 2,891 | $ | 3,833 | |||||||
Work in progress | 2,394 | 2,157 | |||||||||
Finished goods | 1,366 | 808 | |||||||||
$ | 6,651 | $ | 6,798 |
LONG_TERM_RECEIVABLES_AND_DEPO1
LONG TERM RECEIVABLES AND DEPOSITS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
LONG TERM RECEIVABLES AND DEPOSITS [Abstract] | |||||||||||
Schedule of Long Term Receivables and Deposits | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts (see Note 3) | $ | 1,017 | $ | 1,017 | |||||||
Restricted deposits | 330 | 38 | |||||||||
Leasing deposits | 47 | 78 | |||||||||
$ | 1,394 | $ | 1,133 |
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |||||||||||
Schedule of Property, Plant and Equipment | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Cost: | |||||||||||
Factory building | $ | 1,989 | $ | 1,989 | |||||||
Other buildings | 1,366 | 1,371 | |||||||||
Machinery and equipment (*) | 9,530 | 9,095 | |||||||||
Office furniture and equipment | 435 | 411 | |||||||||
Leasehold improvements | 231 | 209 | |||||||||
13,551 | 13,075 | ||||||||||
Accumulated depreciation: | |||||||||||
Factory building | 1,898 | 1,821 | |||||||||
Other buildings | 726 | 674 | |||||||||
Machinery and equipment (*) | 7,693 | 7,173 | |||||||||
Office furniture and equipment | 332 | 311 | |||||||||
Leasehold improvements | 112 | 110 | |||||||||
10,761 | 10,089 | ||||||||||
Depreciated cost | $ | 2,790 | $ | 2,986 |
BANK_CREDIT_AND_LOANS_Tables
BANK CREDIT AND LOANS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BANK CREDIT AND LOANS [Abstract] | |||||||||
Schedule of Bank Credit and Loans | December 31, | ||||||||
2014 | 2013 | ||||||||
Loan in U.S. dollars from shareholders (2,3,4,5) | $ | 5,120 | $ | 5,307 | |||||
Convertible note from controlling shareholder, net (1) | 3,000 | 3,000 | |||||||
Bank credit (8) | 1,589 | 1,887 | |||||||
$ | 9,709 | $ | 10,194 |
OTHER_ACCOUNTS_PAYABLE_AND_ACC1
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||
Schedule of Other Accounts Payable and Accrued Expenses | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Payroll and related accruals | $ | 1,476 | $ | 1,895 | |||||||
Accrued expenses - subcontractors | 1,433 | 1,053 | |||||||||
Accrued expenses | 486 | 607 | |||||||||
Accrued commissions | - | 434 | |||||||||
Tax authorities | 602 | 361 | |||||||||
Derivatives Instruments | 216 | - | |||||||||
Others | 54 | - | |||||||||
$ | 4,267 | $ | 4,350 |
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |||||
Schedule of Future Minimum Payments Under Operating Leases | 2015 | $ | 549 | ||
2016 | 495 | ||||
2017 | 412 | ||||
2018 | 28 | ||||
$ | 1,484 |
TAXES_ON_INCOME_Tables
TAXES ON INCOME (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
TAXES ON INCOME [Abstract] | |||||||||
Schedule of Deferred Tax Assets | December 31, | ||||||||
2014 | 2013 | ||||||||
Net operating loss carry forward | $ | 16,389 | $ | 16,926 | |||||
Allowance and reserve | 346 | 351 | |||||||
Total deferred tax assets before valuation allowance | 16,735 | 17,277 | |||||||
Valuation allowance | (16,735 | ) | (17,277 | ) | |||||
Net deferred tax assets | $ | - | $ | - |
FINANCIAL_EXPENSES_NET_Tables
FINANCIAL EXPENSES, NET (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
FINANCIAL EXPENSES, NET [Abstract] | |||||||||||||
Schedule of Financial Expenses, Net | Year ended | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income: | |||||||||||||
Foreign currency exchange differences | $ | 208 | $ | 15 | $ | 166 | |||||||
Interest on cash equivalents and restricted deposits | 5 | 12 | 18 | ||||||||||
Others | - | - | 31 | ||||||||||
(213 | ) | (27 | ) | (215 | ) | ||||||||
Expenses: | |||||||||||||
Interest on convertible note and loans from shareholders | 708 | 729 | 376 | ||||||||||
Withholding taxes of Interest to convertible note and loans from shareholders | 294 | 205 | 106 | ||||||||||
Amortization of discount on a convertible note and loans from shareholders | 43 | 489 | 516 | ||||||||||
Foreign currency exchange differences | 271 | 135 | 60 | ||||||||||
Interest on loans from banks and other credit balances | 7 | 84 | 26 | ||||||||||
Bank commissions and others | 144 | 292 | 280 | ||||||||||
1,467 | 1,934 | 1,364 | |||||||||||
Financial Expenses, net | $ | 1,254 | $ | 1,907 | $ | 1,149 |
MAJOR_CUSTOMERS_AND_GEOGRAPHIC1
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION [Abstract] | |||||||||||||
Schedule of Revenues by Geographic Area | Year ended | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Israel | $ | 5,005 | $ | 4,267 | $ | 5,329 | |||||||
Asia | 6,604 | 5,466 | 4,594 | ||||||||||
North America | 8,072 | 5,091 | 2,370 | ||||||||||
Latin America | 2,731 | 6,798 | 8,943 | ||||||||||
Europe | 69 | 139 | 315 | ||||||||||
Total | $ | 22,481 | $ | 21,761 | $ | 21,551 | |||||||
Schedule of Revenues by Major Customers | Year ended | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
% | |||||||||||||
Customer A | 5 | 1 | 5 | ||||||||||
Customer B | 10 | 12 | 11 | ||||||||||
Customer C | - | 11 | 9 | ||||||||||
Customer D | 16 | 20 | 32 | ||||||||||
Customer E | 2 | 2 | 11 | ||||||||||
Customer F | 22 | 17 | 6 | ||||||||||
Customer G | 13 | 17 | 5 | ||||||||||
Customer H | 10 | - | - | ||||||||||
Schedule of Long-Lived Assets by Geographic Area | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Israel | $ | 2,820 | $ | 2,930 | |||||||||
China | 557 | 644 | |||||||||||
$ | 3,377 | $ | 3,574 |
GENERAL_Narrative_Details
GENERAL (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Apr. 27, 2015 | Apr. 16, 2015 | Feb. 01, 2015 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||||||
GENERAL [Abstract] | ||||||
Number of operating segment | 1 | |||||
Accumulated deficit | $67,992,000 | 68,200,000 | ||||
Subsequent Event [Member] | Convertible debt [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Convertible amount of debt | 300,000 | |||||
Percentage of conversion price | 15.00% | |||||
Number of trading days | 7 days | |||||
Debt Instrument, Convertible, Latest Date | 31-Aug-16 | |||||
Number of extended convertible days | 30 days | |||||
Percentage of variable rate | 9.00% | |||||
Subsequent Event [Member] | Convertible debt [Member] | Minimum [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Conversion price | $1 | |||||
Repayment of convertible debt | 7,500,000 | |||||
Subsequent Event [Member] | IPO [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Proceeds from shares issued under initial public offering | $13,000,000 | |||||
CACS [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 80.00% | |||||
Equity interest held by third party | 20.00% | |||||
Revenue [Member] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues from major customers, percentage | 78.00% | 81.00% | 68.00% |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
Interest rate on investments held as restricted deposits | 1.50% | ||
Severance expense | $674 | $483 | $562 |
Provision for estimated losses | 0 | 41 | |
Outstanding forward contracts, fair value | $216 | $46 |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Factory and other buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rate of depreciation | 4.00% |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rate of depreciation | 7.00% |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rate of depreciation | 33.00% |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rate of depreciation | 6.00% |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual rate of depreciation | 15.00% |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Assets and Liablities Measured at Fair Value on a Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | $216 | $46 |
Total assets | 216 | 46 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | ||
Total assets | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | 216 | 46 |
Total assets | 216 | 46 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currencies derivatives assets | ||
Total assets |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Total Accumulated Other Comprehensive Income, Net) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income, net | $536 | $547 |
Accumulated foreign currency translation differences [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income, net | $536 | $547 |
SIGNIFICANT_ACCOUNTING_POLICIE7
SIGNIFICANT ACCOUNTING POLICIES (Changes in Accumulated Balances of Other Comprehensive Income, Net of Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning of the period | $547 | ||
Current period other comprehensive income (loss) | -11 | 79 | 25 |
Balance as of end of the period | 536 | 547 | |
Accumulated foreign currency translation differences [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning of the period | 547 | ||
Current period other comprehensive income (loss) | -11 | ||
Balance as of end of the period | $536 |
CONTRACTS_IN_PROGRESS_Details
CONTRACTS IN PROGRESS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
CONTRACTS IN PROGRESS [Abstract] | ||||
Costs incurred on uncompleted contracts, net | $18,417 | [1] | $35,032 | [1] |
Estimated earnings | 8,544 | 5,221 | ||
Total costs and estimated earnings on uncompleted contract | 26,961 | 40,253 | ||
Less - billings and progress payments | 23,287 | 37,205 | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 3,674 | 3,048 | ||
Less: Long-term portion | -1,017 | -1,017 | ||
Costs and estimated earnings in excess of billings on uncompleted contracts - Current portion | 2,657 | 2,031 | ||
OCS Grants | $0 | $15 | ||
[1] | Net of OCS grants in the amount of $0 and $15 as of December 31, 2014 and 2013, respectively (see Note 10b). |
OTHER_ACCOUNTS_RECEIVABLE_AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ||
Prepaid expenses | $279 | $250 |
Government institutions | 53 | 79 |
Derivative instruments | 46 | |
Advance payment to vendors | 96 | 37 |
Total | $428 | $412 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INVENTORIES [Abstract] | |||
Raw materials | $2,891 | $3,833 | |
Work in progress | 2,394 | 2,157 | |
Finished goods | 1,366 | 808 | |
Inventories | 6,651 | 6,798 | |
Write-offs of inventories | $138 | $313 | $72 |
LONG_TERM_RECEIVABLES_AND_DEPO2
LONG TERM RECEIVABLES AND DEPOSITS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
LONG TERM RECEIVABLES AND DEPOSITS [Abstract] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts (see Note 3) | $1,017 | $1,017 |
Restricted deposits | 330 | 38 |
Leasing deposits | 47 | 78 |
Long-term receivables and deposits, Total | $1,394 | $1,133 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | |||
Total cost | $13,551 | $13,075 | |
Total accumulated depreciation | 10,761 | 10,089 | |
Depreciated cost | 2,790 | 2,986 | |
Depreciation expenses | 690 | 752 | 742 |
Factory building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 1,989 | 1,989 | |
Total accumulated depreciation | 1,898 | 1,821 | |
Other buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 1,366 | 1,371 | |
Total accumulated depreciation | 726 | 674 | |
Machinery and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 9,530 | 9,095 | |
Total accumulated depreciation | 7,693 | 7,173 | |
Write-offs of property, plant and equipment | 0 | 333 | 3,502 |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 435 | 411 | |
Total accumulated depreciation | 332 | 311 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 231 | 209 | |
Total accumulated depreciation | $112 | $110 |
BANK_CREDIT_AND_LOANS_Schedule
BANK CREDIT AND LOANS (Schedule of Debt) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Short-term and Long-term Debt [Line Items] | ||
Total Current maturities | $9,709 | $10,194 |
Loan in U.S. dollars from shareholders [Member] | ||
Schedule of Short-term and Long-term Debt [Line Items] | ||
Total Current maturities | 5,120 | 5,307 |
Convertible note from controlling shareholder, net [Member] | ||
Schedule of Short-term and Long-term Debt [Line Items] | ||
Total Current maturities | 3,000 | 3,000 |
Bank credit [Member] | ||
Schedule of Short-term and Long-term Debt [Line Items] | ||
Total Current maturities | $1,589 | $1,887 |
BANK_CREDIT_AND_LOANS_Narrativ
BANK CREDIT AND LOANS (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||||
Feb. 28, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Jul. 31, 2008 | Sep. 30, 2012 | Dec. 31, 2007 | Dec. 31, 2010 | Apr. 27, 2015 | Feb. 01, 2015 | Feb. 28, 2014 | Sep. 30, 2013 | Aug. 31, 2013 | Sep. 30, 2014 | |
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Proceeds from loans from shareholders, net of issuance expenses | $1,000,000 | $850,000 | $3,998,000 | |||||||||||||||||
Warrants issued | 1,200,000 | |||||||||||||||||||
Warrant exercise price | $2.50 | |||||||||||||||||||
Warrants exercisable term, years | 3 years | |||||||||||||||||||
Discount on convertible note | 708,000 | |||||||||||||||||||
Total Current maturities | 9,709,000 | 10,194,000 | 10,194,000 | |||||||||||||||||
Repayment of loan | 1,700,000 | |||||||||||||||||||
Number of warrants warrants exercised | 120,000 | |||||||||||||||||||
Repayments of loan from shareholders | 1,230,000 | |||||||||||||||||||
Line of credit, applicable interest rate | 3.02% | |||||||||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Line of credit, maximum borrowing amounts | 1,000,000 | |||||||||||||||||||
Line of credit, amounts utilized | 930,000 | |||||||||||||||||||
Secured Borrowings [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Line of credit, maximum borrowing amounts | 1,134,000 | |||||||||||||||||||
Line of credit, amounts utilized | 479,000 | |||||||||||||||||||
Standstill Agreement [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Additional default interest rate | 5.00% | |||||||||||||||||||
Affiliated Entity [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Interest rate additional rate over LIBOR | 5.00% | |||||||||||||||||||
Total Long-term loans | 3,000,000 | 2,970,000 | ||||||||||||||||||
Annual rate | 7.00% | |||||||||||||||||||
Repayment date | 28-Feb-14 | |||||||||||||||||||
Majority Shareholder [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Interest rate additional rate over LIBOR | 3.50% | |||||||||||||||||||
Total Long-term loans | 2,700,000 | |||||||||||||||||||
Line of credit, maximum borrowing amounts | 1,000,000 | |||||||||||||||||||
Principal Owner [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Total Long-term loans | 300,000 | |||||||||||||||||||
Repayment of loan | 30,000 | |||||||||||||||||||
Loan in U.S. dollars from shareholders [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Proceeds from loans from shareholders, net of issuance expenses | 1,500,000 | |||||||||||||||||||
Interest rate additional rate over LIBOR | 3.00% | |||||||||||||||||||
Total Current maturities | 5,120,000 | 5,307,000 | 5,307,000 | |||||||||||||||||
Remaining unpaid loan amount | 1,150,000 | 1,150,000 | ||||||||||||||||||
Debt instrument, principal installment | 750,000 | 750,000 | ||||||||||||||||||
Repayment of loan | 350,000 | 350,000 | ||||||||||||||||||
Loan in U.S. dollars from shareholders [Member] | September Amendment [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Proceeds from loans from shareholders, net of issuance expenses | 1,148,000 | |||||||||||||||||||
Remaining unpaid loan amount | 352,000 | |||||||||||||||||||
Bank credit [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Total Current maturities | 1,589,000 | 1,887,000 | 1,887,000 | |||||||||||||||||
Bank credit [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Line of credit, maximum borrowing amounts | 2,250,000 | |||||||||||||||||||
Secured borrowing against specific accounts receivables, maximum amount | 659,000 | |||||||||||||||||||
Convertible note from controlling shareholder, net [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Proceeds from loans from shareholders, net of issuance expenses | 3,000,000 | |||||||||||||||||||
Warrants issued | 1,578,947 | |||||||||||||||||||
Warrant exercise price | $2.38 | |||||||||||||||||||
Warrants exercisable term, years | 5 years | |||||||||||||||||||
Interest rate additional rate over LIBOR | 7.50% | 3.50% | 3.96% | |||||||||||||||||
Debt conversion, price per share | $2.09 | |||||||||||||||||||
Discount on convertible note | 451,000 | |||||||||||||||||||
Total Current maturities | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||||||||||
Convertible note from controlling shareholder, net [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Interest rate additional rate over LIBOR | 9.00% | |||||||||||||||||||
Latest date of conversion | 31-Aug-16 | |||||||||||||||||||
Number of extended convertible days | 30 days | |||||||||||||||||||
Convertible note from controlling shareholder, net [Member] | Minimum [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Repayment of convertible debt | 7,500,000 | |||||||||||||||||||
Convertible note from controlling shareholder, net [Member] | Majority Shareholder [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Interest rate additional rate over LIBOR | 3.50% | |||||||||||||||||||
Total Long-term loans | 8,120,000 | |||||||||||||||||||
Amount of loan from shareholders | 850,000 | |||||||||||||||||||
Repayments of loan from shareholders | 850,000 | |||||||||||||||||||
Convertible note from controlling shareholder, net [Member] | Majority Shareholder [Member] | Maximum [Member] | ||||||||||||||||||||
Schedule of Short-term and Long-term Debt [Line Items] | ||||||||||||||||||||
Total Current maturities | 1,000,000 |
OTHER_ACCOUNTS_PAYABLE_AND_ACC2
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | ||
Payroll and related accruals | $1,476 | $1,895 |
Accrued expenses - subcontractors | 1,433 | 1,053 |
Accrued expenses | 486 | 607 |
Accrued commissions | 434 | |
Tax authorities | 602 | 361 |
Derivatives Instruments | 216 | |
Others | 54 | |
Total other accounts payable and accrued expenses | $4,267 | $4,350 |
COMMITMENTS_AND_CONTINGENT_LIA2
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments [Line Items] | |||
Total bank guarantees provided to customers and others | $479 | ||
OCS [Member] | |||
Commitments [Line Items] | |||
Total obligation for royalties | 1,500 | ||
Amount of royalties charged to operations | 18 | 12 | 6 |
Grants receivable from the OCS | 5,545 | ||
Grants received from OCS | 0 | 15 | 142 |
OCS [Member] | Maximum [Member] | |||
Commitments [Line Items] | |||
Royalties payable, percent of sales | 5.00% | ||
OCS [Member] | Minimum [Member] | |||
Commitments [Line Items] | |||
Royalties payable, percent of sales | 3.00% | ||
BIRD [Member] | |||
Commitments [Line Items] | |||
Royalties payable, percent of sales | 5.00% | ||
Total obligation for royalties | $2,066 |
COMMITMENTS_AND_CONTINGENT_LIA3
COMMITMENTS AND CONTINGENT LIABILITIES (Annual Minimum Future Rental Commitments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |||
2015 | $549 | ||
2016 | 495 | ||
2017 | 412 | ||
2018 | 28 | ||
Operating Leases, Future Minimum Payments Due, Total | 1,484 | ||
Lease expenses | $754 | $747 | $791 |
SHAREHOLDERS_EQUITY_Narrative_
SHAREHOLDERS' EQUITY (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||
Sep. 30, 2014 | Feb. 28, 2012 | Dec. 31, 2014 | Dec. 31, 2006 | Feb. 28, 2015 | Dec. 31, 2003 | |
SHAREHOLDERS' EQUITY [Abstract] | ||||||
Authorized grant of options, aggregate amount, shares | 1,666,667 | |||||
Authorized grants, additional options, shares | 500,000 | |||||
Vesting terms and description | One third of the options granted under the Company's Plan vest immediately on the grant date and the remaining two thirds vest ratably over two years. | |||||
Options granted, maximum number of years before expiration | 10 years | |||||
Minimum percent of fair market value of ordinary share on the date of grant, exercise price | 60.00% | |||||
Minimum percent of fair market value of ordinary share on the date of grant, exercise price, non-employee | 80.00% | |||||
Warrants issued | 1,200,000 | |||||
Warrant exercise price | $2.50 | |||||
Warrants issued, term, years | 3 years | |||||
Common stock, price per share | $2.04 | $2.50 | ||||
Risk free interest rate | 0.41% | |||||
Volatility factor | 52.50% | |||||
Dividend yield | 0.00% | |||||
Contractual life, years | 3 years | |||||
Number of warrants exercised | 120,000 | |||||
Ordinary shares on a cashless basis upon warrants exercise | 69,749 | |||||
Subsequent Event [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of warrants expired | 1,080,000 |
TAXES_ON_INCOME_Details
TAXES ON INCOME (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
TAXES ON INCOME [Abstract] | |||
Effective tax rate | 26.50% | 25.00% | 25.00% |
Net operating loss carry forward | $61,800,000 | ||
Capital loss carryforwards | 3,400,000 | ||
Deferred tax assets resulting from net operating loss and capital loss carryforwards | 16,700,000 | ||
Deferred tax assets: | |||
Net operating loss carry forward | 16,389,000 | 16,926,000 | |
Allowance and reserve | 346,000 | 351,000 | |
Total deferred tax assets before valuation allowance | 16,735,000 | 17,277,000 | |
Valuation allowance | -16,735,000 | -17,277,000 | |
Net deferred tax assets |
FINANCIAL_EXPENSES_NET_Details
FINANCIAL EXPENSES, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
FINANCIAL EXPENSES, NET [Abstract] | |||
Foreign currency exchange differences, income | $208 | $15 | $166 |
Interest on cash equivalents and restricted deposits | 5 | 12 | 18 |
Others | 31 | ||
Total other income | -213 | -27 | -215 |
Interest on convertible note and loans from shareholders | 708 | 729 | 376 |
Withholding taxes of Interest to convertible note and loans from shareholders | 294 | 205 | 106 |
Amortization of discount on a convertible note and loans from shareholders | 43 | 489 | 516 |
Foreign currency exchange differences | 271 | 135 | 60 |
Interest on loans from banks and other credit balances | 7 | 84 | 26 |
Bank commissions and others | 144 | 292 | 280 |
Total expenses | 1,467 | 1,934 | 1,364 |
Financial Expenses, net | $1,254 | $1,907 | $1,149 |
RELATED_PARTY_BALANCE_AND_TRAN1
RELATED PARTY BALANCE AND TRANSACTIONS (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
RELATED PARTY BALANCE AND TRANSACTIONS [Abstract] | |
Interest incurred, loans received from its shareholders | $473 |
MAJOR_CUSTOMERS_AND_GEOGRAPHIC2
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Revenues And Long-Lived Assets by Geographic Areas) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $22,481 | $21,761 | $21,551 |
Long-Lived Assets | 3,377 | 3,574 | |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 5,005 | 4,267 | 5,329 |
Long-Lived Assets | 2,820 | 2,930 | |
China [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-Lived Assets | 557 | 644 | |
Asia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 6,604 | 5,466 | 4,594 |
North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 8,072 | 5,091 | 2,370 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 2,731 | 6,798 | 8,943 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $69 | $139 | $315 |
MAJOR_CUSTOMERS_AND_GEOGRAPHIC3
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Revenues by Major Customers) (Details) (Revenue [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 78.00% | 81.00% | 68.00% |
Customer A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 5.00% | 1.00% | 5.00% |
Customer B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 10.00% | 12.00% | 11.00% |
Customer C [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 11.00% | 9.00% | |
Customer D [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 16.00% | 20.00% | 32.00% |
Customer E [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 2.00% | 2.00% | 11.00% |
Customer F [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 22.00% | 17.00% | 6.00% |
Customer G [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 13.00% | 17.00% | 5.00% |
Customer H [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues from major customers, percentage | 10.00% |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 16, 2015 | Apr. 16, 2015 | Apr. 16, 2015 | Apr. 16, 2015 |
ILS | ILS | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |
ILS | Convertible debt [Member] | Convertible debt [Member] | IPO [Member] | |||
USD ($) | Minimum [Member] | USD ($) | ||||
USD ($) | ||||||
Subsequent Event [Line Items] | ||||||
Amount of increase in authorized capital | 200,000 | |||||
Amount of authorized capital | 450,000 | |||||
Ordinary shares, shares authorized | 16,333,333 | 16,333,333 | 30,000,000 | |||
Ordinary shares, par value per share | 0.015 | 0.015 | 0.015 | |||
Proceeds from shares issued under initial public offering | 13,000,000 | |||||
Convertible amount of debt | $300,000 | |||||
Conversion price | $1 | |||||
Percentage of conversion price | 15.00% | |||||
Number of trading days | 7 days |