Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | BALLANTYNE STRONG, INC. | |
Entity Central Index Key | 946,454 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,422,090 | |
Trading Symbol | BTN | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,348 | $ 4,870 |
Accounts receivable (net of allowance for doubtful accounts of $1,976 and $1,877, respectively) | 10,749 | 10,766 |
Inventories: | ||
Raw materials and components, net | 1,248 | 1,376 |
Work in process | 496 | 362 |
Finished goods, net | 2,449 | 3,083 |
Total inventories, net | 4,193 | 4,821 |
Recoverable income taxes | 492 | 495 |
Other current assets | 1,572 | 1,290 |
Total current assets | 20,354 | 22,242 |
Property, plant and equipment (net of accumulated depreciation of $9,037 and $8,780 respectively) | 10,542 | 10,826 |
Equity method investments | 17,833 | 18,053 |
Intangible assets, net | 3,947 | 3,972 |
Goodwill | 926 | 952 |
Notes receivable | 2,773 | 2,815 |
Other assets | 656 | 154 |
Total assets | 57,031 | 59,014 |
Current liabilities: | ||
Accounts payable | 4,221 | 3,425 |
Accrued expenses | 3,562 | 3,071 |
Short-term debt | 500 | 500 |
Current portion of long-term debt | 65 | 65 |
Deferred revenue and customer deposits | 2,314 | 1,619 |
Income tax payable | 40 | |
Total current liabilities | 10,702 | 8,680 |
Long-term debt, net of current portion and debt issuance costs | 1,855 | 1,870 |
Deferred revenue and customer deposits, net of current portion | 1,207 | 1,207 |
Deferred income taxes | 2,852 | 2,816 |
Other accrued expenses, net of current portion | 257 | 319 |
Total liabilities | 16,873 | 14,892 |
Stockholders' equity: | ||
Preferred stock, par value $.01 per share; authorized 1,000 shares; none outstanding | ||
Common stock, par value $.01 per share; authorized 25,000 shares; issued 17,216 shares; outstanding 14,422 shares | 169 | 169 |
Additional paid-in capital | 40,820 | 40,565 |
Accumulated other comprehensive income (loss): | ||
Foreign currency translation | (4,515) | (4,048) |
Postretirement benefit obligations | 108 | 99 |
Unrealized gain on available-for-sale securities of equity method investments | 301 | 353 |
Retained earnings | 21,861 | 25,570 |
Stockholders' equity before treasury stock | 58,744 | 62,708 |
Less 2,794 of common shares in treasury, at cost | (18,586) | (18,586) |
Total stockholders' equity | 40,158 | 44,122 |
Total liabilities and stockholders' equity | $ 57,031 | $ 59,014 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,976 | $ 1,877 |
Property, plant and equipment, accumulated depreciation | $ 9,037 | $ 8,780 |
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | ||
Common stock par value | $ .01 | $ .01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 17,216,000 | 17,216,000 |
Common stock, shares outstanding | 14,422,000 | 14,422,000 |
Common shares in treasury, shares | 2,794,000 | 2,794,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net product sales | $ 8,639 | $ 12,456 |
Net service revenues | 7,189 | 5,470 |
Total net revenues | 15,828 | 17,926 |
Cost of products sold | 5,812 | 10,308 |
Cost of services | 7,166 | 3,179 |
Total cost of revenues | 12,978 | 13,487 |
Gross profit | 2,850 | 4,439 |
Selling and administrative expenses: | ||
Selling | 1,225 | 1,490 |
Administrative | 4,709 | 3,547 |
Total selling and administrative expenses | 5,934 | 5,037 |
Loss from operations | (3,084) | (598) |
Other income (expense): | ||
Interest income | 22 | |
Interest expense | (45) | (10) |
Foreign currency transaction gain | 104 | 3 |
Fair value adjustment to notes receivable | (42) | |
Other (expense) income, net | (10) | 5 |
Total other income | 7 | 20 |
Loss before income taxes and equity method investment (loss) income | (3,077) | (578) |
Income tax expense | 698 | 1,493 |
Equity method investment (loss) income | (10) | 2,481 |
Net (loss) earnings from continuing operations | (3,785) | 410 |
Net loss from discontinued operations, net of tax | (23) | |
Net (loss) earnings | $ (3,785) | $ 387 |
Net (loss) earnings per share - basic | ||
Net (loss) earnings from continuing operations | $ (0.26) | $ 0.03 |
Net loss from discontinued operations | 0 | |
Net (loss) earnings | (0.26) | 0.03 |
Net (loss) earnings per share - diluted | ||
Net (loss) earnings from continuing operations | (0.26) | 0.03 |
Net loss from discontinued operations | 0 | |
Net (loss) earnings | $ (0.26) | $ 0.03 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) earnings | $ (3,785) | $ 387 |
Adjustment to postretirement benefits | 9 | |
Currency translation adjustment: | ||
Unrealized net change arising during period | (467) | 109 |
Unrealized loss on available-for-sale securities of equity method investments, net of tax | (52) | |
Total other comprehensive (loss) income | (510) | 109 |
Comprehensive (loss) income | $ (4,295) | $ 496 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net (loss) earnings | $ (3,785) | $ 387 |
Net loss from discontinued operations, net of tax | (23) | |
Net (loss) earnings from continuing operations | (3,785) | 410 |
Adjustments to reconcile net (loss) earnings from continuing operations to net cash (used in) provided by operating activities: | ||
Provision for doubtful accounts | 103 | 3 |
Provision for obsolete inventory | 44 | 68 |
Provision for warranty | 79 | 18 |
Depreciation and amortization | 524 | 482 |
Equity method investment loss (income) | 10 | (2,481) |
Fair value adjustment to notes receivable | 42 | |
Deferred income taxes | 87 | 867 |
Amortization of contract acquisition costs | 57 | |
Stock-based compensation expense | 255 | 136 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (178) | (282) |
Inventories | 537 | (514) |
Other current assets | 5 | (102) |
Accounts payable | 256 | 2,321 |
Accrued expenses | 429 | 154 |
Customer deposits/deferred revenue | 704 | (86) |
Current income taxes | 36 | (156) |
Other assets | (796) | (271) |
Net cash flows (used in) provided by operating activities - continuing operations | (1,591) | 567 |
Net cash flows used in operating activities - discontinued operations | (24) | |
Net cash (used in) provided by operating activities | (1,591) | 543 |
Cash flows from investing activities: | ||
Purchase of equity securities | (2,525) | |
Dividends received from investee in excess of cumulative earnings | 23 | 103 |
Capital expenditures | (356) | (1,120) |
Net cash used in investing activities - continuing operations | (333) | (3,542) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (16) | |
Purchase of treasury stock | (65) | |
Payments on capital lease obligations | (53) | (67) |
Net cash used in financing activities - continuing operations | (69) | (132) |
Effect of exchange rate changes on cash and cash equivalents - continuing operations | 471 | 39 |
Net decrease in cash and cash equivalents | (1,522) | (3,092) |
Discontinued operations activity included above: | ||
Add: Cash balance included in assets held for sale at beginning of period | 175 | |
Less: Cash balance included in assets held for sale at end of period | (150) | |
Cash and cash equivalents at beginning of period | 4,870 | 7,596 |
Cash and cash equivalents at end of period | $ 3,348 | $ 4,529 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Ballantyne Strong, Inc. (“Ballantyne” or the “Company”), a Delaware corporation, is a holding company with diverse business activities focused on serving the cinema, retail, financial, advertising and government markets. The Company, and its wholly owned subsidiaries Strong Technical Services, Inc., Strong/MDI Screen Systems, Inc. (“Strong/MDI”), Convergent Media Systems Corporation and Strong Digital Media, LLC design, integrate and install technology solutions for a broad range of applications; develop and deliver out-of-home messaging, advertising and communications; manufacture projection screens; and provide managed services including monitoring of networked equipment to our customers. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 2. Discontinued Operations In May 2017, the Company sold the operational assets of Strong Westrex, Inc. for total proceeds of $60 thousand. The summary financial results of discontinued operations for the three months ended March 31, 2017 were as follows (in thousands): Total net revenues $ 12 Total cost of revenues 26 Total selling and administrative expenses 9 Loss from operations of discontinued operations (23 ) Loss before income taxes (23 ) Income tax expense - Net loss from discontinued operations, net of tax $ (23 ) There was no depreciation and amortization related to discontinued operations recorded for the three month period ended March 31, 2017. There were no capital expenditures related to discontinued operations during the three month period ended March 31, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The condensed consolidated balance sheet as of December 31, 2017 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year. Use of Management Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. Equity Method Investments We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity method investment (loss) income” in our condensed consolidated statements of operations. The carrying value of our equity method investments is reported in equity method investments in the condensed consolidated balance sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the condensed consolidated statements of cash flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company did not record any impairments related to its investments during the three months ended March 31, 2018 or 2017. Note 6 contains additional information on our equity method investments, which are held by our Cinema segment. Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 31, 2018 and December 31, 2017. Fair values measured on a recurring basis at March 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,348 $ - $ - $ 3,348 Notes receivable - - 2,773 $ 2,773 Total $ 3,348 $ - $ 2,773 $ 6,121 Fair values measured on a recurring basis at December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,870 $ - $ - $ 4,870 Notes receivable - - 2,815 $ 2,815 Total $ 4,870 $ - $ 2,815 $ 7,685 Quantitative information about the Company’s level 3 fair value measurements at March 31, 2018 is set forth below: Fair value at 3/31/18 (in thousands) Valuation technique Unobservable input Range Notes receivable $ 2,773 Discounted cash flow Default percentage 49 % Discount rate 18 % During 2011, the Company entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of digital projection equipment. The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular year is added to the principal and also accrues interest at 15%. The notes receivable are recorded at estimated fair value. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During the first quarter of 2018, the Company updated its estimated future cash flow assumptions. This resulted in a decrease to the fair value of the notes receivable of $42 thousand recorded in earnings during the quarter ended March 31, 2018. There was no adjustment to the estimated fair value of the notes receivable during the quarter ended March 31, 2017. The significant unobservable inputs used in the fair value measurement of the Company’s notes receivable are discount rate and percentage of default. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement. The Company’s short-term and long-term debt is recorded at historical cost. As of March 31, 2018, the Company’s long-term debt, including current maturities, had a carrying value of $1.95 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at March 31, 2018 was $1.90 million. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt, reported in the condensed consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. Note 6 includes fair value information related to our equity method investments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the three months ended March 31, 2018 and 2017, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” “(ASC 606)”. The ASU replaced most existing revenue recognition guidance in U.S. GAAP. The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method. The Company recorded a transition adjustment of approximately $76 thousand increasing the opening balance of retained earnings, primarily related to the deferral and amortization of direct and incremental costs of obtaining contracts. See Note 4 for further information about the nature and pattern of revenue recognition for the different types of contracts with customers. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments that do not result in consolidation and are not accounted under the equity method to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets; and modifies certain fair value disclosure requirements. The Company adopted ASU 2016-01 prospectively on January 1, 2018. The adoption of this ASU did not significantly impact the Company’s results of operations and financial position. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The new guidance describes the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The Company adopted this ASU effective January 1, 2018. The adoption of this ASU did not significantly impact the Company’s results of operations and financial position. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months, on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is evaluating the requirements of ASU 2016-02 and its potential impact on the Company’s financial statements. The Company has leases primarily for property and equipment and is in the process of identifying and evaluating these leases for purposes of ASU 2016-02. For each of these leases, the term will be evaluated, including extension and renewal options as well as the lease payments. While the Company has not yet quantified the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements, the Company expects to record assets and liabilities on its balance sheet upon adoption of this standard, which may be material. The Company will continue to provide enhanced disclosures as it continues its assessment. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment testing which requires the fair value of individual assets and liabilities of a reporting unit to be determined when measuring goodwill impairment. The new guidance may result in different amounts of impairment that could be recognized compared to existing guidance. In addition, failing step 1 of the impairment test may not result in impairment under existing guidance. However, under the revised guidance, failing step 1 will always result in a goodwill impairment. ASU 2017-04 is to be applied prospectively for goodwill impairment testing performed in years beginning after December 15, 2019. The Company does not believe its adoption will significantly impact the Company’s results of operations or financial position. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 4. Revenue On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts not completed as of the date of adoption. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Under ASC 606, the Company accounts for revenue using the following steps: ● Identify the contract, or contracts, with a customer ● Identify the performance obligations in the contract ● Determine the transaction price ● Allocate the transaction price to the identified performance obligations ● Recognize revenue when, or as, the Company satisfies the performance obligations The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company does not have any material extended payment terms as payment is due at or shortly after the time of the sale. Observable prices are used to determine the standalone selling price of separate performance obligations or a cost plus margin approach when one is not available. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation. Deferred contract acquisition costs are included in other assets. Beginning January 1, 2018, with the adoption of ASC 606, the Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. Prior to 2018, all contract acquisition costs were expensed as incurred. The Company recorded a transition adjustment of approximately $76 thousand increasing the opening balance of retained earnings, primarily related to the deferral and amortization of direct and incremental costs of obtaining contracts. The following table summarizes the changes in the Company’s contract asset balance during the three months ended March 31, 2018 (in thousands): Deferred contract acquisition costs as of January 1, 2018 $ 76 Costs capitalized 10 Amortization (14 ) Impairment - Deferred contract acquisition costs as of March 31, 2018 $ 72 The following tables summarize the impact the adoption of ASC 606 had on the Company’s consolidated financial statements (in thousands, except per share data): Condensed Consolidated Balance Sheet: As reported March 31, 2018 Adjustments Balances without adoption of ASC 606 Total current assets $ 20,354 $ 146 $ 20,500 Total noncurrent assets 36,677 (14 ) 36,663 Total assets $ 57,031 $ 132 $ 57,163 Total current liabilities $ 10,702 $ 258 $ 10,960 Total noncurrent liabilities 6,171 - 6,171 Total liabilities 16,873 258 17,131 Retained earnings 21,861 (126 ) 21,735 Other stockholders’ equity 18,297 - 18,297 Total stockholders’ equity 40,158 (126 ) 40,032 Total liabilities and stockholders’ equity $ 57,031 $ 132 $ 57,163 Condensed Consolidated Statement of Operations: As reported for the three months ended March 31, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 15,828 $ (57 ) $ 15,771 Total cost of revenues 12,978 (2 ) 12,976 Gross profit 2,850 (55 ) 2,795 Total selling and administrative expenses 5,934 (5 ) 5,929 Loss from operations (3,084 ) (50 ) (3,134 ) Other income 7 - 7 Loss before income taxes and equity method investment loss (3,077 ) (50 ) (3,127 ) Income tax expense 698 - 698 Equity method investment loss (10 ) - (10 ) Net loss $ (3,785 ) $ (50 ) $ (3,835 ) Net loss per share of common stock: Basic $ (0.26 ) (0.00 ) $ (0.26 ) Diluted $ (0.26 ) (0.00 ) $ (0.26 ) The adoption of ASC 606 did not have any net impact on other comprehensive loss or cash flows. The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2018: Cinema Digital Media Other Eliminations Total Screen system sales $ 4,005 $ - $ - $ - $ 4,005 Digital equipment sales 3,158 766 - (216 ) 3,708 Field maintenance and monitoring services 2,944 2,114 - (138 ) 4,920 Installation services 328 1,360 - - 1,688 Extended warranty sales 342 - - - 342 Other 672 477 16 - 1,165 Total $ 11,449 $ 4,717 $ 16 $ (354 ) $ 15,828 Screen system sales The Company recognizes revenue on the sale of its screen systems when control of the screen is transferred to the customer, usually at time of shipment. However, revenue is recognized upon delivery for certain international shipments with longer shipping transit time because control does not transfer to the customer until delivery. Digital equipment sales The Company recognizes revenue on sales of digital equipment when the control of the equipment is transferred, which occurs at the time of shipment from the Company’s warehouse or drop-shipment from a third party. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer. Field maintenance and monitoring services The Company sells service contracts that provide maintenance and monitoring services to Cinema and Digital Media customers. In the Cinema segment, these contracts are generally 12 months in length, while the term for service contracts in the Digital Media segment can be for multiple years. Revenue is recognized over the term of the agreement in proportion to the costs incurred in fulfilling performance obligations under the contract. The Company also performs time and materials-based maintenance and repair work for customers in the Cinema and Digital Media segments. Revenue is recognized at a point in time when the performance obligation has been fully satisfied. Installation services The Company performs installation services for both its Cinema and Digital Media customers and recognizes revenue upon completion of the installations. Extended warranty sales The Company sells extended warranties to its Cinema customers. When the Company is the primary obligor, revenue is recognized on a gross basis over the term of the extended warranty in proportion to the costs incurred in fulfilling performance obligations under the extended warranty. In third party extended warranty sales, the Company is not the primary obligor, and revenue is recognized on a net basis at the time of the sale. At January 1, 2018, $0.8 million of unearned revenue associated with maintenance and monitoring services and extended warranty sales in which the Company is the primary obligor was reported in deferred revenue and customer deposits. During the three months ended March 31, 2018, $0.4 million of this balance was earned and recognized as revenue. At March 31, 2018, the unearned revenue amount was $0.8 million. The Company expects to recognize $0.7 million of unearned revenue amounts throughout the rest of 2018, and immaterial amounts each year from 2019 through 2023. The following table disaggregates the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 9,598 $ 2,529 $ 16 $ (354 ) $ 11,789 Over time 1,851 2,188 - - 4,039 Total $ 11,449 $ 4,717 $ 16 $ (354 ) $ 15,828 |
(Loss) Earnings Per Common Shar
(Loss) Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Common Share | 5. (Loss) Earnings Per Common Share Basic (loss) earnings per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted (loss) earnings per share has been computed on the basis of the weighted average number of shares of common stock outstanding after giving effect to potential common shares from dilutive stock options and certain non-vested shares of restricted stock and restricted stock units. The following table provides the reconciliation between average shares used to compute basic and diluted (loss) earnings per share: Three Months Ended March 31, 2018 2017 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,341 14,264 Dilutive effect of stock options and certain non-vested shares of restricted stock - 156 Diluted weighted average shares outstanding 14,341 14,420 For the three month period ended March 31, 2018, options to purchase 490,000 shares of common stock were outstanding but were not included in the computation of diluted loss per share as the option’s exercise price was greater than the average market price of the common shares for each period. An additional 129,525 common stock equivalents related to options and restricted stock awards were excluded for the three months ended March 31, 2018, respectively, as their inclusion would be anti-dilutive, thereby decreasing the net losses per share. For the three month period ended March 31, 2017, options to purchase 385,000 shares of common stock were outstanding but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 6. Equity Method Investments The following summarizes our equity method investments (dollars in thousands): March 31, 2018 December 31, 2017 Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,102 8.3 % $ 4,473 8.3 % Itasca Capital, Ltd. 5,814 32.3 % 5,870 32.3 % 1347 Property Insurance Holdings, Inc. 7,917 17.4 % 7,710 17.4 % Total $ 17,833 $ 18,053 The following summarizes the (loss) income of equity method investees reflected in the Statement of Operations (in thousands): Three months ended March 31, Entity 2018 2017 RELM Wireless Corporation $ (354 ) $ 8 Itasca Capital, Ltd. 103 2,461 1347 Property Insurance Holdings, Inc. 241 12 Total $ (10 ) $ 2,481 RELM Wireless Corporation (“RELM”) is a publicly traded company that designs, manufactures and markets two-way land mobile radios, repeaters, base stations and related components and subsystems. The Company’s Chief Executive Officer is chairman of the board of directors of RELM, and controls entities that, when combined with the Company’s ownership in RELM, own greater than 20% of RELM, providing the Company with significant influence over RELM, but not controlling interest. The Company received dividends of $23 thousand and $0.1 million for the three month periods ended March 31, 2018 and 2017, respectively. Based on quoted market prices, the market value of the Company’s ownership in RELM was $4.5 million at March 31, 2018. Itasca Capital, Ltd. (“Itasca”) is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Company’s Chief Executive Officer is a member of the board of directors of Itasca. This board seat, combined with the Company’s 32.3% ownership of Itasca, provide the Company with significant influence over Itasca, but not controlling interest. The Company did not receive dividends from Itasca during the three month periods ended March 31, 2018 or 2017. Based on quoted market prices, the market value of the Company’s ownership in Itasca was $3.5 million at March 31, 2018. 1347 Property Insurance Holdings, Inc. (“PIH”) is a publicly traded company that provides property and casualty insurance in the States of Louisiana, Texas and Florida. The Company’s Chief Executive Officer is a member of the board of directors of PIH, and controls entities that, when combined with the Company’s ownership in PIH, own greater than 20% of PIH, providing the Company with significant influence over PIH, but not controlling interest. The Company did not receive dividends from PIH during the three month periods ended March 31, 2018 and 2017. Based on quoted market prices, the market value of the Company’s ownership in PIH was $7.4 million at March 31, 2018. As of March 31, 2018, the Company’s retained earnings included undistributed earnings from our equity method investees of $1.5 million. The summarized financial information presented below reflects the financial information of the Company’s equity method investees for the three months ended December 31, 2017, consistent with the Company’s recognition of the results of its equity method investments on a one-quarter lag. For the three months ended December 31, 2017 2016 (in thousands) Revenue $ 20,576 $ 15,358 Operating loss from continuing operations $ (2,034 ) $ 2,590 Net income $ (2,557 ) $ 9,351 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consisted of the following at March 31, 2018 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 877 $ - $ 877 Intangible assets subject to amortization: Software in service 5 3,718 (768 ) 2,950 Product formulation 10 473 (353 ) 120 Total $ 5,068 $ (1,121 ) $ 3,947 Intangible assets consisted of the following at December 31, 2017 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 1,243 $ - $ 1,243 Intangible assets subject to amortization: Software in service 5 3,191 (597 ) 2,594 Product formulation 10 486 (351 ) 135 Total $ 4,920 $ (948 ) $ 3,972 Amortization expense relating to intangible assets was $0.2 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively. The following table shows the Company’s estimated future amortization expense related to intangible assets currently subject to amortization for the next five years (in thousands): Amount Remainder 2018 $ 639 2019 840 2020 831 2021 670 2022 86 Thereafter 4 Total $ 3,070 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 8. Goodwill The following represents a summary of changes in the Company’s carrying amount of goodwill for the three months ended March 31, 2018 (in thousands): Balance as of December 31, 2017 $ 952 Foreign currency translation (26 ) Balance as of March 31, 2018 $ 926 |
Warranty Reserves
Warranty Reserves | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Warranty Reserves | 9. Warranty Reserves In most instances, the Company’s digital projection products are covered by the manufacturing firm’s original warranty; however, for certain customers the Company may grant warranties in excess of the manufacturer’s warranty. In addition, the Company provides warranty coverage on screens it manufactures. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Warranty accrual at beginning of period $ 521 $ 645 Charged to expense 84 47 Claims paid, net of recoveries (30 ) (231 ) Foreign currency adjustment (11 ) 1 Warranty accrual at end of period $ 564 $ 462 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt The Company’s debt consists of the following (in thousands): March 31, 2018 December 31, 2017 Short-term debt: Revolving line of credit $ 500 $ 500 Current portion of long-term debt 65 65 Total short-term debt 565 565 Long-term debt: $2 million term loan 1,951 1,968 Less: current portion (65 ) (65 ) Less: unamortized debt issuance costs (31 ) (33 ) Total long-term debt 1,855 1,870 Total short-term and long-term debt $ 2,420 $ 2,435 On April 27, 2017, the Company entered into a debt agreement with a bank consisting of 1) a $2.0 million five-year term loan secured by a first lien deed of trust on the Company’s Alpharetta, GA facility, bearing interest at a fixed rate of 4.5% and payable in equal monthly installments of principal and interest calculated based on a 20-year amortization schedule with a final balloon payment of approximately $1.7 million due on May 10, 2022 and 2) a line of credit of up to $1.0 million secured by a second lien deed of trust on the Company’s Alpharetta, GA facility, bearing interest at the Prime Rate published in the Wall Street Journal plus 0.25% (5.00% at March 31, 2018) and with a term ending May 10, 2018. On April 23, 2018, the Company entered into a one-year extension of the maturity date of the line of credit through May 10, 2019. The debt agreement requires the Company to maintain a ratio of total liabilities to tangible net worth not in excess of 3:1 and maintain minimum liquidity of $2.0 million. The Company was in compliance with its debt covenants as of March 31, 2018. The Company’s Chairman and Chief Executive Officer is also a member of the bank’s board of directors. On September 5, 2017, the Company’s Canadian subsidiary, Strong/MDI, entered into a demand credit agreement with a bank consisting of a revolving line of credit for up to CDN$3.5 million subject to a borrowing base requirement, a 20-year installment loan for up to CDN$6.0 million and a 5-year installment loan for up to CDN$500,000. Amounts outstanding under the line of credit are payable on demand and will bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans will bear interest at the prime rate plus 0.5% and are payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loans at any time. The Strong/MDI credit facilities are secured by a lien on Strong/MDI’s Quebec, Canada facility and substantially all of Strong/MDI’s assets. The credit agreement requires Strong/MDI to maintain a ratio of liabilities to “effective equity” (tangible stockholders’ equity, less amounts receivable from affiliates and equity method investments) not exceeding 2 to 1, a current ratio (excluding amounts due from related parties) of at least 1.5 to 1 and minimum “effective equity” of CDN$8.0 million. There were no borrowings outstanding at March 31, 2018 on any of the Strong/MDI credit facilities, as Strong/MDI had not yet drawn on the facilities. On April 24, 2018, the Company borrowed CDN$3.5 million on the 20-year installment loan. Strong/MDI was in compliance with its debt covenants as of March 31, 2018. Scheduled repayments are as follows for the Company’s long-term debt outstanding as of March 31, 2018 (in thousands): Remainder of 2018 $ 48 2019 68 2020 70 2021 74 2022 1,691 Thereafter - Total $ 1,951 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular tax jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence, including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance should be recorded against all of the Company’s U.S. tax jurisdiction deferred tax assets as of March 31, 2018 and December 31, 2017. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was signed into law in the United States. The law includes significant changes to the United States corporate income tax system, including a federal corporate rate reduction and the transition of the United States from a worldwide tax system to a territorial tax system. As part of the transition to a territorial tax system, the 2017 Tax Act requires taxpayers to calculate a one-time transition tax based on the deemed repatriation of undistributed earnings of foreign subsidiaries. The Company is currently analyzing the 2017 Tax Act, and in certain areas, has made provisional estimates of the effects on our consolidated financial statements and tax disclosures, including the amount of the repatriation tax and changes to existing deferred tax balances. The Company is subject to possible examinations not yet initiated for Federal purposes for fiscal years 2014 through 2017. In most cases, the Company is subject to possible examinations by state or local jurisdictions based on the particular jurisdiction’s statute of limitations. |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | 12. Stock Compensation The Company recognizes compensation expense for all stock-based payment awards made to employees and directors based on estimated grant date fair values. Stock-based compensation expense included in selling and administrative expenses approximated $0.3 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively. The Company’s 2017 Omnibus Equity Compensation Plan (“2017 Plan”) was approved by the Company’s stockholders and provides the Compensation Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other stock-based awards and cash-based awards. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares authorized for issuance under the 2017 Plan is 1,371,189 shares, with 758,354 shares remaining available for grant at March 31, 2018. Options The Company granted a total of 387,500 and 285,000 options during the three month periods ended March 31, 2018 and 2017, respectively. Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant. The weighted average grant date fair value of stock options granted during the three month periods ended March 31, 2018 and 2017 was $1.82 and $2.41, respectively. The fair value of each stock option granted was estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions: 2018 2017 Expected dividend yield at date of grant 0.00 % 0.00 % Risk-free interest rate 2.49 % 2.04 % Expected stock price volatility 35.65 % 34.71 % Expected life of options (in years) 6.0 6.0 The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on historical daily price changes of the Company’s stock for six years prior to the date of grant. The expected life of options is the average number of years the Company estimates that options will be outstanding. The following table summarizes stock option activity for the three months ended March 31, 2018: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 930,300 $ 5.63 8.7 $ 150 Granted 387,500 4.70 Exercised - - Forfeited (32,000 ) 5.59 Expired (8,000 ) 5.41 Outstanding at March 31, 2018 1,277,800 $ 5.29 8.8 $ 64 Exercisable at March 31, 2018 269,300 $ 4.88 7.9 $ 31 The aggregate intrinsic value in the table above represents the total that would have been received by the option holders if all in-the-money options had been exercised and sold on the date indicated. As of March 31, 2018, 1,008,500 stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $1.9 million, which is expected to be recognized over a weighted average period of 4.0 years. Restricted Stock The Company estimates the fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of March 31, 2018, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $1.1 million, which is expected to be recognized over a weighted average period of 2.4 years. The following table summarizes restricted stock share activity for the three months ended March 31, 2018: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2017 85,000 $ 6.50 Granted - - Shares vested (28,333 ) 6.50 Shares forfeited - - Non-vested at March 31, 2018 56,667 $ 6.50 The following table summarizes restricted stock unit activity for the three months ended March 31, 2018: Number of Restricted Stock Units Weighted Average Grant Price Fair Value Non-vested at December 31, 2017 35,835 $ 6.45 Granted 147,500 4.70 Shares vested - - Shares forfeited - - Non-vested at March 31, 2018 183,335 $ 5.04 |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 13. Commitments, Contingencies and Concentrations Litigation The Company is involved, from time to time, in certain legal disputes in the ordinary course of business operations. No such disputes, individually or in the aggregate, are expected to have a material effect on the Company’s business or financial condition. Concentrations The Company’s top ten customers accounted for approximately 56% of total consolidated net revenues for the three months ended March 31, 2018. Trade accounts receivable from these customers represented approximately 37% of net consolidated receivables at March 31, 2018. While the Company believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company’s significant customers could have a material adverse effect on the Company’s business, financial condition and results of operations. The Company could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells its products. Financial instruments that potentially expose the Company to a concentration of credit risk principally consist of accounts receivable. The Company sells product to a large number of customers in many different geographic regions. To minimize credit risk, the Company performs ongoing credit evaluations of its customers’ financial condition. Leases The Company and its subsidiaries lease plant and office facilities, furniture, autos and equipment under operating leases expiring through 2022. These leases generally contain renewal options and the Company expects to renew or replace certain of these leases in the ordinary course of business. The Company’s future minimum lease payments for leases at March 31, 2018 are as follows: Capital Leases Operating Leases (in thousands) Remainder 2018 $ 185 $ 1,342 2019 116 1,768 2020 - 1,543 2021 - 1,415 2022 - 1,081 Thereafter - - Total minimum lease payments $ 301 $ 7,149 Less: Amount representing interest (10 ) Present value of minimum lease payments 291 Less: Current maturities (226 ) Capital lease obligations, net of current portion $ 65 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information | 14. Business Segment Information As of March 31, 2018, the Company’s operations were conducted principally through two business segments: Cinema and Digital Media. The Cinema segment provides a full range of product and service solutions primarily for the theater exhibition industry, including a wide spectrum of premier audio-visual products and accessories such as digital projectors, state of the art projection screens, servers, library management systems, menu boards, flat panel displays, and sound systems, as well as network monitoring and on-site service for cinema equipment. The Digital Media segment develops and delivers solutions for out-of-home messaging, advertising and communication and provides managed services including monitoring of networked equipment. While there is digital signage equipment sold within this segment, the primary focus of this segment is providing solutions and services to our customers. Summary by Business Segments Three Months Ended March 31, (In thousands) 2018 2017 Net revenues Cinema $ 11,449 $ 12,689 Digital Media 4,717 5,345 Other 16 - Total segment net revenues 16,182 18,034 Eliminations (354 ) (108 ) Total net revenues 15,828 17,926 Gross profit (loss) Cinema 3,385 3,616 Digital Media (551 ) 823 Other 16 - Total gross profit 2,850 4,439 Operating income (loss) Cinema 2,325 2,679 Digital Media (2,496 ) (1,113 ) Other (113 ) (117 ) Total segment operating (loss) income (284 ) 1,449 Unallocated general and administrative expenses (2,800 ) (2,047 ) Loss from operations (3,084 ) (598 ) Other income 7 20 Loss before income taxes and equity method investment (loss) income $ (3,077 ) $ (578 ) (In thousands) March 31, 2018 December 31, 2017 Identifiable assets Cinema $ 24,845 $ 27,358 Digital Media 14,353 13,603 Corporate 17,833 18,053 Total $ 57,031 $ 59,014 Summary by Geographical Area Three Months Ended March 31, (In thousands) 2018 2017 Net revenue United States $ 12,830 $ 14,393 Canada 1,400 1,220 Mexico 556 356 China 541 1,466 Latin America 270 284 Europe 158 116 Asia (excluding China) 73 72 Other - 19 Total $ 15,828 $ 17,926 (In thousands) March 31, 2018 December 31, 2017 Identifiable assets United States $ 38,325 $ 37,230 Canada 18,706 21,784 Total $ 57,031 $ 59,014 Net revenues by business segment are to unaffiliated customers. Identifiable assets by geographical area are based on location of facilities. Net sales by geographical area are based on destination of sales. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 15. Subsequent Event On April 27, 2018, the Company executed a definitive agreement for a sale-leaseback of its Alpharetta, Georgia office facility. The Company agreed to sell the Alpharetta facility for $7.0 million in cash and enter into a 10-year leaseback of the facility for rent in the amount of $600,000 per year, escalating at the rate of 2% per year. In addition, the Company agreed to issue 100,000 warrants to the buyer or its designee to purchase Company stock, consisting of 25,000 warrants at each of $10, $12, $14 and $16 purchase prices per share. The warrants will have a 10-year maturity. The closing of the transaction is expected to occur within 30 days after the completion of a 60-day due diligence period and satisfaction of customary contingencies. Upon closing of the sale-leaseback transaction, the Company’s term loan and revolving line of credit that are currently secured by the Alpharetta facility will be repaid and the related debt agreement would be terminated. The Company expects to receive net proceeds of approximately $4.0 million on the sale-leaseback after repayment of the loans. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The condensed consolidated balance sheet as of December 31, 2017 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year. |
Use of Management Estimates | Use of Management Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. |
Equity Method Investments | Equity Method Investments We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity method investment (loss) income” in our condensed consolidated statements of operations. The carrying value of our equity method investments is reported in equity method investments in the condensed consolidated balance sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the condensed consolidated statements of cash flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company did not record any impairments related to its investments during the three months ended March 31, 2018 or 2017. Note 6 contains additional information on our equity method investments, which are held by our Cinema segment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 31, 2018 and December 31, 2017. Fair values measured on a recurring basis at March 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,348 $ - $ - $ 3,348 Notes receivable - - 2,773 $ 2,773 Total $ 3,348 $ - $ 2,773 $ 6,121 Fair values measured on a recurring basis at December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,870 $ - $ - $ 4,870 Notes receivable - - 2,815 $ 2,815 Total $ 4,870 $ - $ 2,815 $ 7,685 Quantitative information about the Company’s level 3 fair value measurements at March 31, 2018 is set forth below: Fair value at 3/31/18 (in thousands) Valuation technique Unobservable input Range Notes receivable $ 2,773 Discounted cash flow Default percentage 49 % Discount rate 18 % During 2011, the Company entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of digital projection equipment. The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular year is added to the principal and also accrues interest at 15%. The notes receivable are recorded at estimated fair value. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During the first quarter of 2018, the Company updated its estimated future cash flow assumptions. This resulted in a decrease to the fair value of the notes receivable of $42 thousand recorded in earnings during the quarter ended March 31, 2018. There was no adjustment to the estimated fair value of the notes receivable during the quarter ended March 31, 2017. The significant unobservable inputs used in the fair value measurement of the Company’s notes receivable are discount rate and percentage of default. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement. The Company’s short-term and long-term debt is recorded at historical cost. As of March 31, 2018, the Company’s long-term debt, including current maturities, had a carrying value of $1.95 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at March 31, 2018 was $1.90 million. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt, reported in the condensed consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. Note 6 includes fair value information related to our equity method investments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the three months ended March 31, 2018 and 2017, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” “(ASC 606)”. The ASU replaced most existing revenue recognition guidance in U.S. GAAP. The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method. The Company recorded a transition adjustment of approximately $76 thousand increasing the opening balance of retained earnings, primarily related to the deferral and amortization of direct and incremental costs of obtaining contracts. See Note 4 for further information about the nature and pattern of revenue recognition for the different types of contracts with customers. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments that do not result in consolidation and are not accounted under the equity method to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets; and modifies certain fair value disclosure requirements. The Company adopted ASU 2016-01 prospectively on January 1, 2018. The adoption of this ASU did not significantly impact the Company’s results of operations and financial position. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The new guidance describes the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The Company adopted this ASU effective January 1, 2018. The adoption of this ASU did not significantly impact the Company’s results of operations and financial position. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months, on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is evaluating the requirements of ASU 2016-02 and its potential impact on the Company’s financial statements. The Company has leases primarily for property and equipment and is in the process of identifying and evaluating these leases for purposes of ASU 2016-02. For each of these leases, the term will be evaluated, including extension and renewal options as well as the lease payments. While the Company has not yet quantified the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements, the Company expects to record assets and liabilities on its balance sheet upon adoption of this standard, which may be material. The Company will continue to provide enhanced disclosures as it continues its assessment. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment testing which requires the fair value of individual assets and liabilities of a reporting unit to be determined when measuring goodwill impairment. The new guidance may result in different amounts of impairment that could be recognized compared to existing guidance. In addition, failing step 1 of the impairment test may not result in impairment under existing guidance. However, under the revised guidance, failing step 1 will always result in a goodwill impairment. ASU 2017-04 is to be applied prospectively for goodwill impairment testing performed in years beginning after December 15, 2019. The Company does not believe its adoption will significantly impact the Company’s results of operations or financial position. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Financial Results of Discontinued Operations | The summary financial results of discontinued operations for the three months ended March 31, 2017 were as follows (in thousands): Total net revenues $ 12 Total cost of revenues 26 Total selling and administrative expenses 9 Loss from operations of discontinued operations (23 ) Loss before income taxes (23 ) Income tax expense - Net loss from discontinued operations, net of tax $ (23 ) |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair values measured on a recurring basis at March 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,348 $ - $ - $ 3,348 Notes receivable - - 2,773 $ 2,773 Total $ 3,348 $ - $ 2,773 $ 6,121 Fair values measured on a recurring basis at December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,870 $ - $ - $ 4,870 Notes receivable - - 2,815 $ 2,815 Total $ 4,870 $ - $ 2,815 $ 7,685 |
Summary of Quantitative Information About Company's Level 3 Fair Value Measurements | Quantitative information about the Company’s level 3 fair value measurements at March 31, 2018 is set forth below: Fair value at 3/31/18 (in thousands) Valuation technique Unobservable input Range Notes receivable $ 2,773 Discounted cash flow Default percentage 49 % Discount rate 18 % |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Changes in Contract Cost | The following table summarizes the changes in the Company’s contract asset balance during the three months ended March 31, 2018 (in thousands): Deferred contract acquisition costs as of January 1, 2018 $ 76 Costs capitalized 10 Amortization (14 ) Impairment - Deferred contract acquisition costs as of March 31, 2018 $ 72 |
Schedule of Impact the Adoption of ASC 606 on Consolidated Financial Statements | The following tables summarize the impact the adoption of ASC 606 had on the Company’s consolidated financial statements (in thousands, except per share data): Condensed Consolidated Balance Sheet: As reported March 31, 2018 Adjustments Balances without adoption of ASC 606 Total current assets $ 20,354 $ 146 $ 20,500 Total noncurrent assets 36,677 (14 ) 36,663 Total assets $ 57,031 $ 132 $ 57,163 Total current liabilities $ 10,702 $ 258 $ 10,960 Total noncurrent liabilities 6,171 - 6,171 Total liabilities 16,873 258 17,131 Retained earnings 21,861 (126 ) 21,735 Other stockholders’ equity 18,297 - 18,297 Total stockholders’ equity 40,158 (126 ) 40,032 Total liabilities and stockholders’ equity $ 57,031 $ 132 $ 57,163 Condensed Consolidated Statement of Operations: As reported for the three months ended March 31, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 15,828 $ (57 ) $ 15,771 Total cost of revenues 12,978 (2 ) 12,976 Gross profit 2,850 (55 ) 2,795 Total selling and administrative expenses 5,934 (5 ) 5,929 Loss from operations (3,084 ) (50 ) (3,134 ) Other income 7 - 7 Loss before income taxes and equity method investment loss (3,077 ) (50 ) (3,127 ) Income tax expense 698 - 698 Equity method investment loss (10 ) - (10 ) Net loss $ (3,785 ) $ (50 ) $ (3,835 ) Net loss per share of common stock: Basic $ (0.26 ) (0.00 ) $ (0.26 ) Diluted $ (0.26 ) (0.00 ) $ (0.26 ) |
Major Source [Member] | |
Schedule of Disaggregation of Revenue | The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2018: Cinema Digital Media Other Eliminations Total Screen system sales $ 4,005 $ - $ - $ - $ 4,005 Digital equipment sales 3,158 766 - (216 ) 3,708 Field maintenance and monitoring services 2,944 2,114 - (138 ) 4,920 Installation services 328 1,360 - - 1,688 Extended warranty sales 342 - - - 342 Other 672 477 16 - 1,165 Total $ 11,449 $ 4,717 $ 16 $ (354 ) $ 15,828 |
Timing Of Transfer [Member] | |
Schedule of Disaggregation of Revenue | The following table disaggregates the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 9,598 $ 2,529 $ 16 $ (354 ) $ 11,789 Over time 1,851 2,188 - - 4,039 Total $ 11,449 $ 4,717 $ 16 $ (354 ) $ 15,828 |
(Loss) Earnings Per Common Sh26
(Loss) Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Between Basic and Diluted Earnings Per Share | The following table provides the reconciliation between average shares used to compute basic and diluted (loss) earnings per share: Three Months Ended March 31, 2018 2017 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,341 14,264 Dilutive effect of stock options and certain non-vested shares of restricted stock - 156 Diluted weighted average shares outstanding 14,341 14,420 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | The following summarizes our equity method investments (dollars in thousands): March 31, 2018 December 31, 2017 Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,102 8.3 % $ 4,473 8.3 % Itasca Capital, Ltd. 5,814 32.3 % 5,870 32.3 % 1347 Property Insurance Holdings, Inc. 7,917 17.4 % 7,710 17.4 % Total $ 17,833 $ 18,053 |
Summary of Income (Loss) of Equity Method Investees | The following summarizes the (loss) income of equity method investees reflected in the Statement of Operations (in thousands): Three months ended March 31, Entity 2018 2017 RELM Wireless Corporation $ (354 ) $ 8 Itasca Capital, Ltd. 103 2,461 1347 Property Insurance Holdings, Inc. 241 12 Total $ (10 ) $ 2,481 |
Summarized Financial Information | For the three months ended December 31, 2017 2016 (in thousands) Revenue $ 20,576 $ 15,358 Operating loss from continuing operations $ (2,034 ) $ 2,590 Net income $ (2,557 ) $ 9,351 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at March 31, 2018 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 877 $ - $ 877 Intangible assets subject to amortization: Software in service 5 3,718 (768 ) 2,950 Product formulation 10 473 (353 ) 120 Total $ 5,068 $ (1,121 ) $ 3,947 Intangible assets consisted of the following at December 31, 2017 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 1,243 $ - $ 1,243 Intangible assets subject to amortization: Software in service 5 3,191 (597 ) 2,594 Product formulation 10 486 (351 ) 135 Total $ 4,920 $ (948 ) $ 3,972 |
Schedule of Intangible Assets Future Amortization Expense | The following table shows the Company’s estimated future amortization expense related to intangible assets currently subject to amortization for the next five years (in thousands): Amount Remainder 2018 $ 639 2019 840 2020 831 2021 670 2022 86 Thereafter 4 Total $ 3,070 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following represents a summary of changes in the Company’s carrying amount of goodwill for the three months ended March 31, 2018 (in thousands): Balance as of December 31, 2017 $ 952 Foreign currency translation (26 ) Balance as of March 31, 2018 $ 926 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes warranty activity for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Warranty accrual at beginning of period $ 521 $ 645 Charged to expense 84 47 Claims paid, net of recoveries (30 ) (231 ) Foreign currency adjustment (11 ) 1 Warranty accrual at end of period $ 564 $ 462 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt consists of the following (in thousands): March 31, 2018 December 31, 2017 Short-term debt: Revolving line of credit $ 500 $ 500 Current portion of long-term debt 65 65 Total short-term debt 565 565 Long-term debt: $2 million term loan 1,951 1,968 Less: current portion (65 ) (65 ) Less: unamortized debt issuance costs (31 ) (33 ) Total long-term debt 1,855 1,870 Total short-term and long-term debt $ 2,420 $ 2,435 |
Schedule of Long-term Debt Maturities | Scheduled repayments are as follows for the Company’s long-term debt outstanding as of March 31, 2018 (in thousands): Remainder of 2018 $ 48 2019 68 2020 70 2021 74 2022 1,691 Thereafter - Total $ 1,951 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the Period | The fair value of each stock option granted was estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions: 2018 2017 Expected dividend yield at date of grant 0.00 % 0.00 % Risk-free interest rate 2.49 % 2.04 % Expected stock price volatility 35.65 % 34.71 % Expected life of options (in years) 6.0 6.0 |
Summary of Stock Options Activities | The following table summarizes stock option activity for the three months ended March 31, 2018: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 930,300 $ 5.63 8.7 $ 150 Granted 387,500 4.70 Exercised - - Forfeited (32,000 ) 5.59 Expired (8,000 ) 5.41 Outstanding at March 31, 2018 1,277,800 $ 5.29 8.8 $ 64 Exercisable at March 31, 2018 269,300 $ 4.88 7.9 $ 31 |
Summary of Restricted Stock Activity | The following table summarizes restricted stock share activity for the three months ended March 31, 2018: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2017 85,000 $ 6.50 Granted - - Shares vested (28,333 ) 6.50 Shares forfeited - - Non-vested at March 31, 2018 56,667 $ 6.50 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes restricted stock unit activity for the three months ended March 31, 2018: Number of Restricted Stock Units Weighted Average Grant Price Fair Value Non-vested at December 31, 2017 35,835 $ 6.45 Granted 147,500 4.70 Shares vested - - Shares forfeited - - Non-vested at March 31, 2018 183,335 $ 5.04 |
Commitments, Contingencies an33
Commitments, Contingencies and Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Capital and Operating Leases Future Minimum Lease Payments | The Company’s future minimum lease payments for leases at March 31, 2018 are as follows: Capital Leases Operating Leases (in thousands) Remainder 2018 $ 185 $ 1,342 2019 116 1,768 2020 - 1,543 2021 - 1,415 2022 - 1,081 Thereafter - - Total minimum lease payments $ 301 $ 7,149 Less: Amount representing interest (10 ) Present value of minimum lease payments 291 Less: Current maturities (226 ) Capital lease obligations, net of current portion $ 65 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Summary by Business Segments Three Months Ended March 31, (In thousands) 2018 2017 Net revenues Cinema $ 11,449 $ 12,689 Digital Media 4,717 5,345 Other 16 - Total segment net revenues 16,182 18,034 Eliminations (354 ) (108 ) Total net revenues 15,828 17,926 Gross profit (loss) Cinema 3,385 3,616 Digital Media (551 ) 823 Other 16 - Total gross profit 2,850 4,439 Operating income (loss) Cinema 2,325 2,679 Digital Media (2,496 ) (1,113 ) Other (113 ) (117 ) Total segment operating (loss) income (284 ) 1,449 Unallocated general and administrative expenses (2,800 ) (2,047 ) Loss from operations (3,084 ) (598 ) Other income 7 20 Loss before income taxes and equity method investment (loss) income $ (3,077 ) $ (578 ) |
Reconciliation of Assets from Segment to Consolidated | (In thousands) March 31, 2018 December 31, 2017 Identifiable assets Cinema $ 24,845 $ 27,358 Digital Media 14,353 13,603 Corporate 17,833 18,053 Total $ 57,031 $ 59,014 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area Three Months Ended March 31, (In thousands) 2018 2017 Net revenue United States $ 12,830 $ 14,393 Canada 1,400 1,220 Mexico 556 356 China 541 1,466 Latin America 270 284 Europe 158 116 Asia (excluding China) 73 72 Other - 19 Total $ 15,828 $ 17,926 |
Summary of Identifiable Assets by Geographical Area | (In thousands) March 31, 2018 December 31, 2017 Identifiable assets United States $ 38,325 $ 37,230 Canada 18,706 21,784 Total $ 57,031 $ 59,014 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) $ in Thousands | 1 Months Ended |
May 31, 2017USD ($) | |
Strong Westrex, Inc. [Member] | |
Proceeds from sale of subsidiaries | $ 60 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Financial Results of Discontinued Operations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Total net revenues | $ 12 |
Total cost of revenues | 26 |
Total selling and administrative expenses | 9 |
Loss from operations of discontinued operations | (23) |
Loss before income taxes | (23) |
Income tax expense | |
Net loss from discontinued operations, net of tax | $ (23) |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair value adjustment | $ (42) | ||
Long-term debt | 1,951 | $ 1,968 | |
Long-term debt fair value | 1,900 | ||
Adjustment to Retained Earnings - Deferred Contract Acquisition Costs [Member] | |||
Change in accounting principle effect of adoption quantification | $ 76 | ||
CDF2 Holdings, LLC [Member] | Unsecured Notes Receivable Arrangements [Member] | |||
Percentage of notes receivable accrue interest rate | 15.00% | ||
Description of accrues interest rate | The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular year is added to the principal and also accrues interest at 15%. |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents | $ 3,348 | $ 4,870 |
Notes receivable | 2,773 | 2,815 |
Total | 6,121 | 7,685 |
Level 1 [Member] | ||
Cash and cash equivalents | 3,348 | 4,870 |
Notes receivable | ||
Total | 3,348 | 4,870 |
Level 2 [Member] | ||
Cash and cash equivalents | ||
Notes receivable | ||
Total | ||
Level 3 [Member] | ||
Cash and cash equivalents | ||
Notes receivable | 2,773 | 2,815 |
Total | $ 2,773 | $ 2,815 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Note receivable | $ 2,773 | $ 2,815 |
Valuation Technique | Discounted cash flow | |
Probability of default | 49.00% | |
Discount rate | 18.00% |
Revenue (Details Narrative)
Revenue (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Contract liability (or deferred revenue) | $ 800 |
Revenue recognized | 400 |
January 1, 2018 [Member] | |
Contract liability (or deferred revenue) | 800 |
2018 [Member] | |
Unearned revenue reported in deferred revenue and customer deposits | $ 700 |
Field Maintenance and Monitoring Services [Member] | |
Contract duration or term with field maintenance | 12 months |
Adjustment to Retained Earnings - Deferred Contract Acquisition Costs [Member] | |
Change in accounting principle effect of adoption quantification | $ 76 |
Revenue - Schedule of Changes i
Revenue - Schedule of Changes in Contract Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred contract acquisition costs, beginning balance | $ 76 |
Costs capitalized | 10 |
Amortization | (14) |
Impairment | |
Deferred contract acquisition costs, ending balance | $ 72 |
Revenue - Schedule of Impact th
Revenue - Schedule of Impact the Adoption of ASC 606 on Consolidated Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Total current assets | $ 20,354 | $ 22,242 | |
Total noncurrent assets | 36,677 | ||
Total assets | 57,031 | 59,014 | |
Total current liabilities | 10,702 | 8,680 | |
Total noncurrent liabilities | 6,171 | ||
Total liabilities | 16,873 | 14,892 | |
Retained earnings | 21,861 | 25,570 | |
Other stockholders’ equity | 18,297 | ||
Total stockholders’ equity | 40,158 | 44,122 | |
Total liabilities and stockholders’ equity | 57,031 | $ 59,014 | |
Total net revenues | 15,828 | $ 17,926 | |
Total cost of revenues | 12,978 | 13,487 | |
Gross profit | 2,850 | 4,439 | |
Total selling and administrative expenses | 5,934 | 5,037 | |
Loss from operations | (3,084) | (598) | |
Other income | 7 | 20 | |
Loss before income taxes and equity method investment loss | (3,077) | (578) | |
Income tax expense | 698 | 1,493 | |
Equity method investment loss | (10) | 2,481 | |
Net loss | $ (3,785) | $ 387 | |
Net loss per share of common stock: Basic | $ (0.26) | $ 0.03 | |
Net loss per share of common stock: Diluted | $ (0.26) | $ 0.03 | |
Balances without Adoption of ASC 606 [Member] | |||
Total current assets | $ 20,500 | ||
Total noncurrent assets | 36,663 | ||
Total assets | 57,163 | ||
Total current liabilities | 10,960 | ||
Total noncurrent liabilities | 6,171 | ||
Total liabilities | 17,131 | ||
Retained earnings | 21,735 | ||
Other stockholders’ equity | 18,297 | ||
Total stockholders’ equity | 40,032 | ||
Total liabilities and stockholders’ equity | 57,163 | ||
Total net revenues | 15,771 | ||
Total cost of revenues | 12,976 | ||
Gross profit | 2,795 | ||
Total selling and administrative expenses | 5,929 | ||
Loss from operations | (3,134) | ||
Other income | 7 | ||
Loss before income taxes and equity method investment loss | (3,127) | ||
Income tax expense | 698 | ||
Equity method investment loss | (10) | ||
Net loss | $ (3,835) | ||
Net loss per share of common stock: Basic | $ (0.26) | ||
Net loss per share of common stock: Diluted | $ (0.26) | ||
Difference Between Revenue Guidance in Effect Before and After Topic 606 [Member] | Adjustments for New Accounting Pronouncement [Member] | |||
Total current assets | $ 146 | ||
Total noncurrent assets | (14) | ||
Total assets | 132 | ||
Total current liabilities | 258 | ||
Total noncurrent liabilities | |||
Total liabilities | 258 | ||
Retained earnings | (126) | ||
Other stockholders’ equity | |||
Total stockholders’ equity | (126) | ||
Total liabilities and stockholders’ equity | 132 | ||
Total net revenues | (57) | ||
Total cost of revenues | (2) | ||
Gross profit | (55) | ||
Total selling and administrative expenses | (5) | ||
Loss from operations | (50) | ||
Other income | |||
Loss before income taxes and equity method investment loss | (50) | ||
Income tax expense | |||
Equity method investment loss | |||
Net loss | $ (50) | ||
Net loss per share of common stock: Basic | $ 0 | ||
Net loss per share of common stock: Diluted | $ 0 |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Major Source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total net revenues | $ 15,828 | $ 17,926 |
Screen System Sales [Member] | ||
Total net revenues | 4,005 | |
Digital Equipment Sales [Member] | ||
Total net revenues | 3,708 | |
Field Maintenance and Monitoring Services [Member] | ||
Total net revenues | 4,920 | |
Installation Services [Member] | ||
Total net revenues | 1,688 | |
Extended Warranty Sales [Member] | ||
Total net revenues | 342 | |
Other [Member] | ||
Total net revenues | 1,165 | |
Cinema [Member] | ||
Total net revenues | 11,449 | |
Cinema [Member] | Screen System Sales [Member] | ||
Total net revenues | 4,005 | |
Cinema [Member] | Digital Equipment Sales [Member] | ||
Total net revenues | 3,158 | |
Cinema [Member] | Field Maintenance and Monitoring Services [Member] | ||
Total net revenues | 2,944 | |
Cinema [Member] | Installation Services [Member] | ||
Total net revenues | 328 | |
Cinema [Member] | Extended Warranty Sales [Member] | ||
Total net revenues | 342 | |
Cinema [Member] | Other [Member] | ||
Total net revenues | 672 | |
Digital Media [Member] | ||
Total net revenues | 4,717 | |
Digital Media [Member] | Screen System Sales [Member] | ||
Total net revenues | ||
Digital Media [Member] | Digital Equipment Sales [Member] | ||
Total net revenues | 766 | |
Digital Media [Member] | Field Maintenance and Monitoring Services [Member] | ||
Total net revenues | 2,114 | |
Digital Media [Member] | Installation Services [Member] | ||
Total net revenues | 1,360 | |
Digital Media [Member] | Extended Warranty Sales [Member] | ||
Total net revenues | ||
Digital Media [Member] | Other [Member] | ||
Total net revenues | 477 | |
Other [Member] | ||
Total net revenues | 16 | |
Other [Member] | Screen System Sales [Member] | ||
Total net revenues | ||
Other [Member] | Digital Equipment Sales [Member] | ||
Total net revenues | ||
Other [Member] | Field Maintenance and Monitoring Services [Member] | ||
Total net revenues | ||
Other [Member] | Installation Services [Member] | ||
Total net revenues | ||
Other [Member] | Extended Warranty Sales [Member] | ||
Total net revenues | ||
Eliminations [Member] | ||
Total net revenues | (354) | |
Eliminations [Member] | Screen System Sales [Member] | ||
Total net revenues | ||
Eliminations [Member] | Digital Equipment Sales [Member] | ||
Total net revenues | (216) | |
Eliminations [Member] | Field Maintenance and Monitoring Services [Member] | ||
Total net revenues | (138) | |
Eliminations [Member] | Installation Services [Member] | ||
Total net revenues | ||
Eliminations [Member] | Extended Warranty Sales [Member] | ||
Total net revenues | ||
Eliminations [Member] | Other [Member] | ||
Total net revenues |
Revenue - Schedule of Revenue44
Revenue - Schedule of Revenue by Timing of Transfer of Goods or Services to Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total net revenues | $ 15,828 | $ 17,926 |
Cinema [Member] | ||
Total net revenues | 11,449 | |
Digital Media [Member] | ||
Total net revenues | 4,717 | |
Other [Member] | ||
Total net revenues | 16 | |
Eliminations [Member] | ||
Total net revenues | (354) | |
Transferred at Point in Time [Member] | ||
Total net revenues | 11,789 | |
Transferred over Time [Member] | ||
Total net revenues | 4,039 | |
Cinema [Member] | Transferred at Point in Time [Member] | ||
Total net revenues | 9,598 | |
Cinema [Member] | Transferred over Time [Member] | ||
Total net revenues | 1,851 | |
Digital Media [Member] | Transferred at Point in Time [Member] | ||
Total net revenues | 2,529 | |
Digital Media [Member] | Transferred over Time [Member] | ||
Total net revenues | 2,188 | |
Other [Member] | Transferred at Point in Time [Member] | ||
Total net revenues | 16 | |
Other [Member] | Transferred over Time [Member] | ||
Total net revenues | ||
Eliminations [Member] | Transferred at Point in Time [Member] | ||
Total net revenues | (354) | |
Eliminations [Member] | Transferred over Time [Member] | ||
Total net revenues |
(Loss) Earnings Per Common Sh45
(Loss) Earnings Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock Option In Which Exercise Price Exceeds The Average Market Price Of Common Shares [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 490,000 | 385,000 |
Common Stock Equivalents [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 129,525 |
(Loss) Earnings Per Common Sh46
(Loss) Earnings Per Common Share - Schedule of Reconciliation Between Basic and Diluted Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding | 14,341,000 | 14,264,000 |
Dilutive effect of stock options and certain non-vested shares of restricted stock | 156,000 | |
Diluted weighted average shares outstanding | 14,341,000 | 14,420,000 |
Equity Method Investments (Deta
Equity Method Investments (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Retained earnings undistributed earnings from our equity method investees | $ 1,500 | ||
RELM Wireless Corp [Member] | |||
Dividend received | 23 | $ 100 | |
Quoted market value of the company's ownership | $ 4,500 | ||
Equity method ownership percentage | 8.30% | 8.30% | |
RELM Wireless Corp [Member] | Chief Executive Officer [Member] | Minimum [Member] | |||
Combined equity ownership percentage | 20.00% | ||
Itasca Capital Ltd [Member] | |||
Quoted market value of the company's ownership | $ 3,500 | ||
Equity method ownership percentage | 32.30% | 32.30% | |
1347 Property Insurance Holdings Inc [Member] | |||
Quoted market value of the company's ownership | $ 7,400 | ||
Equity method ownership percentage | 17.40% | 17.40% | |
1347 Property Insurance Holdings Inc [Member] | Minimum [Member] | |||
Combined equity ownership percentage | 20.00% |
Equity Method Investments - Sum
Equity Method Investments - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Equity investment, Carrying Amount | $ 17,833 | $ 18,053 |
RELM Wireless Corp [Member] | ||
Equity investment, Carrying Amount | $ 4,102 | $ 4,473 |
Equity investment, Economic Interest | 8.30% | 8.30% |
Itasca Capital Ltd [Member] | ||
Equity investment, Carrying Amount | $ 5,814 | $ 5,870 |
Equity investment, Economic Interest | 32.30% | 32.30% |
1347 Property Insurance Holdings Inc [Member] | ||
Equity investment, Carrying Amount | $ 7,917 | $ 7,710 |
Equity investment, Economic Interest | 17.40% | 17.40% |
Equity Method Investments - S49
Equity Method Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity method investment income | $ (10) | $ 2,481 |
Equity Method Investments [Member] | ||
Equity method investment income | (10) | 2,481 |
RELM Wireless Corporation [Member] | Equity Method Investments [Member] | ||
Equity method investment income | (354) | 8 |
Itasca Capital Ltd [Member] | Equity Method Investments [Member] | ||
Equity method investment income | 103 | 2,461 |
1347 Property Insurance Holdings Inc [Member] | Equity Method Investments [Member] | ||
Equity method investment income | $ 241 | $ 12 |
Equity Method Investments - S50
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Revenue | $ 20,576 | $ 15,358 |
Operating loss from continuing operations | (2,034) | 2,590 |
Net income | $ (2,557) | $ 9,351 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 200 | $ 100 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Intangible assets, Gross | $ 5,068 | $ 4,920 |
Intangible assets, Accumulated amortization | (1,121) | (948) |
Intangible assets, Net | $ 3,947 | $ 3,972 |
Software in Service [Member] | ||
Intangible assets, Useful life | 5 years | 5 years |
Intangible assets, Gross | $ 3,718 | $ 3,191 |
Intangible assets, Accumulated amortization | (768) | (597) |
Intangible assets, Net | $ 2,950 | $ 2,594 |
Production Formulation [Member] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 473 | $ 486 |
Intangible assets, Accumulated amortization | (353) | (351) |
Intangible assets, Net | 120 | 135 |
Software in Development [Member] | ||
Intangible assets, Gross | 877 | 1,243 |
Intangible assets, Accumulated amortization | ||
Intangible assets, Net | $ 877 | $ 1,243 |
Intangible Assets - Schedule 53
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Total | $ 3,947 | $ 3,972 |
Intangible Assets [Member] | ||
Remainder 2,018 | 639 | |
2,019 | 840 | |
2,020 | 831 | |
2,021 | 670 | |
2,022 | 86 | |
Thereafter | 4 | |
Total | $ 3,070 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance | $ 952 |
Foreign currency translation | (26) |
Balance | $ 926 |
Warranty Reserves - Schedule of
Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Extended Product Warranty Disclosure [Abstract] | ||
Warranty accrual at beginning of period | $ 521 | $ 645 |
Charged to expense | 84 | 47 |
Claims paid, net of recoveries | (30) | (231) |
Foreign currency adjustment | (11) | 1 |
Warranty accrual at end of period | $ 564 | $ 462 |
Debt (Details Narrative)
Debt (Details Narrative) $ in Thousands, $ in Thousands | Sep. 05, 2017CAD ($) | Apr. 27, 2017USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Secured loan | $ 2,000 | $ 2,000 | $ 2,000 | ||
Line of Credit [Member] | |||||
Debt maturity date | May 10, 2018 | ||||
Line of credit maximum borrowing capacity | $ 1,000 | ||||
Line of Credit [Member] | April 23, 2018 [Member] | |||||
Line of credit extended maturity date | May 10, 2019 | ||||
Line of Credit [Member] | Prime Rate [Member] | |||||
Interest rate of installment loans | 0.25% | ||||
Line of credit bearing interest rate | 5.00% | ||||
Demand Credit Agreement [Member] | |||||
Description on effective equity | The credit agreement requires Strong/MDI to maintain a ratio of liabilities to effective equity (tangible stockholders equity, less amounts receivable from affiliates and equity method investments) not exceeding 2 to 1, a current ratio (excluding amounts due from related parties) of at least 1.5 to 1 | ||||
Maximum liabilities to effective equity | 200.00% | ||||
Minimum current ratio | 150.00% | ||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | |||||
Minimum effective equity | $ 8,000 | ||||
Demand Credit Agreement [Member] | Line of Credit [Member] | Canadian Dollar [Member] | |||||
Line of credit maximum borrowing capacity | $ 3,500 | ||||
Term Loan [Member] | |||||
Secured loan | $ 2,000 | ||||
Loan term | 5 years | ||||
Debt bearing interest fixed rate | 4.50% | ||||
Debt installment determination period | 20 years | ||||
Debt balloon payment amount | $ 1,700 | ||||
Debt maturity date | May 10, 2022 | ||||
Term Loan [Member] | Debt Agreement [Member] | Line of Credit [Member] | |||||
Maximum allowed liabilities to tangible net worth, description | 3:1 | ||||
Minimum liquidity value | $ 2,000 | ||||
20-year Installment Loan [Member] | April 24, 2018 [Member] | |||||
Loan term | 20 years | ||||
20-year Installment Loan [Member] | April 24, 2018 [Member] | Canadian Dollar [Member] | |||||
Secured loan | $ 3,500 | $ 3,500 | |||
20-year Installment Loan [Member] | Demand Credit Agreement [Member] | |||||
Loan term | 20 years | ||||
20-year Installment Loan [Member] | Demand Credit Agreement [Member] | Canadian Dollar [Member] | |||||
Line of credit maximum borrowing capacity | $ 6,000 | ||||
20-year Installment Loan [Member] | Demand Credit Agreement [Member] | Prime Rate [Member] | |||||
Interest rate of installment loans | 0.50% | ||||
5-year Installment Loan [Member] | Demand Credit Agreement [Member] | |||||
Loan term | 5 years | ||||
5-year Installment Loan [Member] | Demand Credit Agreement [Member] | Canadian Dollar [Member] | |||||
Line of credit maximum borrowing capacity | $ 500 | ||||
5-year Installment Loan [Member] | Demand Credit Agreement [Member] | Prime Rate [Member] | |||||
Interest rate of installment loans | 0.50% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Revolving line of credit | $ 500 | $ 500 |
Current portion of long-term debt | 65 | 65 |
Total short-term debt | 565 | 565 |
$2 million term loan | 1,951 | 1,968 |
Less: current portion | (65) | (65) |
Less: unamortized debt issuance costs | (31) | (33) |
Total long-term debt | 1,855 | 1,870 |
Total short-term and long-term debt | $ 2,420 | $ 2,435 |
Debt - Schedule of Debt (Deta58
Debt - Schedule of Debt (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Secured loan | $ 2,000 | $ 2,000 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Maturities (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2018 | $ 48 |
2,019 | 68 |
2,020 | 70 |
2,021 | 74 |
2,022 | 1,691 |
Thereafter | |
Total | $ 1,951 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Number of shares granted | 387,500 | |
Restricted Stock [Member] | ||
Compensation cost expected to be recognized, weighted average period | 2 years 4 months 24 days | |
Unrecognized for restricted stock, value | $ 1,100 | |
Stock Option [Member] | ||
Number of shares granted | 387,500 | 285,000 |
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair value | $ 1.82 | $ 2.41 |
Share-based compensation arrangement by share-based payment award, options, non-vested, number | 1,008,500 | |
Total unrecognized compensation cost related to stock option awards | $ 1,900 | |
Compensation cost expected to be recognized, weighted average period | 4 years | |
Year 2017 Plan [Member] | ||
Number of shares authorized for issuance | 1,371,189 | |
Share based compensation arrangement by share based payment award number of shares available for grant | 758,354 | |
Selling, General and Administrative Expenses [Member] | ||
Share based compensation expense | $ 300 | $ 100 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the Period (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected dividend yield at date of grant | 0.00% | 0.00% |
Risk-free interest rate | 2.49% | 2.04% |
Expected stock price volatility | 35.65% | 34.71% |
Expected life of options (in years) | 6 years | 6 years |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Options, Outstanding beginning balance | shares | 930,300 |
Number of Options, Granted | shares | 387,500 |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | (32,000) |
Number of Options, Expired | shares | (8,000) |
Number of Options, Outstanding ending balance | shares | 1,277,800 |
Number of Options, Exercisable | shares | 269,300 |
Weighted Average Exercise Price Per Share, Outstanding beginning balance | $ / shares | $ 5.63 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 4.70 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | 5.59 |
Weighted Average Exercise Price Per Share, Expired | $ / shares | 5.41 |
Weighted Average Exercise Price Per Share, Outstanding ending balance | $ / shares | 5.29 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 4.88 |
Weighted Average Remaining Contractual Term, beginning balance | 8 years 8 months 12 days |
Weighted Average Remaining Contractual Term, ending balance | 8 years 9 months 18 days |
Weighted Average Remaining Contractual Term, Exercisable | 7 years 10 months 25 days |
Aggregate Intrinsic Value, beginning balance | $ | $ 150 |
Aggregate Intrinsic Value, ending balance | $ | 64 |
Aggregate Intrinsic Value, Exercisable | $ | $ 31 |
Stock Compensation - Summary 63
Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock Shares [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Restricted Stock, Non-vested beginning balance | shares | 85,000 |
Number of Restricted Stock, Granted | shares | |
Number of Restricted Stock, vested | shares | (28,333) |
Number of Restricted Stock, forfeited | shares | |
Number of Restricted Stock, Non-vested ending balance | shares | 56,667 |
Weighted Average Grant Price Fair Value, Non-vested beginning balance | $ / shares | $ 6.50 |
Weighted Average Grant Price Fair Value, Granted | $ / shares | |
Weighted Average Grant Price Fair Value, Vested | $ / shares | 6.50 |
Weighted Average Grant Price Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Price Fair Value, Non-vested ending balance | $ / shares | $ 6.50 |
Stock Compensation - Schedule64
Stock Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Restricted Stock Units, Non-vested beginning balance | shares | 35,835 |
Number of Restricted Stock Units, Granted | shares | 147,500 |
Number of Restricted Stock Units, vested | shares | |
Number of Restricted Stock Units, forfeited | shares | |
Number of Restricted Stock Units, Non-vested ending balance | shares | 183,335 |
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares | $ 6.45 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 4.70 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares | $ 5.04 |
Commitments, Contingencies an65
Commitments, Contingencies and Concentrations (Details Narrative) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating lease expire, term | expiring through 2022 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 56.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 37.00% |
Commitments, Contingencies an66
Commitments, Contingencies and Concentrations - Schedule of Capital and Operating Leases Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Capital Leases, Remainder 2018 | $ 185 |
Capital Leases, 2019 | 116 |
Capital Leases, 2020 | |
Capital Leases, 2021 | |
Capital Leases, 2022 | |
Capital Leases, Thereafter | |
Total minimum Capital lease payments | 301 |
Less: Amount representing interest | (10) |
Present value of minimum lease payments | 291 |
Less: Current maturities | (226) |
Capital lease obligations, net of current portion | 65 |
Operating Leases, Remainder 2018 | 1,342 |
Operating Leases, 2019 | 1,768 |
Operating Leases, 2020 | 1,543 |
Operating Leases, 2021 | 1,415 |
Operating Leases, 2022 | 1,081 |
Operating Leases, Thereafter | |
Total minimum Operating lease payments | $ 7,149 |
Business Segment Information (D
Business Segment Information (Details Narrative) | 3 Months Ended |
Mar. 31, 2018Segments | |
Segment Reporting [Abstract] | |
Number of business segment | 2 |
Business Segment Information -
Business Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total segment net revenue | $ 15,828 | $ 17,926 |
Total gross profit | 2,850 | 4,439 |
Loss from operations | (3,084) | (598) |
Other income | (10) | 5 |
Loss before taxes and equity method investment (loss) income | (3,077) | (578) |
Business Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment net revenue | 16,182 | 18,034 |
Eliminations | (354) | (108) |
Total net revenue | 15,828 | 17,926 |
Total gross profit | 2,850 | 4,439 |
Total segment operating (loss) income | (284) | 1,449 |
Unallocated general and administrative expenses | (2,800) | (2,047) |
Loss from operations | (3,084) | (598) |
Other income | 7 | 20 |
Loss before taxes and equity method investment (loss) income | (3,077) | (578) |
Business Segments [Member] | Cinema [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment net revenue | 11,449 | 12,689 |
Total gross profit | 3,385 | 3,616 |
Total segment operating (loss) income | 2,325 | 2,679 |
Business Segments [Member] | Digital Media [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment net revenue | 4,717 | 5,345 |
Total gross profit | (551) | 823 |
Total segment operating (loss) income | (2,496) | (1,113) |
Business Segments [Member] | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment net revenue | 16 | |
Total gross profit | 16 | |
Total segment operating (loss) income | $ (113) | $ (117) |
Business Segment Information 69
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Identifiable assets | $ 57,031 | $ 59,014 |
Cinema [Member] | Business Segments [Member] | ||
Identifiable assets | 24,845 | 27,358 |
Digital Media [Member] | Business Segments [Member] | ||
Identifiable assets | 14,353 | 13,603 |
Corporate Assets [Member] | Business Segments [Member] | ||
Identifiable assets | $ 17,833 | $ 18,053 |
Business Segment Information 70
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net revenue | $ 15,828 | $ 17,926 |
United States [Member] | ||
Net revenue | 12,830 | 14,393 |
Canada [Member] | ||
Net revenue | 1,400 | 1,220 |
Mexico [Member] | ||
Net revenue | 556 | 356 |
China [Member] | ||
Net revenue | 541 | 1,466 |
Latin America [Member] | ||
Net revenue | 270 | 284 |
Europe [Member] | ||
Net revenue | 158 | 116 |
Asia (Excluding China) [Member] | ||
Net revenue | 73 | 72 |
Other [Member] | ||
Net revenue | $ 19 |
Business Segment Information 71
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Identifiable assets | $ 57,031 | $ 59,014 |
United States [Member] | ||
Identifiable assets | 38,325 | 37,230 |
Canada [Member] | ||
Identifiable assets | $ 18,706 | $ 21,784 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] $ in Thousands | Apr. 27, 2018USD ($)shares |
Net proceeds from sale leaseback after repayment of debt | $ 4,000 |
Buyer [Member] | |
Number of warrants to purchase shares | shares | 100,000 |
Definitive Agreement [Member] | Alpharetta Facility [Member] | |
Agreed to sale leaseback in cash | $ 7,000 |
Sale leaseback term | P10Y |
Sale lease back rent expense | $ 600 |
Sale leaseback escalating rate | 2.00% |
Warrant maturity term | 10 years |
Demand Credit Agreement [Member] | |
Warrants description | 25,000 warrants at each of $10, $12, $14 and $16 purchase prices per share. |
Number of warrants to purchase shares | shares | 25,000 |