Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Aug. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TANDY LEATHER FACTORY INC | |
Entity Central Index Key | 0000909724 | |
Entity Address, State or Province | TX | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,663,921 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 11,423 | $ 15,905 |
Short-term Investments | 9,183 | 9,152 |
Accounts receivable-trade, net of allowance for doubtful accounts of $16 at March 31, 2020 and December 31, 2019, respectively | 339 | 409 |
Inventory | 29,224 | 24,042 |
Income tax receivable | 1,969 | 1,629 |
Prepaid expenses | 1,160 | 1,082 |
Other current assets | 146 | 297 |
Total current assets | 53,444 | 52,516 |
Property and equipment, at cost | 26,985 | 27,471 |
Less accumulated depreciation | (14,730) | (14,552) |
Property and equipment, net | 12,255 | 12,919 |
Operating lease assets | 12,613 | 13,897 |
Deferred income taxes | 691 | 427 |
Other intangibles, net of accumulated amortization of $547 at March 31, 2020 and December 31, 2019, respectively | 7 | 7 |
Other assets | 354 | 345 |
TOTAL ASSETS | 79,364 | 80,111 |
CURRENT LIABILITIES: | ||
Accounts payable-trade | 7,898 | 5,753 |
Accrued expenses and other liabilities | 2,303 | 2,656 |
Operating lease liabilities | 3,743 | 3,823 |
Total current liabilities | 13,944 | 12,232 |
Deferred income taxes | 296 | 296 |
Other non-current liabilities | 509 | 509 |
Operating lease liabilities, non-current | 10,052 | 10,655 |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.10 par value; 20,000,000 shares authorized; none issued or outstanding; attributes to be determined on issuance | 0 | 0 |
Common stock, $0.0024 par value; 25,000,000 shares authorized; 10,467,367 and 10,446,563 shares issued at March 31, 2020 and December 31, 2019, respectively | 25 | 25 |
Paid-in capital | 5,265 | 5,037 |
Retained earnings | 60,473 | 62,211 |
Treasury stock at cost (1,424,376 shares at March 31, 2020 and December 31, 2019, respectively) | (9,773) | (9,773) |
Accumulated other comprehensive loss (net of tax of $476 and $359 at March 31, 2020 and December 31, 2019, respectively) | (1,427) | (1,081) |
Total stockholders' equity | 54,563 | 56,419 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 79,364 | $ 80,111 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Allowance for doubtful accounts | $ 16 | $ 16 |
Accumulated amortization | $ 547 | $ 547 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0024 | $ 0.0024 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 10,467,367 | 10,446,563 |
Treasury stock, shares (in shares) | 1,424,376 | 1,424,376 |
Accumulated other comprehensive loss, tax | $ 476 | $ 359 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | [1] | ||
Consolidated Statements of Operations and Comprehensive Income (Loss) [Abstract] | ||||
Net sales | $ 17,145 | $ 20,941 | ||
Cost of sales | 7,279 | 8,696 | ||
Gross profit | 9,866 | 12,245 | ||
Operating expenses | 11,096 | 10,032 | ||
Impairment expense | 1,069 | 0 | ||
Income (loss) from operations | (2,299) | 2,213 | ||
Other (income) expense: | ||||
Interest expense | 0 | 32 | ||
Other, net | (53) | 110 | ||
Total other (income) expense | (53) | 142 | ||
Income (loss) before income taxes | (2,246) | 2,071 | ||
Provision (benefit) for income taxes | (508) | 551 | ||
Net income (loss) | (1,738) | [2] | 1,520 | |
Foreign currency translation adjustments, net of tax | (346) | 314 | ||
Comprehensive income (loss) | $ (2,084) | $ 1,834 | ||
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ (0.19) | $ 0.17 | ||
Diluted (in dollars per share) | $ (0.19) | $ 0.17 | ||
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 9,029,212 | [2] | 9,009,752 | |
Diluted (in shares) | 9,029,212 | [2] | 9,011,107 | |
[1] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 | |||
[2] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | [2] | ||
Cash flows from operating activities: | ||||
Net income (loss) | $ (1,738) | [1] | $ 1,520 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 335 | 494 | ||
Operating lease asset amortization | 898 | 865 | ||
Impairment of long-lived assets | 1,069 | 0 | ||
(Gain) loss on disposal of assets | 6 | (4) | ||
Stock-based compensation | 228 | 186 | ||
Deferred income taxes | (264) | 184 | ||
Exchange (gain) loss | (3) | 136 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable-trade | 88 | (56) | ||
Inventory | (5,302) | 3,172 | ||
Prepaid expenses | 27 | 33 | ||
Other current assets | 46 | (194) | ||
Accounts payable-trade | 3,107 | (1,281) | ||
Accrued expenses and other liabilities | (385) | (1,156) | ||
Income taxes, net | (293) | 109 | ||
Other assets | (952) | (41) | ||
Operating lease liabilities | (890) | (834) | ||
Total adjustments | (2,285) | 1,613 | ||
Net cash provided by (used in) operating activities | (4,023) | 3,133 | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | (184) | (31) | ||
Purchase of short-term investments | (1,697) | (5,000) | ||
Proceeds from sales of short-term investments | 1,700 | 0 | ||
Proceeds from sales of assets | 1 | 13 | ||
Net cash used in investing activities | (180) | (5,018) | ||
Cash flows from financing activities: | ||||
Payments on long-term debt | 0 | (8,968) | ||
Repurchase of treasury stock | 0 | (715) | ||
Net cash used in financing activities | 0 | (9,683) | ||
Effect of exchange rate changes on cash and cash equivalents | (279) | 177 | ||
Net decrease in cash and cash equivalents | (4,482) | (11,391) | ||
Cash and cash equivalents, beginning of period | 15,905 | 24,070 | ||
Cash and cash equivalents, end of period | $ 11,423 | $ 12,679 | ||
[1] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. | |||
[2] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Other Comprehensive Income (Loss) [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Balance at Dec. 31, 2018 | $ 25 | $ 4,267 | $ (9,038) | $ 64,476 | $ (1,444) | $ 58,286 | |||||
Balance (Accounting Standards Update 2016-02 [Member]) at Dec. 31, 2018 | $ (362) | $ 0 | $ (362) | ||||||||
Balance (in shares) at Dec. 31, 2018 | 9,060,561 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation expense | 0 | 186 | 0 | 0 | 0 | $ 186 | |||||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 | 0 | 0 | |||||
Issuance of restricted stock (in shares) | 1,408 | ||||||||||
Purchase of treasury stock | $ 0 | 0 | $ (714) | 0 | 0 | (714) | |||||
Purchase of treasury stock (in shares) | (127,945) | ||||||||||
Net income (loss) | 0 | 0 | $ 0 | 1,520 | 0 | 1,520 | [1] | ||||
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | 0 | 314 | 314 | [1] | ||||
Balance at Mar. 31, 2019 | [1] | 25 | 4,453 | (9,752) | 65,634 | (1,130) | $ 59,230 | ||||
Balance (in shares) at Mar. 31, 2019 | [1] | 8,934,024 | |||||||||
Balance at Dec. 31, 2019 | 25 | 5,037 | (9,773) | 62,211 | (1,081) | $ 56,419 | |||||
Balance (in shares) at Dec. 31, 2019 | 9,022,187 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation expense | 0 | 228 | 0 | 0 | 0 | $ 228 | |||||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 | 0 | 0 | |||||
Issuance of restricted stock (in shares) | 20,804 | ||||||||||
Net income (loss) | $ 0 | 0 | 0 | (1,738) | 0 | (1,738) | [2] | ||||
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | 0 | (346) | (346) | |||||
Balance at Mar. 31, 2020 | $ 25 | $ 5,265 | $ (9,773) | $ 60,473 | $ (1,427) | $ 54,563 | |||||
Balance (in shares) at Mar. 31, 2020 | 9,042,991 | ||||||||||
[1] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 | ||||||||||
[2] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. |
BASIS OF PRESENTATION AND CERTA
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES Tandy Leather Factory, Inc. (“TLFA,” “we,” “our,” “us,” the” Company,” “Tandy,” or “Tandy Leather” mean Tandy Leather Factory, Inc., together with its subsidiaries.) What differentiates Tandy from the competition is our high brand awareness and strong brand equity and loyalty, our network of retail stores that provides convenience, a high-touch customer service experience, a hub for the local leathercrafting community, and our 100-year heritage. We believe that this combination of qualities is unique to Tandy and gives the brand competitive advantages that are difficult for others to replicate. We sell our products primarily through company-owned stores and through orders generated from our four websites: tandyleather.com, tandyleather.ca, tandyleather.eu and tandyleather.com.au. We also manufacture leather lace, cut leather pieces and most of the do-it-yourself kits that are sold in our stores and on our websites. We also offer production services to our business customers such as cutting (“clicking”), splitting, and some assembly. We maintain our principal offices at 1900 Southeast Loop 820, Fort Worth, Texas 76140. The Company currently operates a total of 106 retail stores. There are 95 stores in the U.S., ten stores in Canada and one store in Spain. During the second quarter of 2020, we centralized U.S. e-commerce web order fulfillment from the stores to our Fort Worth distribution center. Nasdaq Stock Market LLC (“Nasdaq”) suspended trading in the Company’s shares as of August 13, 2020 due to the Company not being current with its SEC filings. Our stock has since traded on the OTC Link (previously “Pink Sheets”) operated by OTC Markets Group The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. In the opinion of management, the accompanying Consolidated Financial Statements for Tandy Leather Factory, Inc. and its consolidated subsidiaries contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our financial position as of March 31, 2020 and December 31, 2019, our results of operations for the three month periods ended March 31, 2020 and 2019, our cash flows for the three-month periods ended March 31, 2020 and 2019, and our statements of stockholders equity as of March 31, 2020 and 2019. The preparation of financial statements in accordance with GAAP requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for the Company’s conclusions. The Company continually evaluates the information used to make these estimates as the business and the economic environment changes. Actual results may differ from these estimates, and estimates are subject to change due to modifications in the underlying conditions or assumptions. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in our Comprehensive Form 10-K for the year ended December 31, 2019. COVID-19 In late 2019, COVID-19 was detected in Wuhan, China and has since spread to other parts of the world, including the U.S. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. Federal, state, and local governments implemented various restrictions, including travel restrictions, border closings, restrictions on public gatherings, quarantining of people who may have been exposed to the virus, shelter-in-place restrictions and limitations on business operations. As previously announced and for the health and safety of employees and customers, o n March 17, 2020, the Company made the decision to begin temporary store closures. We began closing stores on March 18, 2020, and by April 2, 2020, we temporarily closed all stores to the public. While we pivoted to serve customers only online, In response, w e took immediate action to mitigate the impact of temporary store closures on our cash flows by: (i) furloughing 406 Tandy employees, comprising two-thirds of the Tandy work force, (ii) temporarily cutting corporate salaries, with deeper cuts for the Executive Leadership Team, (iii) negotiating abatements, deferrals and other favorable lease terms with landlords, and (iv) negotiating longer payment terms with our key product vendors. Due to our size, we were not eligible for the Paycheck Protection Program administered through the Small Business Administration. Also, due to our not being current on financial filings with the SEC, we were not able to obtain loans under Nine stores were permanently closed during 2020 as leases expired or early terminations were negotiated, including at locations where we believe we can retain a majority of customers through geographically proximate stores and/or our enhanced website platform. After these permanent closures, Tandy operates 106 stores, including ten in Canada and one in Spain. On May 22, 2020, our Fort Worth flagship store reopened to the public, the beginning of a phased approach to reopening our stores with limited hours, new protocols for sanitizing, social distancing, wearing masks and taking daily temperatures of employees. uring the fourth quarter of 2020 and into the present, we continue to manage through the pandemic as we saw increased spikes in COVID-19 infections, and continue to see varying levels of infection rates, and have been forced to close certain stores or move certain stores to “curbside only” operations. With the rapid spread of the Delta variant of COVID-19 during the third quarter of 2021, we have experienced an increasing number of these shutdowns. We believe that the rollout of COVID-19 vaccines in 2021 has offset these closures somewhat, but it is difficult to predict whether these vaccines will be adopted by further large numbers of Americans or whether current or future vaccines will remain effective against Delta or other future variants of the virus. We expect that at least some further infections and temporary store shutdowns will continue for the foreseeable future. While we previously fulfilled our web orders out of our retail stores, during the second quarter of 2020, we built a centralized web fulfillment capability in our Fort Worth distribution center and have been and expect to continue to fulfill web orders primarily through Fort Worth going forward. Both our e-commerce business and stores have been performing above last year sales levels, but the future remains uncertain, and more store closures and/or other ongoing effects of the pandemic on the economy or employment market could cause a material negative impact on future sales. As part of the Company’s accounting policy for long-lived asset impairments, we believe the COVID-19 impact on the Company’s results of operations, cash flows and financial position and the ongoing uncertainty the virus has created around future operating results represented a triggering event during the first quarter of 2020 and continuing throughout the remainder of 2020. For the three months ended March 31, 2020, the Company recorded impairment expense of $1.1 million, primarily related to property and equipment and operating lease assets for certain stores that underperformed to a level where the cash flows they generate will not be sufficient to cover their respective asset carry values. Significant Accounting Policies Cash and cash equivalents Foreign currency translation and transactions Revenue Recognition. The sales return allowance is based each year on historical customer return behavior and other known factors and reduces net sales and cost of sales, accordingly. As of March 31, 2020 and December 31, 2019, we have established a sales return allowance of $0.2 million and $0.3 million, respectively, based on historical customer return behavior and other known factors. The sales return allowance is included in accrued expenses and other liabilities, while an estimated value of the merchandise expected to be returned of $0.1 million and $0.1 million is included in other current assets as of March 31, 2020 and December 31, 2019, respectively. We record a gift card liability for the unfulfilled performance obligation on the date we issue a gift card to a customer. We record revenue and reduce the gift card liability as the customer redeems the gift card. In addition, for gift card breakage, we recognize a proportionate amount for the expected unredeemed gift cards over the expected customer redemption period, which is one year. As of March 31, 2020 and December 31, 2019, our gift card liability, included in accrued expenses and other liabilities, totaled $0.2 million and $0.3 million, respectively. We recognized gift card revenue of $0.1 million in the first quarter of 2020 from the December 31, 2019 deferred revenue balance and $0.1 million during the first quarter of 2019 from the December 31, 2018 deferred revenue balance. During 2019, we ended our wholesale pricing club program where customers received lower prices in exchange for a yearly membership fee. Under this program, the yearly membership fee when paid was recorded as deferred revenue and recognized in net sales throughout the one-year period. For the three months ended March 31, 2020 and 2019, we recognized $0.2 million, and $0.4 million, respectively, in net sales associated with gift cards and the wholesale pricing club membership fees. Disaggregated Revenue. (in thousands) Three Months Ended March 31, 2020 2019 United States $ 15,333 $ 18,324 Canada 1,493 1,732 Spain 319 353 All other countries - 532 Net sales $ 17,145 $ 20,941 Geographic sales information is based on the location of the customer. Excluding Canada, no single foreign country had net sales greater than 1.9% of our consolidated net sales for the three-month periods ended March 31, 2020 and 2019. Discounts Operating expense Property and equipment, net of accumulated depreciation Inventory We regularly review all inventory items to determine if there are (i) damaged goods (e.g., for leather, excessive scars or damage from ultra-violet (“UV”) light), (ii) items that need to be removed from our product line (e.g., slow-moving items, inability of a supplier to provide items of acceptable quality or quantity, and to maintain freshness in the product line) and (iii) pricing actions that need to be taken to adequately value our inventory at the lower of cost or net realizable value. Since the determination of net realizable value of inventory involves both estimation and judgement with regard to market values and reasonable costs to sell, differences in these estimates could result in ultimate valuations that differ from the recorded asset. The majority of inventory purchases and commitments are made in U.S. dollars in order to limit the Company’s exposure to foreign currency fluctuations. Goods shipped to us are recorded as inventory owned by us when the risk of loss shifts to us from the supplier. Inventory is physically counted twice annually in the Texas distribution center. At the store level, inventory is physically counted each quarter. Inventory is then adjusted in our accounting system to reflect actual count results. (in thousands) March 31, 2020 December 31, 2019 On hand: Finished goods held for sale $ 24,741 $ 20,575 Raw materials and work in process 792 717 Inventory in transit 3,691 2,750 TOTAL $ 29,224 $ 24,042 Leases We elected not to record leases with an initial term of 12 months or less on the balance sheet for all our asset classes. For operating leases, the present value of our lease payments may include: (1) rental payments adjusted for inflation or market rates, and (2) lease terms with options to renew the lease or options to purchase leased equipment, when it is reasonably certain we will exercise such an option. The exercise of lease renewal or purchase option is generally at our discretion. Payments based on a change in an index or market rate are not considered in the determination of lease payments for purposes of measuring the related lease liability. We discount lease payments using our incremental borrowing rate based on information available as of the measurement date. We recognize rent expense related to our operating leases on a straight-line basis over the lease term. For finance leases, our right-of-use assets are amortized on a straight-line basis over the earlier of the useful life of the right-of-use asset or the end of the lease term with rent expense recorded to operating expenses. We adjust the lease liability to reflect lease payments made during the period and interest incurred on the lease liability using the effective interest method. The incurred interest expense is recorded in interest expense on the consolidated statements of comprehensive income (loss). The depreciable life of related leasehold improvements is based on the shorter of the useful life or the lease term. We also perform interim reviews of our lease assets for impairment when evidence exists that the carrying value of an asset group, including a lease asset, may not be recoverable. None of our lease agreements contain contingent rental payments, material residual value guarantees or material restrictive covenants. We have no sublease agreements and no lease agreements in which we are named as a lessor. Impairment of Long-Lived Assets Fair Value of Financial Instruments • Level 1 – observable inputs that reflect quoted prices in active markets for identical assets or liabilities. • Level 2 – significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. Classification of the financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Our principal financial instruments held consist of short-term investments, accounts receivable, accounts payable, and long-term debt. As of March 31, 2020 and December 31, 2019, the carrying values of our financial instruments, included in our Consolidated Balance Sheets, approximated or equaled their fair values. There were no transfers into or out of Levels 1, 2 and 3 three months ended March 31, 2020 and March 31, 2019. Short-Term Investments As of both March 31, 2020 and December 31, 2019, we held investments in U.S. Treasuries with maturity values of $9.2 million and maturities less than one year. We have classified these investments in debt securities as held-to-maturity. Such investments are recorded at amortized cost with book value approximating fair value which is based on Level 1 inputs for these investments. The Company believes there is no current expected credit allowance necessary for our short-term investments as: 1) Treasury securities typically are the most highly rated securities among rating agencies; 2) Treasury securities have a long history of no credit losses; and 3) Treasury securities are guaranteed by a sovereign entity (the U.S. Government) that can print its own money and whose currency (the U.S. dollar) is the reserve currency. Income Taxes Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. We recognize tax liabilities for uncertain tax positions and adjust these liabilities when our judgement changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which new information becomes available. We recognize interest and/or penalties related to all tax positions in income tax expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such determination is made. We may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions. Stock-based compensation Performance-based RSUs vest, if at all, upon the Company satisfying certain performance targets. The Company records compensation expense for awards with a performance condition when it is probable that the condition will be achieved. If the Company determines it is not probable a performance condition will be achieved, no compensation expense is recognized. If the Company changes its assessment in a subsequent period and concludes it is probable a performance condition will be achieved, the Company will recognize compensation expense ratably between the period of the change in assessment through the expected date of satisfying the performance condition for vesting. If the Company subsequently assesses that it is no longer probable that a performance condition will be achieved, the accumulated expense that has been previously recognized will be reversed. The compensation expense ultimately recognized, if any, related to performance-based awards will equal the grant date fair value based on the number of shares for which the performance condition has been satisfied. We issue shares from authorized shares upon the lapsing of vesting restrictions on RSUs. We do not use cash to settle equity instruments issued under stock-based compensation awards. Accounts Receivable and Expected Credit Losses. Other Intangible Assets (in thousands) March 31, 2020 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 December 31, 2019 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 All our intangible assets are definite-lived intangibles and are subject to amortization. The weighted average amortization period is 15 years for trademarks and copyrights. Amortization expense related to other intangible assets of less than $0.01 million during both the three months ended March 31, 2020 and 2019 was recorded in operating expenses, and non-compete intangible assets were fully amortized during 2019 upon the expiration of such agreements. Based on the current amount of intangible assets subject to amortization, we estimate amortization expense to be less than $0.01 million annually over the next five years. Comprehensive Income (Loss ) Recently Adopted Accounting Pronouncements Internal-Use Software In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software Intangibles—Goodwill and Other—Internal-Use Software Credit Losses In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments Recent Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 2. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS Our unaudited Consolidated Financial Statements as of and for the three months ended March 31, 2019 were restated. Restatement Background As previously disclosed, on October 14, 2019, as a result of the findings of the Independent Investigation and the Company’s ongoing reviews, the Company, in consultation with the Audit Committee, determined that Tandy’s previously issued Consolidated Financial Statements as of and for (i) the years ended December 31, 2018 and 2017, (ii) the three and six-month periods ended June 30, 2018, (iii) the three and nine-month periods ended September 30, 2018, and (iv) the three-month period ended March 31, 2019, should no longer be relied upon due to misstatements related to our accounting processes for inventory transactions, and we would make the necessary accounting corrections and restate such financial statements. In addition to inventory misstatements, management identified additional areas that required restatement adjustments as described below, with all such restatement items constituting the “Restatement Process.” The restatement adjustments described below pertain to all restatement periods noted above, and restatement adjustments specific to the three months ended March 31, 2019 are reflected in the tables below. Such errors included: (i) methods used by the Company in the valuation and expensing of costs related to inventory which was not correctly stated and was not consistent with the first-in, first-out (“FIFO”) methodology, (ii) warehousing and handling expenditures which were not properly capitalized during the first and third quarters but were subsequently corrected on a semi-annual basis in the second and fourth quarters resulting in the understatement of inventory and net income in the first and third quarters and the overstatement of net income in the second and fourth quarters, (iii) warehouse and handling expenditures which were improperly classified in operating expenses in all quarters resulting in an overstatement of operating expenses in all restated periods, (iv) freight-in, warehousing and handling expenditures, factory labor and overhead, and freight-out costs which were being capitalized to inventory using historical standard rates that were not based on the actual costs incurred in each period resulting in misstatements of inventory value, (v) inventory reserve levels which did not reflect the Company’s accounting policy of carrying inventory at the lower of cost or net realizable value resulting in misstatements of inventory value, (vi) sales returns were not accounted for until November 2018, and through year end 2017 gift cards were initially recorded to net sales causing net sales to be overstated, (vii) lease accounting errors upon the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases Description of Restatement Adjustments Inventory Under the Company’s inventory accounting policy, inventory is stated using the FIFO methodology for cost, and such cost includes merchandise purchases, the costs to bring the merchandise to its Texas distribution center (freight-in), warehousing and handling expenditures, factory labor and overhead for items that are internally manufactured, and distributing and delivering merchandise to stores (freight-out). The Company carries inventory at the lower of this cost or net realizable value. The inventory restatement adjustments below were first identified by management as a result of a deeper analysis of legacy systems and practices that were in place for many years and which the Company is working to replace. Management identified the following areas in which the accounting for inventory did not adhere to the Company’s inventory accounting policy: (1) FIFO adjustment: inventory was not correctly stated and was not consistent with the FIFO methodology; (2) Freight-in, warehousing and handling expenditures, factory labor and overhead, and freight-out adjustment: i. warehousing and handling expenditures were not properly capitalized during the first and third quarters but were subsequently corrected on a semi-annual basis in the second and fourth quarters resulting in the understatement of inventory and net income in the first and third quarters and the overstatement of net income in the second and fourth quarters; and ii. freight-in, warehousing and handling expenditures, factory labor and overhead, and freight-out costs were being capitalized to inventory using historical standard rates that were not based on the actual costs incurred in each period resulting in misstatements; (3) Inventory reserve adjustment: Tandy’s accounting policy is to carry inventory at the lower of cost or net realizable value. Management noted inventory reserve levels did not reflect the Company’s accounting policy of carrying inventory at the lower of cost or net realizable value. This resulted in cumulative understatements of inventory. Sales Returns (4) Sales returns: management noted estimates for sales returns had not been accounted for using historical sales return trends. Management has estimated a sales return liability along with a corresponding inventory asset for the first quarter of 2019. In addition, estimated sales returns previously recorded in the first quarter of 2019 were incorrectly presented on a net basis in cost of sales and have since been restated to reflect accounting on a gross basis in both net sales and cost of sales. Warehouse and Handling Reclassifications (5) Warehousing and handling expenditures were classified as operating expenses, resulting in overstatement of operating expenses in all periods. These costs have been reclassified to cost of sales since the inventory restatement in adjustment (2) above is properly adjusting the inventory balance for such costs with the offset recorded to cost of sales. There was no impact to net income (loss) related to this reclassification. Income Tax (6) Management noted the income tax provision for the three months ended March 31, 2019 had misstatements related to the recognition of UTP liability and related interest expense among other smaller tax correcting adjustments. Also, income tax restatement adjustments were made to reflect the tax effect of the pre-tax restatement adjustments for the three months ended March 31, 2019. Accruals and Other (7) There were misstatements related to the recognition of accrued paid-time-off (“PTO”) resulting in understatement of accrued expenses and other liabilities as well as other misstatements primarily related to recognition of other accrued operating expenses, payroll related costs, long-term debt classification, cash cutoff for outstanding checks, break out of impairment expense previously included in operating expenses, and reclass of leasehold improvements from prepaid expenses to property and equipment, all of which are being corrected in connection with the restatement of previously issued financial statements. Leases (8) During the first quarter of 2019, we adopted the new lease accounting standard under Topic 842. Management noted as part of the adoption that the Company did not ensure the appropriateness of inputs being used to calculate the present value of lease payments over the lease terms. This resulted in the misstatement of operating lease assets, and the current and long-term portion of operating lease liabilities upon initial recognition on January 1, 2019. Foreign Currency Gains & Losses and Cumulative Translation Adjustments (9) Foreign currency gains and losses associated with the activity of the Company’s Canadian subsidiary were incorrectly classified as a component of accumulated other comprehensive income (loss). These gains and losses have been restated and are included in net income (loss). Cumulative translation adjustments (“CTA”) included in accumulated other comprehensive income (loss) were not tax effected. Management has corrected this error by tax effecting CTA and by presenting CTA net of tax within accumulated other comprehensive income (loss). Common Stock (10) A number of shares of the Company’s common stock were repurchased by the Company and cancelled prior to 2010. Management noted these repurchases were incorrectly accounted for as treasury stock. The number of shares issued, and the number of shares held in treasury, were both overstated by 993,623 shares. The number of shares outstanding has been properly presented in all periods. This correction will not result in any change to net stockholders’ equity, nor will it affect any weighted average shares outstanding calculations used in the determination of earnings per share. The net effect of the adjustments on the Consolidated Statements of Comprehensive Income (Loss) was to increase net income by $0.7 million for the three months ended March 31, 2019. Restatement Reconciliation Tables The following tables present a reconciliation of our Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Cash Flows for the three months ended March 31, 2019, as previously reported to the restated amounts shown in this filing. The following restatement adjustment footnote numbers correspond to the restatement adjustment descriptions above. Tandy Leather Factory, Inc. Consolidated Statement of Operations and Comprehensive Income Unaudited For the Three Months Ended March 31, 2019 As Reported Adjustments As Restated Net sales $ 20,785 $ 156 (4) $ 20,941 Cost of sales 8,334 362 (1) (2)(2)(3)(4)(5)(7) 8,696 Gross profit 12,451 (206 ) 12,245 Operating expenses 11,282 (1,250 ) (5)(7)(8) 10,032 Income from operations 1,169 1,044 2,213 Other (income) expense: Interest expense 32 - 32 Other, net (33 ) 143 (7)(9) 110 Total other (income) expense (1 ) 143 142 Income before income taxes 1,170 901 2,071 Income tax expense 301 250 (6) 551 Net income $ 869 $ 651 $ 1,520 Foreign currency translation adjustments, net of tax 287 27 (9) 314 Comprehensive income $ 1,156 $ 678 $ 1,834 Net income per common share: Basic $ 0.10 $ 0.07 $ 0.17 Diluted $ 0.10 $ 0.07 $ 0.17 Basic 9,009,752 9,009,752 9,009,752 Diluted 9,010,037 9,011,107 9,011,107 Tandy Leather Factory, Inc. Consolidated Statement of Cash Flows Unaudited For the Three Months Ended March 31, 2019 As Reported Adjustments As Restated Cash flows from operating activities: Net income $ 869 $ 651 $ 1,520 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 495 (1 ) (7) 494 Right-of-use asset amortization - 865 (8) 865 (Gain) loss on disposal of assets (4 ) - (4 ) Stock-based compensation 186 - 186 Deferred income taxes (34 ) 218 (6)(9) 184 Exchange (gain) loss 2 134 (7)(9) 136 Changes in operating assets and liabilities: Accounts receivable-trade (48 ) (8 ) (7) (56 ) Inventory 3,303 (131 ) (1)(2)(3)(4) 3,172 Prepaid expenses (293 ) 326 (7) 33 Other current assets (13 ) (181 ) (7) (194 ) Accounts payable-trade (318 ) (963 ) (7) (1,281 ) Accrued expenses and other liabilities (1,205 ) 49 (4)(7) (1,156 ) Income taxes 96 13 (6) 109 Other assets 7 (48 ) (7) (41 ) Operating lease liability - (834 ) (8) (834 ) Total adjustments 2,174 (561 ) 1,613 Net cash provided by operating activities 3,043 90 3,133 Cash flows from investing activities: Purchase of property and equipment (31 ) - (31 ) Purchase of short-term investments (5,000 ) - (5,000 ) Proceeds from sales of assets 13 - 13 Net cash used in investing activities (5,018 ) - (5,018 ) Cash flows from financing activities: Payments on long-term debt (8,968 ) - (8,968 ) Repurchase of treasury stock (715 ) - (715 ) Net cash used in financing activities (9,683 ) - (9,683 ) Effect of exchange rate changes on cash and cash equivalents 267 (90 ) (9) 177 Net (decrease) increase in cash and cash equivalents (11,391 ) - (11,391 ) Cash and cash equivalents, beginning of period 24,070 - 24,070 Cash and cash equivalents, end of period $ 12,679 $ - $ 12,679 |
NOTES PAYABLE AND LONG-TERM DEB
NOTES PAYABLE AND LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2020 | |
NOTES PAYABLE AND LONG-TERM DEBT [Abstract] | |
NOTES PAYABLE AND LONG-TERM DEBT | 3. NOTES PAYABLE AND LONG-TERM DEBT During the second quarter of 2020, the Company borrowed $0.4 million from Banco Santander S.A. under the Institute of Official Credit Guarantee for Small and Medium-sized Enterprises in order to facilitate the continuation of employment and to attenuate the economic effects of the coronavirus (“COVID-19”) virus. This loan was provided for by the Spanish government as part of a COVID-19 relief program. The term of the agreement is five years and the interest rate is fixed at 1.5%. Based on the terms of the loan agreement, we are required to make monthly interest-only payments for the first two years and monthly principal and interest payments for the remainder of the term of the agreement. We restated our previously issued audited financial statements as of and for the years ended December 31, 2018 and 2017 as well as the quarterly and year-to-date periods within fiscal 2018 included in the Company’s previously filed Quarterly Reports on Form 10-Q, and the three months ended March 31, 2019, included in the Company’s previously filed Quarterly Report on Form 10-Q. Under the terms of the Promissory Note agreements we had in place with our primary bank, BOKF, NA d/b/a Bank of Texas (“BOKF”), we were required to provide BOKF quarterly financial statements and compliance certificates. We were unable to provide these financial statements and compliance certificates for the Delinquent Filings noted above. In response, on April 2, 2020, BOKF provided notice under the terms of the Promissory Note agreements that such Promissory Notes were cancelled. As of the date of cancellation, Tandy had no borrowings outstanding under these credit facilities or with any other lending institution. As of the date of this filing, Tandy has no lines of credit outstanding. Details of the terms of the Promissory Note agreements with BOKF are as follows. On September 18, 2015, we executed a Promissory Note agreement with BOKF which provided us with a working capital line of credit facility of up to $6 million which was secured by our inventory. On August 20, 2018, this line of credit was amended to extend the maturity to September 18, 2020 and to reduce the interest rate by 0.35%, and on September 18, 2019, the maturity date was further extended through September 18, 2021. The Business Loan Agreement contained covenants that required us to maintain a funded debt to EBITDA ratio of no greater than 1.5 to 1 and a Fixed Charge Coverage Ratio greater than or equal to 1.2 to 1. Both ratios were calculated quarterly on a trailing four quarter basis. For the three months ended March 31, 2020 and the year ended December 31, 2019, there were no amounts drawn on this line of credit. Also, on September 18, 2015, we executed a Promissory Note agreement with BOKF which provided us with a line of credit facility of up to $10 million for the purpose of repurchasing shares of our common stock pursuant to our stock repurchase program, announced in August 2015 and subsequently amended, which permitted us to repurchase up to 2.2 million shares of our common stock through August 2020. Subsequently, this line of credit was amended to increase the availability from $10 million to $15 million for the repurchase of shares of our common stock pursuant to our stock repurchase program through the end of the draw down period which was the earlier of August 9, 2020 or the date on which the entire amount was drawn. In addition, this Promissory Note was amended on August 20, 2018 to reduce the interest rate by 0.35%, and on September 18, 2019, the maturity date was further extended through September 18, 2024. We were required to make monthly interest-only payments through September 18, 2020. After this date, the principal balance would have rolled into a 4-year term note with principal and interest paid on a monthly basis with a maturity date of September 18, 2024. This Promissory Note was secured by a Deed of Trust on the real estate located at 1900 SE Loop 820, Fort Worth, Texas. During the first quarter of 2019, we paid $9.0 million to pay off this line of credit with no pre-payment penalties incurred. For the three months ended March 31, 2020 and the year ended December 31, 2019, there were no amounts outstanding on this line of credit. |
INCOME TAX
INCOME TAX | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAX [Abstract] | |
INCOME TAX | 4. INCOME TAX Our effective tax rate for the three months ended March 31, 2020 and 2019 was 22.6% and 26.6%, respectively. Our effective tax rate differs from the federal statutory rate primarily due to U.S. state income tax expense, the difference in tax rates for loss carryback periods, foreign income/loss positions, expenses that are nondeductible for tax purposes, the change in our valuation allowance associated with our deferred tax assets, and differences in tax rates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company is currently evaluating the impact of the CARES Act and expects that the NOL carryback provision of the CARES Act will result in a cash tax benefit to the Company. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | 5. STOCK-BASED COMPENSATION The Tandy Leather Factory, Inc. 2013 Restricted Stock Plan (the “2013 Plan”) was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The 2013 Plan initially reserved up to 300,000 shares of our common stock for restricted stock and restricted stock unit (“RSU”) awards, on or prior to June 2018, to our executive officers, non-employee directors and other key employees (of which, there were 125,595 shares available for future awards at March 31, 2020). Awards granted under the 2013 Plan may be service-based awards or performance-based awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years, unless otherwise determined by the Compensation Committee of the Board of Directors that administers the plan. In March 2020, as part of their annual director compensation, certain of our non-employee directors were granted a total of 24,010 service-based RSUs under the 2013 Plan which will vest ratably over the next 3 years provided that the participant is still on the board on the vesting date. In December 2020, certain of our key employees were granted a total of 18,255 RSUs under the 2013 Plan which vested immediately. In June 2020, our stockholders approved an increase to the plan reserve to 800,000 shares of our common stock and extended the 2013 Plan to June 2023. In addition to grants under the Company’s 2013 Restricted Stock Plan, in October 2018, we granted a total of 644,000 RSUs to the Company’s Chief Executive Officer (“CEO”), of which (i) 460,000 are service-based RSUs that vest ratably over a period of five years from the grant date based on our CEO’s continued employment in her role, (ii) 92,000 are performance-based RSUs that will vest if the Company’s operating income exceeds $12 million dollars two fiscal years in a row, and (iii) 92,000 are performance-based RSUs that will vest if the Company’s operating income exceeds $14 million dollars in one fiscal year. A summary of the activity for non-vested restricted stock and RSU awards as of March 31, 2020 and 2019 is presented below: Shares Weighted Average Balance, December 31, 2019 606 $ 7.27 Granted 24 4.78 Vested (19 ) 6.61 Balance, March 31, 2020 611 $ 7.27 Balance, December 31, 2018 658 $ 7.39 Granted 28 5.64 Forfeited (5 ) 5.64 Vested (1 ) 7.72 Balance, March 31, 2019 (Restated) 680 $ 7.39 The Company’s stock-based compensation relates primarily to RSU awards. For these service-based awards, our stock-based compensation expense, included in operating expenses, was $0.2 million for both the three-month periods ended March 31, 2020 and 2019. As of March 31, 2020, the Company has concluded it is not probable that the performance conditions related to performance-based RSUs will be achieved, and as a result no compensation expense related to performance-based RSUs has been recorded. As of March 31, 2020, there was unrecognized compensation cost related to non-vested, service-based restricted stock and RSU awards of $2.7 million which will be recognized in each of the following years: (in thousands) 2020 $ 594 2021 797 2022 760 2023 516 Unrecognized Expense $ 2,667 We issue shares from authorized shares upon the lapsing of vesting restrictions on restricted stock and RSUs. For the three months ended March 31, 2020, we issued 20,804 shares resulting from the vesting of restricted stock. We do not use cash to settle equity instruments issued under stock-based compensation awards. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 6. EARNINGS PER SHARE Basic earnings per share (“EPS”) are computed based on the weighted average number of common shares outstanding during the period. Diluted EPS includes additional common shares that would have been outstanding if potential common shares with a dilutive effect, such as stock awards from the Company’s restricted stock plan, had been issued. Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted EPS as their impact would be anti-dilutive. Diluted EPS is computed using the treasury stock method. The following table sets forth the computation of basic and diluted EPS for the three months ended March 31, 2020 and 2019: (in thousands, except share data) Three Months Ended March 31, 2020 (1) 2019 Numerator: Net income (loss) $ (1,738 ) $ 1,520 Denominator: Basic weighted-average common shares outstanding 9,029,212 9,009,752 Dilutive effect of service-based restricted stock awards granted to Board of Directors under the Plan - 1,355 Diluted weighted-average common shares outstanding 9,029,212 9,011,107 (1) For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Legal Proceedings We are periodically involved in various litigation that arises in the ordinary course of business and operations. There are no such matters pending that we expect to have a material impact on our financial position or operating results. Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred. In November 2019, a class action lawsuit seeking unspecified damages was brought by a stockholder in the Federal District Court in Los Angeles, California, and subsequently transferred to the Federal District Court for the Northern District of Texas, against the Company and members of its current and former management relating to our announcement of the circumstances leading to our restatement. We believe that suit was without merit, and the suit was withdrawn by the plaintiff in April 2020; however, there can be no assurance that additional litigation against the Company and/or its management or Board of Directors might not be threatened or brought in connection with matters related to our restatement. Delisting of Company’s Common Stock As previously disclosed, the Company was unable to timely file the delinquent filings due to the process of restating its financial statements as described above. As a result, on February 18, 2020, the Company received a notice from the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”), the Company’s common stock would be subject to suspension and delisting from Nasdaq due to non-compliance with Nasdaq Listing Rule 5250(c)(1). On May 1, 2020, the Panel granted the Company’s request to remain listed on Nasdaq, subject to the Company filing all current and overdue quarterly and annual reports with the Securities and Exchange Commission on or before August 10, 2020. Because the restatement process was not complete by such date, Nasdaq suspended trading in our shares as of August 13, 2020. Our stock has since traded on the OTC Link (previously “Pink Sheets”) operated by OTC Markets Group under the symbol “TLFA”. Nasdaq denied our appeal of this decision, resulting in our stock being formally delisted on February 9, 2021. We intend to reapply for Nasdaq listing once the Company has made the required Exchange Act filings. SEC Investigation In 2019, the Company self-reported to the SEC information concerning the internal investigation of previously disclosed accounting matters resulting in the restatement for the full year 2017 and full year 2018, including interim quarters in 2018, and the first quarter of 2019. In response, the Division of Enforcement of the SEC initiated an investigation into the Company’s historical accounting practices. In July 2021, the Company entered into a settlement agreement with the SEC to conclude this investigation. Under the terms of the settlement, in addition to other non-monetary settlement terms, (1) the Company paid a civil monetary penalty of $200,000 , and (2) the Company’s former Chief Financial Officer and Chief Executive Officer, agreed to pay a civil monetary penalty of $25,000. In accepting the Company’s settlement offer, the SEC took into account remedial actions the Company took promptly after learning of the issues detailed in the SEC’s order. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS Share Repurchase Program On August 9, 2020, the Board of Directors approved a new program to repurchase up to $5.0 million of its common stock between August 9, 2020 and July 31, 2022, subject to the completion of our financial restatement and the filing of all delinquent filings with the SEC. The Company's previous share repurchase program expired in August 2020. As of March 31, 2020, the full $5.0 million of our common stock remained available for repurchase under this program. On January 28, 2021, we entered into an agreement with an institutional shareholder of the Company, to repurchase 500,000 shares of our common stock, par value $0.0024 in a private transaction. The purchase price was $3.35 per share for a total of $1.7 million. The closing of the repurchase of these shares took place on February 1, 2021. Prior to the repurchase, the shares represented approximately 5.5% of our outstanding common stock. This repurchase was separately authorized by our Board of Directors and did not reduce the remaining amount authorized to be repurchased under the plan described in the previous paragraph. |
BASIS OF PRESENTATION AND CER_2
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Cash and cash equivalents | Cash and cash equivalents |
Foreign currency translation and transactions | Foreign currency translation and transactions |
Revenue Recognition | Revenue Recognition. The sales return allowance is based each year on historical customer return behavior and other known factors and reduces net sales and cost of sales, accordingly. As of March 31, 2020 and December 31, 2019, we have established a sales return allowance of $0.2 million and $0.3 million, respectively, based on historical customer return behavior and other known factors. The sales return allowance is included in accrued expenses and other liabilities, while an estimated value of the merchandise expected to be returned of $0.1 million and $0.1 million is included in other current assets as of March 31, 2020 and December 31, 2019, respectively. We record a gift card liability for the unfulfilled performance obligation on the date we issue a gift card to a customer. We record revenue and reduce the gift card liability as the customer redeems the gift card. In addition, for gift card breakage, we recognize a proportionate amount for the expected unredeemed gift cards over the expected customer redemption period, which is one year. As of March 31, 2020 and December 31, 2019, our gift card liability, included in accrued expenses and other liabilities, totaled $0.2 million and $0.3 million, respectively. We recognized gift card revenue of $0.1 million in the first quarter of 2020 from the December 31, 2019 deferred revenue balance and $0.1 million during the first quarter of 2019 from the December 31, 2018 deferred revenue balance. During 2019, we ended our wholesale pricing club program where customers received lower prices in exchange for a yearly membership fee. Under this program, the yearly membership fee when paid was recorded as deferred revenue and recognized in net sales throughout the one-year period. For the three months ended March 31, 2020 and 2019, we recognized $0.2 million, and $0.4 million, respectively, in net sales associated with gift cards and the wholesale pricing club membership fees. Disaggregated Revenue. (in thousands) Three Months Ended March 31, 2020 2019 United States $ 15,333 $ 18,324 Canada 1,493 1,732 Spain 319 353 All other countries - 532 Net sales $ 17,145 $ 20,941 Geographic sales information is based on the location of the customer. Excluding Canada, no single foreign country had net sales greater than 1.9% of our consolidated net sales for the three-month periods ended March 31, 2020 and 2019. |
Discounts | Discounts |
Operating expense | Operating expense |
Property and equipment, net of accumulated depreciation | Property and equipment, net of accumulated depreciation |
Inventory | Inventory We regularly review all inventory items to determine if there are (i) damaged goods (e.g., for leather, excessive scars or damage from ultra-violet (“UV”) light), (ii) items that need to be removed from our product line (e.g., slow-moving items, inability of a supplier to provide items of acceptable quality or quantity, and to maintain freshness in the product line) and (iii) pricing actions that need to be taken to adequately value our inventory at the lower of cost or net realizable value. Since the determination of net realizable value of inventory involves both estimation and judgement with regard to market values and reasonable costs to sell, differences in these estimates could result in ultimate valuations that differ from the recorded asset. The majority of inventory purchases and commitments are made in U.S. dollars in order to limit the Company’s exposure to foreign currency fluctuations. Goods shipped to us are recorded as inventory owned by us when the risk of loss shifts to us from the supplier. Inventory is physically counted twice annually in the Texas distribution center. At the store level, inventory is physically counted each quarter. Inventory is then adjusted in our accounting system to reflect actual count results. (in thousands) March 31, 2020 December 31, 2019 On hand: Finished goods held for sale $ 24,741 $ 20,575 Raw materials and work in process 792 717 Inventory in transit 3,691 2,750 TOTAL $ 29,224 $ 24,042 |
Leases | Leases We elected not to record leases with an initial term of 12 months or less on the balance sheet for all our asset classes. For operating leases, the present value of our lease payments may include: (1) rental payments adjusted for inflation or market rates, and (2) lease terms with options to renew the lease or options to purchase leased equipment, when it is reasonably certain we will exercise such an option. The exercise of lease renewal or purchase option is generally at our discretion. Payments based on a change in an index or market rate are not considered in the determination of lease payments for purposes of measuring the related lease liability. We discount lease payments using our incremental borrowing rate based on information available as of the measurement date. We recognize rent expense related to our operating leases on a straight-line basis over the lease term. For finance leases, our right-of-use assets are amortized on a straight-line basis over the earlier of the useful life of the right-of-use asset or the end of the lease term with rent expense recorded to operating expenses. We adjust the lease liability to reflect lease payments made during the period and interest incurred on the lease liability using the effective interest method. The incurred interest expense is recorded in interest expense on the consolidated statements of comprehensive income (loss). The depreciable life of related leasehold improvements is based on the shorter of the useful life or the lease term. We also perform interim reviews of our lease assets for impairment when evidence exists that the carrying value of an asset group, including a lease asset, may not be recoverable. None of our lease agreements contain contingent rental payments, material residual value guarantees or material restrictive covenants. We have no sublease agreements and no lease agreements in which we are named as a lessor. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Fair Value of Financial Instruments | Fair Value of Financial Instruments • Level 1 – observable inputs that reflect quoted prices in active markets for identical assets or liabilities. • Level 2 – significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. Classification of the financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Our principal financial instruments held consist of short-term investments, accounts receivable, accounts payable, and long-term debt. As of March 31, 2020 and December 31, 2019, the carrying values of our financial instruments, included in our Consolidated Balance Sheets, approximated or equaled their fair values. There were no transfers into or out of Levels 1, 2 and 3 three months ended March 31, 2020 and March 31, 2019. |
Short-Term Investments | Short-Term Investments As of both March 31, 2020 and December 31, 2019, we held investments in U.S. Treasuries with maturity values of $9.2 million and maturities less than one year. We have classified these investments in debt securities as held-to-maturity. Such investments are recorded at amortized cost with book value approximating fair value which is based on Level 1 inputs for these investments. The Company believes there is no current expected credit allowance necessary for our short-term investments as: 1) Treasury securities typically are the most highly rated securities among rating agencies; 2) Treasury securities have a long history of no credit losses; and 3) Treasury securities are guaranteed by a sovereign entity (the U.S. Government) that can print its own money and whose currency (the U.S. dollar) is the reserve currency. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. We recognize tax liabilities for uncertain tax positions and adjust these liabilities when our judgement changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which new information becomes available. We recognize interest and/or penalties related to all tax positions in income tax expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such determination is made. We may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions. |
Stock-based compensation | Stock-based compensation Performance-based RSUs vest, if at all, upon the Company satisfying certain performance targets. The Company records compensation expense for awards with a performance condition when it is probable that the condition will be achieved. If the Company determines it is not probable a performance condition will be achieved, no compensation expense is recognized. If the Company changes its assessment in a subsequent period and concludes it is probable a performance condition will be achieved, the Company will recognize compensation expense ratably between the period of the change in assessment through the expected date of satisfying the performance condition for vesting. If the Company subsequently assesses that it is no longer probable that a performance condition will be achieved, the accumulated expense that has been previously recognized will be reversed. The compensation expense ultimately recognized, if any, related to performance-based awards will equal the grant date fair value based on the number of shares for which the performance condition has been satisfied. We issue shares from authorized shares upon the lapsing of vesting restrictions on RSUs. We do not use cash to settle equity instruments issued under stock-based compensation awards. |
Accounts Receivable and Expected Credit Losses | Accounts Receivable and Expected Credit Losses. |
Other Intangible Assets | Other Intangible Assets (in thousands) March 31, 2020 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 December 31, 2019 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 All our intangible assets are definite-lived intangibles and are subject to amortization. The weighted average amortization period is 15 years for trademarks and copyrights. Amortization expense related to other intangible assets of less than $0.01 million during both the three months ended March 31, 2020 and 2019 was recorded in operating expenses, and non-compete intangible assets were fully amortized during 2019 upon the expiration of such agreements. Based on the current amount of intangible assets subject to amortization, we estimate amortization expense to be less than $0.01 million annually over the next five years. |
Comprehensive Income (Loss) | Comprehensive Income (Loss ) |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Internal-Use Software In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software Intangibles—Goodwill and Other—Internal-Use Software Credit Losses In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments Recent Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
BASIS OF PRESENTATION AND CER_3
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Net Sales for Geographic Areas | In the following table, revenue for the three months ended March 31, 2020 and 2019 is disaggregated by geographic areas as follows: (in thousands) Three Months Ended March 31, 2020 2019 United States $ 15,333 $ 18,324 Canada 1,493 1,732 Spain 319 353 All other countries - 532 Net sales $ 17,145 $ 20,941 |
Inventory | Inventory is physically counted twice annually in the Texas distribution center. At the store level, inventory is physically counted each quarter. Inventory is then adjusted in our accounting system to reflect actual count results. (in thousands) March 31, 2020 December 31, 2019 On hand: Finished goods held for sale $ 24,741 $ 20,575 Raw materials and work in process 792 717 Inventory in transit 3,691 2,750 TOTAL $ 29,224 $ 24,042 |
Other Intangible Assets | Our intangible assets and related accumulated amortization consisted of the following: (in thousands) March 31, 2020 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 December 31, 2019 Gross Accumulated Amortization Net Trademarks/copyrights $ 554 $ 547 $ 7 TOTAL $ 554 $ 547 $ 7 |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |
Reconciliation of Consolidated Statement of Comprehensive Income and Cash Flows | The following restatement adjustment footnote numbers correspond to the restatement adjustment descriptions above. Tandy Leather Factory, Inc. Consolidated Statement of Operations and Comprehensive Income Unaudited For the Three Months Ended March 31, 2019 As Reported Adjustments As Restated Net sales $ 20,785 $ 156 (4) $ 20,941 Cost of sales 8,334 362 (1) (2)(2)(3)(4)(5)(7) 8,696 Gross profit 12,451 (206 ) 12,245 Operating expenses 11,282 (1,250 ) (5)(7)(8) 10,032 Income from operations 1,169 1,044 2,213 Other (income) expense: Interest expense 32 - 32 Other, net (33 ) 143 (7)(9) 110 Total other (income) expense (1 ) 143 142 Income before income taxes 1,170 901 2,071 Income tax expense 301 250 (6) 551 Net income $ 869 $ 651 $ 1,520 Foreign currency translation adjustments, net of tax 287 27 (9) 314 Comprehensive income $ 1,156 $ 678 $ 1,834 Net income per common share: Basic $ 0.10 $ 0.07 $ 0.17 Diluted $ 0.10 $ 0.07 $ 0.17 Basic 9,009,752 9,009,752 9,009,752 Diluted 9,010,037 9,011,107 9,011,107 Tandy Leather Factory, Inc. Consolidated Statement of Cash Flows Unaudited For the Three Months Ended March 31, 2019 As Reported Adjustments As Restated Cash flows from operating activities: Net income $ 869 $ 651 $ 1,520 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 495 (1 ) (7) 494 Right-of-use asset amortization - 865 (8) 865 (Gain) loss on disposal of assets (4 ) - (4 ) Stock-based compensation 186 - 186 Deferred income taxes (34 ) 218 (6)(9) 184 Exchange (gain) loss 2 134 (7)(9) 136 Changes in operating assets and liabilities: Accounts receivable-trade (48 ) (8 ) (7) (56 ) Inventory 3,303 (131 ) (1)(2)(3)(4) 3,172 Prepaid expenses (293 ) 326 (7) 33 Other current assets (13 ) (181 ) (7) (194 ) Accounts payable-trade (318 ) (963 ) (7) (1,281 ) Accrued expenses and other liabilities (1,205 ) 49 (4)(7) (1,156 ) Income taxes 96 13 (6) 109 Other assets 7 (48 ) (7) (41 ) Operating lease liability - (834 ) (8) (834 ) Total adjustments 2,174 (561 ) 1,613 Net cash provided by operating activities 3,043 90 3,133 Cash flows from investing activities: Purchase of property and equipment (31 ) - (31 ) Purchase of short-term investments (5,000 ) - (5,000 ) Proceeds from sales of assets 13 - 13 Net cash used in investing activities (5,018 ) - (5,018 ) Cash flows from financing activities: Payments on long-term debt (8,968 ) - (8,968 ) Repurchase of treasury stock (715 ) - (715 ) Net cash used in financing activities (9,683 ) - (9,683 ) Effect of exchange rate changes on cash and cash equivalents 267 (90 ) (9) 177 Net (decrease) increase in cash and cash equivalents (11,391 ) - (11,391 ) Cash and cash equivalents, beginning of period 24,070 - 24,070 Cash and cash equivalents, end of period $ 12,679 $ - $ 12,679 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION [Abstract] | |
Summary of Activity of Non-vested Restricted Stock and RSU Awards | A summary of the activity for non-vested restricted stock and RSU awards as of March 31, 2020 and 2019 is presented below: Shares Weighted Average Balance, December 31, 2019 606 $ 7.27 Granted 24 4.78 Vested (19 ) 6.61 Balance, March 31, 2020 611 $ 7.27 Balance, December 31, 2018 658 $ 7.39 Granted 28 5.64 Forfeited (5 ) 5.64 Vested (1 ) 7.72 Balance, March 31, 2019 (Restated) 680 $ 7.39 |
Non-vested, Service-based Restricted Stock and RSU Awards | As of March 31, 2020, there was unrecognized compensation cost related to non-vested, service-based restricted stock and RSU awards of $2.7 million which will be recognized in each of the following years: (in thousands) 2020 $ 594 2021 797 2022 760 2023 516 Unrecognized Expense $ 2,667 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted EPS for the three months ended March 31, 2020 and 2019: (in thousands, except share data) Three Months Ended March 31, 2020 (1) 2019 Numerator: Net income (loss) $ (1,738 ) $ 1,520 Denominator: Basic weighted-average common shares outstanding 9,029,212 9,009,752 Dilutive effect of service-based restricted stock awards granted to Board of Directors under the Plan - 1,355 Diluted weighted-average common shares outstanding 9,029,212 9,011,107 (1) For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. |
BASIS OF PRESENTATION AND CER_4
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Basis of Presentation (Details) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020USD ($)Store | Mar. 31, 2020USD ($)WebSiteStore | Sep. 30, 2020Store | Apr. 02, 2020Employee | |
Segment Information [Abstract] | ||||
Number of websites | WebSite | 4 | |||
Number of stores | 106 | |||
Operating lease asset impairment expense | $ | $ 1,100 | |||
Forecast [Member] | ||||
Segment Information [Abstract] | ||||
Number of employees given temporary leave | Employee | 406 | |||
Percentage on total workforce reduced | 0.66% | |||
Number of years to pay interest only repayments, related to loan agreement | 2 years | |||
Number of stores permanently closed | 9 | |||
Number of stores, reopened | 106 | |||
Forecast [Member] | CECRA [Member] | ||||
Segment Information [Abstract] | ||||
Percentage reduction of store rent | 75.00% | |||
Rent abatements received | $ | $ 50 | |||
Forecast [Member] | Institute of Official Credit Guarantee for Small and Medium-sized Enterprises [Member] | ||||
Segment Information [Abstract] | ||||
Proceeds from issuance of long-term debt | $ | $ 400 | |||
Term of agreement | 5 years | |||
Fixed interest rate | 1.50% | |||
United States [Member] | ||||
Segment Information [Abstract] | ||||
Number of stores | 95 | |||
Canada [Member] | ||||
Segment Information [Abstract] | ||||
Number of stores | 10 | |||
Spain [Member] | ||||
Segment Information [Abstract] | ||||
Number of stores | 1 |
BASIS OF PRESENTATION AND CER_5
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020USD ($)Level | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)Level | ||
Revenue Recognition [Abstract] | ||||
Sales return allowance | $ 200 | $ 300 | ||
Estimate of merchandise expected to be returned | $ 100 | $ 100 | ||
Gift card redemption period | 1 year | |||
Deferred revenue recognized period | 1 year | |||
Revenue recognized from change in deferred obligation balance | $ 100 | $ 100 | ||
Deferred revenue, recognized | 200 | 400 | ||
Disaggregated Revenue [Abstract] | ||||
Net sales | $ 17,145 | 20,941 | [1] | |
Discounts [Abstract] | ||||
Number of price levels | Level | 3 | 5 | ||
United States [Member] | ||||
Disaggregated Revenue [Abstract] | ||||
Net sales | $ 15,333 | 18,324 | ||
Canada [Member] | ||||
Disaggregated Revenue [Abstract] | ||||
Net sales | $ 1,493 | $ 1,732 | ||
Canada [Member] | Net Sales Benchmark [Member] | Geographic Concentration Risk [Member] | Customer [Member] | Minimum [Member] | ||||
Disaggregated Revenue [Abstract] | ||||
Revenue percentage | 1.90% | 1.90% | ||
Spain [Member] | ||||
Disaggregated Revenue [Abstract] | ||||
Net sales | $ 319 | $ 353 | ||
All Other Countries [Member] | ||||
Disaggregated Revenue [Abstract] | ||||
Net sales | 0 | $ 532 | ||
Accrued Expenses and Other Liabilities [Member] | ||||
Revenue Recognition [Abstract] | ||||
Contract with customer liability | $ 200 | $ 300 | ||
[1] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
BASIS OF PRESENTATION AND CER_6
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment, Net of Accumulated Depreciation (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Equipment and Machinery [Member] | Minimum [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 3 years |
Equipment and Machinery [Member] | Maximum [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 10 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 7 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 15 years |
Vehicles [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 5 years |
Buildings and Related Improvements [Member] | |
Property and Equipment, Net of Accumulated Depreciation and Amortization [Abstract] | |
Estimated useful lives of assets | 40 years |
BASIS OF PRESENTATION AND CER_7
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
On hand [Abstract] | ||
Finished goods held for sale | $ 24,741 | $ 20,575 |
Raw materials and work in process | 792 | 717 |
Inventory in transit | 3,691 | 2,750 |
TOTAL | $ 29,224 | $ 24,042 |
BASIS OF PRESENTATION AND CER_8
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Fair Value of Financial Instruments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | ||
Transfers from Level 1 to Level 2 | $ 0 | $ 0 |
Transfers from Level 2 to Level 1 | 0 | 0 |
Transfers into (out of) Level 3 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND CER_9
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Short Term Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | [1] | Dec. 31, 2019 | |
Short-term Investments [Abstract] | ||||
Payments to acquire short-term investments | $ 1,697 | $ 5,000 | ||
US Treasuries [Member] | ||||
Short-term Investments [Abstract] | ||||
Payments to acquire short-term investments | $ 9,200 | $ 9,200 | ||
[1] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
BASIS OF PRESENTATION AND CE_10
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable and Expected Credit Losses (Details) $ in Millions | Mar. 31, 2020USD ($) |
Accounts Receivable and Expected Credit Losses [Abstract] | |
Allowance for expected credit losses | $ 0.1 |
BASIS OF PRESENTATION AND CE_11
BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES, Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Other intangibles [Abstract] | |||
Intangible assets, gross | $ 554 | $ 554 | |
Accumulated amortization | 547 | 547 | |
Intangible assets, net | 7 | 7 | |
Maximum [Member] | |||
Other intangibles [Abstract] | |||
Amortization expenses | 10 | $ 10 | |
Amortization expense, 2020 | 10 | ||
Amortization expense, 2021 | 10 | ||
Amortization expense, 2022 | 10 | ||
Amortization expense, 2023 | 10 | ||
Amortization expense, 2024 | 10 | ||
Trademarks/Copyrights [Member] | |||
Other intangibles [Abstract] | |||
Intangible assets, gross | 554 | 554 | |
Accumulated amortization | 547 | 547 | |
Intangible assets, net | $ 7 | $ 7 | |
Weighted average amortization period | 15 years |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |||
Common Stock [Abstract] | |||||
Common stock, shares issued (in shares) | (10,467,367) | (10,446,563) | |||
Treasury stock, shares (in shares) | (1,424,376) | (1,424,376) | |||
Net income | $ (1,738) | [1] | $ 1,520 | [2] | |
Restatement Adjustment [Member] | |||||
Common Stock [Abstract] | |||||
Common stock, shares issued (in shares) | (993,623) | ||||
Treasury stock, shares (in shares) | (993,623) | ||||
Net income | $ 651 | ||||
[1] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. | ||||
[2] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
RESTATEMENT OF PREVIOUSLY ISS_4
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS, Consolidated Statement of Operations and Comprehensive Income (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Income Statement [Abstract] | ||||
Net sales | $ 17,145 | $ 20,941 | [1] | |
Cost of sales | 7,279 | 8,696 | [1] | |
Gross profit | 9,866 | 12,245 | [1] | |
Operating expenses | 11,096 | 10,032 | [1] | |
Income (loss) from operations | (2,299) | 2,213 | [1] | |
Other (income) expense [Abstract] | ||||
Interest expense | 0 | 32 | [1] | |
Other, net | (53) | 110 | [1] | |
Total other (income) expense | (53) | 142 | [1] | |
Income (loss) before income taxes | (2,246) | 2,071 | [1] | |
Income tax expense | (508) | 551 | [1] | |
Net income (loss) | (1,738) | [2] | 1,520 | [1] |
Foreign currency translation adjustments, net of tax | (346) | 314 | [1] | |
Comprehensive income (loss) | $ (2,084) | $ 1,834 | [1] | |
Net income per common share [Abstract] | ||||
Basic (in dollars per share) | $ (0.19) | $ 0.17 | [1] | |
Diluted (in dollars per share) | $ (0.19) | $ 0.17 | [1] | |
Weighted average number of shares outstanding [Abstract] | ||||
Basic (in shares) | 9,029,212 | [2] | 9,009,752 | [1] |
Diluted (in shares) | 9,029,212 | [2] | 9,011,107 | [1] |
As Reported [Member] | ||||
Income Statement [Abstract] | ||||
Net sales | $ 20,785 | |||
Cost of sales | 8,334 | |||
Gross profit | 12,451 | |||
Operating expenses | 11,282 | |||
Income (loss) from operations | 1,169 | |||
Other (income) expense [Abstract] | ||||
Interest expense | 32 | |||
Other, net | (33) | |||
Total other (income) expense | (1) | |||
Income (loss) before income taxes | 1,170 | |||
Income tax expense | 301 | |||
Net income (loss) | 869 | |||
Foreign currency translation adjustments, net of tax | 287 | |||
Comprehensive income (loss) | $ 1,156 | |||
Net income per common share [Abstract] | ||||
Basic (in dollars per share) | $ 0.10 | |||
Diluted (in dollars per share) | $ 0.10 | |||
Weighted average number of shares outstanding [Abstract] | ||||
Basic (in shares) | 9,009,752 | |||
Diluted (in shares) | 9,010,037 | |||
Adjustments [Member] | ||||
Income Statement [Abstract] | ||||
Net sales | $ 156 | |||
Cost of sales | 362 | |||
Gross profit | (206) | |||
Operating expenses | (1,250) | |||
Income (loss) from operations | 1,044 | |||
Other (income) expense [Abstract] | ||||
Interest expense | 0 | |||
Other, net | 143 | |||
Total other (income) expense | 143 | |||
Income (loss) before income taxes | 901 | |||
Income tax expense | 250 | |||
Net income (loss) | 651 | |||
Foreign currency translation adjustments, net of tax | 27 | |||
Comprehensive income (loss) | $ 678 | |||
Net income per common share [Abstract] | ||||
Basic (in dollars per share) | $ 0.07 | |||
Diluted (in dollars per share) | $ 0.07 | |||
Weighted average number of shares outstanding [Abstract] | ||||
Basic (in shares) | 9,009,752 | |||
Diluted (in shares) | 9,011,107 | |||
[1] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 | |||
[2] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. |
RESTATEMENT OF PREVIOUSLY ISS_5
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS, Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||||
Cash flows from operating activities [Abstract] | ||||||
Net income | $ (1,738) | [1] | $ 1,520 | [2] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | 335 | 494 | [2] | |||
Right-of-use asset amortization | 898 | 865 | [2] | |||
(Gain) loss on disposal of assets | 6 | (4) | [2] | |||
Stock-based compensation | 228 | 186 | [2] | |||
Deferred income taxes | (264) | 184 | [2] | |||
Exchange (gain) loss | (3) | 136 | [2] | |||
Changes in operating assets and liabilities [Abstract] | ||||||
Accounts receivable-trade | 88 | (56) | [2] | |||
Inventory | (5,302) | 3,172 | [2] | |||
Prepaid expenses | 27 | 33 | [2] | |||
Other current assets | 46 | (194) | [2] | |||
Accounts payable-trade | 3,107 | (1,281) | [2] | |||
Accrued expenses and other liabilities | (385) | (1,156) | [2] | |||
Income taxes | (293) | 109 | [2] | |||
Other assets | (952) | (41) | [2] | |||
Operating lease liabilities | (890) | (834) | [2] | |||
Total adjustments | (2,285) | 1,613 | [2] | |||
Net cash provided by (used in) operating activities | (4,023) | 3,133 | [2] | |||
Cash flows from investing activities [Abstract] | ||||||
Purchase of property and equipment | (184) | (31) | [2] | |||
Purchase of short-term investments | (1,697) | (5,000) | [2] | |||
Proceeds from sales of assets | 1 | 13 | [2] | |||
Net cash used in investing activities | (180) | (5,018) | [2] | |||
Cash flows from financing activities [Abstract] | ||||||
Payments on long-term debt | 0 | (8,968) | [2] | |||
Repurchase of treasury stock | 0 | (715) | [2] | |||
Net cash used in financing activities | 0 | (9,683) | [2] | |||
Effect of exchange rate changes on cash and cash equivalents | (279) | 177 | [2] | |||
Net decrease in cash and cash equivalents | (4,482) | (11,391) | [2] | |||
Cash and cash equivalents, beginning of period | 15,905 | 24,070 | [2] | $ 24,070 | [2] | |
Cash and cash equivalents, end of period | $ 11,423 | 12,679 | [2] | 15,905 | ||
As Reported [Member] | ||||||
Cash flows from operating activities [Abstract] | ||||||
Net income | 869 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | 495 | |||||
Right-of-use asset amortization | 0 | |||||
(Gain) loss on disposal of assets | (4) | |||||
Stock-based compensation | 186 | |||||
Deferred income taxes | (34) | |||||
Exchange (gain) loss | 2 | |||||
Changes in operating assets and liabilities [Abstract] | ||||||
Accounts receivable-trade | (48) | |||||
Inventory | 3,303 | |||||
Prepaid expenses | (293) | |||||
Other current assets | (13) | |||||
Accounts payable-trade | (318) | |||||
Accrued expenses and other liabilities | (1,205) | |||||
Income taxes | 96 | |||||
Other assets | 7 | |||||
Operating lease liabilities | 0 | |||||
Total adjustments | 2,174 | |||||
Net cash provided by (used in) operating activities | 3,043 | |||||
Cash flows from investing activities [Abstract] | ||||||
Purchase of property and equipment | (31) | |||||
Purchase of short-term investments | (5,000) | |||||
Proceeds from sales of assets | 13 | |||||
Net cash used in investing activities | (5,018) | |||||
Cash flows from financing activities [Abstract] | ||||||
Payments on long-term debt | (8,968) | |||||
Repurchase of treasury stock | (715) | |||||
Net cash used in financing activities | (9,683) | |||||
Effect of exchange rate changes on cash and cash equivalents | 267 | |||||
Net decrease in cash and cash equivalents | (11,391) | |||||
Cash and cash equivalents, beginning of period | 24,070 | 24,070 | ||||
Cash and cash equivalents, end of period | 12,679 | |||||
Adjustments [Member] | ||||||
Cash flows from operating activities [Abstract] | ||||||
Net income | 651 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | (1) | |||||
Right-of-use asset amortization | 865 | |||||
(Gain) loss on disposal of assets | 0 | |||||
Stock-based compensation | 0 | |||||
Deferred income taxes | 218 | |||||
Exchange (gain) loss | 134 | |||||
Changes in operating assets and liabilities [Abstract] | ||||||
Accounts receivable-trade | (8) | |||||
Inventory | (131) | |||||
Prepaid expenses | 326 | |||||
Other current assets | (181) | |||||
Accounts payable-trade | (963) | |||||
Accrued expenses and other liabilities | 49 | |||||
Income taxes | 13 | |||||
Other assets | (48) | |||||
Operating lease liabilities | (834) | |||||
Total adjustments | (561) | |||||
Net cash provided by (used in) operating activities | 90 | |||||
Cash flows from investing activities [Abstract] | ||||||
Purchase of property and equipment | 0 | |||||
Purchase of short-term investments | 0 | |||||
Proceeds from sales of assets | 0 | |||||
Net cash used in investing activities | 0 | |||||
Cash flows from financing activities [Abstract] | ||||||
Payments on long-term debt | 0 | |||||
Repurchase of treasury stock | 0 | |||||
Net cash used in financing activities | 0 | |||||
Effect of exchange rate changes on cash and cash equivalents | (90) | |||||
Net decrease in cash and cash equivalents | 0 | |||||
Cash and cash equivalents, beginning of period | 0 | $ 0 | ||||
Cash and cash equivalents, end of period | $ 0 | |||||
[1] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. | |||||
[2] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
NOTES PAYABLE AND LONG-TERM D_2
NOTES PAYABLE AND LONG-TERM DEBT (Details) shares in Millions | Aug. 20, 2018 | Sep. 18, 2015USD ($)shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
BOKF Promissory Note Agreement, Working Capital [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Proceeds from issuance of long-term debt | $ 0 | $ 0 | |||||
Line of credit facility, amount outstanding | $ 0 | $ 0 | |||||
Line of credit facility maximum borrowing capacity | $ 6,000,000 | ||||||
Debt instrument interest rate increase (decrease) | (0.35%) | ||||||
Line of credit maturity date | Sep. 18, 2021 | ||||||
BOKF Promissory Note Agreement, Working Capital [Member] | Minimum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Debt instrument covenants fixed charge coverage ratio | 1.2 | ||||||
BOKF Promissory Note Agreement, Working Capital [Member] | Maximum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Debt instrument covenants EBITDA ratio | 1.5 | ||||||
BOKF Promissory Note Agreement, Stock Repurchase [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Line of credit facility, amount outstanding | $ 0 | $ 0 | |||||
Line of credit facility maximum borrowing capacity | $ 10,000,000 | $ 15,000,000 | |||||
Debt instrument interest rate increase (decrease) | (0.35%) | ||||||
Line of credit maturity date | Sep. 18, 2024 | ||||||
Line of credit facility term of principal balance rolled | 4 years | ||||||
Repayments of lines of credit | $ 9,000,000 | ||||||
Pre-payment penalties incurred | $ 0 | ||||||
BOKF Promissory Note Agreement, Stock Repurchase [Member] | Maximum [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Stock repurchase program number of shares authorized to be repurchased (in shares) | shares | 2.2 | ||||||
Institute of Official Credit Guarantee for Small and Medium-sized Enterprises [Member] | Forecast [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Proceeds from issuance of long-term debt | $ 400,000 | ||||||
Term of agreement | 5 years | ||||||
Fixed interest rate | 1.50% | ||||||
Period required to make monthly interest payments | 2 years |
INCOME TAX (Details)
INCOME TAX (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAX [Abstract] | ||
Effective tax rate | 22.60% | 26.60% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2020 | Mar. 31, 2020 | Oct. 31, 2018 | Mar. 31, 2020 | Jun. 30, 2020 | Jan. 31, 2013 | |
Restricted Stock Units [Member] | Chief Executive Officer [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Number of restricted stock units granted (in shares) | 644,000 | |||||
Serviced Based RSUs [Member] | Chief Executive Officer [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Vesting period from grant date | 5 years | |||||
Number of restricted stock units granted (in shares) | 460,000 | |||||
Performance Based Restricted Stock Units [Member] | Chief Executive Officer [Member] | Tranche One [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Number of restricted stock units granted (in shares) | 92,000 | |||||
Minimum amount of operating income (two/one fiscal year in a row) | $ 12 | |||||
Performance Based Restricted Stock Units [Member] | Chief Executive Officer [Member] | Tranche Two [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Number of restricted stock units granted (in shares) | 92,000 | |||||
Minimum amount of operating income (two/one fiscal year in a row) | $ 14 | |||||
2013 Restricted Stock Plan [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Shares available for future awards (in shares) | 125,595 | 125,595 | ||||
2013 Restricted Stock Plan [Member] | Forecast [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Shares of common stock reserved for restricted stock awards (in shares) | 800,000 | |||||
2013 Restricted Stock Plan [Member] | Minimum [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Vesting period from grant date | 4 years | |||||
2013 Restricted Stock Plan [Member] | Restricted Stock Units [Member] | Maximum [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Shares of common stock reserved for restricted stock awards (in shares) | 300,000 | |||||
2013 Restricted Stock Plan [Member] | Restricted Stock Units [Member] | Employees [Member] | Forecast [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Number of restricted stock units granted (in shares) | 18,255 | |||||
2013 Restricted Stock Plan [Member] | Serviced Based RSUs [Member] | Non-employee Directors [Member] | ||||||
Restricted Stock Plan [Abstract] | ||||||
Vesting period from grant date | 3 years | |||||
Number of restricted stock units granted (in shares) | 24,010 |
STOCK-BASED COMPENSATION, Summa
STOCK-BASED COMPENSATION, Summary of Activity for Non-vested Restricted Stock Unit Awards (Details) - Restricted Stock and RSUs [Member] - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Shares [Roll Forward] | ||
Balance, beginning (in shares) | 606 | 658 |
Granted (in shares) | 24 | 28 |
Forfeited (in shares) | (5) | |
Vested (in shares) | (19) | (1) |
Balance, ending (in shares) | 611 | 680 |
Weighted Average Share price [Abstract] | ||
Balance, beginning (in dollars per share) | $ 7.27 | $ 7.39 |
Granted (in dollars per share) | 4.78 | 5.64 |
Forfeited (in dollars per share) | 5.64 | |
Vested (in dollars per share) | 6.61 | 7.72 |
Balance, ending (in dollars per share) | $ 7.27 | $ 7.39 |
STOCK-BASED COMPENSATION, Non-n
STOCK-BASED COMPENSATION, Non-nested, Service-based Restricted Stock and RSU Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Service-based Restricted Stock Awards [Member] | ||
Share-based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ 200 | $ 200 |
Service-based Restricted Stock and RSU Awards [Member] | ||
Share-based Compensation Expense [Abstract] | ||
2020 | 594 | |
2021 | 797 | |
2022 | 760 | |
2023 | 516 | |
Unrecognized Expense | 2,667 | |
Performance Based Restricted Stock Units [Member] | ||
Share-based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ 0 | |
Restricted Stock and RSUs [Member] | ||
Share-based Compensation Expense [Abstract] | ||
Number of shares issued from vesting of restricted stock (in shares) | 20,804 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Numerator [Abstract] | ||||
Net income (loss) | $ (1,738) | [1] | $ 1,520 | [2] |
Denominator [Abstract] | ||||
Basic weighted-average common shares outstanding (in shares) | 9,029,212 | [1] | 9,009,752 | [2] |
Dilutive effect of service-based restricted stock awards granted under the plan (in shares) | 492 | |||
Diluted weighted-average common shares outstanding (in shares) | 9,029,212 | [1] | 9,011,107 | [2] |
Restricted Stock [Member] | ||||
Denominator [Abstract] | ||||
Dilutive effect of service-based restricted stock awards granted under the plan (in shares) | 0 | [1] | 1,355 | |
[1] | For the three months ended March 31, 2020, there were 492 shares excluded from the diluted EPS calculation because the impact of their assumed vesting would be anti-dilutive due to a net loss in that period. | |||
[2] | As described in Note 2 to these Consolidated Financial Statements, we have restated the consolidated financial statements for the three months ended March 31, 2019 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Forecast [Member] | 1 Months Ended |
Jul. 31, 2021USD ($) | |
SEC Investigation [Abstract] | |
Penalty amount paid | $ 200,000 |
Former Chief Financial Officer and Chief Executive Officer [Member] | |
SEC Investigation [Abstract] | |
Penalty amount | $ 25,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 28, 2021 | Mar. 31, 2020 | Jan. 27, 2021 | Aug. 09, 2020 | Dec. 31, 2019 |
Subsequent Events Description [Abstract] | |||||
Common stock, par value (in dollars per share) | $ 0.0024 | $ 0.0024 | |||
Share Repurchase Program [Member] | |||||
Subsequent Events Description [Abstract] | |||||
Share repurchase program expiration date | Aug. 31, 2020 | ||||
Remaining repurchase of common stock | $ 5 | ||||
Forecast [Member] | Share Repurchase Program [Member] | |||||
Subsequent Events Description [Abstract] | |||||
Repurchase of common stock (in shares) | 500,000 | ||||
Common stock, par value (in dollars per share) | $ 0.0024 | ||||
Purchase price per share (in dollars per share) | $ 3.35 | ||||
Purchase price | $ 1.7 | ||||
Percentage of outstanding common stock | 5.50% | ||||
Forecast [Member] | Share Repurchase Program [Member] | Maximum [Member] | |||||
Subsequent Events Description [Abstract] | |||||
Repurchase of common stock | $ 5 |